<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 29, 1994.
REGISTRATION NO. 33-
REGISTRATION NO. 33-51972
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
AND
POST-EFFECTIVE
AMENDMENT NO. 1
TO FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
RAYONIER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------
<TABLE>
<S> <C>
NORTH CAROLINA 13-2607329
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
1177 SUMMER STREET, STAMFORD, CONNECTICUT 06905-5529
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: 203-348-7000
------------------
JOHN B. CANNING, ESQ.
CORPORATE SECRETARY AND ASSOCIATE GENERAL COUNSEL
RAYONIER INC.
1177 SUMMER STREET, STAMFORD, CONNECTICUT 06905-5529
(NAME AND ADDRESS OF AGENT FOR SERVICE)
AGENT'S TELEPHONE NUMBER: 203-348-7000
COPIES TO
<TABLE>
<S> <C>
C. DUANE BLINN, ESQ. DAVID O. BROWNWOOD, ESQ.
DAY, BERRY & HOWARD CRAVATH, SWAINE & MOORE
CITYPLACE 825 EIGHTH AVENUE
HARTFORD, CT 06103-3499 NEW YORK, NY 10019-7415
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES BEING OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED AMOUNT BEING REGISTERED UNIT PRICE FEE
- -----------------------------------------------------------------------------------------------------
Debt Securities.......... $150,000,000(1) 100% $150,000,000(2) $51,724
</TABLE>
- --------------------------------------------------------------------------------
(1) If any Debt Securities are issued at original issue discount, such greater
amount as may result in the initial offering prices for Debt Securities
aggregating $150,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
------------------
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus included in this Registration Statement
is a combined Prospectus which also relates to Registration Statement No.
33-51972, previously filed by the registrant on Form S-3. This Registration
Statement also constitutes Post-Effective Amendment No. 1 with respect to the
registrant's Registration Statement No. 33-51972, 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 SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS SUBJECT TO
COMPLETION PURSUANT TO RULE 424 UNDER THE SECURITIES ACT OF 1933. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN DECLARED EFFECTIVE
BY THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933. A FINAL PROSPECTUS SUPPLEMENT AND ACCOMPANYING
PROSPECTUS WILL BE DELIVERED TO PURCHASERS OF THESE SECURITIES. THIS
PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING 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
MARCH , 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1994)
$100,000,000
RAYONIER INC.
% DEBENTURES DUE
The % Debentures Due (the "Debentures") will mature on ,
. Interest on the Debentures is payable semiannually on and
of each year commencing . Application has been made to
list the Debentures on the New York Stock Exchange (the "NYSE").
The Debentures will be represented by Global Securities registered in the name
of the nominee of The Depository Trust Company (the "Depositary"). Interests in
the Debentures represented by Global Securities will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary and
its direct and indirect participants. Except as described herein, Debentures in
certificated form will not be issued in exchange for Global 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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Debenture............... % % %
Total....................... $ $ $
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from , 1994.
(2) Before deducting expenses payable by the Company estimated at $ .
The Debentures are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Debentures will be made at the office of
Salomon Brothers Inc, Seven World Trade Center, New York, New York or through
the book-entry facilities of the Depositary, on or about , 1994.
SALOMON BROTHERS INC
BT SECURITIES CORPORATION
MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus Supplement is March , 1994.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
RAYONIER INC.
Rayonier Inc. ("Rayonier" or the "Company") is a leading international
forest products company primarily engaged in the trading, merchandising and
manufacture of logs, timber and wood products, and in the production and sale of
high value added specialty pulps. Rayonier traces its origin to the founding of
Rainier Pulp and Paper Company in Shelton, Washington, in 1926. With the
consolidation of several pulp companies in 1937, the Company became "Rayonier
Incorporated," a corporation whose stock was publicly traded on the NYSE until
Rayonier became a wholly owned subsidiary of ITT Corporation ("ITT") in 1968. On
February 28, 1994, Rayonier again became an independent company when ITT
distributed all of the Common Shares of Rayonier to ITT stockholders. Rayonier
shares are publicly traded on the NYSE under the symbol "RYN."
Rayonier owns, leases or controls approximately 1.5 million acres of
timberlands, with approximately 863,000 acres located in the Southeastern U.S.,
379,000 acres in the Pacific Northwest and 253,000 acres in New Zealand. In
addition, Rayonier operates three pulp mills and two lumber manufacturing
facilities in the United States. With customers in over 60 countries, Rayonier
has historically shipped more than half of its products to foreign markets,
primarily in Asia and Western Europe.
Rayonier is a North Carolina corporation with its principal executive
offices at 1177 Summer Street, Stamford, CT 06905-5529, and its telephone number
is (203) 348-7000.
TIMBER AND WOOD PRODUCTS
Rayonier is a leading international supplier of softwood logs. Rayonier
owns, buys and harvests standing timber, and purchases delivered logs, in
Northwest North America and New Zealand. The logs harvested and purchased are
sold into export markets (primarily to Japan, Korea and China), as well as to
pulp and lumber mills in domestic markets.
In the United States, Rayonier manages timberlands and sells timber
stumpage (cutting rights to standing timber) directly through Rayonier
Timberlands, L.P. ("RTLP"), a master limited partnership. RTLP's timberlands
provide a major source of wood used in Rayonier's other businesses. Rayonier and
Rayonier Forest Resources Company ("RFR"), a wholly owned subsidiary, are the
general partners of RTLP, and Rayonier owns all the Partnership Units of RTLP
except for 25.3 percent of the Class A Limited Partnership Units, which are
publicly traded.
Rayonier's two Georgia lumber mills convert southern yellow pine timber
into dimension and specialty lumber products for residential construction and
industrial uses. The mills have a combined annual capacity of approximately 200
million board feet of lumber and an annual output of approximately 483,000 tons
of wood chips for pulping. Their entire wood chip production is shipped to
Rayonier's Jesup, Georgia pulp facility.
SPECIALTY PULP PRODUCTS
Rayonier is one of the world's leading producers of chemical cellulose,
often called dissolving pulp, from which customers produce a wide variety of
products, principally textile, industrial and filtration fibers, plastics and
other chemical intermediate industrial products. Within the chemical cellulose
industry, Rayonier concentrates on the most highly valued, technologically
demanding end uses, such as cellulose acetate and high purity cellulose ethers.
Rayonier believes that it is one of the world's largest manufacturers of high
grade chemical cellulose. Rayonier also manufactures fluff pulps that customers
S-2
<PAGE> 4
use to produce diapers and other sanitary products, and specialty paper pulps
used in the manufacture of products such as filters and decorative laminates.
The Company owns and operates three wood pulp mills which have an aggregate
annual capacity of approximately 826,000 metric tons. Rayonier does not convert
its pulps into finished products but instead concentrates on the production of
specialty market pulps that are sold to industrial companies producing a wide
variety of products. Rayonier manufactures its specialty pulp products to
customers' specifications. Approximately half of Rayonier's pulp sales are to
export customers, with the more important overseas markets being Western Europe
and Japan.
S-3
<PAGE> 5
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debentures
to retire approximately $100 million of short-term bank debt which was incurred
as bridge financing for the payment of a $90 million special dividend to ITT in
connection with a recapitalization program and for the settlement of
intercompany accounts with ITT. Pending such utilization, the proceeds may be
temporarily invested in short-term marketable securities.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of December 31, 1993 on a historical basis and as adjusted to give
effect to the sale of the Debentures and the application of the net proceeds
therefrom.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
----------------------------
OUTSTANDING AS ADJUSTED
----------- ------------
<S> <C> <C>
($ IN MILLIONS)
Total Short-Term Debt.............................................. $ 182 $ 82
----------- ------------
Long-Term Debt:
Debentures Offered Hereby........................................ $ -- $ 100
7.5% Notes Due 2002.............................................. 110 110
Term Loan Due 1995-1997.......................................... 100 100
Medium-Term Notes Due 1998-1999.................................. 16 16
Other Long-Term Debt............................................. 90 90
----------- ------------
Total Long-Term Debt (exclusive of current
installments).......................................... 316 416
Equity:
Common Shares.................................................... 157 157
Retained Earnings................................................ 449 449
----------- ------------
Total Equity............................................. 606 606
----------- ------------
Total Capitalization............................................... $ 1,104 $1,104
----------- ------------
----------- ------------
</TABLE>
S-4
<PAGE> 6
SUMMARY OF HISTORICAL FINANCIAL AND OPERATING DATA
The following summary of historical financial data for each year of the
five years ended December 31, 1993 is derived from the consolidated financial
statements of the Company. The data should be read in conjunction with the
consolidated financial statements, related notes and other financial information
incorporated by reference herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales...................................... $ 936 $ 974 $ 979 $1,104 $1,082
Cost of sales.............................. 782 822 846 863 801
Operating income before provision for
dispositions............................. 130 102 97 190 224
Provision for dispositions................. (3) (189)(1) -- -- 2
Operating income (loss).................... 127 (87) 97 190 226
Interest expense........................... (23) (21) (14) (12) (18)
Minority interest.......................... (23) (23) (20) (21) (19)
Income (loss) from continuing operations... 52 (81) 44 109 128
Provision for discontinued operations...... -- -- -- (43)(2) --
Cumulative effect of accounting changes.... -- (22)(3) -- -- --
Net income (loss).......................... 52 (103) 44 66 128
DIVIDENDS(4)............................... 122 18 20 61 48
BALANCE SHEET DATA:
Total assets............................... $1,475 $1,476 $1,372 $1,353 $1,330
Short-term bank debt and current maturities
of long-term debt........................ 182 102 12 32 7
Long-term debt............................. 316 302 193 141 174
Shareholder equity......................... 606 676 797 772 767
CASH FLOW DATA:
Capital expenditures....................... $ 72 $ 97 $ 134 $ 100 $ 80
New Zealand acquisition.................... -- 197 -- -- --
Depreciation, depletion and amortization... 78 78 69 64 64
EBITDA(5).................................. 187 156 147 234 271
EBIT(6).................................... 109 78 78 170 207
SELECTED FINANCIAL RATIOS (UNAUDITED):
Total debt to capitalization............... 45% 37% 21% 18% 19%
Total debt to EBITDA....................... 2.7x 2.6x 1.4x 0.7x 0.7x
EBIT/Interest expense...................... 4.7x 3.7x 5.6x 13.7x 11.6x
</TABLE>
S-5
<PAGE> 7
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA (UNAUDITED):
TIMBER AND WOOD PRODUCTS SEGMENT
Log Sales:
North America -- million board feet... 475 435 506 585 629
New Zealand -- thousand cubic
meters.............................. 1,375 682 259 114 57
Other -- million board feet........... 11 -- -- -- --
Timber Harvested:
Northwest U.S. -- million board
feet................................ 143 195 189 202 270
Southeast U.S. -- thousand short
green tons.......................... 2,001 2,006 2,037 1,838 1,765
New Zealand -- thousand cubic
meters.............................. 918 636 -- -- --
Lumber sold -- million board feet........ 125 118 103 113 109
Intercompany Sales:
Logs -- million board feet............ 15 25 35 31 63
Northwest U.S. Timber
Stumpage -- million board feet...... 28 44 68 69 92
Southeast U.S. Timber
Stumpage -- thousand short green
tons................................ 299 317 398 114 129
Wood Chips to Jesup pulp mill -- thou-
sand short green tons............... 319 352 320 356 295
SPECIALTY PULP PRODUCTS SEGMENT
Chemical cellulose sales -- thousand
metric tons........................... 369 399 412 403 436
Fluff and specialty paper
sales -- thousand metric tons(7)...... 352 367 409 446 318
Production as a percentage of capacity... 85% 95% 97% 96% 92%
</TABLE>
- ---------------
(1) Represents a charge of $189 million ($121 million after-tax) to provide for
the loss on the disposal of assets along with the costs for severance,
demolition and other closedown items associated with the disposition of
certain facilities; $180 million ($115 million after-tax) of this charge
relates to the Grays Harbor Complex (as defined elsewhere herein).
(2) Represents adjustments for reserves of discontinued operations which, net of
taxes, were $43 million in 1990.
(3) Represents the cumulative effect of accounting changes due to the adoption
of Statement of Financial Accounting Standards ("SFAS") No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions," and SFAS No.
112 "Employers' Accounting for Postemployment Benefits." These standards
were adopted as of January 1, 1992 using the immediate recognition method,
and the resulting after-tax charge of $22 million ($33 million pre-tax) is
included in net income (loss) in 1992.
(4) Pursuant to a recapitalization program, Rayonier paid a special dividend to
ITT in the fourth quarter of 1993 of $90 million. Dividends paid by Rayonier
to ITT are not indicative of future dividends. In the first quarter of 1994,
the Board of Directors declared a dividend of $.18 per share payable on
March 31, 1994 to holders of record of Rayonier Common Shares on March 10,
1994.
(5) EBITDA is defined as earnings (income) from continuing operations before the
cumulative effect of accounting changes, provision for dispositions, income
taxes, interest expense and depreciation, depletion and amortization.
(6) EBIT is defined as earnings (income) from continuing operations before the
cumulative effect of accounting changes, provision for dispositions, income
taxes and interest expense.
(7) Excludes wood pulp produced by the Grays Harbor pulp mill of 62, 78, 103 and
105 thousand metric tons for the years ended December 31, 1992, 1991, 1990
and 1989, respectively.
S-6
<PAGE> 8
SEGMENT INFORMATION
The amounts and relative contributions to sales and operating income
attributable to each of Rayonier's business segments for each of the last three
years ended December 31, 1993 were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
SALES 1993 1992 1991
- ----------------------------------------------------------------- ----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C>
Timber and Wood Products:
Log Trading and Merchandising.................................. $ 365 $ 301 $ 294
Timberlands Management and Stumpage
(Standing Timber) Sales..................................... 120 123 106
Wood Products Sales............................................ 47 33 24
----- ----- -----
Total Before Intrasegment Eliminations................. 532 457 424
Intrasegment Eliminations...................................... (16) (14) (22)
----- ----- -----
Total Timber and Wood Products......................... 516 443 402
----- ----- -----
Specialty Pulp Products:
Chemical Cellulose............................................. 279 307 325
Fluff and Specialty Paper Pulps................................ 183 218 228
----- ----- -----
Total Specialty Pulp Products.......................... 462 525 553
----- ----- -----
Intersegment Eliminations........................................ (42) (34) (31)
----- ----- -----
Total Before Dispositions........................................ 936 934 924
Dispositions..................................................... -- 40 55
----- ----- -----
Total Sales...................................................... $ 936 $ 974 $ 979
----- ----- -----
----- ----- -----
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
OPERATING INCOME (LOSS) 1993 1992 1991
- ----------------------------------------------------------------- ----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C>
Timber and Wood Products......................................... $ 144 $ 100 $ 79
Specialty Pulp Products.......................................... (4) 16 44
Corporate and Other.............................................. (8) (10) (9)
Intersegment Eliminations........................................ (2) 3 (1)
----- ----- -----
Total Before Dispositions.............................. 130 109 113
Dispositions..................................................... (3) (196) (16)
----- ----- -----
Total Operating Income (Loss).................................... $ 127 $ (87) $ 97
----- ----- -----
----- ----- -----
</TABLE>
RECENT EVENTS
On February 28, 1994, ITT, Rayonier's then sole shareholder, distributed,
as a special dividend, all of the Common Shares of Rayonier to the holders of
ITT Common Stock and ITT Series N Preferred Stock (the "Distribution"). In
connection with the Distribution, the Company changed its name from ITT Rayonier
Incorporated to Rayonier Inc. and became a publicly traded company listed on the
NYSE under the symbol "RYN". On March 1, 1994, there were approximately 29.6
million Common Shares of Rayonier outstanding.
S-7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEE "SEGMENT INFORMATION."
BUSINESS CONDITIONS
Operating results in the forest products industry are cyclical. Rayonier's
recent operating results for the Timber and Wood Products segment have improved
due to significantly higher selling prices and increased activity resulting from
the Company's May 1992 expansion of its New Zealand operations. However,
Rayonier's recent operating results for the Specialty Pulp Products segment have
been adversely affected by lower selling prices and reduced shipments resulting
from excess capacity in the pulp industry combined with weak domestic and
international markets. As a result, sales for the Company's Specialty Pulp
Products segment declined in the last three fiscal years, affecting total
Company sales results. In 1992 and 1993, increasing Timber and Wood Products
sales have offset the Specialty Pulp Products sales decline. During the most
recent economic downturn, the Company remained profitable, except for the effect
of the pre-tax restructuring charge for the Grays Harbor Complex (as defined
below) of $180 million, which resulted in a net loss in 1992 of $103 million.
Specialty Pulp Products operating results in 1993 continued to decline from
prior year levels as a result of an extended period of slow economic growth and
overcapacity in the industry. The Company expects that this business segment
will continue to be under pressure in 1994.
Rayonier's results continue to be heavily dependent on the pulp industry
cycle, and the Company continues to look at the strategic value of its
facilities in light of these market conditions. In 1992 the Company permanently
closed operations at the Grays Harbor Pulp Mill and Vanillin plant and the
associated Grays Harbor Paper Company (collectively referred to as the Grays
Harbor Complex). The Company took a charge of $189 million ($121 million
after-tax) in the year for the write-off of assets and closure costs for certain
facilities; $180 million ($115 million after-tax) of this charge related to the
Grays Harbor Complex.
The Company's two remaining sulfite mills, Port Angeles, Washington, and
Fernandina Beach, Florida, are currently facing severe margin pressure as a
result of many factors including their age and size and possible environmental
compliance costs. The mill in Port Angeles, Washington, in particular, has faced
and will likely continue to face significantly higher wood costs than facilities
in other parts of the country. The viability of these two particular facilities
will be dependent upon a resurgence of economic growth in Rayonier's markets
and, for the Port Angeles mill, the return of Northwest wood costs to a more
competitive level. If the resurgence in economic growth is delayed, and, in the
case of Port Angeles, raw material wood costs do not become more competitive,
the Company may be faced with considering other alternatives relative to these
facilities. Potential options include sale of the facilities, a restructuring of
the operations to make alternative products, temporary mothball of the
facilities, joint-venture arrangements or possible closure and termination of
operations. The net plant and equipment invested in the Port Angeles and
Fernandina pulp facilities was $101 million and $142 million, respectively, at
December 31, 1993.
The Company's repositioning of strategic assets into timber and wood
markets, such as the expansion of its New Zealand timber and wood based
operations, and its significant timberland holdings, have allowed it to moderate
the effect of the pulp cycle and, except for the significant write-off of the
Grays Harbor Complex in 1992, report profitable results for the last three
fiscal years.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993 COMPARED WITH
THE YEAR ENDED DECEMBER 31, 1992
SALES AND OPERATING INCOME
Sales of $936 million for the year ended December 31, 1993 were $38 million
(4 percent) lower than the comparable period of 1992. Operating income of $127
million for the year ended December 31, 1993 increased $214 million over the
comparable 1992 period.
S-8
<PAGE> 10
Timber and Wood Products
Sales for the Timber and Wood Products segment were $516 million, an
increase of $73 million (16 percent) over 1992 sales due to significantly higher
selling prices and increased activity resulting from the Company's May 1992
major expansion of its New Zealand operations, partially offset by lower North
American log and stumpage volume. Prices were substantially higher for stumpage,
logs and lumber products due to supply shortages caused by environmental
restrictions and litigation in the Northwest U.S., wet weather conditions in the
Southeast U.S. in the first quarter, and concerns over the availability of
timber and lumber supplies worldwide. Sales in 1993 were adversely affected by
lower timber harvest volumes in the Northwest as a result of customers delaying
stumpage harvesting due to previously contracted prices outpacing end use export
log values. Sales in 1992 included $17 million in timberland parcel sales in the
Northwest with no comparable sales during 1993.
Timber and Wood Products operating income improved $44 million (44 percent)
to $144 million, reflecting significantly improved stumpage, log and lumber
prices and expanded New Zealand operations. The 1992 operating income included
$16 million from the Northwest timberland parcel sales. Other operating expenses
in 1992 included several charges for contract settlements and reserves.
Specialty Pulp Products
Sales for the Specialty Pulp Products segment were $462 million, declining
$63 million (12 percent) from the prior period. The decrease primarily reflects
lower selling prices and reduced volume resulting from excess capacity in the
pulp industry combined with weak domestic and international markets.
Operating income for Specialty Pulp Products decreased $20 million to an
operating loss of $4 million, reflecting lower pulp prices, lower sales volume,
temporary market related downtime costs and higher pulpwood costs.
Dispositions
The Dispositions segment includes the results of the Grays Harbor Complex
which was closed in 1992, and other miscellaneous operations that are being held
for disposition. These operations had no sales in 1993 versus sales of $40
million in 1992. Operating losses of this segment were $3 million in 1993,
representing a provision for disposition of other miscellaneous operations.
Operating losses of the Dispositions segment were $196 million in 1992 which
included a provision for dispositions of $189 million related to the closure of
the Grays Harbor Complex and other miscellaneous facilities. A portion of the
Grays Harbor Complex assets were sold in August 1993 for cash and notes. See
"Business -- Dispositions/Discontinued Operations." The Company is still
completing demolition, personnel termination, environmental remediation and
other closure programs.
OTHER ITEMS
Commission expenses for the year ended December 31, 1993 decreased $12
million from the prior year, as 1992 included external commissions incurred
under a sales agency agreement with ITT Foreign Sales Corporation ("FSC").
Effective January 1, 1993, ITT transferred ownership of FSC to Rayonier.
Equity in the net loss of Grays Harbor Paper Company decreased $3 million
from the prior year as this joint venture company ceased operations in late
1992. See "Business -- Dispositions/Discontinued Operations."
Interest expense increased $2 million from the prior year reflecting higher
debt levels resulting from the May 1992 New Zealand timber rights acquisition.
INCOME TAXES
The provision for income taxes was adversely impacted by the effects of tax
reform legislation enacted August 10, 1993. This legislation increased the
corporate income tax rate from 34 percent to
S-9
<PAGE> 11
35 percent retroactive to January 1, 1993 and eliminated tax benefits related to
log exports for foreign sales corporations effective in the third quarter. The
provision for income taxes includes a charge of $2 million as a result of the
remeasurement of the Company's deferred tax liability for the 1 percent increase
in the corporate income tax rate. In total, the 1993 tax reform legislation
negatively impacted results by approximately $3 million.
NET INCOME
Net income in 1993 was $52 million compared to a net loss of $103 million
in 1992. As noted above, the 1992 net loss includes commission expenses of $12
million, pretax ($8 million after-tax) incurred under a sales agency agreement
with FSC and $190 million, pretax ($123 million after-tax)of operating losses,
equity losses and closure provision relating to the Grays Harbor Complex. In
addition, in 1992 the Company recorded an after-tax charge of $22 million to
reflect the cumulative effect of accounting changes for the adoption of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other than Pensions" and
SFAS No. 112, "Employers' Accounting for Postemployment Benefits." Excluding the
cumulative effect of accounting changes, the FSC commission expense and the
effect of the Grays Harbor Complex related expenses recorded in 1992, net income
of $52 million in 1993 increased $3 million or 6 percent over last year's
comparable net income of $49 million.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities for 1993 amounted to $129 million, an
increase of $5 million from the prior year. Cash from operating activities and
an increase in debt of $95 million were mainly used for capital expenditures of
$72 million, cash dividends to ITT of $122 million, environmental remediation
and other corrective action programs at Rayonier's wholly owned subsidiary,
Southern Wood Piedmont Company ("SWP"), and various closure costs of units held
for disposition of $28 million.
The Company's EBITDA, defined as earnings (income) from continuing
operations (before the cumulative effect of accounting changes and any provision
for dispositions) before income taxes, interest expense and depreciation,
depletion and amortization, for 1993 amounted to $187 million, increasing $31
million from the prior year, due to the higher pre-tax income reported in 1993.
The forest products industry requires substantial annual capital
expenditures to maintain production facilities at peak operating efficiency and
to comply with environmental standards. See "-- Environmental Regulation."
As of December 31, 1993, the Company had negative working capital of $39
million as compared to working capital of $7 million at December 31, 1992. Bank
loans and current maturities of long-term debt increased $80 million, primarily
to fund a $90 million dividend to ITT and a portion of intercompany settlements
of $21 million related to the Distribution. (The impact on income for additional
debt of $111 million will be approximately $8 million ($5 million, after-tax) on
an annual basis, assuming an average incremental borrowing rate of 7.7 percent.)
The Company's current assets also increased in several categories, including
accounts receivable by $8 million and prepaid timber stumpage by $15 million.
The Company is working with its lenders on a program to refinance a portion of
its short-term debt with long-term funding sufficient to return to a positive
working capital position. The Company expects to complete this program in the
second quarter of 1994.
Under a lease to the Company of its Baxley, Georgia sawmill entered into in
1985, the trustee on behalf of the lessor and the loan participant has the right
to require the Company to purchase the sawmill for approximately $8.4 million
because ITT has ceased to own a majority of the Company's voting stock.
As a result of ITT's decision to make the Distribution, Rayonier's senior
debt ratings were placed under review. Moody's Investor Service confirmed the
Company's rating at Baa2 and Standard & Poor's Corporation ("S&P") lowered the
Company's rating from A+ to BBB. The earlier S&P rating had carried with it an
implied support from ITT (although ITT did not have any legally enforceable
obligations with
S-10
<PAGE> 12
respect to Rayonier's debt). It is expected that some of the Company's borrowing
costs may rise as a result of the Distribution, but the increased interest
expense, if any, is not expected to be material.
The Company has established a $174 million medium-term note program. Such
notes may be due nine months or more from the date of issue and will be pari
passu with the Debentures. No assurance can be made as to the amount or timing
of any offerings or sales under the program.
ENVIRONMENTAL REGULATION
The Company has become subject to increasingly stringent environmental laws
and regulations concerning air emission, water discharges and waste disposal
which, in the opinion of management, will require substantial expenditures over
the next ten years. During 1993, 1992, 1991 and 1990 the Company spent
approximately $3 million, $25 million, $43 million and $15 million,
respectively, for capital projects related to environmental compliance for its
continuing operations. The Company expects to spend approximately $4 million on
such projects for its continuing operations for the two-year period 1994-1995.
However, recently proposed Federal environmental regulations governing air and
water discharges may require further expenditures and, if finally enacted in
their proposed form, would prevent Rayonier from meeting certain product quality
specifications for substantially all of its chemical cellulose products and in
other cases will increase the cost of making its products. Sales of the
Company's chemical cellulose products accounted for approximately 30 percent of
the Company's total 1993 sales. While these regulations may have a material
effect on the Company's operations if not changed, it will not be possible for
the Company to determine the nature or costs of such effect until the
regulations are issued in final form. The Company recently developed initial
order of magnitude estimates of the costs of complying with these regulations if
they are modified to remove the technological bases that would prevent Rayonier
from manufacturing some of its products. These estimates indicate that with
incremental capital expenditures of approximately $95 million at Jesup, $55
million at Fernandina Beach and $40 million at Port Angeles, the Company could
continue to manufacture its current product line. Such expenditures would most
likely be incurred over several years and not commence before 1995. Rayonier,
however, will continue to argue, both individually and through the industry
trade association, for modifying the proposed operating guidelines further to
eliminate errors it believes the agency has made and Rayonier will continue to
explore new and revised operating and technical process alternatives in lieu of
spending such funds. Rayonier cannot predict, however, whether these efforts
will be successful.
Over the past three years, the harvest of timber from private lands in the
State of Washington has been restricted as a result of the listing of the
northern spotted owl as a threatened species under the Endangered Species Act
("ESA"). These restrictions have caused RTLP to restructure and reschedule some
of its harvest plans. The U.S. Fish and Wildlife Service ("FWS") is developing a
proposed rule under the ESA to redefine protective measures for the northern
spotted owl on private lands. This proposed rule, as currently drafted, would
reduce the harvest restrictions on private lands except within specified special
emphasis areas, where restrictions would be increased. One proposed special
emphasis area is on the Olympic Peninsula, where a significant portion of RTLP's
Washington timberlands is located. The new rule may also include guidelines for
the protection of the marbled murrelet, also recently listed as a threatened
species. Separately, the State of Washington Forest Practices Board is in the
process of adopting new harvest regulations to protect the northern spotted owl
and the marbled murrelet. The State Department of Natural Resources draft of
this rule also provides for a special emphasis area to protect the northern
spotted owl on the Olympic Peninsula, which would increase harvest restrictions
on the Company's lands. The Company is unable at this time to predict the form
in which the Federal or state rules will eventually be adopted. However, if
either rule is adopted in the form proposed by the respective agencies, the
result will be some reduction in the volume of Company timber available for
harvest.
S-11
<PAGE> 13
BUSINESS
GENERAL
Rayonier is a leading international forest products company primarily
engaged in the trading, merchandising and manufacture of logs, timber and wood
products, and in the production and sale of high value added specialty pulps. In
1993, timber and wood products accounted for 51 percent of sales and pulp
products accounted for 49 percent of sales. With customers in over 60 countries,
more than half of Rayonier's 1993 sales of $936 million were shipped to
customers outside of the United States, with Asian and Western European
customers representing 36 percent and 12 percent of total sales in 1993,
respectively. No single customer accounts for more than 8 percent of total
sales.
Rayonier owns, leases or controls approximately 1.5 million acres of
timberland in the United States and New Zealand. In addition, Rayonier operates
three pulp mills and two lumber manufacturing facilities in the United States.
Rayonier traces its origin to the founding of Rainier Pulp and Paper
Company in Shelton, Washington, in 1926. With the consolidation of several pulp
companies in 1937, the Company became "Rayonier Incorporated", a corporation
whose stock was publicly traded on the NYSE until Rayonier became a wholly owned
subsidiary of ITT in 1968. On February 28, 1994, Rayonier again became an
independent company when ITT distributed all of the Common Shares of Rayonier to
ITT stockholders. Rayonier shares are publicly traded on the NYSE under the
symbol "RYN". See "Recent Events."
TIMBER AND WOOD PRODUCTS
Rayonier owns, buys and harvests timber stumpage, and purchases delivered
logs, in North America and New Zealand for subsequent sale into export markets
(primarily to Japan, Korea and China), as well as to domestic lumber and pulp
mills. Rayonier also produces dimension and specialty lumber products for
residential construction and industrial uses.
Rayonier participates in the worldwide timber and wood products business in
three specific ways:
Log Trading and Merchandising -- The Company harvests logs from Company
owned parcels and from third party parcels on which the Company has acquired
cutting rights and purchases logs on the open market. The Company subsequently
packages and sells these logs throughout the world.
Timberlands Management and Stumpage (Standing Timber) Sales -- The Company
manages owned, leased and otherwise controlled timber properties and, after
scientifically growing and nurturing the trees to their economic peak, sells the
cutting rights to the timber on these properties at market prices through
auction or negotiation. See "-- Rayonier Timberlands, L.P."
Wood Products Sales -- The Company manufactures and sells lumber products
for construction and other uses both domestically and in international markets.
Log Trading and Merchandising
Rayonier is a leading supplier and exporter of softwood logs. Rayonier buys
and harvests timber stumpage principally in Northwest North America from third
parties as well as from Company sources on an arm's-length basis, competitively
auctioned or negotiated. The Company also purchases, merchandises and sells
purchased logs from New Zealand, both domestically in New Zealand as well as in
export markets. The sale of logs accounted for approximately 71 percent of the
Timber and Wood Products segment's sales in 1993. In 1993, 64 percent of New
Zealand's sales came from Company-managed timberlands. In North America 8
percent was directly sourced from Rayonier timberlands with an additional 2
percent purchased as logs from local dealers who had, in turn, purchased their
cutting rights from the Company's timberland stumpage sales.
The logs harvested and purchased are sold into export markets (primarily to
Japan, Korea and China), as well as to pulp and lumber mills in domestic
markets. The Company also trades Canadian and
S-12
<PAGE> 14
Russian timber. During 1993, approximately 83 percent of the revenues Rayonier
derived from the sale of logs were from logs sold to export markets.
Timberlands Management and Stumpage (Standing Timber) Sales
Rayonier manages timberlands, scientifically growing and nurturing tree
stands until their economic peak for specific markets. As of December 31, 1993,
Rayonier managed approximately 1.5 million acres of timberlands, with
approximately 863,000 acres or 58 percent located in the Southeastern United
States, approximately 379,000 acres or 25 percent located in the Pacific
Northwest (See "-- Rayonier Timberlands, L.P.") and approximately 253,000 acres
or 17 percent located in New Zealand.
The Company is organized to regularly sell timber stumpage in North America
through auction processes predominately to third parties. By requiring the
Company's other business sectors (e.g., Specialty Pulp Products and Log Trading
and Merchandising) to competitively bid on the stumpage, the Company believes it
can maximize the true economic return on its investment.
Also key to the success of the Company's management of timberlands has been
the extensive application of Rayonier's silvicultural expertise to species
selection for plantations, soil preparation, thinning of timber stands, pruning
of selected species and careful timing of harvest, all designed to maximize
growth and forest yields while responding to environmental needs. The average
rotation age for timber destined for export markets from the Northwestern United
States is 50 years (primarily hemlock and Douglas fir species). The average
rotation age for timber from the Southeastern United States is 25 years for
timber sold to sawmills and 20 years for pulp wood destined for pulp and paper
mills. The Company manages its timberlands on a sustainable yield basis in
conformity with forest industry practices. Management of the Company's forest
resources includes the annual planting of millions of genetically improved
seedlings developed at Rayonier or cooperative nurseries.
The 863,000 acres of Southeastern timberlands are located primarily in
Georgia and Florida. Their proximity to a large number of pulp, paper and lumber
mills results in significant competition for the purchase of Rayonier's timber.
Approximately 726,000 acres are owned in fee and 137,000 acres are held under
long-term leases. The Southeastern timberlands include approximately 554,000
acres of pine plantations, 290,000 acres of hardwood lands and 19,000 non-forest
acres (representing main line and access roads and other acreage not suitable
for forest development). Approximately 60 percent of the timber harvest is
pulpwood, which is destined for pulp mills, with the remaining 40 percent being
higher value sawlogs, which are sold to sawmills. Over the last five years the
Company, through advanced silvicultural practices, has been able to increase the
amount of timber volume per acre available for harvest from its Southeastern
timberlands by approximately 2-3 percent per year and expects this trend to
continue.
The 379,000 acres of the Company's Northwestern timberlands are located
primarily on the Olympic Peninsula in Washington state, are all owned in fee and
consist almost entirely of second-growth trees. The dramatic reduction of
Northwest federal timber supply due to a shift to preservationist management has
significantly increased demand on all alternative private timber supply,
including that of the Company. These timberlands include approximately 322,000
acres of softwood stands, approximately 70 percent of which is hemlock and 30
percent Douglas fir, western red cedar and white fir. The Northwestern
timberlands also include approximately 19,000 acres of hardwood timber stands,
consisting principally of alder and maple. The remaining 38,000 acres are
classified as non-forest lands.
On May 15, 1992, Rayonier, through its wholly owned New Zealand subsidiary,
purchased for approximately $197 million from the New Zealand government forest
assets consisting primarily of Crown Forest licenses providing the right to
utilize approximately 250,000 acres of New Zealand plantation forests for a
minimum period of 35 years. Most of these timberlands consist of radiata pine
trees, with a planting-to-harvesting time of approximately 27 years, well-suited
for the highest quality lumber and panel products. These trees typically produce
up to twice as much fiber per acre, per year as the most productive commercial
tree species in the United States. Rayonier intends to grow and harvest the New
Zealand timber for both domestic New Zealand uses and for export primarily to
Pacific Rim markets. The
S-13
<PAGE> 15
Company believes the acquisition was an important strategic initiative in that
it increased Rayonier's assets employed in the Timber and Wood Products segment
from 29 percent to 40 percent of total assets from 1991 to 1992, further
reducing the effects of the Specialty Pulp Products segment's cyclicality on
Rayonier's earnings and cash flows because of the more stable characteristics of
the timber stumpage business.
Wood Products Sales
Rayonier's two Georgia lumber mills located at Baxley and Swainsboro
convert southern yellow pine timber into dimension and specialty lumber products
for residential construction and industrial uses. The Baxley mill utilizes
modern and technologically advanced equipment, including computer and laser
technology. The other lumber mill (an integrated complex located at Swainsboro
and Lumber City, Georgia) was acquired in October 1993. The mills have a
combined annual capacity of approximately 200 million board feet of lumber and
an annual output of approximately 483,000 tons of wood chips for pulping. The
mills sell their lumber output primarily in Southeastern markets. Their entire
wood chip production, however, is shipped to Rayonier's Jesup, Georgia pulp
facility and accounts for approximately 20 percent of Jesup's pine chip
consumption. The sale of lumber accounted for approximately 9 percent of the
Timber and Wood Products segment's sales in 1993.
Sales of logs and lumber in the Timber and Wood Products segment are made
directly by Rayonier sales personnel to customers, although sales to certain
export locations are made through agents.
SPECIALTY PULP PRODUCTS
Rayonier is a leading specialty manufacturer of chemical cellulose, often
called dissolving pulp, from which customers produce a wide variety of products,
principally textile, industrial and filtration fibers, plastics and other
chemical intermediate industrial products. Rayonier believes that it is one of
the world's largest manufacturers of high grade chemical cellulose. Rayonier
also manufactures fluff pulps that customers use to produce diapers and other
sanitary products, and specialty paper pulps used in the manufacture of products
such as filters and decorative laminates.
Rayonier manufactures its specialty pulp products to customers'
specifications. Approximately half of Rayonier's pulp sales are to export
customers, with the more important overseas markets being Western Europe (23
percent of sales) and Japan (12 percent of sales). Over 90 percent of specialty
pulp products sales are made directly by Rayonier sales personnel. In certain of
the Company's export locations, sales are made with the aid of agents.
Rayonier manufactures more than 25 different grades of pulp. The Company
owns and operates three wood pulp mills which have an aggregate annual capacity
of approximately 826,000 metric tons. Rayonier's wood pulp production facilities
are able to manufacture a broad mix of products to meet customers' needs. The
Company owns wood pulp production facilities in Jesup, Georgia; Fernandina
Beach, Florida; and Port Angeles, Washington. The Jesup facility, a kraft mill
that began operations in 1954 and was subsequently significantly expanded and
modernized, today accounts for approximately 530,000 metric tons of annual wood
pulp production capacity, or 64 percent of Rayonier's current total. The
Fernandina Beach facility began operations in 1939 and accounts for
approximately 146,000 metric tons of annual wood pulp production capacity, or 18
percent of Rayonier's current total. The Port Angeles facility began operations
in 1929 and accounts for approximately 150,000 metric tons of annual wood pulp
production capacity, or 18 percent of Rayonier's current total.
Pulp Pricing
Rayonier believes pulp industry prices are currently at or near a cyclical
low. On an inflation adjusted basis such prices are at or below historical lows.
However, while Rayonier's pricing has been adversely impacted, the Company's
higher value pulps are significantly less cyclical than commodity paper pulp.
S-14
<PAGE> 16
Because Rayonier is a non-integrated market pulp producer, its high value
product mix pricing trends tend to lag (on both the upturn and downturn) pulp
and paper industry trends which are dominated by paper, paperboard and newsprint
products. Over the past ten to twelve years, compared to commodity paper pulp
prices, the Company's price trends for fluff grades have lagged by one to two
quarters and for chemical cellulose by three to four quarters.
FOREIGN SALES AND OPERATIONS
Rayonier relies on foreign markets for its pulp and timber products, with
approximately 50 percent of its sales going to foreign customers during the past
five years. In 1993, Asian markets accounted for 30 percent of U.S. sales and
Western Europe 12 percent. Exports, primarily to Asian markets, also accounted
for 78 percent of Rayonier's New Zealand sales. The Company is therefore
reasonably dependent upon strong economic growth in all international markets as
well as in the United States. With alternate markets in Latin America and the
Middle East, however, the Company has been able to spread its geographical risk
when specific markets have entered economic recessions.
In recent years, substantially all of Rayonier's operating activities have
been in the United States. In May 1992, the Company purchased timber rights in
New Zealand, significantly increasing its overseas assets. Overseas assets
amounted to 15 percent of total assets as of the end of 1993, and Rayonier's
sales from non-U.S. sources in 1993 were 10 percent of total sales.
The following tables summarize the sales, operating income and identifiable
assets of the Company by geographical operating area for the three years ended
December 31, 1993 (in millions of dollars):
<TABLE>
<CAPTION>
OPERATING INCOME
SALES (LOSS) IDENTIFIABLE ASSETS
------------------ ------------------ ------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
---- ---- ---- ---- ---- ---- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States............ $839 $944 $968 $103 $(89) $ 99 $1,248 $1,271 $1,367
New Zealand.............. 93 30 11 27 5 1 226 205 5
All other................ 4 -- -- (3) (3) (3) 1 -- --
---- ---- ---- ---- ---- ---- ------ ------ ------
Total.......... $936 $974 $979 $127 $(87) $ 97 $1,475 $1,476 $1,372
---- ---- ---- ---- ---- ---- ------ ------ ------
---- ---- ---- ---- ---- ---- ------ ------ ------
</TABLE>
DISPOSITIONS/DISCONTINUED OPERATIONS
Dispositions/Discontinued Operations includes units and site facilities no
longer considered integral to Rayonier's business strategy. This segment
includes operations of SWP, the Grays Harbor Complex and other miscellaneous
operations held for disposition.
Management made a determination effective December 31, 1986 to phase out
and discontinue SWP, its treated wood and preserving business subsidiary,
establishing an after-tax provision for its discontinuation. Increases to the
after-tax provision were recorded in 1988 and 1990, primarily as a result of
revisions in Rayonier's estimate of environmental costs for closure,
post-closure, and corrective action programs at SWP.
Rayonier is currently actively involved in implementing cleanup and closure
programs for SWP in compliance with the Resource Conservation and Recovery Act
("RCRA") and is in negotiations with Federal and state environmental agencies on
such programs. The costs of the corrective action and closure programs at SWP's
nine primary manufacturing locations are affected by many factors, which has led
to increases in the reserves for such programs in the past, and may result in
increases in the future, as the effectiveness of the existing cleanup programs
is measured against applicable standards. Expenditures for such programs will
also depend on new laws, regulations and administrative interpretations,
governmental responses to programs proposed by Rayonier and changes in
environmental control technology. Although considerable progress on cleanup was
made by year-end 1993, in particular at three of SWP's nine locations where the
installation of corrective action facilities has been completed, there is still
uncertainty as to the timing and amount of expenditures beyond 1993 at these
sites and the extent and timing for completing programs at all sites.
S-15
<PAGE> 17
In 1992, Rayonier provided $180 million, pre-tax, for the loss on disposal
of assets along with the costs for severance, demolition and other close down
items associated with the disposition of the Grays Harbor Complex. In August
1993, a portion of the Grays Harbor Complex was sold for cash and notes. The
Company is still completing demolition, personnel termination, environmental
remediation and other closure programs.
As of December 31, 1993 the Company had $76 million reserved for
discontinued operations and units held for disposition. Subject to the
uncertainties discussed above, the Company believes that its reserves
established to divest or close all of these business activities are adequate.
The Company further believes that future changes in estimates, if necessary,
will not materially affect the financial condition of the Company.
RAYONIER TIMBERLANDS, L.P.
In the United States, Rayonier manages timberlands and sells timber
stumpage directly through RTLP, a publicly traded master limited partnership.
Rayonier and RFR, a wholly owned subsidiary, are the general partners of RTLP.
Rayonier also owns 74.7 percent of the Class A Limited Partnership Units, the
remaining 25.3 percent being publicly held. Class A Units participate
principally in the revenues, expenses and cash flow associated with RTLP's sales
of timber through December 31, 2000 and to a significantly lesser extent in
subsequent periods. RTLP's sales of timber after that date as well as cash flow
associated with land management activities before and after that date are
principally allocable to the Class B Limited Partnership Units, all of which
have been retained by Rayonier. RTLP, through Rayonier Timberlands Operating
Company, L.P., owns, leases and manages timberlands in the Southeastern and
Northwestern United States previously owned or leased by Rayonier, sells timber
stumpage from such timberlands and from time to time purchases and sells
timberlands. RTLP's timberlands provide a major source of wood used in
Rayonier's other businesses. Since RTLP is majority owned by the Company, RTLP
is included in the Company's consolidated financial statements as a consolidated
entity. The Company's investment in RTLP as of December 31, 1993 was $219
million, on the basis of historical cost.
ENVIRONMENTAL MATTERS
Rayonier's current and future operations are closely linked with the
environment. Timber regeneration, wildlife protection, recycling and waste
reduction, energy conservation and compliance with increasingly stringent
environmental standards are significant factors affecting operations. As a
result, Rayonier closely monitors all of its environmental responsibilities,
together with trends in environmental laws.
Historically, Rayonier has invested substantial capital in order to comply
with Federal, state and local environmental laws and regulations. During 1993,
1992, 1991 and 1990, capital expenditures attributable to environmental
compliance amounted to $3 million, $25 million, $43 million and $15 million,
respectively. By making the anticipated expenditures for its ongoing pollution
abatement program, Rayonier believes that it will continue to meet the
environmental standards now applicable to its various facilities. Failure to
meet applicable pollution control standards could result in interruption or
suspension of operations of the affected facilities, or could require additional
capital expenditures at these facilities in the future.
Rayonier believes that the Clean Air Act Amendments of 1990 (the "CAAA")
will require substantial capital expenditures by the pulp and paper industry
over the next ten years. In particular, regulations recently proposed by the
U.S. Environmental Protection Agency (the "EPA") would require incineration of
volatile pulp mill emissions and scrubbing of similar emissions from bleach
plants. While Rayonier has some of the technology to meet these proposed
regulations in place, it believes that certain parts of this proposal are not
based on sound technology and are outside the authority of the law that the EPA
seeks to apply. During the regulatory comment period, Rayonier expects to file
comments with the EPA documenting this position and seeking to have the EPA
modify these proposed regulations.
S-16
<PAGE> 18
Rayonier believes that many provisions of these proposed regulations, if
adopted in their current form, would also require substantial modifications in
the operations of most mills within the industry. Other provisions of the CAAA
will require more stringent monitoring of mill emissions than has previously
been required in order to demonstrate compliance with air permits to be issued
under Title V of the CAAA. These permits will apply emission limitations on a
facility-wide basis to each of Rayonier's mill operations.
The EPA is also revising effluent guidelines applicable to pulp and paper
facilities under the Clean Water Act (the "CWA"). The proposed regulations,
which are designed to reduce or eliminate the discharge of chlorinated organics,
are, in some cases, based on technological requirements which would prevent
Rayonier from meeting certain product quality specifications for substantially
all of its chemical cellulose products and in other cases will increase the cost
of making its products. Sales of the Company's chemical cellulose products
accounted for approximately 30 percent of the Company's total 1993 sales.
Rayonier expects to file comments with the EPA during the CWA regulatory comment
period to challenge the technical and legal bases of these proposed regulations
and to seek to have the proposals modified by the EPA.
These proposed regulations would also require a large reduction in the
discharge of conventional pollutants from dissolving sulfite mills (Rayonier's
Port Angeles, Washington and Fernandina Beach, Florida mills are dissolving
sulfite mills). Rayonier expects to submit comments challenging the technical
and legal bases for the proposed regulations.
The proposed regulations under the CAAA and CWA are scheduled to be
promulgated in final form by late 1995, and compliance must be achieved within
three years thereafter. Although these regulations, if not changed, may have a
material effect on Rayonier's operations, it will not be possible for Rayonier
to determine the nature or costs of such effect until the regulations are issued
in final form. The Company recently developed initial order of magnitude
estimates of the costs of complying with these regulations if they are modified
to remove the technological bases that would prevent Rayonier from manufacturing
some of its products. These estimates indicate that with incremental capital
expenditures of approximately $95 million at Jesup, $55 million at Fernandina
Beach and $40 million at Port Angeles, the Company could continue to manufacture
its current product line. Such expenditures would most likely be incurred over
several years and not commence before 1995. Rayonier, however, will continue to
argue, both individually and through the industry trade association, for
modifying the EPA's proposed operating guidelines further to eliminate errors it
believes the agency has made and Rayonier will continue to explore new and
revised operating and technical process alternatives in lieu of spending such
funds. Rayonier cannot predict, however, whether these efforts will be
successful.
Over the past three years, the harvest of timber from private lands in the
State of Washington has been restricted as a result of the listing of the
northern spotted owl as a threatened species under the ESA. These restrictions
have caused RTLP to restructure and reschedule some of its harvest plans. The
FWS is developing a proposed rule under the ESA to redefine protective measures
for the northern spotted owl on private lands. This proposed rule, as currently
drafted, would reduce the harvest restrictions on private lands except within
specified special emphasis areas, where restrictions would be increased. One
proposed special emphasis area is on the Olympic Peninsula, where a significant
portion of RTLP's Washington timberlands is located. The new rule may also
include guidelines for the protection of the marbled murrelet, also recently
listed as a threatened species. Separately, the State of Washington Forest
Practices Board is in the process of adopting new harvest regulations to protect
the northern spotted owl and the marbled murrelet. The State Department of
Natural Resources draft of this rule also provides for a special emphasis area
to protect the northern spotted owl on the Olympic Peninsula, which would
increase harvest restrictions on the Company's lands. The Company is unable at
this time to predict the form in which the Federal or state rules will
eventually be adopted. However, if either rule is adopted in the form proposed
by the respective agencies, the result will be some reduction in the volume of
Company timber available for harvest.
S-17
<PAGE> 19
LEGAL PROCEEDINGS
The Company and its wholly owned subsidiary, SWP, are named defendants in
six cases arising out of former wood preserving operations at SWP's plant
located in Augusta, Georgia. In general, these cases, five pending in the U.S.
District Court for the Southern District of Georgia and one pending in the
Superior Court of Richmond County, Georgia, seek recovery for property damage
and personal injury or medical monitoring costs based on the alleged exposure to
toxic chemicals used by SWP in its former operations. One case, Ernest Jordan v.
Southern Wood Piedmont Co., et al., seeks certification as a class action and
damages in the amount of $700 million. Counsel for the Company believes that the
Company has meritorious defenses in all these cases. Several previous lawsuits
related to the Augusta facility have been settled for amounts not material to
the Company.
Rayonier has been named as a "Potentially Responsible Party" ("PRP") or is
a defendant in actions being brought by a PRP in five proceedings instituted by
the EPA under the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA") or by state agencies under comparable state statutes.
In three of these proceedings, Rayonier is presently considered a "de minimis"
participant. In one proceeding, the Company is not a "de minimis" participant
because of the limited number of PRP's, and the Company believes that its share
of liability for total cleanup costs (currently estimated to be between $30
million and $39 million) will be less than 9 percent of the total. In another
proceeding, the Company is not a "de minimis" participant based on an analysis
of the volume and type of waste that the Company is alleged to have disposed of
at the site, and the Company believes that its share of liability for total
cleanup costs (currently estimated to be between $25 million and $32 million)
will be less than 1.75 percent of the total. In each case, Rayonier has
established reserves for its estimated liability. Rayonier has also received
requests for information from the EPA in connection with two other CERCLA sites,
but the Company does not currently know to what extent, if at all, liability
under CERCLA will be asserted against Rayonier with respect to either site.
There are various other lawsuits pending against or affecting Rayonier and
its subsidiaries, some of which involve claims for substantial amounts. The
ultimate liability with respect to all actions pending against Rayonier and its
subsidiaries is not considered material in relation to the consolidated
financial condition of Rayonier and its subsidiaries.
EMPLOYEE RELATIONS
Rayonier currently employs approximately 2,600 people. Of this number,
approximately 2,500 are employees in the United States, of whom 60 percent are
represented by labor unions. Most hourly employees are represented by labor
unions. Generally, labor relations have been maintained in a normal and
satisfactory manner.
The ten labor unions within Rayonier represent approximately 1,500
employees at the three pulp mills and at the Rayonier Research Center.
Bargaining activity in 1993 resulted in a three-year extension of the Port
Angeles pulp mill's two labor agreements. The Fernandina Beach pulp mill
(approximately 300 covered employees) and the Rayonier Research Center
(approximately 25 covered employees) contracts will expire on April 30, 1994 and
August 31, 1994, respectively. During 1995, labor contracts of Rayonier's Jesup
mill will expire, covering approximately 875 employees.
Rayonier has in effect various plans which extend to its employees and
retirees certain group medical, dental and life insurance coverage, pension, and
other benefits. The cost of such benefit plans is borne primarily by Rayonier,
with the exception of health care, for which employees are responsible for
approximately 20 percent of premium costs.
S-18
<PAGE> 20
DESCRIPTION OF THE DEBENTURES
The following description of the particular terms of the Debentures
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
The Debentures will be issued under an indenture dated as of April 1, 1994
(the "Indenture") between the Company and Chemical Bank (the "Trustee").
The Debentures will be limited to $100,000,000 aggregate principal amount
and will mature on , . Each Debenture will bear interest from
, 1994, or from the most recent interest payment date to which
interest has been paid, at the rate of % per annum, payable semiannually on
and , commencing on , 1994, to the person in
whose name such Debenture is registered at the close of business on the
preceding and , respectively.
The Indenture permits defeasance of the Debentures upon satisfaction of the
conditions described under "Description of the Debt Securities -- Defeasance of
Debt Securities and Certain Covenants" in the accompanying Prospectus.
GLOBAL SECURITY
Upon issuance, the Debentures will be represented by a single global
security (the "Global Security") which will be deposited with, or on behalf of,
the Depositary and will be registered in the name of the Depositary or a nominee
of the Depositary.
Upon the issuance of the Global Security, the Depositary or its nominee
will credit on its book-entry registration and transfer system the respective
principal amounts of the individual Debentures represented by the Global
Security to the accounts of persons that have accounts with such Depositary
("Participants"). Such accounts shall be designated by the Underwriters.
Ownership of beneficial interests in the Global Security will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in the Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary or its nominee (with respect to interests of Participants) and
the records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depositary, or its nominee, is the registered owner of the
Global Security, the Depositary or the nominee, as the case may be, will be
considered the sole owner or holder of the Debentures represented by the Global
Security for all purposes under the Indenture. Except as provided below, owners
of beneficial interests in the Global Security will not be entitled to have any
of the individual Debentures represented by the Global Security registered in
their names, will not receive or be entitled to receive physical delivery of any
such Debentures in definitive form and will not be considered the owners or
holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Debentures represented by the Global Security registered in the name of the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security. None of the
Company, the Trustee, any Paying Agent, or the Securities Registrar for such
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interest
of the Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company has been advised by the Depositary that, upon receipt of any
payment of principal, premium or interest in respect of the Global Security, the
Depositary immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
S-19
<PAGE> 21
amount of the Global Security as shown on the records of the Depositary.
Payments by Participants to owners of beneficial interests in the Global
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name".
Such payments will be the responsibility of such Participants.
If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Debentures in exchange
for the Global Security. In addition, the Company may at any time and in its
sole discretion determine not to have any Debentures represented by one or more
Global Securities and, in such event, will issue individual Debentures in
exchange for the Global Security. Further, if the Company so specifies with
respect to the Debentures, an owner of a beneficial interest in the Global
Security may, on terms acceptable to the Company, the Trustee and the
Depositary, receive individual Debentures in exchange for such beneficial
interests. In any such instance, an owner of a beneficial interest in the Global
Security will be entitled to physical delivery of individual Debentures equal in
principal amount to such beneficial interest and to have such Debentures
registered in its name. Individual Debentures of such series so issued will be
issued in denominations, unless otherwise specified by the Company, of $1,000
and integral multiples thereof.
Except as provided above, owners of beneficial interests in the Global
Security will not be entitled to receive physical delivery of Debentures in
definitive form and will not be considered the holders thereof for any purposes
under the Indenture. Accordingly, each person owning a beneficial interest in
the Global Security must rely on the procedures of the Depositary and, if such
person is not a Participant, on the procedures of the Participant through which
such person owns its interest, to exercise any rights of a holder of such
securities under the Indenture. The Depositary may grant proxies and otherwise
authorize Participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action that a holder is entitled to
give or take under the Indenture. The Company understands that under existing
industry practices, in the event that the Company requests any action of holders
or that an owner of a beneficial interest in the Global Security desires to give
or take any action to which a holder is entitled to give or take under the
Indenture, the Depositary would authorize the Participants holding the relevent
beneficial interests to give or take such action, and such Participants would
authorize beneficial owners owning through such Participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A under the Exchange Act. The
Depositary was created to hold the securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant either directly or indirectly.
S-20
<PAGE> 22
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF DEBENTURES
------------------------------------------------------------- ----------------
<S> <C>
Salomon Brothers Inc.........................................
BT Securities Corporation....................................
Morgan Stanley & Co. Incorporated............................
----------------
Total................................................... $
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the Debentures are subject to
certain conditions precedent, that the Underwriting Agreement may be terminated
under certain circumstances, and that the Underwriters will be obligated to
purchase all of the Debentures if any are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose initially to offer the Debentures to the public at the respective public
offering prices set forth on the cover page of this Prospectus Supplement, and
to certain dealers at such prices less a concession of not more than % of the
principal amount with respect to the Debentures. The Underwriters may allow and
such dealers may reallow a concession of not more than % of the principal
amount of the Debentures to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments which the Underwriters may be required to make in respect
thereof.
The Underwriters have provided and may in the future provide investment
banking or other financial services to the Company and its affiliates in the
ordinary course of business, for which they have received and may in the future
receive customary fees. Banker's Trust Company, an affiliate of BT Securities
Corporation, one of the Underwriters, acts as trustee under one of the Company's
indentures, acts as trustee under the Company's salaried employees savings plan
and as investment manager for certain funds under such plan, and acts as
depositary for funds of, makes loans to, and performs other services for, the
Company and its subsidiaries in the normal course of business.
As indicated on the cover page hereof, the Company has applied for the
listing of the Debentures on the NYSE. In addition, the Company has been advised
by the Underwriters that they presently intend to make a market in the
Debentures, as permitted by applicable laws and regulations. However, such
market-making may be discontinued at any time and, accordingly, no assurance can
be given as to the market for, or the liquidity of, the Debentures.
S-21
<PAGE> 23
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SUPPLEMENT OR THE 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, AGENT OR DEALER. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE DEBENTURES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND/OR THE PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.
- -------------------------------------------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Rayonier Inc......................... S-2
Use of Proceeds...................... S-4
Capitalization....................... S-4
Summary of Historical Financial and
Operating Data..................... S-5
Segment Information.................. S-7
Recent Events........................ S-7
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... S-8
Business............................. S-12
Description of the Debentures........ S-19
Underwriting......................... S-21
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Rayonier Inc. ....................... 3
Use of Proceeds...................... 4
Ratio of Earnings to Fixed Charges... 4
Description of the Debt Securities... 5
Plan of Distribution................. 13
Legal Matters........................ 14
Experts.............................. 14
</TABLE>
$100,000,000
RAYONIER INC.
% DEBENTURES DUE
SALOMON BROTHERS INC
BT SECURITIES CORPORATION
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED , 1994
<PAGE> 24
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH , 1994
$174,000,000
RAYONIER INC.
SERIES B MEDIUM-TERM NOTES
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
------------------------
The Company may offer from time to time its Series B Medium-Term Notes, due
9 months or more from the date of issue (the "Notes"), as selected by the
purchaser and agreed to by the Company, at an aggregate initial public offering
price not to exceed U.S. $174,000,000.
The Notes will be denominated in U.S. dollars. The Notes may be issued with
the principal amount thereof payable at maturity, or the amount of interest
payable on an interest payment date, to be determined by reference to an index
(e.g., currencies, composite currencies, commodities or financial or
non-financial indices) ("Indexed Notes"), as specified in the applicable Pricing
Supplement. The index (if any), interest rate (if any), issue price and maturity
date of any Note will be set forth in a pricing supplement (a "Pricing
Supplement") to this Prospectus Supplement. Notes may also be issued as
Amortizing Notes (as defined herein), as disclosed herein. See "Description of
Notes."
Unless otherwise specified in the applicable Pricing Supplement, the Notes,
except Zero Coupon Notes (as defined), will bear interest at a fixed rate or
rates (a "Fixed Rate Note") or at a floating rate (a "Floating Rate Note")
determined by reference to the Commercial Paper Rate, the Prime Rate, LIBOR, the
Treasury Rate, the CD Rate, the Federal Funds Rate or such other interest rate
formula as set forth in the Pricing Supplement, as adjusted by the Spread or
Spread Multiplier, if any, applicable to such Notes (as such terms are defined
herein). Interest rates and interest rate formulas are subject to change by the
Company, but no such change will affect any Notes already issued or as to which
an offer to purchase has been accepted by the Company. Unless otherwise
specified in the applicable Pricing Supplement, interest on the Fixed Rate Notes
will be payable on each May 15 and November 15 and at Maturity (as defined
herein). Interest on the Floating Rate Notes will be payable on the dates
specified therein and in the applicable Pricing Supplement. Zero Coupon Notes
will not bear interest.
Unless a redemption commencement date (a "Redemption Commencement Date") or
a repayment date (a "Repayment Date") is specified in the applicable Pricing
Supplement, the Notes will not be redeemable or repayable prior to their Stated
Maturity. If a Redemption Commencement Date or a Repayment Date is so specified,
the Notes will be redeemable at the option of the Company, or repayable at the
option of the holder (the "Holder"), or both (as specified therein) at any time
after such date (or for a limited period) as described herein and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
offered hereby will be issued in global or definitive form in a minimum
denomination of U.S. $1,000, and integral multiples of $1,000 in excess thereof,
as specified in the applicable Pricing Supplement. If Notes are issued in global
form, a global Note representing Book-Entry Notes will be registered in the name
of the nominee of The Depository Trust Company, which will act as Depositary.
Interests in Book-Entry Notes will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary (with respect to
participants' interests) and its participants. Except as described herein under
"Description of Notes -- Book-Entry System", owners of beneficial interests in a
global Note will not be considered the Holders thereof and will not be entitled
to receive physical delivery of Notes in definitive form, and no global Note
will be exchangeable except for another global Note of like denomination and
terms to be registered in the name of the Depositary or its nominee. See
"Description of Notes."
------------------------
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 SUPPLEMENT, ANY
PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
-----------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................................... % % - % % - %
Total.................................................. $174,000,000 $ - $ $ - $
</TABLE>
- ---------------
(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Company will pay the Agents a commission of from % to % of the
principal amount of any Notes, depending on maturity, for sales made through
them as agents of Notes with a maturity of less than 40 years; the
commission to be paid by the Company to the Agents on any sale of Notes with
a maturity of 40 years or more will be negotiated at the time of sale.
Unless otherwise specified in the applicable Pricing Supplement, any Note
sold to an Agent as principal will be purchased by such Agent at a price
equal to 100% of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical maturity, and
may be resold by such Agent to investors or other purchasers at varying
prices relating to prevailing market prices at the time of resale to be
determined by such Agent. The Company has agreed to indemnify the Agents
against certain liabilities, including liabilities under the Securities Act
of 1933.
(3) Before deducting estimated expenses of $ payable by the Company,
including $ of estimated expenses of the Agents to be reimbursed by
the Company.
------------------------
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Company. Notes may be sold to
the Agents on their own behalf at negotiated discounts. The Company may also
sell Notes to an Agent acting as principal for its own account for resale to one
or more investors and other purchasers at varying prices related to prevailing
market prices at the time of resale or otherwise, to be determined by such
Agent. The Company reserves the right to sell Notes directly on its own behalf.
The Company also reserves the right to withdraw, cancel or modify the offering
contemplated hereby without notice. No termination date for the offering of the
Notes has been established. The Company or the Agents may reject any order as a
whole or in part. The Notes are a new issue of securities with no established
trading market and will not be listed on any securities exchange. No assurance
can be given as to the existence or liquidity of the secondary market for the
Notes. See "Supplemental Plan of Distribution."
LAZARD FRERES & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
------------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH , 1994.
<PAGE> 25
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
S-2
<PAGE> 26
USE OF PROCEEDS
Except as otherwise provided in the applicable Pricing Supplement, the net
proceeds from the sale of the Notes will be added to the Company's general funds
and will be used for general corporate purposes, including, but not limited to,
additions to working capital and capital expenditures and the repayment of loans
under bank credit agreements and other short-term debt. Pending such use, the
net proceeds may be used to make short-term investments.
S-3
<PAGE> 27
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth in
the accompanying Prospectus, to which description reference is hereby made. The
following description of the Notes will apply to the Notes unless otherwise
specified in the applicable Pricing Supplement.
The Notes will be issued under an Indenture dated September 1, 1992 (the
"Indenture") between the Company and Bankers Trust Company, a New York banking
corporation (the "Trustee"). The Notes constitute a new series for purposes of
the Indenture and are limited in amount as set forth on the cover page hereof,
less an amount equal to the aggregate initial offering price of any other Debt
Securities (as defined in the Prospectus) issued from time to time after the
date of this Prospectus Supplement. For a description of the rights attaching to
different series of Debt Securities under the Indenture, see "Description of the
Debt Securities" in the Prospectus.
Unless previously redeemed, a Note will mature on a date ("Stated
Maturity"), 9 months or more from its date of issue, that is specified on the
face thereof and in the applicable Pricing Supplement. As used herein, the term
"Market Day" means (a) with respect to any Note (other than any LIBOR Note), any
Business Day, and (b) with respect to any LIBOR Note, any such Business Day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market. The term "Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in The City
of New York generally are authorized or obligated by law or executive order to
close. Each Note will be denominated in U.S. dollars.
Purchasers of the Notes are required to pay for them by delivery of the
requisite amount of U.S. dollars to an Agent, unless other arrangements have
been made. Payments on the Notes will be made in U.S. dollars. See "Payment of
Principal and Interest".
Each Note will be represented by either a global security (a "Global
Security") registered in the name of a nominee of the Depositary (each such Note
represented by a Global Security being herein referred to as a "Book-Entry
Note") or a certificate issued in definitive registered form, without coupons (a
"Certified Note"), as set forth in the applicable Pricing Supplement. Except as
set forth under "Book-Entry System" below, Book-Entry Notes will not be issuable
in certificated form. So long as the Depositary or its nominee, as the case may
be, is the registered owner of any Global Security, the Depositary or its
nominee, as the case may be, will be considered the sole Holder of the
Book-Entry Note or Notes represented by such Global Security for all purposes
under the Indenture and the Book-Entry Notes. See "Book-Entry System" below.
Certificated Notes may be presented for registration of transfer or
exchange at the Corporate Trust and Agency Group of Bankers Trust Company in the
Borough of Manhattan, The City of New York.
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of any Note will be U.S. $1,000 and integral multiples
of U.S. $1,000 in excess thereof.
Notes will be sold in individual issues of Notes having such interest rate
or interest rate formula, if any, Stated Maturity and date of original issuance
as shall be selected by the initial purchasers and agreed to by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, each Note will
bear interest at either (i) a fixed rate (a "Fixed Rate Note"), which may be
zero in the case of Notes issued at a discount from the principal amount payable
at maturity thereof (a "Zero Coupon Note") or (ii) a floating rate (a "Floating
Rate Note") determined by reference to the interest rate formula which may be
adjusted by adding or subtracting the Spread or multiplying by the Spread
Multiplier (such terms as defined in "-- Floating Rate Notes" below).
The Notes may be issued as Original Issue Discount Notes. An Original Issue
Discount Note is a Note, including any Zero Coupon Note, which is issued at a
price lower than the principal amount thereof and which
S-4
<PAGE> 28
provides that upon redemption or acceleration of the maturity thereof an amount
less than the principal thereof shall become due and payable. In the event of
redemption or acceleration of the maturity of an Original Issue Discount Note,
the amount payable to the Holder of such Note upon such redemption or
acceleration will be determined in accordance with the terms of the Note, but
will be an amount less than the amount payable at the Stated Maturity of such
Note. In addition, a Note issued at a discount may, for U.S. Federal income tax
purposes, be considered an original issue discount note, regardless of the
amount payable upon redemption or acceleration of maturity of such Note. See
"United States Federal Taxation" below.
Notes may be issued from time to time as Amortizing Notes. "Amortizing
Notes" are Notes for which payments of principal and interest are made in
installments over the life of the Note. Interest on each Amortizing Note will
be, unless otherwise specified in the applicable Pricing Supplement, computed on
the basis of a 360-day year of twelve 30-day months. Payments with respect to
Amortizing Notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof. A table setting
forth repayment information in respect of each Amortizing Note will be provided
in the applicable Pricing Supplement.
Indexed Notes may be issued with the principal amount payable at maturity,
or the amount of interest payable on an interest payment date, to be determined
by reference to a currency exchange rate, composite currency, commodity price or
other financial or nonfinancial index as set forth in the applicable Pricing
Supplement. Holders of Indexed Notes may receive a principal amount at maturity
that is greater than, equal to or less than the face amount of such Notes
depending upon the value at maturity of the applicable index. Information as to
the methods for determining the principal amount payable at maturity or the
amount of interest payable on an interest payment date, as the case may be, any
currency or commodity market to which principal or interest is indexed, foreign
exchange risks and certain additional tax considerations with respect to Indexed
Notes will be set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund and, unless a Redemption Commencement
Date or a Repayment Date is specified in the applicable Pricing Supplement, will
not be redeemable or repayable prior to their Stated Maturity. If a Redemption
Commencement Date is so specified with respect to any Note, the applicable
Pricing Supplement will also specify one or more redemption prices (expressed as
a percentage of the principal amount of such Note) ("Redemption Price") and the
redemption period or periods ("Redemption Periods") during which such Redemption
Prices shall apply. Unless otherwise specified in the Pricing Supplement, any
such Note shall be redeemable at the option of the Company or repayable at the
option of the Holder thereof (as specified in such Pricing Supplement) at any
time on or after such specified Redemption Commencement Date or Repayment Date,
as the case may be, or, with respect to redeemed Notes, for a limited period (as
specified in such Pricing Supplement) at the specified Redemption Price
applicable to the Redemption Period during which such Note is to be redeemed,
together with interest accrued to the redemption date. Notice of redemption
shall be given not later than 30 days, and not earlier than 60 days, prior to
the date fixed for redemption. With respect to the redemption of Global
Securities, the Depositary advises that if less than all of the Notes with like
tenor and terms are to be redeemed, the particular interests (in integral
multiples of $1,000) in the Book-Entry Notes representing the Notes to be
redeemed shall be selected by the Depositary's impartial lottery procedures.
The Pricing Supplement relating to each Note will describe the following
terms: (i) the price (expressed as a percentage of the aggregate principal
amount thereof) at which such Note will be issued; (ii) the date on which such
Note will be issued; (iii) the date on which such Note will mature; (iv) whether
such Note is a Fixed Rate Note or a Floating Rate Note; (v) if such Note is a
Fixed Rate Note, the rate per annum at which such Note will bear interest, if
any, and the interest payment date or dates, if different from those set forth
below under "Fixed Rate Notes"; (vi) if such Note is a Floating Rate Note, the
interest rate basis (the "Interest Rate Basis") for each such Floating Rate Note
which will be (a) the Commercial Paper Rate, in which case such Note will be a
Commercial Paper Rate Note, (b) the Prime Rate, in which case such Note will be
a Prime Rate Note, (c) the London InterBank Offered Rate ("LIBOR"), in which
case such Note will be a LIBOR Note, (d) the Treasury Rate, in which case such
Note will be a Treasury Rate Note, (e) the CD Rate, in which case such Note will
be a CD Rate Note, (f) the Federal Funds Rate, in which case such
S-5
<PAGE> 29
Note will be a Federal Funds Rate Note, or (g) such other interest rate formula
as is set forth in such Pricing Supplement, and, if applicable, the Calculation
Agent, the Index Maturity, the Spread or Spread Multiplier, the Maximum Interest
Rate, the Minimum Interest Rate, the Initial Interest Rate, the Floating Rate
Note Interest Payment Dates, the Regular Record Dates, the Calculation Date, the
Interest Determination Date and the Interest Reset Date (as such terms are
defined herein) with respect to such Floating Rate Note; (vii) whether such Note
is an Original Issue Discount Note, and, if so, the yield to maturity; (viii)
whether such Note is an Indexed Note, and, if so, the principal amount thereof
payable at maturity, or the amount of interest payable on an interest payment
date, as determined by reference to the applicable index, in addition to certain
other information relating to the Indexed Note; (ix) whether such Note may be
redeemed at the option of the Company, or repaid at the option of the holder,
prior to the Stated Maturity and, if so, the provisions relating to such
redemption or repayment; (x) whether such Note will be issued initially as a
Book-Entry Note or a Certificated Note; and (xi) any other terms of such Note
not inconsistent with the provisions of the Indenture.
FIXED RATE NOTES
Each Fixed Rate Note (except any Zero Coupon Note) will bear interest from
its date of issue or from the most recent Interest Payment Date to which
interest on such Note has been paid or duly provided for at the fixed rate per
annum stated on the face thereof and in the applicable Pricing Supplement until
the principal thereof is paid or made available for payment. Unless otherwise
specified in the applicable Pricing Supplement, interest on such Fixed Rate
Notes will be payable semiannually on each May 15 and November 15 (each an
"Interest Payment Date") and at maturity or upon earlier redemption or
repayment. Each payment of interest in respect of an Interest Payment Date will
include interest accrued to but excluding such Interest Payment Date. Interest
on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve
30-day months. Interest will be payable on each Interest Payment Date and at
maturity as specified below under "-- Payment of Principal and Interest."
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its date of issue or from
the most recent Floating Rate Note Interest Payment Date (as defined herein) to
which interest on such Note has been paid or duly provided for, unless the
applicable Interest Reset Dates are daily or weekly, in which case from the day
following the most recent Regular Record Date to which interest on such Note has
been paid or duly provided for, at the rate per annum determined pursuant to the
interest rate formula stated therein and in the applicable Pricing Supplement
until the principal thereof is paid or made available for payment. Interest will
be payable on each Floating Rate Note Interest Payment Date and at maturity as
specified below under "-- Payment of Principal and Interest."
The interest rate for each Floating Rate Note will be determined by
reference to an interest rate formula which may be adjusted by adding or
subtracting the Spread, if any, or multiplying by the Spread Multiplier, if any
(both terms as defined below). A Floating Rate Note may also have either or both
of the following: (a) a maximum interest rate limitation, or ceiling, on the
rate of interest which may accrue during any interest period (a "Maximum
Interest Rate"); and (b) a minimum interest rate limitation, or floor, on the
rate of interest which may accrue during any interest period (a "Minimum
Interest Rate"). The "Spread" is the number of basis points specified in the
applicable Pricing Supplement as being applicable to the interest rate for such
Note, and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to the interest rate for such Note.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as specified in the applicable Pricing Supplement. Unless otherwise
provided in the applicable Pricing Supplement, Bankers Trust Company will be the
calculation agent (the "Calculation Agent") with respect to the Floating Rate
Notes.
Unless otherwise specified in the applicable Pricing Supplement, the rate
of interest on each Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually (each an "Interest Reset Date"), as
specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing
S-6
<PAGE> 30
Supplement, the Interest Reset Date will be, in the case of Floating Rate Notes
which reset daily, each Business Day; in the case of Floating Rate Notes (other
than Treasury Rate Notes) which reset weekly, the Wednesday of each week; in the
case of Treasury Rate Notes which reset weekly, the Tuesday of each week; in the
case of Floating Rate Notes which reset monthly, the third Wednesday of each
month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semi-annually, the third Wednesday of two months of each year
as specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of one month of each year
as specified in the applicable Pricing Supplement; provided, however, that (a)
the interest rate in effect from the date of issue to the first Interest Reset
Date with respect to a Floating Rate Note will be the Initial Interest Rate (as
set forth in the applicable Pricing Supplement) and (b) unless otherwise
specified in the applicable Pricing Supplement, the interest rate in effect for
the ten days immediately prior to maturity of a Note will be that in effect on
the tenth day preceding such maturity. If any Interest Reset Date for any
Floating Rate Note would otherwise be a day that is not a Market Day with
respect to such Floating Rate Note, the Interest Reset Date for such Floating
Rate Note shall be postponed to the next day that is a Market Day with respect
to such Floating Rate Note, except that in the case of a LIBOR Note, if such
Market Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day.
The "Interest Determination Date" pertaining to an Interest Reset Date for
a Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), for a Prime Rate Note (the "Prime Rate Interest Determination Date"),
for a LIBOR Note (the "LIBOR Interest Determination Date"), for a CD Rate Note
(the "CD Rate Interest Determination Date") and for a Federal Funds Rate Note
(the "Federal Funds Rate Interest Determination Date") will be the second Market
Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be auctioned. Treasury
bills are usually sold at auction on the Monday of each week, unless that day is
a legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first Market Day immediately following
such auction date.
All percentages resulting from any calculations referred to in this
Prospectus Supplement will be rounded upwards, if necessary, to the next higher
one hundred-thousandth of a percentage point (e.g., 9.876541% (or .09876541)
being rounded to 9.87655% (or .0987655)), and all U.S. dollar amounts used in or
resulting from such calculations will be rounded to the nearest cent (with
one-half cent or more being rounded upwards).
In addition to any maximum interest rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on the
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law, as the same may be modified by United States law of general
application. Under present New York law the maximum rate of interest is 25% per
annum on a simple interest basis, with certain exceptions. The limit may not
apply to Floating Rate Notes in which U.S. $2,500,000 or more has been invested.
The Calculation Agent will calculate the interest rate with respect to each
Interest Reset Date on or before the applicable Calculation Date (as defined
below). Upon the request of the Holder of any Floating Rate Note, the
Calculation Agent will provide the interest rate then in effect, and, if
determined, the interest rate which will become effective on the next Interest
Reset Date with respect to such Floating Rate Note. The Calculation Agent's
determination of any interest rate will be final and binding in the absence of
manifest error.
S-7
<PAGE> 31
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or Spread
Multiplier, if any), and will be payable on the dates, specified on the face of
the Commercial Paper Rate Note and in the applicable Pricing Supplement. Unless
otherwise indicated in the applicable Pricing Supplement, the "Calculation Date"
pertaining to a Commercial Paper Interest Determination Date will be the tenth
day after such Commercial Paper Interest Determination Date or, if any such day
is not a Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Reset Date, the
Money Market Yield (calculated as described below) of the per annum rate (quoted
on a bank discount basis) for the relevant Commercial Paper Interest
Determination Date for commercial paper having the specified Index Maturity as
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper". In the event that such rate
is not published at or prior to 9:00 A.M., New York City time, on the relevant
Calculation Date, then the Commercial Paper Rate with respect to such Interest
Reset Date shall be the Money Market Yield of such rate on such Commercial Paper
Interest Determination Date for commercial paper having the specified Index
Maturity as published by the Federal Reserve Bank of New York in its daily
statistical release, "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication published by the Federal Reserve Bank
of New York ("Composite Quotations") under the heading "Commercial Paper". If by
3:00 P.M., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, the Commercial Paper Rate
with respect to such Interest Reset Date shall be calculated by the Calculation
Agent and shall be the Money Market Yield of the arithmetic mean of the offered
per annum rates (quoted on a bank discount basis), as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index Maturity placed
for an industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency; provided, however, that if fewer than three
dealers selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Commercial Paper Rate with respect to such Interest Reset
Date will be the Commercial Paper Rate in effect on such Commercial Paper
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
<TABLE>
<S> <C>
Money Market Yield = 100 X 360 X D
360-(D X M)
</TABLE>
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal calculated to seven decimal places,
without rounding; and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread or Spread Multiplier, if any), and
will be payable on the dates specified on the face of the Prime Rate Note and in
the applicable Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, the "Calculation Date" pertaining to a Prime Rate Interest
Determination Date will be the tenth day after such Prime Rate Interest
Determination Date or, if any such day is not a Market Day, the next succeeding
Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Reset Date, the rate set forth for the
relevant Prime Rate Interest Determination Date in H.15(519) under the heading
"Bank Prime Loan". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the Prime Rate
with respect to such
S-8
<PAGE> 32
Interest Reset Date will be the arithmetic mean (determined by the Calculation
Agent) of the rates of interest publicly announced by each bank that appears on
the display designated as page "NYMF" on the Reuters Monitor Money Rates Service
(or such other page as may replace the NYMF page on that service for the purpose
of displaying prime rates or base lending rates of major United States banks)
("Reuters Screen NYMF Page") as such bank's prime rate or base lending rate as
in effect for such Prime Rate Interest Determination Date. If fewer than four
such rates appear on the Reuters Screen NYMF Page on such Prime Rate Interest
Determination Date, the Prime Rate with respect to such Interest Reset Date will
be the arithmetic mean (determined by the Calculation Agent) of the prime rates
or base lending rates (quoted on the basis of the actual number of days in the
year divided by a 360-day year) as of the close of business on such Prime Rate
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent; provided, however, that if fewer than three
banks selected as aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, the Prime Rate with respect to such Interest Reset Date will be
the Prime Rate in effect on such Prime Rate Interest Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any), and will be
payable on the dates specified on the face of the LIBOR Note and in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the "Calculation Date" with respect to a LIBOR Interest
Determination Date will be the tenth day after such LIBOR Interest Determination
Date or, if any such day is not a Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR,
with respect to any Interest Reset Date, will be determined by the Calculation
Agent in accordance with the following provisions:
(i) On the relevant LIBOR Interest Determination Date, LIBOR will be
determined on the basis of the offered rates for deposits of not less than
U.S. $1,000,000 having the specified Index Maturity, commencing on the
second Market Day immediately following such LIBOR Interest Determination
Date, which appear on the Designated LIBOR Page (as defined herein) as of
11:00 A.M., London time. "Designated LIBOR Page" means "LIBOR Telerate,"
which shall be the display designated as page "3750" on the Dow Jones
Telerate Service (or such other page as may replace page "3570" on such
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying the London interbank offered
rates of major banks), unless "LIBOR Reuters" is designated in the
applicable Pricing Supplement, in which case "Designated LIBOR Page" means
the display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on such service or
such other service as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates of major
banks). If at least two such offered rates appear on the Designated LIBOR
Page, LIBOR with respect to such Interest Reset Date will be the arithmetic
mean of such offered rates as determined by the Calculation Agent. If fewer
than two offered rates appear, LIBOR with respect to such Interest Reset
Date will be determined as described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates for the applicable Index Maturity appear on
the Designated LIBOR Page as described in (i) above, LIBOR will be
determined on the basis of the rates at approximately 11:00 A.M., London
time, on such LIBOR Interest Determination Date at which deposits in U.S.
dollars having the specified Index Maturity are offered to prime banks in
the London interbank market by four major banks in the London interbank
market selected by the Calculation Agent commencing on the second Market
Day immediately following such LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000 that
in the Calculation Agent's judgment is representative for a single
transaction in such market at such time (a "Representative Amount"). The
Calculation Agent will request the principal London office of each of such
banks to provide a quotation of its rate. If at least two such quotations
are provided, LIBOR with respect to such Interest Reset Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR with respect to such Interest
S-9
<PAGE> 33
Reset Date will be the arithmetic mean of the rates quoted at approximately
11:00 A.M., New York City time, on such LIBOR Interest Determination Date
by three major banks in The City of New York, selected by the Calculation
Agent, for loans in U.S. dollars to lending European banks having the
specified Index Maturity commencing on the Interest Reset Date and in a
Representative Amount; provided, however, that if fewer than three banks
selected as aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, LIBOR with respect to such Interest Reset Date will be the
LIBOR in effect on such LIBOR Interest Determination Date.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any)
and will be payable on the dates specified on the face of the Treasury Rate Note
and in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, the "Calculation Date" with respect to a Treasury
Interest Determination Date will be the tenth day after such Treasury Interest
Determination Date or, if any such day is not a Market Day, the next succeeding
Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Reset Date, the rate for the auction
on the relevant Treasury Interest Determination Date of direct obligations of
the United States ("Treasury Bills") having the specified Index Maturity as
published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New
York City time, on the relevant Calculation Date, the auction average rate
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that the
results of such auction of Treasury bills having the specified Index Maturity
are not published or reported as provided above by 3:00 P.M., New York City
time, on such Calculation Date, or if no such auction is held by the relevant
Interest Determination Date, then the Treasury Rate shall be the rate set forth
in H.15(519) for the relevant Treasury Rate Interest Determination Date for the
specified Index Maturity under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market". In the event such rate is not so published by 3:00
P.M., New York City time, on the relevant Calculation Date, the Treasury Rate
with respect to such Interest Reset Date shall be calculated by the Calculation
Agent and shall be the yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates as of approximately
3:30 P.M., New York City time, on such Treasury Interest Determination Date, of
three leading primary United States government securities dealers in The City of
New York selected by the Calculation Agent for the issue of Treasury bills with
a remaining maturity closest to the specified Index Maturity; provided, however,
that if fewer than three dealers selected as aforesaid by the Calculation Agent
are quoting as mentioned in this sentence, the Treasury Rate with respect to
such Interest Reset Date will be the Treasury Rate in effect on such Treasury
Interest Determination Date.
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any), and will
be payable on the dates specified on the face of the CD Rate Note and in the
applicable Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, the "Calculation Date" pertaining to a CD Rate Interest
Determination Date will be the tenth day after such CD Rate Interest
Determination Date or, if such day is not a Market Day, the next succeeding
Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Reset Date, the rate for the relevant CD
Rate Interest Determination Date for negotiable certificates of deposit having
the specified Index Maturity as published in H.15(519) under the heading "CDs
(Secondary Market)". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the CD Rate
with respect to such Interest Reset Date shall be the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having the
specified Index
S-10
<PAGE> 34
Maturity as published in Composite Quotations under the heading "Certificates of
Deposit". If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not published in either H.15(519) or Composite Quotations, the CD Rate
with respect to such Interest Reset Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean of the secondary market offered rates, as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers of negotiable U.S. dollar certificates of
deposit in the City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money center banks with a
remaining maturity closest to the specified Index Maturity in a denomination of
U.S. $5,000,000; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the CD Rate with respect to such Interest Reset Date will be the CD Rate in
effect on such CD Rate Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any), and will be payable on the dates specified on the face of
the Federal Funds Rate Note and in the applicable Pricing Supplement. Unless
otherwise indicated in the applicable Pricing Supplement, the "Calculation Date"
pertaining to a Federal Funds Interest Determination Date will be the tenth day
after such Federal Funds Interest Determination Date or, if such day is not a
Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Reset Date, the rate on the
relevant Federal Funds Interest Determination Date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)". In the
event that such rate is not published prior to 9:00 A.M., New York City time, on
the relevant Calculation Date, then the Federal Funds Rate with respect to such
Interest Reset Date will be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, the Federal Funds Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean of
the rates, as of 9:00 A.M., New York City time, on such Federal Funds Interest
Determination Date, for the last transaction in overnight Federal Funds arranged
by three leading brokers and Federal Funds transactions in The City of New York
selected by the Calculation Agent; provided, however, that if fewer than three
brokers selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Federal Funds Rate with respect to such Interest Reset
Date will be the Federal Funds Rate in effect on such Federal Funds Interest
Determination Date.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of principal of (and premium, if any) and interest on all Fixed
Rate Notes and Floating Rate Notes will be made in U.S. dollars. If specified in
the applicable Pricing Supplement, the amount of principal payable on the Notes
therein described will be determined by reference to an index or formula
described in such Pricing Supplement.
Interest will be payable to the person in whose name a Note is registered
(which in the case of Global Securities representing Book-Entry Notes will be
the Depositary or a nominee of the Depositary) at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, that interest payable at maturity will be payable to the person to whom
principal shall be payable (which in the case of Global Securities representing
Book-Entry Notes will be the Depositary or a nominee of the Depositary). The
first payment of interest on any Note originally issued between a Regular Record
Date and an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the Holder on such next
succeeding Regular Record Date. Unless otherwise indicated in the applicable
Pricing Supplement, the "Regular Record Date" with respect to any Floating Rate
Note shall be the date 15 calendar days prior to each Interest Payment Date,
whether or not such date shall be a Business
S-11
<PAGE> 35
Day, and the "Regular Record Date" with respect to any Fixed Rate Note shall be
the May 1 and November 1 next preceding the May 15 and November 15 Interest
Payment Dates.
Unless otherwise indicated in the applicable Pricing Supplement, and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year (as
indicated in the applicable Pricing Supplement); in the case of Floating Rate
Notes which reset quarterly, on the third Wednesday of March, June, September
and December of each year; in the case of Floating Rate Notes which reset
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and in the case of Floating Rate Notes which
reset annually, on the third Wednesday of the month specified in the applicable
Pricing Supplement (each a "Floating Rate Note Interest Payment Date"), and in
each case, at maturity.
Payments of interest on any Fixed Rate Note or Floating Rate Note with
respect to any Interest Payment Date or Floating Rate Note Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date or
Floating Rate Note Interest Payment Date; provided, however, that if the
Interest Reset Date with respect to any Floating Rate Note are daily or weekly,
interest payable on such Note on any Interest Payment Date, unless otherwise
specified in the applicable Pricing Supplement, will include interest accrued to
and including the next preceding Regular Record Date, except that at maturity or
earlier redemption or repayment, the interest payable will include interest
accrued to, but excluding, the maturity, redemption or repayment date.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from the last date to which
interest has been paid, to but excluding the date for which accrued interest is
being calculated. Unless otherwise specified in the applicable Pricing
Supplement, the interest factor (expressed as a decimal calculated to seven
decimal places) for each such day is computed by dividing the interest rate
(expressed as a decimal calculated to seven decimal places) applicable to such
date by 360, in the case of Commercial Paper Rate Notes, Prime Rate Notes, LIBOR
Notes, CD Rate Notes or Federal Funds Rate Notes, or by the actual number of
days in the year, in the case of Treasury Rate Notes. Interest on Fixed Rate
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date for any Floating Rate Note would otherwise be
a day that is not a Market Day, unless such Interest Payment Date is also the
date of maturity, such Interest Payment Date shall be the next day that is a
Market Day, except that, in the case of a LIBOR Note, if such Market Day is in
the next succeeding calendar month, such Interest Payment Date shall be the next
preceding Market Day. If the date of maturity for any Fixed Rate Note or
Floating Rate Note or any Interest Payment Date for any Fixed Rate Note falls on
a day which is not a Market Day, payment of principal and any premium and
interest with respect to such Note will be paid on the next succeeding Market
Day, with the same force and effect as if made on such date and no interest on
such payment will accrue from and after such date.
Unless otherwise specified in the applicable Pricing Supplement, payment of
the principal of (and premium, if any) and any interest due with respect to any
Certificated Note at maturity will be made in immediately available funds upon
surrender of such Note at the Corporate Trust and Agency Group of Bankers Trust
Company in the Borough of Manhattan, The City of New York; provided that the
Certificated Note is presented to the Paying Agent in time for the Paying Agent
to make such payments in such funds in accordance with its normal procedures.
Payments of interest with respect to Certificated Notes to be made other than at
maturity will be made by check mailed to the address of the person entitled
thereto as it appears in the security register (or by wire transfer to those
persons holding Notes with an aggregate principal amount of greater than $5
million) to such account as may have been appropriately designated by such
Person in time for the Paying Agent to make such payment in accordance with its
normal procedures.
The total amount of any principal, premium, if any, and interest due on any
Global Security representing one or more Book-Entry Notes on any Interest
Payment Date or at maturity will be made available to the
S-12
<PAGE> 36
Trustee on such date. As soon as possible thereafter, the Trustee will make such
payments to The Depository Trust Company, New York, New York (the "Depositary").
The Depositary will allocate such payments to each Book-Entry Note represented
by such Global Security and make payments to its participants in accordance with
its existing operating procedures. Neither the Company nor the Trustee shall
have any responsibility or liability for such payments by the Depositary. So
long as the Depositary or its nominee is the registered owner of any Global
Security, the Depositary or its nominee, as the case may be, will be considered
the sole Holder of the Book-Entry Note or Notes represented by such Global
Security for all purposes under the Indenture and the Book-Entry Notes. The
Company understands, however, that under existing industry practice, the
Depositary will authorize the persons on whose behalf it holds a Global Security
to exercise certain rights of Holders of Securities. See "-- Book-Entry System."
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes bearing interest (if any) at the same
rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, Stated Maturity and other terms will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary located
in the Borough of Manhattan, The City of New York, and will be registered in the
name of the Depositary or a nominee of the Depositary. Currently, the Depositary
accepts deposits of Global Securities denominated in U.S. dollars only.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of its participants held with
it with the respective principal or face amounts of the Book-Entry Notes
represented by such Global Security. Such accounts shall be designated by the
Agents (as defined herein) with respect to Book-Entry Notes or by the Company if
such Notes are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to participants and to persons
that have accounts with the Depositary ("Participants") or persons that may hold
interests through Participants. Ownership interests in a Global Security will be
shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary or its nominee (with respect to a
Participant's interest) for such Global Security and records maintained by
Participants (with respect to interests of persons other than Participants).
Payment of principal of and any premium and interest on Book-Entry Notes
represented by any such Global Security will be made to the Depositary or its
nominee, as the case may be, as the sole registered owner and the sole Holder of
the Book-Entry Notes represented thereby for all purposes under the Indenture.
Neither the Company or the Trustee, nor any agent of the Company or the Trustee,
will have any responsibility or liability for any aspect of the Depositary's
records relating to or payments made on account of beneficial ownership
interests in a Global Security representing any Book-Entry Notes or for
maintaining, supervising or reviewing any of the Depositary's records relating
to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or any premium or interest on any Global Security, the
Depositary or its nominee will immediately credit, on its book-entry
registration and transfer system, the accounts of Participants with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary or its
nominee. Payments by Participants to owners of beneficial interests in a Global
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for customer accounts registered in "street name", and will be the sole
responsibility of such Participants.
A Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by the Depositary or
any nominee to a successor Depositary or any nominee of such successor. A Global
Security representing Book-Entry Notes is exchangeable only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Company does not appoint a successor Depositary (in any
case in which the Company may appoint a
S-13
<PAGE> 37
successor Depositary), within 90 days after the Company receives notice or
becomes aware of such unwillingness, inability or ineligibility, (ii) the
Company executes and delivers to the Trustee a Company Order that all such
Global Securities shall be exchangeable for definitive Notes in registered form,
or (iii) there shall have occurred and be continuing an Event of Default with
respect to the Notes represented by such Global Security. Unless otherwise
specified in the applicable Pricing Supplement, any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Certificated Notes issuable in denominations of $1,000 and integral multiples of
$1,000 in excess thereof and registered in such names as the Depositary holding
such Global Security shall direct. Subject to the foregoing, the Global Security
is not exchangeable, except for a Global Security of like denomination to be
registered in the name of the Depositary or its nominee.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole Holder of Book-Entry Notes
represented by such Global Security for the purposes of receiving payment on the
Notes, receiving notices and for all other purposes under the Indenture and the
Notes. Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture. Accordingly, each person owning a beneficial interest in
such a Global Security must rely on the procedures of the Depositary and, if
such person is not a Participant, on the procedures of the Participant through
which such person owns its interest, to exercise any rights of a Holder under
the Indenture. The Company understands that under existing industry practices,
in the event that the Company requests any action of Holders or that an owner of
a beneficial interest in such a Global Security desires to give or take any
action which a Holder is entitled to give or take under the Indenture, the
Depositary would authorize the Participants holding the relevant beneficial
interests to give or take such action, and such Participants would authorize
beneficial owners owning through such Participants to give or take such action
or would otherwise act upon the instructions of beneficial owners owning through
them.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold the
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Agents), banks, trust companies, clearing corporations, and certain other
organizations some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
UNITED STATES FEDERAL TAXATION
The following is a summary of the principal United States Federal tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes held as capital assets. Moreover, except as expressly
indicated, it deals only with initial purchasers and not beneficial owners with
a special tax status or special tax situations, such as dealers in securities or
currencies, Notes held as a hedge against currency risks or as part of a
straddle with other investments or as part of a "synthetic security" or other
integrated investment (including a "conversion transaction") comprised of a Note
and one or more other investments, or situations in which the functional
currency of the beneficial owner is not the U.S. dollar. Except to the extent
discussed below under "Non-U.S. Holders," this summary may not be applicable to
non-U.S. persons not subject to United States Federal income tax on their
worldwide income. The summary is based upon the United States Federal tax laws
and regulations as now in effect and as currently interpreted and does not take
into account possible changes in such tax laws or such interpretations, which
may be applied
S-14
<PAGE> 38
retroactively. It does not include any description of the tax laws of any state,
local or foreign governments that may be applicable to the Notes or holders
thereof. Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of the United States Federal tax laws to
their particular situations as well as any consequences to them under the laws
of any other taxing jurisdiction.
U.S. HOLDERS
PAYMENTS OF INTEREST
In general, interest on a Note (other than certain payments on a Discount
Note, as defined and described below under "Original Issue Discount"), will be
taxable to a beneficial owner who or which is (i) a citizen or resident of the
United States, (ii) a corporation created or organized under the laws of the
United States or any State thereof (including the District of Columbia) or (iii)
a person otherwise subject to United States Federal income taxation on its
worldwide income (a "U.S. Holder") as ordinary income at the time it is received
or accrued, depending on the holder's method of accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the United States Federal income tax
consequences to holders of Notes issued with original issue discount ("OID").
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the "Code"). On February 4, 1994, the Treasury Department
issued final regulations (the "OID Regulations"), which expand and illustrate
the rules provided by the Code. The OID Regulations are effective for debt
instruments issued on or after April 4, 1994, and the preamble to the OID
Regulations provides that a taxpayer generally may rely upon the OID Regulations
for debt instruments issued after December 21, 1992.
General. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue or Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the "stated redemption price at maturity" of a Note is the sum of all payments
provided by the Note that are not payments of "qualified stated interest". A
"qualified stated interest" payment includes any stated interest payment on a
Note that is unconditionally payable at least annually at a single fixed rate
(or at certain floating rates) that appropriately takes into account the length
of the interval between stated interest payments. The Pricing Supplement will
state whether a particular issue of Notes will constitute Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID." Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a Note
will not be treated as issued with OID (in which case the following paragraphs
under "Original Issue Discount" will not apply), and a U.S. Holder of such a
Note will recognize capital gain with respect to such de minimis OID as stated
principal payments on the Note are made. The amount of such gain with respect to
each such payment will equal the product of the total amount of the Note's de
minimis OID and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where (i) a Note bearing interest at a floating rate (a "Floating
Rate Note") provides for a maximum interest rate or a minimum interest rate that
is reasonably expected as of the issue date to cause the yield on the debt
instrument to be significantly less, in the case of a maximum rate, or more, in
the case of a minimum rate, than the expected yield determined without the
maximum or minimum rate, as the case may be; (ii) a Floating Rate Note provides
for a significant front-loading or back-loading of interest; or (iii) a Note
bears
S-15
<PAGE> 39
interest at a floating rate in combination with one or more floating or fixed
rates. Notice will be given in the applicable Pricing Supplement if the Company
determines that a particular Note will be a Discount Note. Unless specified in
the applicable Pricing Supplement, Variable Rate Notes will not be Discount
Notes.
The Code and the OID Regulations provide rules that require a U.S. Holder
of a Discount Note having a maturity of more than one year from its date of
issue to include OID in gross income before the receipt of cash attributable to
such income, without regard to the holder's method of accounting for tax
purposes. The amount of OID includible in gross income by a U.S. Holder of a
Discount Note is the sum of the "daily portions" of OID with respect to the
Discount Note for each day during the taxable year or portion of the taxable
year in which the U.S. Holder holds such Discount Note ("accrued OID"). The
daily portion is determined by allocating to each day in any "accrual period" a
pro rata portion of the OID allocable to that accrual period. Under the OID
Regulations, accrual periods with respect to a Note may be any set of periods
(which may be of varying lengths) selected by the U.S. Holder as long as (i) no
accrual period is longer than one year and (ii) each scheduled payment of
interest or principal on the Note occurs on the first day or final day of an
accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the amortization
of any acquisition premium or bond premium, which are discussed below), and the
amount of any qualified stated interest on the Note that has accrued prior to
the beginning of the accrual period but is not payable until a later date, less
(y) any prior payments on the Discount Note that were not qualified stated
interest payments. If a payment (other than a payment of qualified stated
interest) is made on the first day of an accrual period, then the adjusted issue
price at the beginning of such accrual period is reduced by the amount of the
payment. If a portion of the initial purchase price of a Note is attributable to
interest that accrued prior to the Note's issue date, the first stated interest
payment on the Note is to be made within one year of the Note's issue date and
such payment will equal or exceed the amount of pre-issuance accrued interest,
in which case a portion of the first stated interest payment will be treated as
a return of the excluded pre-issuance accrued interest and not as an amount
payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Note (other than any
payment of qualified stated interest) over the Note's adjusted issue price as of
the beginning of such final accrual period. In addition, if an interval between
payments of qualified stated interest on a Note contains more than one accrual
period, than the amount of qualified stated interest payable at the end of such
interval is allocated pro rata (on the basis of their relative length) between
the accrual periods contained in the interval.
A U.S. Holder of a Discount Note generally will have to include in income
increasingly greater amounts of OID over the life of the Note.
Acquisition Premium. A U.S. Holder that purchases a Note at its original
issuance for an amount in excess of its issue price but less than its stated
redemption price at maturity (any such excess being "acquisition premium"), and
that does not make the election described below under "Original Issue
Discount -- Election To Treat All Interest as Original Issue Discount", is
permitted to reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the U.S. Holder's purchase price for the Note over the
Note's adjusted issue price, and the denominator of which is the excess of the
sum of all amounts payable on the Note after the purchase date, other than
payments of qualified stated interest over the Note's issue price.
Alternatively, a U.S. Holder may elect to compute OID accruals as described
under "Original Issue Discount -- General" above, treating the U.S. Holder's
purchase price as the issue price.
S-16
<PAGE> 40
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than its
yield to stated maturity, or (ii) in the case of an option of the Holder, higher
than its yield to state maturity. If such option is not in fact exercised when
presumed to be exercised, the Note would be treated soley for OID purposes as if
it were redeemed or repurchased, and a new Note were issued, on the presumed
exercise date for an amount equal to the Note's adjusted issue price on that
date.
Short-Term Notes. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, an individual or other cash basis U.S. Holder of a
Short-Term Note is not required to accrue OID for United States Federal income
tax purposes unless such holder elects to do so. Accrual basis U.S. Holders and
certain other U.S. Holders, including banks, regulated investment companies,
dealers in securities and cash basis U.S. Holders who so elect, are required to
accrue original issue discount on Short-Term Notes on either a straight-line
basis or under the constant yield method (based on daily compounding), at the
election of the U.S. Holder. In the case of a U.S. Holder not required and not
electing to include OID in income currently, any gain realized on the sale or
retirement of the Short-Term Note will be ordinary income to the extent of the
OID accrued on a straight-line basis (unless an election is made to accrue the
original issue discount under the constant yield method) through the date of
sale or retirement. U.S. Holders who are not required and do not elect to accrue
OID on Short-Term Notes will be required to defer deductions for interest on
borrowings allocable to Short-Term Notes in an amount not exceeding the deferred
income until the deferred income is realized.
Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount", if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the U.S. Holder's purchase price. Acquisition discount
will be treated as accruing on a ratable basis or, at the election of the
holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
NOTES PURCHASED AT A PREMIUM
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its principal amount will not be subject to the OID rules and may elect to
treat such excess as "amortizable bond premium", in which case the amount of
qualified stated interest required to be included in the U.S. Holder's income
each year with respect to interest on the Note will be reduced by the amount of
amortizable bond premium allocable (based on the Note's yield to maturity) to
such year. Any election to amortize bond premium shall apply to all bonds (other
than bonds the interest on which is excludible from gross income) held by the
U.S. Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. Holder, and is irrevocable without
the consent of the Internal Revenue Service (the "IRS"). See also "Original
Issue Discount -- Election to Treat All Interest as Original Issue Discount".
NOTES PURCHASED AT A MARKET DISCOUNT
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a de minimis
rule similar to the rule relating to de minimis OID described under "Original
Issue Discount -- General".
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
S-17
<PAGE> 41
currently over the life of the Note. Such an election applies to all debt
instruments with market discount acquired by the electing U.S. Holder on or
after the first day of the first taxable year to which the election applies and
may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such market discount on a constant yield to maturity basis.
Such an election shall apply only to the Note with respect to which it is made
and may not be revoked without the consent of the IRS. A U.S. Holder of a Market
Discount Note who does not elect to include market discount in income currently
generally will be required to defer deductions for interest on borrowings
allocable to such Note in an amount not exceeding the accrued market discount on
such Note until the maturity or disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
Election to Treat All Interest as Original Issue Discount. Any U.S. Holder
that holds a Note issued after April 4, 1994, may elect to include in gross
income all interest that accrues on a Note using the constant yield method
described above under the heading "Original Issue Discount -- General," with the
modifications described below. For purposes of this election, interest includes
stated interest, OID, de minimis OID, market discount (described below under
"Notes Purchased at a Market Discount"), acquisition discount, de minimis market
discount and unstated interest, as adjusted by any amortizable bond premium
(described below under "Notes Purchased at a Premium" or acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing U.S.
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, then the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by such electing U.S. Holder as of the
beginning of the taxable year in which the Note with respect to which the
election is made or thereafter acquired. The deemed election with respect to
amortizable bond premium may not be revoked without the consent of the IRS.
If the election described above to apply the constant-yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
below, then the electing U.S. Holder will be treated as having made the election
discussed below under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
PURCHASE, SALE, AND RETIREMENT OF THE NOTES
General. A U.S Holder's tax basis in a Note will generally be its cost,
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the U.S. Holder's income with
respect to the Note and the amount, if any, or income attributable to de minimus
OID included in the U.S. Holder's income with respect to the Note, and reduced
by the sum of (i) the amount of any payments that are not qualified stated
interest payments, and (ii) the amount of any amortizable bond premium applied
to reduce interest on the Note. A U.S. Holder generally will recognize gain or
loss on the sale or retirement of a Note equal to the difference between the
amount realized on the sale or retirement and the tax basis of the Note. Except
to the extent described above under "Original Issue Discount -- Short Term
Notes" or "Market Discount", and except to the extent attributable to accrued
but unpaid interest, gain or loss recognized on the sale or retirement of a Note
generally will be capital gain or loss and will be long-term capital gain or
loss if the Note was held for more than one year.
INDEXED NOTES
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to Indexed notes.
S-18
<PAGE> 42
NON-U.S. HOLDERS
Under the U.S. Federal income tax laws in effect on the date of this
Prospectus Supplement and subject to the discussion of backup withholding below,
payments of principal (and premium, if any) and interest, including OID, by the
Company or it agent (acting in its capacity as such) to any Non-U.S. Holder will
not be subject to U.S. Federal withholding tax; provided, in the case of
interest, including OID, that (i) such Non-U.S. Holder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote, (ii) such Non-U.S. Holder is not a
controlled foreign corporation for U.S. tax purposes that is related to the
Company through stock ownership, and (iii) either (A) the beneficial owner of
the Note certifies to the Company or its agent, under penalties of perjury, on
Form W-8, Certificate of Foreign Status, that it is a Non-U.S. Holder and
provides its name and address, or (B) a securities clearing organization, bank
or other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and that holds the
Note certifies to the Company or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a financial
institution and furnishes the payor with a copy thereof. A certificate described
in this paragraph is effective only with respect to payments of interest made to
the certifying Non-U.S. Holder in the calendar year of issuance and the two
immediately succeeding calendar years.
In the event that the above requirements are not met, certain Non-U.S.
Holders of Notes may nevertheless be entitled to a reduced rate of withholding
under a bilateral tax treaty with the United States. Any Non-U.S. Holder
claiming entitlement to such a reduced rate of withholding must certify to the
Company or its agent (i) that such holder is a Non-U.S. Holder and (ii) that
such Non-U.S. Holder is entitled to the benefits of a specific bilateral tax
treaty, and must provide its name and address.
In no event shall the Company be obligated in any manner to reimburse any
Non-U.S. Holder of a Note for any withholding or other tax imposed, including
any related interest or penalties, or otherwise gross-up or increase interest
payments to take into account any withholding or other tax, including any
interest or penalties thereon.
If a Non-U.S. Holder of a Note is engaged in a trade or business in the
United States and interest, including OID, on the Note is effectively connected
with the conduct of such trade or business, such Non-U.S. Holder, although
exempt from the withholding tax discussed in the third preceding paragraph, may
be subject to U.S. Federal income tax on such interest, and OID, in the same
manner as if it were a U.S. Holder. In addition, if such Non-U.S. Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
adjustments. Interest (including OID) on a Note will be included in earnings and
profits if such interest (or OID) is effectively connected with the Non-U.S.
Holder's U.S. trade or business. In lieu of the certificate described in the
third preceding paragraph, such Non-U.S. Holder must provide the payor with a
properly executed IRS Form 4224 to claim an exemption from U.S. Federal
withholding tax.
Any capital gain or market discount realized upon the sale, exchange,
retirement or other disposition of a Note by a Non-U.S. Holder will not be
subject to U.S. Federal income or withholding taxes if (i) such gain is not
effectively connected with a U.S. trade or business of the Non-U.S. Holder and
(ii) in the case of an individual, such Non-U.S. Holder is not present in the
United States for 183 days or more in the taxable year of the sale, exchange,
retirement or disposition.
Notes held by an individual who is neither a citizen nor a resident of the
United States for U.S. Federal income tax purposes at the time of such
individual's death will not be subject to U.S. Federal estate tax provided that
the income from such Notes was not or would not have been effectively connected
with a U.S. trade or business of such individual and that such individual
qualified for the exemption from U.S. Federal withholding tax (without regard to
the certification requirements) that is described above.
BACKUP WITHHOLDING AND INFORMATION REPORTING
For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the U.S.
Holder's name, address and taxpayer identification number
S-19
<PAGE> 43
(either the U.S. Holder's Social Security number or its employer identification
number, as the case may be), the aggregate amount of principal and interest paid
(including OID, if any) to that U.S. Holder during the calendar year and the
amount of tax withheld, if any. This obligation, however, does not apply with
respect to certain U.S. Holders, including corporation, tax-exempt
organizations, qualified pension and profit sharing trusts and individual
retirement accounts.
In the event that a U.S. Holder subject to the reporting requirements
described above fails to supply its correct taxpayer identification number in
the manner required or underreports its tax liability with respect to interest,
the Company, its agents or paying agents or a broker may be required to "backup"
withhold a tax equal to 31% of each payment of interest (including OID) and
principal (and premium, if any) on the Notes. This tax is not an additional tax
and may be credited against the U.S. Holder's U.S. Federal income tax liability,
provided that the required information is furnished to the IRS.
Under current Treasury regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-U.S. Holder of a Note with respect to which
the Non-U.S. Holder has provided required certification that it is not a U.S.
Holder as set forth in clause (iii) in the first paragraph under "Non-U.S.
Holders" above, or has otherwise established an exemption (provided that neither
the Company nor such agent has actual knowledge that the holder is a U.S. Holder
or that the conditions of any exemption are not in fact satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a U.S. person, a controlled foreign
corporation for U.S. tax purposes or a foreign person 50% or more of whose gross
income from all sources for the three-year period ending with the close of its
taxable year preceding the payment was effectively connected with a U.S. trade
or business, information reporting may apply to such payments. Payment of the
proceeds from a sale of a Note to or through the U.S. office of a broker is
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its taxpayer identification or otherwise
establishes an exemption from information reporting and backup withholding.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE NOTES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS
AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER TAX LAWS.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution
Agreement, dated March , 1994, the Notes are being offered on a continuing
basis by the Company through Lazard Freres & Co., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc (the "Agents"), who have agreed to use
reasonable efforts to solicit purchases of the Notes. The Company will have the
sole right to accept offers to purchase Notes and may reject any proposed
purchase of Notes as a whole or in part. The Agents shall have the right, in
their discretion reasonably exercised, to reject any offer to purchase Notes, as
a whole or in part. The Company will pay the Agents a commission of from %
to % of the principal amount of Notes, depending upon maturity, for sales
made through them as Agents of Notes with a maturity of less than 40 years; the
commission to be paid by the Company to the Agents on any sale of Notes with a
maturity of 40 years or more will be negotiated at the time of sale.
The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the purchasing
Agents may receive from the Company a commission or discount equivalent to that
set forth on the cover page hereof in the case of any such principal transaction
in which no other discount is agreed. Such Notes may be resold at prevailing
market prices, or at prices related thereto, at the time of such resale, as
determined by the Agents. The Company reserves the right to sell Notes directly
on its own behalf. No commission will be payable on any Notes sold directly by
the Company.
S-20
<PAGE> 44
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of % of the
discount to be received by such Agent from the Company. Unless otherwise
indicated in the applicable Pricing Supplement, any Note sold to an Agent as
principal will be purchased by such Agent at a price equal to 100% of the
principal amount thereof less a percentage equal to the commission applicable to
any agency sale of a Note of identical maturity, and may be resold by the Agent
to investors and other purchasers from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale or may be resold to certain
dealers as described above. After the initial public offering of Notes to be
resold to investors and other purchasers on a fixed public offering price basis,
the public offering price, concession and discount may be changed.
In addition, the Company may appoint additional agents from time to time.
The name of any such additional agent and details as to the arrangements between
such agent and the Company will be set forth in the applicable Pricing
Supplement.
The Agents, as agents or principals, may be deemed to be underwriters
within the meaning of the Securities Act of 1933 (the "Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Company had agreed to reimburse the Agents for
certain expenses.
Lazard Freres & Co., Morgan Stanley & Co. Incorporated and Salomon Brothers
Inc have performed various investment banking services for the Company and may
perform such services in the future.
Notes may also be sold at the price to the public set forth herein to
dealers who may resell to investors. Such dealers may be deemed to be
Underwriters within the meaning of the Act.
The Company does not intend to apply for the listing of the Notes on a
national securities exchange, but has been advised by the Agents that the Agents
intend to make a market in the Notes, as permitted by applicable laws and
regulations. The Agents are not obligated to do so, however, and the Agents may
discontinue making a market at any time without notice. No assurance can be
given as to the existence or liquidity of any trading market for the Notes.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by John B.
Canning, Corporate Secretary and Associate General Counsel of the Company, and
for the Agents by Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York
10019. The opinions of John B. Canning and Cravath, Swaine & Moore will be
conditioned upon, and subject to certain assumptions regarding, future actions
required to be taken by the Company and the Trustee in connection with the
issuance and sale of any particular Note, the specific terms of Notes and other
matters which may affect the validity of Notes but which cannot be ascertained
on the date of such opinion.
S-21
<PAGE> 45
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT
OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER
OR SOLICITATION BY ANYONE IN ANY STATE 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 ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds....................... S-3
Description of Notes.................. S-4
United States Federal Taxation........ S-14
Supplemental Plan of Distribution..... S-20
Validity of Notes..................... S-21
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Rayonier, Inc. ....................... 3
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 4
Description of the Debt Securities.... 5
Plan of Distribution.................. 13
Legal Matters......................... 14
Experts............................... 14
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$174,000,000
RAYONIER INC.
SERIES B MEDIUM-TERM NOTES
--------------------------
PROSPECTUS SUPPLEMENT
--------------------------
LAZARD FRERES & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 46
PROSPECTUS
$274,000,000
RAYONIER INC.
DEBT SECURITIES
- ------------------------
Rayonier Inc. ("Rayonier" or the "Company") may offer or issue from time to time
its unsecured debt securities consisting of notes, debentures or other evidences
of indebtedness (the "Debt Securities") in an aggregate principal amount of up
to $274,000,000 (or, if Debt Securities are issued at an original issue
discount, such greater amount as shall result in aggregate proceeds of
$274,000,000 to the Company). The Debt Securities may be offered as separate
series in amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in an accompanying supplement to
this Prospectus (each a "Prospectus Supplement").
The terms of each series of Debt Securities, including, where applicable, the
specific designation, aggregate principal amount, authorized denominations,
maturity, interest rate or rates (which may be fixed or variable) and time or
times of payment of any interest, any terms for optional or mandatory redemption
or payment of additional amounts or any sinking fund provisions, any initial
public offering price, the proceeds to the Company and any other specific terms
in connection with the offering and sale of such series (the "Offered
Securities") will be set forth in a Prospectus Supplement.
The Debt Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If agents, dealers or underwriters are involved in the sale of
the Debt Securities, the names of such agents, dealers or underwriters and any
applicable agents' commissions, dealers' purchase price or underwriters'
discounts will be set forth in a Prospectus Supplement. The net proceeds to the
Company from such sale will also be set forth in a Prospectus Supplement.
Each Prospectus Supplement will state whether the Offered Securities will be
listed on any securities exchange. If the Offered Securities are not listed on
any national securities exchange, there can be no assurance that there will be a
secondary market for the Offered Securities.
The Debt Securities may be issued only in registered form, and may be issued in
temporary or definitive global form.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by a Prospectus Supplement.
March , 1994
<PAGE> 47
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND A PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, AGENT OR DEALER. THIS PROSPECTUS
AND A PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND/OR A PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
Rayonier is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; Seven World Trade Center, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material may also be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, copies of such material
and the information about the Company are available for inspection at the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
Rayonier has filed with the Commission a registration statement (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), with respect to the Debt
Securities. This Prospectus does not contain all the information set forth in
the Registration Statement and reference is hereby made to the Registration
Statement for further information with respect to the Company and the Debt
Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is hereby incorporated in this Prospectus by reference the following
document filed by Rayonier with the Commission under the Exchange Act:
Annual Report on Form 10-K for the year ended December 31, 1993.
All documents filed by Rayonier pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, or in the
accompanying Prospectus Supplement, 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 incorporated or deemed
to be incorporated by reference herein, or in an accompanying Prospectus
Supplement, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Rayonier will furnish without charge to each person to whom a copy of this
Prospectus is delivered, upon request, a copy of any of the documents
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Requests should be directed to Corporate Secretary, Rayonier Inc., 1177 Summer
Street, Stamford, Connecticut 06905-5529. Telephone requests may be directed to
(203) 348-7000.
2
<PAGE> 48
RAYONIER INC.
Rayonier Inc. ("Rayonier" or the "Company") is a leading international
forest products company primarily engaged in the trading, merchandising and
manufacture of logs, timber and wood products, and in the production and sale of
high value added specialty pulps. Rayonier owns, leases or controls
approximately 1.5 million acres of timberland in the United States and New
Zealand. In addition, Rayonier operates three pulp mills and two lumber
manufacturing facilities in the United States.
Rayonier traces its origin to the founding of Rainier Pulp and Paper
Company in Shelton, Washington, in 1926. With the consolidation of several pulp
companies in 1937, the Company became "Rayonier Incorporated," a corporation
whose stock was publicly traded on the New York Stock Exchange until Rayonier
became a wholly owned subsidiary of ITT Corporation ("ITT") in 1968. On February
28, 1994, ITT distributed, as a special dividend, all of the Common Shares of
Rayonier to the holders of ITT Common Stock and Series N Preferred Stock. In
connection with the distribution, the Company changed its name from ITT Rayonier
Incorporated to Rayonier Inc. and became a publicly traded company listed on the
New York Stock Exchange under the symbol "RYN."
The principal subsidiaries of the Company are Rayonier Timberlands, L.P.
("RTLP"), Rayonier Timberlands Operating Company, L.P. ("RTOC") and Rayonier New
Zealand Limited ("RNZ").
Rayonier is a North Carolina corporation with its principal executive
offices at 1177 Summer Street, Stamford, CT 06905-5529 and its telephone number
is (203) 348-7000.
TIMBER AND WOOD PRODUCTS
Rayonier owns, buys and harvests timber stumpage, and purchases delivered
logs, in North America and New Zealand for subsequent sale into export markets
(primarily to Japan, Korea and China), as well as to domestic lumber and pulp
mills. Rayonier also produces dimension and specialty lumber products for
residential construction and industrial uses.
Rayonier participates in the worldwide timber and wood products business in
three specific ways:
Log Trading and Merchandising -- The Company harvests logs from Company
owned parcels and from third party parcels on which the Company has acquired
cutting rights and purchases logs on the open market. The Company then
subsequently packages and sells these logs throughout the world.
Timberlands Management and Stumpage (Standing Timber) Sales -- The Company
manages owned, leased and otherwise controlled timber properties and, after
scientifically growing and nurturing the trees to their economic peak, sells the
cutting rights to the timber on these properties at market prices through
auction or negotiation.
Wood Products Sales -- The Company manufactures and sells lumber products
for construction and other uses both domestically and in international markets.
In the United States, the Company manages timberlands and sells timber
stumpage (cutting rights to standing timber) directly through RTLP, a publicly
traded master limited partnership. Rayonier and Rayonier Forest Resources
Company ("RFR"), a wholly owned subsidiary, are the general partners of RTLP.
Rayonier also owns 74.7% of the Class A Limited Partnership Units, the remaining
25.3% being publicly held. Class A Units participate principally in the
revenues, expenses and cash flow associated with RTLP's sales of timber through
December 31, 2000 and to a significantly lesser extent in subsequent periods.
RTLP's sales of timber after that date as well as cash flow associated with land
management activities before and after that date are principally allocable to
the Class B Limited Partnership Units, all of which have been retained by
Rayonier. RTLP, through RTOC owns, leases and manages timberlands in the
Southeastern and Northwestern United States previously owned or leased by the
Company, sells timber stumpage from such timberlands and from time to time
purchases and sells timberlands. RTLP's timberlands provide a major source of
wood used in the Company's other businesses.
3
<PAGE> 49
On May 15, 1992, the Company, through RNZ, purchased for approximately $197
million from the New Zealand government forest assets consisting primarily of
Crown Forest licenses providing the right to utilize approximately 250,000 acres
of New Zealand plantation forests for a minimum period of 35 years. Most of
these timberlands consist of radiata pine trees, with a planting-to-harvesting
time of approximately 27 years, well-suited for the highest quality lumber and
panel products. These trees typically produce up to twice as much fiber per
acre, per year as the most productive commercial tree species in the United
States. Rayonier intends to grow and harvest the New Zealand timber for both
domestic New Zealand uses and for export primarily to Pacific Rim markets.
SPECIALTY PULP PRODUCTS
The Company is a leading specialty manufacturer of chemical cellulose,
often called dissolving pulp, from which customers produce a wide variety of
products, principally textile, industrial and filtration fibers, plastics and
other chemical intermediate industrial products. Rayonier believes that it is
one of the world's largest manufacturers of high grade chemical cellulose. The
Company also manufactures fluff pulps that customers use to produce diapers and
other sanitary products, and specialty paper pulps used in the manufacture of
products such as filters and decorative laminates.
Rayonier manufactures its specialty pulp products to customers'
specifications. Approximately half of Rayonier's pulp sales are to export
customers, with the more important overseas markets being Western Europe and
Japan.
The Company manufactures more than 25 different grades of pulp. The Company
owns and operates three wood pulp mills which have an aggregate annual capacity
of approximately 826,000 metric tons. Rayonier's wood pulp production facilities
are able to manufacture a broad mix of products to meet customers' needs. The
Company owns wood pulp production facilities in Jesup, Georgia; Fernandina
Beach, Florida; and Port Angeles, Washington. The Jesup facility, a kraft mill
that began operations in 1954 and was subsequently significantly expanded and
modernized, today accounts for approximately 530,000 metric tons of annual wood
pulp production capacity, or 64 percent of Rayonier's current total. The
Fernandina Beach facility began operations in 1939 and accounts for
approximately 146,000 metric tons of annual wood pulp production capacity, or 18
percent of Rayonier's current total. The Port Angeles facility began operations
in 1929 and accounts for approximately 150,000 metric tons of annual wood pulp
production capacity, or 18 percent of Rayonier's current total.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Debt
Securities will be used as set forth in the applicable Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------
1993 1992 1991 1990 1989
- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C>
5.25x * 5.37x 13.04x 11.52x
</TABLE>
- ---------------
* Earnings were inadequate to cover total fixed charges and preferred dividend
requirement by $106 million. For the year ended December 31, 1992, the
Company's loss from continuing operations before the cumulative effect of
accounting changes was $81 million, including a provision of $180 million,
pre-tax ($115 million net of tax), for the loss on disposal of assets along
with the costs for severance, demolition and other closedown items associated
with the disposition of the Grays Harbor pulp mill and vanillin plant, and the
associated Grays Harbor Paper Company (the "Grays Harbor Complex"). Excluding
the effects of such provision, the ratio of earnings to fixed charges would
have been 3.98x.
4
<PAGE> 50
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before cumulative effect
of accounting changes, adjusted to eliminate undistributed earnings or losses of
a joint venture accounted for under the equity method, minority interest in
consolidated partnerships, amortization of capitalized interest, the provision
for income taxes and fixed charges. Fixed charges comprise interest on long-term
and short-term debt, amortization of debt discount and debt expense, and the
portion of rentals deemed representative of the interest factor and preferred
dividends.
DESCRIPTION OF THE DEBT SECURITIES
As specified in the Prospectus Supplement, the Debt Securities will be
issued under either an indenture, dated as of September 1, 1992, as supplemented
and amended, between Rayonier and Bankers Trust Company, a New York banking
corporation, as Trustee, or an indenture to be dated as of April 1, 1994,
between Rayonier and Chemical Bank, a New York banking corporation, as Trustee,
copies of which indentures are filed as exhibits to the Registration Statement
of which this Prospectus is a part. The indentures are hereafter referred to
respectively as the "Indenture," and Bankers Trust Company and Chemical Bank are
hereafter referred to respectively as the "Trustee." The Indentures are the same
in all material respects. The statements under this caption are brief 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 of the
provisions of the Indenture, including the definitions therein of certain terms.
Whenever particular sections of the Indenture or terms that are defined in the
Indenture are referred to herein or in a Prospectus Supplement, it is intended
that such sections or defined terms shall be incorporated by reference herein or
therein, as the case may be.
The Debt Securities may be issued by Rayonier from time to time in one or
more series. The particular terms of each series of Offered Securities will be
described in the Prospectus Supplement or Prospectus Supplements relating to
such series.
GENERAL
The Debt Securities offered pursuant to this Prospectus will be limited to
$274,000,000 aggregate principal amount (or, if any Debt Securities are issued
at original issue discount, such greater amount as shall result in proceeds of
$274,000,000 to the Company). Debt Securities may be issued under the Indenture
from time to time in separate series up to the aggregate amount from time to
time authorized by the Company for each series.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Offered Securities: (1) the title of the
Offered Securities; (2) the aggregate principal amount of the Offered
Securities; (3) the date on which the principal of the Offered Securities will
mature; (4) the rate or rates (or, if subject to adjustment, the manner for
determining such rates) at which the Offered Securities shall bear interest, if
any, the date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable, and the Regular
Record Date for any interest payable on any Interest Payment Date; (5) the place
or places where, subject to the terms of the Indenture as described below under
"Payment and Paying Agents," the principal of (and premium, if any) and interest
on the Offered Securities will be payable and where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer,"
the Offered Securities may be presented for registration of transfer or exchange
and the place or places where notices and demands to or upon the Company in
respect of the Offered Securities and the Indenture may be made ("Place of
Payment"); (6) any period or periods within or date or dates on which, the price
or prices at which and the terms and conditions upon which Offered Securities
may be redeemed, in whole or in part, at the option of the Company; (7) the
obligation or the right, if any, of the Company to redeem, purchase or repay the
Offered Securities prior to the Stated Maturity pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder thereof or of
the Company and the date or dates on which, the period or periods within which,
the price or prices at which and the terms and conditions upon which the Offered
Securities shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Offered Securities shall
be issued if other than
5
<PAGE> 51
$1,000 or any integral multiple thereof; (9) any addition to, or modification or
deletion of, any Event of Default or any covenant of the Company specified in
the Indenture with respect to the Offered Securities; (10) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Securities which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to the Indenture; (11) any index or indices used to
determine the amount of payments of principal of and premium, if any, on the
Offered Securities and the manner in which such amounts will be determined; and
(12) any other terms of the Offered Securities not inconsistent with the
provisions of the Indenture. (Section 3.01.)
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise set forth in the Prospectus Supplement for the Offered
Securities, the Debt Securities will be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. Debt
Securities of any series will be exchangeable for other Debt Securities of the
same issue and series, of any authorized denominations, of a like aggregate
principal amount, of the same Original Issue Date and Stated Maturity and
bearing the same interest rate. (Section 3.05.)
Debt Securities may be presented for exchange as provided above, and may be
presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed), at
the office of the Securities Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to any series of Debt
Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. The Company has appointed the Trustee as Securities
Registrar. (Section 3.05.) If a Prospectus Supplement refers to any transfer
agents (in addition to the Securities Registrar) initially designated by the
Company with respect to any series of Debt Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, provided that the
Company maintains a transfer agent in each Place of Payment for such series. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities. (Section 10.02.)
In the event of any redemption, neither the Company nor the Trustee shall
be required to (i) issue, register the transfer of, or exchange Debt Securities
of any series during a period beginning at the opening of business 15 days
before the day of selection for redemption of Debt Securities of that series and
ending at the close of business on the day of mailing of the relevant notice of
redemption or (ii) transfer or exchange any Debt Security so selected for
redemption, except, in the case of any Debt Security being redeemed in part, any
portion thereof not to be redeemed. (Section 3.05.)
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 (a "Global Security") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the Prospectus Supplement relating to such series. Global Securities may be
issued only in fully registered form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary ("Participants"). Such accounts shall be
designated by the agents,
6
<PAGE> 52
underwriters or dealers with respect to such Debt Securities or by the Company
if such Debt Securities are offered and sold directly by the Company. Ownership
of beneficial interests in a Global Security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of Participants) and the
records of Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Debt Securities.
Payments of principal of (and premium, if any) and interest on individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. None of the Company, the Trustee for such Debt Securities, any
Paying Agent, or the Securities Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the Global Security
for such Debt Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
If a Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of such series represented by one or more Global Securities and, in
such event, will issue individual Debt Securities of such series in exchange for
the Global Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, the Trustee
and the Depositary for such Global Security, receive individual Debt Securities
of such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and integral
multiples thereof.
7
<PAGE> 53
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Debt Securities will
be made at the office of the Trustee in the City of New York or at the office of
such Paying Agent or Paying Agents as the Company may designate from time to
time in an applicable Prospectus Supplement, except that at the option of the
Company payment of any interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Securities
Register or (ii) by transfer to an account maintained by the Person entitled
thereto as specified in the Securities Register, provided that proper transfer
instructions have been received by the Trustee or any Paying Agent, as the case
may be, by the Regular Record Date. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any interest on Debt Securities will be made
to the Person in whose name such Debt Security is registered at the close of
business on the Regular Record Date for such interest, except in the case of
Defaulted Interest. The Company may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent; however, the Company will
at all times be required to maintain a Paying Agent in each Place of Payment for
each series of Debt Securities. (Sections 3.01, 3.07 and 10.02.)
Any moneys deposited with the Trustee or any Paying Agent, or then held by
the Company in trust, for the payment of the principal of (and premium, if any)
or interest on any Debt Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall, at the request of the Company, be repaid to the Company, and the Holder
of such Debt Security shall thereafter look, as a general unsecured creditor,
only to the Company for payment thereof. (Section 10.03.)
REDEMPTION
Unless otherwise indicated in an applicable Prospectus Supplement, Debt
Securities will not be subject to any sinking fund and will not be redeemable
prior to their Stated Maturity.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless (i) in case the Company consolidates with or
merges into another corporation or conveys, transfers or leases its properties
and assets substantially as an entirety to any Person, the successor corporation
is organized under the laws of the United States of America or any state or the
District of Columbia, and such successor corporation expressly assumes the
Company's obligations on the Debt Securities issued under the Indenture; (ii)
immediately after giving effect thereto, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and (iii) certain other conditions as
prescribed in the Indenture are met.
The Indenture provides that in the event of any conveyance, transfer or
lease in accordance with the preceding paragraph, the Company shall be
discharged from all obligations and covenants under the Indenture and the Debt
Securities and may be dissolved and liquidated.
The Indenture also provides that if, upon any consolidation or merger of
the Company with or into any other corporation, or upon any conveyance, transfer
or lease of its properties and assets substantially as an entirety to any
Person, any of the property or assets of the Company or of any Restricted
Subsidiary would thereupon become subject to any mortgage, lien or pledge, the
Company, prior to or simultaneously with such consolidation, merger, conveyance,
transfer or lease will secure the Debt Securities equally and ratably with any
other obligations of the Company or any Restricted Subsidiary then entitled
thereto, by a direct lien on all such property and assets prior to all liens
other than any theretofore existing thereon.
8
<PAGE> 54
COVENANTS
The Indenture contains covenants including, among others, the following:
Limitations on Liens
The Indenture provides that the Company will not, nor will it permit any
Restricted Subsidiary to, issue, assume or guarantee any indebtedness for money
borrowed if such indebtedness is secured by a Lien upon any Principal Property
of the Company or any Restricted Subsidiary or on any shares of stock of any
Restricted Subsidiary (whether such Principal Property or shares of stock are
now owned or hereafter acquired) without in any such case effectively providing
that the Debt Securities of any series Outstanding which are entitled to the
benefits of such provision of the Indenture (together with, if the Company shall
so determine, any other Indebtedness of or guaranteed by the Company or such
Restricted Subsidiary entitled thereto, subject to applicable priority of
payment) shall be secured equally and ratably with or prior to such
Indebtedness, except that the foregoing restriction shall not apply to
(i) Liens on property or shares of stock of any corporation existing
at the time such corporation becomes a Restricted Subsidiary;
(ii) Liens on property existing at the time of acquisition thereof, or
Liens on property which secure the payment of the purchase price of such
property, or Liens on property which secure indebtedness incurred or
guaranteed for the purpose of financing the purchase price of such property
or the construction of such property (including improvements to existing
property), which indebtedness is incurred or guaranteed within 180 days
after the latest of such acquisition or completion of such construction or
commencement of operation of such property; provided that such Lien shall
not extend to or cover any property of the Company or any Restricted
Subsidiary other than such property hereafter acquired or previously
unimproved property theretofore owned and the principal amount of Funded
Debt secured by such Lien shall not exceed (a) in the case of any
timberlands or pollution control facility, 100% of the lesser of (i) the
cost of such acquisition, construction or improvement of such property to
the Company or such Restricted Subsidiary or (ii) the fair value of such
acquisition, construction or improvement of such property at the time of
such acquisition, construction or improvement, and (b) in the case of any
other type of property, 75% of the lesser of (i) the cost of such
acquisition, construction or improvement of such property to the Company or
such Restricted Subsidiary or (ii) the fair value of such acquisition,
construction or improvement of such property at the time of such
acquisition, construction or improvement;
(iii) Liens securing indebtedness owing by any Restricted Subsidiary
to the Company or a wholly owned Restricted Subsidiary;
(iv) Liens on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a purchase, lease or other acquisition of the
properties of a corporation or other Person as an entirety or substantially
as an entirety by the Company or a Restricted Subsidiary;
(v) Liens on property of the Company or a Restricted Subsidiary in
favor of the United States of America or any State thereof or any agency,
instrumentality or political subdivision thereof, or in favor of any other
country, or any political subdivision thereof, to secure any indebtedness
incurred or guaranteed for the purpose of financing all or any part of the
purchase price or the cost of construction of the property subject to such
Liens within 180 days after the latest of the acquisition, completion of
construction or commencement of operation of such property; and
(vi) any extension renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in
the foregoing clauses (i) to (v), inclusive, provided however, that the
principal amount of such indebtedness secured thereby shall not exceed the
principal amount of such indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the
9
<PAGE> 55
property which secured the Lien so extended, renewed or replaced (plus
improvements and construction on such property).
Notwithstanding the above, the Company and one or more Restricted
Subsidiaries may, without securing the Debt Securities, issue, assume or
guarantee secured indebtedness which would otherwise be subject to the foregoing
restrictions, provided that after giving effect thereto the aggregate amount of
such indebtedness issued pursuant to such exception at such time and the
aggregate Value of Sale and Lease-Back Transactions (other than those in
connection with which the Company has voluntarily retired Funded Debt in
compliance with the provisions described below under "Limitation on Sale and
Lease-Back Transactions") does not at any one time exceed 10% of Consolidated
Net Tangible Assets. In computing the aggregate amount of indebtedness
outstanding for purposes of the foregoing sentence, there shall not be included
in the calculation any indebtedness issued, assumed or guaranteed pursuant to
clauses (i) through (vi) above. (Section 10.08.)
Limitation on Sale and Lease-Back Transactions
The Indenture provides that the Company shall not and, shall not permit any
Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction with
respect to any Principal Property with any person (other than the Company or a
Restricted Subsidiary) unless either (a) the Company or such Restricted
Subsidiary would be entitled, pursuant to the provisions set forth above under
"Limitation on Liens," to incur Funded Debt in a principal amount equal to or
exceeding the Value of such Sale and Lease-Back Transaction secured by a Lien on
the Principal Property to be leased without equally and ratably securing the
Debt Securities, or (b) the Company, during the four-month period after the
effective date of such transaction, applies to the voluntary retirement of its
Funded Debt an amount equal to the greater of: (1) the net proceeds of the sale
of the Principal Property leased in such transaction or (2) the fair market
value in the good faith opinion of the Board of Directors of the Company of the
Principal Property at the time such transaction was entered into. (Section
10.09.)
Certain Definitions
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed) and (ii) all segregated goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent balance sheet of the Company and its consolidated
Subsidiaries and prepared in accordance with generally accepted accounting
principles.
"Funded Debt" means all indebtedness for borrowed money having a maturity
of more than 12 months from the date as of which the amount thereof is to be
determined or having a maturity of less than 12 months but by its terms being
renewable or extendible beyond 12 months from such date at the option of the
borrower.
"Lien" means any mortgage, pledge, lien, encumbrance or security interest
of any kind.
"Principal Property" means all timberlands, land, buildings, machinery and
equipment, and leasehold interests and improvements in respect of the foregoing,
which would be reflected on a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with generally accepted accounting
principles, excluding all such tangible property located outside the United
States, Canada and New Zealand (including their respective territories and
possessions) and excluding any such property which, in the opinion of the Board
of Directors set forth in a Board Resolution, is not material to the Company and
its Subsidiaries taken as a whole.
"Restricted Subsidiary" is defined as any Subsidiary (a) substantially all
of the property of which is located in the United States, Canada or New Zealand
(including their respective territories and possessions) and which owns a
Principal Property; provided, however, that no Subsidiary shall be a
10
<PAGE> 56
Restricted Subsidiary if pursuant to this clause (a) (i) the total assets of
such Subsidiary are less than 10% of the total assets of the Company and its
consolidated Subsidiaries (including such Subsidiary) in each case as set forth
on the most recent fiscal year-end balance sheets of such Subsidiary and the
Company and its consolidated Subsidiaries, respectively, and computed in
accordance with generally accepted accounting principles, or (ii) in the
judgment of the Board of Directors, as evidenced by a Board Resolution, the
Company determines that such Subsidiary is not material to the financial
condition of the Company and its Subsidiaries taken as a whole or (b) that is
designated as a Restricted Subsidiary by the Board of Directors, as evidenced by
a Board Resolution. As of the date of this Prospectus the subsidiaries of
Rayonier which meet the definition of Restricted Subsidiaries are RTLP, RTOC and
RNZ.
"Sale and Lease-Back Transaction" means any arrangement with any bank,
insurance company or other lender or investor, or to which any such lender or
investor is a party, providing for the leasing by the Company or a Restricted
Subsidiary for a period, including renewals, in excess of three years of any
Principal Property of the Company or a Restricted Subsidiary which has been or
is to be sold or transferred by the Company or a Restricted Subsidiary to such
lender or investor or to any person to which funds have been or are to be
advanced by such lender or investor on the security of such Principal Property.
"Subsidiary" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the outstanding shares of voting stock
or (ii) any other Person (other than a corporation) in which the Company or one
or more Subsidiaries directly or indirectly owns or controls more than 50% of
the voting interests therein or otherwise has the power to direct the policies,
management and affairs thereof.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (i) the net proceeds of the
sale or transfer of the Principal Property leased pursuant to such Sale and
Lease-Back Transaction and (ii) the fair market value, in the good faith opinion
of the Board of Directors, of such Principal Property at the time of entering
into such Sale and Lease-Back Transaction, in either case divided first by the
number of full years of the term of the lease and then multiplied by the number
of full years of such term remaining at the time of determination, without
regard to any renewal or extension options contained in the lease.
MODIFICATION AND WAIVER
Modification and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby, (i)
change the Stated Maturity of the principal of, or any installment of interest
on, any Outstanding Debt Security; (ii) reduce the principal amount of, or the
rate of interest on or any premium payable upon the redemption of, or the amount
of principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity of, any Outstanding
Debt Security; (iii) change the Place of Payment, or the coin or currency in
which any Outstanding Debt Security or the interest thereon is payable; (iv)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Outstanding Debt Security after the Stated Maturity; or (v)
change the provisions of the Indenture relating to amendments of the Indenture
requiring the consent of the affected Holders for waiver of compliance with
certain provisions of the Indenture or waiver of past defaults. (Section 9.02.)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of each series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as the series is concerned, compliance by the Company
with certain restrictive covenants of the Indenture. (Section 10.10.) The
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of that series waive any
past default under the Indenture with respect to that series of Debt Securities,
except a default in the payment of the principal of (or premium, if any), or any
11
<PAGE> 57
interest on, or payment into any sinking fund on, any Debt Security of that
series or in respect of a provision which under the Indenture cannot be modified
or amended without the consent of the Holder of each Outstanding Debt Security
of that series affected. (Section 5.13.)
EVENTS OF DEFAULT
The Indenture provides that the following shall constitute Events of
Default with respect to any series of Debt Securities: (i) default for 30 days
in the payment of any interest when due; (ii) default in the payment of
principal (or premium, if any) at Maturity; (iii) default in the payment of any
sinking fund or analogous payments; (iv) default in the performance of any other
covenant in the Indenture for 60 days after written notice thereof; (v) certain
events in bankruptcy, insolvency or reorganization; (vi) acceleration of
indebtedness for borrowed money in excess of $10,000,000, which acceleration
shall not have been rescinded or annulled within 30 days after notice; or (vii)
any other Event of Default provided in the applicable Board Resolution or
supplemental indenture under which such series of Debt Securities is issued.
(Section 5.01.) The Company is required to furnish the Trustee annually with a
statement as to the fulfillment by the Company of its obligations under the
Indenture. (Section 10.06.) The Indenture provides that the Trustee may withhold
notice to the Holders of the Debt Securities of any default (except in respect
of the payment of principal or interest on the Debt Securities) if it considers
it in the interest of the Holders to do so. (Section 6.02.)
If an Event of Default with respect to Outstanding Debt Securities of any
series occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debt Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal shall become immediately due and
payable. However, at any time after a declaration or acceleration with respect
to Debt Securities of any series has been made, but before a judgment or decree
for payment of the money due has been obtained, the Holders of a majority in
principal amount of Outstanding Debt Securities of that series may, subject to
certain conditions, rescind and annul such declaration. (Section 5.02.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing the Trustee
shall be under no obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable security or indemnity.
(Section 6.03.) Subject to such provisions for the security or indemnification
of the Trustee, the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of that series. (Section 5.12.)
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 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 and unless the Holders of at least 25% in 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, and, within 60 days following the receipt of such notice, the Trustee
shall not 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, and the Trustee shall have failed to institute such proceeding.
(Section 5.07.) 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 a suit for the enforcement of any such payment. (Section 5.08.)
12
<PAGE> 58
DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS
The Company, at its option, either (a) will be discharged from any and all
obligations with respect to any series of Debt Securities (except for certain
obligations to register the transfer or exchange of Debt Securities, replace
stolen, lost or mutilated Debt Securities, maintain paying agencies and hold
moneys for payment in trust) or (b) will cease to be under any obligation to
comply with certain restrictive covenants of the Indenture with respect to any
Debt Securities, upon the deposit with the Trustee, in trust, of money or U.S.
government securities or securities of U.S. government agencies backed by the
full faith and credit of the U.S. government, or a combination thereof, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
and interest on such series of Debt Securities on the dates such payments are
due in accordance with the terms of the Debt Securities. To exercise any such
option, no Event of Default or event which with notice or lapse of time would
become an Event of Default with respect to such series of Debt Securities shall
have occurred and be continuing. The Company is required to deliver to the
Trustee an opinion of counsel (i) to the effect that the deposit and related
defeasance would not cause the holders of the Debt Securities to recognize
income, gain or loss for Federal income tax purposes and, in the case of a
discharge pursuant to clause (a), accompanied by a ruling to such effect from
the United States Internal Revenue Service and (ii) with respect to certain
other matters. (Sections 4.01 and 4.03.)
CHANGES IN CONTROL AND HIGHLY LEVERAGED TRANSACTIONS
The Indenture does not contain provisions requiring redemption of the Debt
Securities by the Company, or adjustment to any terms of the Debt Securities,
upon any change in control of the Company.
Other than restrictions on Liens and Sale and Lease-Back Transactions
described under "Covenants" above, the Indenture does not contain any covenants
or other provisions designed to afford holders of the Debt Securities protection
in the event of a highly leveraged transaction involving the Company.
CONCERNING THE TRUSTEE
Bankers Trust Company and Chemical Bank, each a New York banking
corporation, will act as trustee for the Debt Securities issued under the
respective Indenture, and each acts as depositary for funds of, makes loans to,
and performs other services for, the Company and its subsidiaries in the normal
course of business.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers; (ii) directly to one or more purchasers; or (iii) through agents. The
Prospectus Supplement with respect to the Debt Securities being offered thereby
sets forth the terms of the offering of such Debt Securities, including the name
or names of any underwriters, the purchase price of such Debt Securities and the
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers and
any securities exchange on which such Debt Securities may be listed. Only
underwriters so named in the Prospectus Supplement are deemed to be underwriters
in connection with the Debt Securities offered thereby.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Debt Securities will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all the Debt Securities of the series offered by the Company's
Prospectus Supplement if any of such Debt Securities are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
13
<PAGE> 59
Debt Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offering
and sale of the Debt Securities will be named, and any commissions payable by
the Company to such agent will be set forth, in the Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any such agent is
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Debt Securities providing for payment and delivery on a
future date specified in the Prospectus Supplement. There may be limitations on
the minimum amount which may be purchased by any such institutional investor or
on the portion of the aggregate principal amount of the particular Debt
Securities which may be sold pursuant to such arrangements. Institutional
investors to which such offers may be made, when authorized, include commercial
and savings banks, insurance companies, pension funds, investment companies,
education and charitable institutions and such other institutions as may be
approved by the Company. The obligations of any such purchasers pursuant to such
delayed delivery and payment arrangements will not be subject to any conditions
except (i) the purchase by an institution of the particular Debt Securities
shall not at any time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and (ii)
if the particular 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 such arrangements. The
agents, underwriters or dealers soliciting such offers will not have any
responsibility with respect to the validity of such arrangements or the
performance of the Company or such institutional investors thereunder.
Underwriters, dealers and agents that participate in the distribution of
the Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Company and any profit on the resale of
Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Act. Under agreements which may be entered into by the
Company, underwriters, dealers and agents who participate in the distribution of
Debt Securities may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Act, or to
contribution with respect to payments which the underwriters, dealers or agents
may be required to make with respect thereto. Underwriters, dealers and agents
may engage in transactions with, or perform services for, the Company or its
subsidiaries in the ordinary course of their respective businesses.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sales, at prices related to such prevailing market prices or at
negotiated prices.
The Prospectus Supplement with respect to the Offered Securities will state
whether the Offered Securities will be listed on any securities exchange. If the
Offered Securities are not listed on any national securities exchange, there can
be no assurance that there will be a secondary market for the Offered
Securities.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement, the validity of
the Offered Securities will be passed upon for the Company by John B. Canning,
Esq., Corporate Secretary and Associate General Counsel of the Company, and for
the underwriters or agents, as the case may be, by Cravath, Swaine & Moore, 825
Eighth Avenue, New York, New York 10019.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, which have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in their report with respect thereto, are included herein upon the authority of
said firm as experts in giving said report.
14
<PAGE> 60
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses payable by Rayonier in connection with the offering
herein described are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......................... $ 51,724
Printing registration statement, prospectus and other documents.............. 90,000
Printing and engraving securities............................................ 1,000
Trustee's fees and expenses.................................................. 15,000
NYSE listing fees............................................................ 0
Legal fees................................................................... 90,000
Accountants' fees............................................................ 25,000
Fees and expenses relating to Blue Sky qualifications and legality for
investment................................................................. 15,000
Rating agencies' fees........................................................ 75,000
Miscellaneous................................................................ 12,276
---------
Total................................................................... $ 375,000
---------
---------
</TABLE>
All amounts are estimates except for the registration fee payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The North Carolina Business Corporation Act provides that the registrant
may indemnify officers and directors who are parties in actual or threatened
lawsuits and other proceedings against reasonable expenses, judgments,
penalties, fines and amounts paid in settlement. North Carolina law further
provides that a corporation may purchase insurance, providing for the
indemnification of officers and directors whether or not the corporation would
have the power to indemnify them against such liability under the provisions of
the North Carolina law.
Reference is made to Article VI of the Amended and Restated Articles of
Incorporation of the Company filed as an exhibit to Rayonier's Registration
Statement on Form S-8 filed on February 28, 1994 (Registration No. 33-52437).
The Company has in effect insurance policies indemnifying the directors and
officers of Rayonier and its subsidiaries, against civil liabilities of such
directors and officers.
Reference is made to the form of indemnification agreement between Rayonier
and each of its directors and officers, filed as an exhibit to Rayonier's Form
10-K for the year ended December 31, 1993.
Any underwriters, dealers or agents who execute any of the Underwriting
Agreements referred to in Exhibit 1 to this Registration Statement will agree to
indemnify Rayonier's directors and its officers who signed the Registration
Statement against certain liabilities which might arise under the Act from
information furnished to Rayonier by or on behalf of any such indemnifying
party.
II-1
<PAGE> 61
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------------------------------------------------- -----------------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement Filed herewith
1.2 Form of Distribution Agreement Filed herewith
4.1 Indenture dated as of September 1, 1992 between the Incorporated by reference
Company and Bankers Trust Company, as Trustee, with to Exhibit 4.1 to the
respect to certain debt securities of the Company. Company's Annual Report on
Form 10-K for its fiscal year
ended December 31, 1993 (the
Form "10-K")
4.2 First Supplemental Indenture, dated as of December Incorporated by reference to
13, 1993 Exhibit 4.2 to the Company's
Form 10-K
4.3 Form of Indenture dated as of April 1, 1994 between Filed herewith
the Company and Chemical Bank, as Trustee, with
respect to certain debt securities of the Company.
4.4 Specimen Form of Debenture Filed herewith
4.5 Specimen Form of Series B Medium-Term Fixed Rate Note Filed herewith
4.6 Specimen Form of Series B Medium-Term Floating Rate Filed herewith
Note
5 Opinion of John B. Canning, Esq. with respect to the Filed herewith
legality of the securities registered hereby.
23.1 Consent of independent accountants. Filed herewith
23.2 Consent of John B. Canning, Esq. (See Exhibit 5) Filed herewith
24 Powers of Attorney. Filed herewith
25 Statement as to eligibility of Trustee. Filed herewith
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraph (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 periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-2
<PAGE> 62
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise (but that
term shall not extend to the insurance policies referred to in said Item 15),
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(6) To file an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act, as amended (the "Trust Indenture Act") in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
(7) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1), 424(b)(4), or
479(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(8) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE> 63
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Stamford, State of Connecticut on the 29th day of
March 1994.
RAYONIER INC.
By: /s/ RONALD M. GROSS
---------------------------------
Name Ronald M. Gross
Title Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ---------------
<S> <C> <C>
/s/ RONALD M. GROSS Chairman of the Board, March 29, 1994
- --------------------------------------------- President, Chief Executive
Ronald M. Gross Officer and Director
(Principal Executive Officer)
/s/ GERALD J. POLLACK Senior Vice President and March 29, 1994
- --------------------------------------------- Chief Financial Officer
Gerald J. Pollack
(Principal Financial Officer)
/s/ GEORGE S. ARESON Acting Corporate Controller March 29, 1994
- ---------------------------------------------
George S. Areson
(Principal Accounting Officer)
* Director
- ---------------------------------------------
William J. Alley
* Director
- ---------------------------------------------
Rand V. Araskog
* Director
- ---------------------------------------------
Donald W. Griffin
* Director
- ---------------------------------------------
Paul G. Kirk
* Director
- ---------------------------------------------
Katherine D. Ortega
* Director
- ---------------------------------------------
Burnell R. Roberts
* Director
- ---------------------------------------------
Gordon I. Ulmer
*By: /s/ GERALD J. POLLACK March 29, 1994
Attorney-in-fact
</TABLE>
II-4
<PAGE> 64
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------------------------------------------------- -----------------------------
<S> <C> <C>
1.1 Form of Underwriting Agreement Filed herewith
1.2 Form of Distribution Agreement Filed herewith
4.1 Indenture dated as of September 1, 1992 between the Incorporated by reference
Company and Bankers Trust Company, as Trustee, with to Exhibit 4.1 to the
respect to certain debt securities of the Company. Company's Annual Report on
Form 10-K for its fiscal year
ended December 31, 1993 (the
Form "10-K")
4.2 First Supplemental Indenture, dated as of December Incorporated by reference to
13, 1993 Exhibit 4.2 to the Company's
Form 10-K
4.3 Form of Indenture dated as of April 1, 1994 between Filed herewith
the Company and Chemical Bank, as Trustee, with
respect to certain debt securities of the Company.
4.4 Specimen Form of Debenture Filed herewith
4.5 Specimen Form of Series B Medium-Term Fixed Rate Note Filed herewith
4.6 Specimen Form of Series B Medium-Term Floating Rate Filed herewith
Note
5 Opinion of John B. Canning, Esq. with respect to the Filed herewith
legality of the securities registered hereby.
23.1 Consent of independent accountants. Filed herewith
23.2 Consent of John B. Canning, Esq. (See Exhibit 5) Filed herewith
24 Powers of Attorney. Filed herewith
25 Statement as to eligibility of Trustee. Filed herewith
</TABLE>
<PAGE> 1
EXHIBIT 1.1
[Draft--3/28/94]
Rayonier Inc.
Underwriting Agreement
New York, New York
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Dear Sirs:
Rayonier Inc., a North Carolina corporation (the "Company"),
proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule
I hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of April 1, 1994, between the Company and Chemical Bank, as trustee
(the "Trustee"). If the firm or firms listed in Schedule II hereto include
only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed to
refer to such firm or firms.
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as
so specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use
of Form S-3 under the Securities Act of
<PAGE> 2
2
1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement which is both a post-effective amendment to an
earlier registration statement covering debt obligations and a
new registration statement for additional debt obligations
(the file numbers of which are set forth in Schedule I hereto)
on such Form, including a basic prospectus, for registration
under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, and may
have used a Preliminary Final Prospectus, each of which has
previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering
of the Securities is a Delayed Offering and, although the
Basic Prospectus may not include all the information with
respect to the Securities and the offering thereof required by
the Act and the rules thereunder to be included in the Final
Prospectus, the Basic Prospectus includes all such information
required by the Act and the rules thereunder to be included
therein as of the Effective Date. The Company will next file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5)
a final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Securities and the offering thereof and, except to the extent
the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(ii) The Company meets the requirements for the use
of Form S-3 under the Act and has filed with the Commission a
registration statement which is both a post-effective
amendment to an earlier registration statement covering debt
obligations
<PAGE> 3
3
and a new registration statement for additional debt
obligations (the file numbers of which are set forth in
Schedule I hereto) on such Form, including a basic prospectus,
for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will
next file with the Commission either (x) a final prospectus
supplement relating to the Securities in accordance with Rules
430A and 424(b)(1) or (4), or (y) prior to the effectiveness
of such registration statement, an amendment to such
registration statement, including the form of final prospectus
supplement. In the case of clause (x), the Company has
included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to
be included in the Final Prospectus with respect to the
Securities and the offering thereof. As filed, such final
prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, with
respect to the Securities and the offering thereof and, except
to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture Act
of 1939 (the "Trust Indenture Act") and the respective rules
<PAGE> 4
4
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Final Prospectus (together with any supplement
thereto) will not, include any 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 Company makes
no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from
the Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date"
shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Basic Prospectus"
shall mean the prospectus referred to in paragraph (a) above contained
in the Registration Statement at the Effective Date including, in the
case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and
the offering thereof and is used prior
<PAGE> 5
5
to filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities, including the Basic
Prospectus, included in the Registration Statement at the Effective
Date. "Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended.
Such term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such
rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of
securities which is intended to commence promptly after the effective
date
<PAGE> 6
6
of a registration statement, with the result that, pursuant to Rules
415 and 430A, all information (other than Rule 430A Information) with
respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "Delayed
Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement
at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed
Offering or a Delayed Offering shall be set forth in Schedule I
hereto.
2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Schedule I hereto the principal amount of the Securities set forth
opposite such Underwriter's name in Schedule II hereto, except that, if
Schedule I hereto provides for the sale of Securities pursuant to delayed
delivery arrangements, the respective principal amounts of Securities to be
purchased by the Underwriters shall be as set forth in Schedule II hereto less
the respective amounts of Contract Securities determined as provided below.
Securities to be purchased by the Underwriters are herein sometimes called the
"Underwriters' Securities" and Securities to be purchased pursuant to Delayed
Delivery Contracts as hereinafter provided are herein called "Contract
Securities".
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company pursuant
to delayed delivery contracts ("Delayed Delivery Contracts"), substantially in
the form of Schedule III hereto but with such changes therein as the Company
may authorize or approve. The Underwriters will endeavor to make such
arrangements and, as compensation therefor, the Company will pay to the
Representatives, for the account of the Underwriters, on the Closing Date, the
percentage set forth in Schedule I hereto of the principal amount of the
Securities for which Delayed Delivery Contracts are made. Delayed Delivery
Contracts are to be with institutional investors, including commercial and
savings banks, insurance companies, pension funds, investment
<PAGE> 7
7
companies and educational and charitable institutions. The Company will enter
into Delayed Delivery Contracts in all cases where sales of Contract Securities
arranged by the Underwriters have been approved by the Company but, except as
the Company may otherwise agree, each such Delayed Delivery Contract must be
for not less than the minimum principal amount set forth in Schedule I hereto
and the aggregate principal amount of Contract Securities may not exceed the
maximum aggregate principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts. The principal amount of Securities
to be purchased by each Underwriter as set forth in Schedule II hereto shall be
reduced by an amount which shall bear the same proportion to the total
principal amount of Contract Securities as the principal amount of Securities
set forth opposite the name of such Underwriter bears to the aggregate
principal amount set forth in Schedule II hereto, except to the extent that you
determine that such reduction shall be otherwise than in such proportion and so
advise the Company in writing; provided, however, that the total principal
amount of Securities to be purchased by all Underwriters shall be the aggregate
principal amount set forth in Schedule II hereto less the aggregate principal
amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified in
Schedule I hereto (or such later date not later than five business days after
such specified date as the Representatives shall designate), which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 8 hereof (such date and time of delivery and payment
for the Underwriters' Securities being herein called the "Closing Date").
Delivery of the Underwriters' Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by certified or official bank check or
checks drawn on or by a New York Clearing House bank and payable in next day
funds. Delivery of the Underwriters' Securities shall be made at such location
as the Representatives shall reasonably designate at least one business day in
advance of the Closing Date and payment for the Securities shall be made at the
office specified in Schedule I hereto. Certificates for the Underwriters'
Securities shall be registered in such
<PAGE> 8
8
names and in such denominations as the Representatives may request not less
than three full business days in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement (including the
Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus unless the Company has furnished you a copy for your review
prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Company will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly
advise the Representatives (i) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Final Prospectus, and any supplement
thereto, shall have been filed with the Commission pursuant to Rule
424(b), (iii) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have
been filed or become effective, (iv) of any request by the Commission
for any amendment of the Registration Statement or supplement to the
Final Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or
the initiation or
<PAGE> 9
9
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statement therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii) supply
any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Securities,
will arrange for the determination of the legality of the
<PAGE> 10
10
Securities for purchase by institutional investors and will pay the
fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering.
(f) Until the business date set forth on Schedule I hereto,
the Company will not, without the consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities and any proposed
bank loans or commercial paper programs that have been disclosed to
the Underwriters prior to the date of this Agreement).
(g) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business with
Cuba, and the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Securities and Exchange Commission or
with the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or
with any person or affiliate located in Cuba changes in any material
way, the Company will provide the Department notice of such business
or change, as appropriate, in a form acceptable to the Department.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date
of
<PAGE> 11
11
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon New York City time on the business day following the
day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the Representatives
the opinion of John B. Canning, Corporate Secretary and Associate
General Counsel for the Company, dated the Closing Date, to the effect
that:
(i) the Company and each Restricted Subsidiary (as
defined in the Indenture and hereafter referred to as a
"Significant Subsidiary") has been duly incorporated or
organized and is validly existing as a corporation or
partnership in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
power and authority to own its properties and conduct its
business as described in the Final Prospectus, and is duly
qualified to do business as a foreign corporation or
partnership and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of
each Significant Subsidiary that is a corporation have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital
<PAGE> 12
12
stock or partnership interests of the Significant
Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries or partnerships free and
clear of any perfected security interest and, to the knowledge
of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Prospectus; the Securities
conform to the description thereof contained in the Final
Prospectus; and, if the Securities are to be listed on any
securities exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting
documents with respect to the Securities with such securities
exchange and such counsel has no reason to believe that the
Securities will not be authorized for listing, subject to
official notice of issuance and evidence of satisfactory
distribution;
(iv) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and, as to rights of acceleration and the
availability of equitable remedies, to equitable principles of
general applicability); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture, issued and delivered to
and paid for by the Underwriters pursuant to this Agreement,
in the case of the Underwriters' Securities, or by the
purchasers thereof pursuant to Delayed Delivery Contracts, in
the case of any Contract Securities, will constitute legal,
valid and binding obligations of the Company entitled to the
benefits of the Indenture;
<PAGE> 13
13
(v) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries,
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as
an exhibit, which is not described or filed as required; and
the statements included or incorporated in the Final
Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(vi) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Final Prospectus (other than the financial statements and
other financial and statistical information, as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act,
the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to
believe that at the Effective Date the Registration Statement
(other than that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to, as to which
such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in
<PAGE> 14
14
the light of the circumstances under which they were made, not
misleading;
(vii) this Agreement and any Delayed Delivery
Contracts have been duly authorized, executed and delivered by
the Company;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation of the transactions contemplated herein or in
any Delayed Delivery Contracts or the Indenture, except such
as have been obtained under the Act, the rules and regulations
thereunder and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the
Indenture, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof or of any
Delayed Delivery Contracts will conflict with, result in a
breach or violation of, or constitute a default under any law
or the charter or by-laws of the Company or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is
a party or bound and which is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or
decree known to such counsel to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries;
(x) except as set forth, or incorporated by
reference, in the Final Prospectus, as amended or
supplemented, there is not pending or, to the knowledge of
such counsel, threatened, any action, suit or proceeding
(including arbitration), to which the Company or any of its
subsidiaries is a party before or by any court or governmental
agency or body or arbitrator, which would result
<PAGE> 15
15
in any material adverse change in the condition, financial or
otherwise, earnings, operations or business prospects of the
Company and its subsidiaries, considered as a whole;
(xi) except as set forth, or incorporated by
reference in the Prospectus, as amended or supplemented, the
Company holds all necessary licenses, permits and
authorizations from regulatory authorities required in its
operations and for the marketing of its products, failure to
hold which would have a material adverse effect on the
condition, financial or otherwise, earnings, operations or
business prospects of the Company and its subsidiaries,
considered as a whole;
(xii) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement; and
(xiii) the Company is not an "investment company" or
an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as
amended.
With respect to paragraphs (i) and (ii) above, such counsel may rely
on an opinion of counsel reasonably satisfactory to counsel for the
Underwriters as to the due incorporation or organization (as the case
may be), good standing, power and authority, capital stock or
partnership interests (as the case may be) and such other matters as
counsel for the Underwriters agrees with regard to any Significant
Subsidiary which is incorporated or organized in any jurisdiction
other than the United States of America (or any political subdivision
thereof). With respect to paragraph (vi) above, such counsel may
state that his opinion and belief are based upon his participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and documents incorporated therein
by reference and review and discussion of the contents thereof, but
are without independent check or verification, except as specified.
References to the Final Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
<PAGE> 16
16
(c) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Securities, the Indenture, any Delayed Delivery Contracts,
the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
<PAGE> 17
17
(e) At the Closing Date, Arthur Andersen & Co. shall have
furnished to the Representatives a letter or letters (which may refer
to letters previously delivered to one or more of the
Representatives), dated as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Final Prospectus and
reported on by them comply in form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and committees of
the boards of directors of the Company and the Significant
Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to the date of the most recent audited
financial statements in or incorporated in the Final
Prospectus, nothing came to their attention which caused them
to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Final Prospectus do not comply in
form in all material respects with applicable
accounting requirements and with the published rules
and regulations of the Commission with respect to
financial statements included or incorporated in
quarterly
<PAGE> 18
18
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Final
Prospectus; or
(2) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information), audited or
unaudited, in or incorporated in the Registration
Statement and the Final Prospectus, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in the
short-term bank debt and current maturities of
long-term debt or long-term debt of the Company and
its subsidiaries or capital stock of the Company or
decreases in the shareholder equity or total assets
of the Company as compared with the amounts shown on
the most recent consolidated balance sheet included
or incorporated in the Registration Statement and the
Final Prospectus, or for the period from the date of
the most recent financial statements included or
incorporated in the Registration Statement and the
Final Prospectus to such specified date there were
any decreases, as compared with the corresponding
period in the preceding year, in sales, operating
income, operating income before provision for
dispositions, income from continuing operations or
net income of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited
<PAGE> 19
19
to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the
Final Prospectus and in Exhibit 12 to the Registration
Statement, including the information included or incorporated
in Items 1, 2, 6, 7, 11 and 13 of the Company's Annual Report
on Form 10-K, incorporated in the Registration Statement and
the Prospectus, agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, Arthur Andersen & Co. shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time, in form
and substance satisfactory to the Representatives, to the effect set forth
above.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purpose of Rule 436(g) under the Act) or
any notice
<PAGE> 20
20
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the
direction of the possible change.
(h) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(i) The Company shall have accepted Delayed Delivery
Contracts in any case where sales of Contract Securities arranged by
the Underwriters have been approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. Reimbursement of Underwriters' Expenses. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied, because of any termination pursuant to Section 9 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
<PAGE> 21
21
7. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the state-
<PAGE> 22
22
ments set forth in the last paragraph of the cover page, under the heading
"Underwriting" and, if Schedule I hereto provides for sales of Securities
pursuant to delayed delivery arrangements, in the last sentence under the
heading "Delayed Delivery Arrangements" in any Preliminary Final Prospectus or
the Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the documents referred
to in the foregoing indemnity, and you, as the Representatives, confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying
<PAGE> 23
23
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to whether any alleged untrue
<PAGE> 24
24
statement or omission relates to information provided by the Company or the
Underwriters. The Company and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule II hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the
event of a default by any Underwriter as set forth in this Section 8, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
<PAGE> 25
25
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited
or minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 6 and 7 hereof shall survive the termination or
cancelation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 1177 Summer Street, Stamford,
Connecticut 06904, attention of the legal department.
<PAGE> 26
26
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
RAYONIER INC.
By:
-----------------------
[Title]
<PAGE> 27
27
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Brothers Inc
By: Salomon Brothers Inc
By:
---------------------
Vice President
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
or
Salomon Brothers Inc
By:
---------------------
Vice President
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE> 1
EXHIBIT 1.2
[Draft--3/28/94]
RAYONIER INC.
$174,000,000
Series B Medium-Term Notes
Distribution Agreement
March , 1994
Lazard Freres & Co.
One Rockefeller Plaza
New York, NY 10020
Morgan Stanley & Co.
Incorporated
1221 Avenue of the Americas
New York, NY 10020
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Dear Sirs:
Rayonier Inc., a North Carolina corporation (the "Company"),
proposes to issue and sell from time to time its Series B Medium-Term Notes
(the "Securities") in an aggregate amount up to $174,000,000 and agrees with
each of you (individually, an "Agent", and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf and to offer Securities for sale otherwise then through an Agent (in
accordance with Section 2(a) hereof), the Company hereby (i) appoints each
Agent as an agent of the Company for the purpose of soliciting and receiving
offers to purchase Securities from the Company pursuant to Section 2(a) hereof
and (ii) agrees that, except as otherwise contemplated herein, whenever it
determines to sell Securities directly to any Agent as principal, it will enter
into a separate Terms Agreement (as defined in Section 2(b) hereof),
<PAGE> 2
relating to such sale in accordance with Section 2(b) hereof.
The Securities will be issued under an indenture, dated as of
September 1, 1992 (the "Indenture"), between the Company and Bankers Trust
Company, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 which is
both a post-effective amendment to an earlier registration statement covering
debt securities and a new registration statement for additional debt securities
of the Company, including the Securities. Any preliminary prospectus included
in such registration statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Securities Act
of 1933, as amended (the "Act"), is hereinafter called a "Preliminary
Prospectus". The various parts of such registration statement, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of the
registration statement became effective but excluding Form T-1 and, if
applicable, including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, each as
amended at the time such part of the registration statement became effective,
is hereinafter collectively called the "Registration Statement". The
prospectus (including, if applicable, any prospectus supplement) relating to
the Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus". Any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be. Any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus, including any supplement to
the Prospectus that sets forth only the terms
<PAGE> 3
3
of a particular issue of the Securities (a "Pricing Supplement"), shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated therein
by reference. Any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by reference in the
Registration Statement. Any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof) in relation to Securities sold pursuant to
this Agreement, in the form filed with the Commission pursuant to Rule 424(b)
under the Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of such filing.
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, each Agent as of the Execution Date (as
defined in Section 3 hereof), on each day of an Offering Period (as defined in
Section 2(a) hereof), as of the date of any Terms Agreement, as of each of the
times referred to in Section 4(g) and Section 4(h) hereof and as of the date of
delivery by the Company of any Securities sold hereunder (each such time being
hereinafter sometimes referred to as a "Representation Date") that:
(a) The Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to such Agent,
excluding exhibits to such Registration Statement but including all documents
incorporated by reference in the prospectus included therein, have been
declared effective by the Commission in such form; no other document with
respect to such Registration Statement or document incorporated by reference
therein has heretofore been filed or transmitted for filing with the
Commission; and no stop order suspending the effectiveness of such Registration
Statement has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission.
(b) The Registration Statement and the Prospectus, as amended
or supplemented as of such
<PAGE> 4
4
Representation Date, conform in all material respects with the requirements of
the Act, the rules and regulations (the "Rules and Regulations") of the
Commission thereunder and The Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the Registration Statement and Prospectus, as
amended or supplemented as of such Representation Date, do not as of such
Representation Date, and do not as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; except that the foregoing does not apply to (i) that part of
the Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act, of the Trustee, and
(ii) to statements or omissions in the Registration Statement or the
Prospectus, as amended or supplemented, if applicable, based upon written
information furnished to the Company by any Agent specifically for use therein.
(c) The documents incorporated by reference in the
Prospectus, as amended or supplemented as of such Representation Date, at the
time they became effective or were filed with the Commission, conformed in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, not misleading.
(d) The consolidated financial statements included or
incorporated by reference in the Registration Statement and Prospectus, as
amended or supplemented as of such Representation Date, present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their operations and
the changes in their consolidated financial position for the periods specified;
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the periods
involved, except as indicated therein; and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein.
<PAGE> 5
5
(e) Each Restricted Subsidiary (as defined in the Indenture
and hereafter referred to as a "Significant Subsidiary") of the Company has
been duly incorporated or organized and is validly existing in good standing
under the laws of the jurisdiction of its incorporation or organization, has
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which it owns or
leases properties or in which the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its subsidiaries considered as a whole.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of North
Carolina with corporate power and authority to own, lease and operate its
properties and 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 it owns or leases properties or
in which the conduct of its business requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries considered
as a whole.
(g) Neither the Company nor any of its Significant
Subsidiaries is in violation of its or any of their charters (or equivalent
documents) or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it or any of
them is a party or by which it or any of them or their properties may be bound
except for such violations or defaults which taken in the aggregate would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole; no consent, approval, authorization or order of any court or
governmental authority or agency is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such as may
be required under the Act, the Trust Indenture Act, the Rules and Regulations
or state securities or Blue Sky laws; and the execution and delivery of this
Agreement and the Indenture and the consummation of the transactions
contemplated in the Securities, the Indenture
<PAGE> 6
6
and this Agreement 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 material 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 of its subsidiaries 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 decree, except, in each case, where such conflict,
breach, default, lien, charge or other encumbrance or violation would not have
a material adverse effect on (i) the condition, financial or otherwise,
earnings, affairs or business prospects of the Company and its subsidiaries
considered as a whole and (ii) the Company's ability to perform its obligations
under this Agreement, the Indenture or the Securities.
(h) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus as amended or
supplemented as of such Representation Date and except as otherwise stated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, earnings, operations or business prospects of the
Company and its subsidiaries considered as a whole, whether or not arising in
the ordinary course of business and (ii) 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.
(i) Except as set forth, or incorporated by reference, in the
Prospectus as amended or supplemented as of such Representation Date, the
Company's operations and products, including its marketing thereof, are in
compliance in all material respects with the requirements, regulations and
procedures established by all Federal, state and foreign regulatory authorities
having jurisdiction, failure to comply with which would have a material adverse
effect on the condition, financial or otherwise, earnings, operations, or
business prospects of the Company and its subsidiaries considered as a whole.
(j) Except as set forth, or incorporated by reference, in the
Prospectus as or supplemented as
<PAGE> 7
7
of such Representation Date, 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 result in any material adverse
change in the condition, financial or otherwise, earnings, operations or
business prospects of the Company and its subsidiaries considered as a whole,
or might materially and adversely affect the properties or assets thereof or
might materially and adversely affect the offering of the Securities; and there
are no material contracts or other documents which are required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been so filed.
(k) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company,
except as rights to indemnity hereunder may be limited by applicable law.
(l) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
and has been duly qualified under the Trust Indenture Act.
(m) The series of Securities has been duly authorized, and,
when issued and delivered pursuant to such authorization, this Agreement and
any Terms Agreement, each of the Securities will have been duly authorized,
completed, executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Indenture, which will be substantially in the form filed as an
exhibit to the Registration Statement.
(n) The Company is in compliance with all provisions of
Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of
Doing Business with Cuba, and if the Company, or any of its affiliates
commences engaging in business with the government of Cuba or with any person
or affiliate located in Cuba after the Execution Date (as defined in Section
3), or if the information reported in the Prospectus, if any, concerning the
business of the Company or any of its affiliates with Cuba or with any person
or affiliate located in Cuba changes in any material way, the Company will
provide the Florida Department of Banking and Finance (the "Department") notice
of such
<PAGE> 8
8
business or change, as appropriate, in a form acceptable to the Department.
2. Appointment of Agents. (a) On the basis of the
representations and warranties, and subject to the terms and conditions herein
set forth, each of the Agents hereby severally and not jointly agrees, as agent
of the Company, to use its reasonable efforts to solicit and receive offers to
purchase the Securities during each Offering Period (as defined below) from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as this Agreement shall remain in
effect with respect to any Agent, the Company (except as provided in the
penultimate sentence of this paragraph) shall not, without the consent of such
Agent, solicit or accept offers to purchase, or sell, any medium-term notes
through any agent other than an Agent. However, the Company reserves the right
to sell, and may solicit and accept offers to purchase, Securities directly on
its own behalf, and, in the case of any such sale not resulting from a
solicitation made by any Agent, no commission will be payable with respect to
such sale. The Company may solicit or accept offers to purchase Securities
through an agent other than an Agent; provided, however, that, (i) in the case
of a continuous offering by such agent, (A) the Company and such agent execute
an agreement having terms and conditions (including, without limitation,
commission rates) substantially identical to this Agreement (which may be
accomplished by incorporating by reference in such agreement the terms and
conditions of this Agreement) and (B) the Company, promptly after entering into
such agreement, shall notify the Agents that it has done so and provide the
Agents with a copy of such agreement or (ii) in the case of a specific purchase
of Securities by such agent, (w) the Company did not solicit such offer, (x)
the Company and such agent execute an agreement with respect to such purchase
having terms and conditions (including, without limitation, commission rates)
with respect to such purchase substantially identical to the terms and
conditions that would apply to such purchase under this Agreement if such agent
was an Agent (which may be accomplished by incorporating by reference in such
agreement the terms and conditions of this Agreement), (y) such agreement shall
not provide for further offers or purchases and (z) the Company, promptly
following such purchase, shall notify the Agents of such agreement. These
provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement.
<PAGE> 9
9
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the payment
in each case therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by written
agreement between the Agents and the Company (the "Administrative Procedure").
The provisions of the Administrative Procedure shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms Agreement.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them in the
Administrative Procedure. The Company will furnish to the Trustee a copy of
the Administrative Procedure as from time to time in effect.
The Company shall notify each Agent in writing from time to
time as to the commencement of a period during which the Securities may be
offered and sold by such Agents (each period, commencing with such notification
and ending at such time as the authorization for offers and sales through the
Agents shall have been suspended by the Company or the Agents as provided
hereunder, being referred to as an "Offering Period").
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event no later than one business day in New York City,
after receipt of notice from the Company, the Agents will suspend solicitation
of offers to purchase Securities from the Company until such time as the
Company has advised the Agents that such solicitation may be resumed. For the
purpose of the foregoing sentence, "business day" shall mean any day which is
not a Saturday or Sunday or a legal holiday and which is not a day on which
banking institutions are authorized or required by law or regulation to close
in New York, New York. Any suspension of solicitation of offers to purchase
the Securities by the Company after the Commencement Date shall likewise
suspend until the next Offering Period, the representations and warranties set
forth in Section 1 and the agreements and covenants set forth in Sections 4(h),
4(i) and 6(d); provided, however, that if any event referred to in Sections
4(h), 4(i) or 6(d) hereof occurs during the period of suspension, no Agent
shall be required to resume soliciting offers to purchase Securities until the
Company has delivered the opinions,
<PAGE> 10
10
certificates and letters which would have been required to be delivered
pursuant to Sections 4(h), 4(i) or 6(d) hereof.
The Company agrees to pay each Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
<TABLE>
<CAPTION>
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
<S> <C>
From 9 months to less than 1 year . . . . . . . . . .125%
From 1 year to less than 18 months . . . . . . . . .150%
From 18 months to less than 2 years . . . . . . . . .200%
From 2 years to less than 3 years . . . . . . . . . .250%
From 3 years to less than 4 years . . . . . . . . . .350%
From 4 years to less than 5 years . . . . . . . . . .450%
From 5 years to less than 6 years . . . . . . . . . .500%
From 6 years to less than 7 years . . . . . . . . . .550%
From 7 years to less than 10 years . . . . . . . . .600%
From 10 years to less than 15 years . . . . . . . . .625%
From 15 years to less than 20 years . . . . . . . . .675%
From 20 years to less than 30 years . . . . . . . . .750%
30 years to less than 40 years. . . . . . . . . . . .875%
40 years or greater . . . . . . . . . . . . . . . . negotiated
at the time
of sale
</TABLE>
(b) Each sale of Securities to any Agent as principal shall
be made in accordance with the terms of this Agreement and (unless the Company
and such Agent shall otherwise agree) a supplemental agreement which will
provide for the sale of such Securities to, and the purchase thereof by, such
Agent at such discount as shall be agreed upon by the Company and such Agent.
Each such supplemental agreement is herein referred to as a "Terms Agreement".
Each Terms Agreement will take the form of either (i) a written agreement
substantially in the form of Annex I hereto or (ii) an oral agreement confirmed
in writing. A Terms Agreement may also specify certain provisions relating to
the reoffering of such Securities by such Agent. The commitment of any Agent
to purchase Securities as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the
<PAGE> 11
11
principal amount of Securities to be purchased by any Agent pursuant thereto,
the maturity date of such Securities, the price to be paid to the Company for
such Securities, the interest rate and interest rate formula, if any,
applicable to such Securities, the time and date and place of delivery of and
payment for such Securities and any other terms of such Securities. Such Terms
Agreement may also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Sections 4(h), 6(d)
and 4(i), respectively, hereof.
For each sale of Securities to an Agent as principal, the
procedural details relating to the issue and delivery of such Securities and
payment therefor shall be as set forth in the Administrative Procedure, except
to the extent otherwise agreed in any applicable Terms Agreement. For each
such sale of Securities to an Agent as principal, the Company agrees to pay
such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth in Section
2(a) hereof, unless a different commission or discount is agreed to in any
applicable Terms Agreement.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether set forth in a Terms
Agreement or in accordance with the Administrative Procedure, is referred to
herein as a "Time of Delivery".
Unless otherwise specified in a Terms Agreement, if any Agent
is purchasing Securities as principal, such Agent may resell such Securities to
other dealers. Any such sales may be at a discount, and, unless otherwise
specified in the applicable Pricing Supplement, such discount will not be in
excess of 66-2/3% of the discount to be received by such Agent from the
Company.
3. Delivery of Documents on Execution Date. The documents
required to be delivered pursuant to Section 6 hereof on the Execution Date (as
defined below) shall be delivered to the Agents at the offices of Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which a Terms
Agreement is executed.
<PAGE> 12
12
"Execution Date" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.
4. Certain Agreements and Covenants of the Company. The
Company covenants and agrees with each Agent:
(a) (i) to make no amendment or supplement to the Registration
Statement or the Prospectus (except for periodic or current reports filed under
the Exchange Act) after the date of any Terms Agreement or other agreement by
an Agent to purchase Securities as principal and prior to the related Time of
Delivery which shall be disapproved by any Agent which is a party to such Terms
Agreement or so purchasing as principal promptly after reasonable notice
thereof; (ii) to prepare, with respect to any Securities to be sold through or
to such Agent pursuant to this Agreement, a Pricing Supplement with respect to
such Securities in a form previously approved by such Agent and to file such
Pricing Supplement pursuant to the applicable paragraph of Rule 424(b) under
the Act within the time period prescribed therein; (iii) to make no amendment
or supplement to the Registration Statement or Prospectus (except for periodic
or current reports filed under the Exchange Act), other than any Pricing
Supplement, any supplement relating to debt securities other than the
Securities or the filing of a proxy statement under the Exchange Act, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long
as the delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such same period to advise such Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become effective
or any supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or by such
Agent) has been filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration Statement or
Prospectus or for additional
<PAGE> 13
13
information; and (v) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any such prospectus or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) promptly from time to time to take such action as such
Agent may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdiction as such Agent may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the distribution or sale of
the Securities; provided, however, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) to furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as each
time amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is filed
with the Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Securities (including Securities purchased from the Company by such Agent
as principal) and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than one
business day later); and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing) and to
<PAGE> 14
14
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in
respect of transactions in the Securities, the Company shall promptly prepare
and file with the Commission such an amendment or supplement;
(d) to make generally available to its security holders as
soon as practicable, but in any event no later than 18 months after the
"effective date of the Registration Statement" (as defined in Rule 158(c)), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) so long as the Company's common stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and any Securities sold
to such Agent as principal or by such Agent hereunder are outstanding, to
furnish to such Agent copies of all reports or other communications with
respect to the financial position, earnings, business operations or business
prospects of the Company (financial or other) furnished to its stockholders
generally or to the Commission, and deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
such Agent may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) that, from the date of any Terms Agreement with such Agent
or other agreement of such Agent to purchase Securities as principal and
continuing to and including the earlier of (i) the date such Agent notified the
Company that the restrictions imposed by this subsection (f) are terminated and
(ii) the related Time of Delivery, not to offer, sell, contract to sell or
otherwise dispose of any
<PAGE> 15
15
debt securities of the Company which both mature more than nine months after
such Time of Delivery and are substantially similar to the Securities, without
the prior written consent of such Agent;
(g) that each request by the Company to any Agent to solicit
offers to purchase Securities from the Company, each acceptance by the Company
of an offer to purchase Securities hereunder (including any purchase by such
Agent as principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with such Agent, shall be deemed
to be an affirmation to such Agent that the representations and warranties of
the Company contained in this Agreement are true and correct as of the date of
such request, acceptance or of such Terms Agreement, as the case may be, as
though made at and as of such date, and an undertaking that such
representations and warranties will be true and correct as of the settlement
date for the Securities relating to such acceptance or as of the Time of
Delivery relating to such sale, as the case may be, as though made at and as of
such date (except that such representations and warranties shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Securities to such date);
(h) that each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement, a supplement relating to debt securities other than the Securities
or for a change that the Agents deem to be immaterial), each time a document
filed under the Act or the Exchange Act is incorporated by reference into the
Prospectus (other than (i) a proxy statement which, if incorporated by
reference into an Annual Report on Form 10-K, is filed with the Commission on
or prior to the date such Annual Report on Form 10-K is filed, (ii) an Annual
Report of employee stock purchase, savings and similar plans on Form 11-K or
(iii) a Current Report on Form 8-K filed solely for the purpose of
incorporating a press release announcing the Company's quarterly or annual
results of operations, unless an Agent otherwise reasonably requests an opinion
in connection with such Current Report), and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and such
Terms Agreement specifies the delivery of an opinion under this Section 4(h) as
a condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent a
written opinion of its General Counsel, or at the Company's election
<PAGE> 16
16
such other counsel acceptable to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent to the effect of the opinion
set forth in Section 6(c), or in lieu of such opinion, an opinion to the effect
that such Agent may rely on the opinion of such counsel to the effect of the
opinion referred to in Section 6(c) hereof which was last furnished to such
Agent to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date); provided, however, that if at the time of such
amendment, supplement, incorporation or Time of Delivery relating to such sale,
as the case may be, the Company is not accepting offers to purchase the
Securities or has instructed the Agents to suspend their solicitation of offers
to purchase Securities, then the opinion required to be delivered pursuant to
this Section 4(h) shall not be required until the commencement of the next
Offering Period;
(i) that each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement, a supplement relating to debt securities other than the Securities
or for a change that the Agents deem to be immaterial), each time a document
filed under the Act or the Exchange Act is incorporated by reference into the
Prospectus (other than (i) a proxy statement which, if incorporated by
reference into an Annual Report on Form 10-K, is filed with the Commission on
or prior to the date such Annual Report on Form 10-K is filed, (ii) an Annual
Report of employee stock purchase, savings and similar plans on Form 11-K or
(iii) a Current Report on Form 8-K filed solely for the purpose of
incorporating a press release announcing the Company's quarterly or annual
results of operations, unless the Agent otherwise reasonably requests a
certificate), and each time the Company sells Securities to an Agent as
principal and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to the Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to such sale,
as the case may be, in such form and executed by such officers of the Company
as shall be reasonably satisfactory to such Agent, to the effect that the
statements contained in the
<PAGE> 17
17
certificate referred to in Section 6(f) hereof which was last furnished to such
Agent are true and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(f) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
provided, however, that if at the time of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may be,
the Company is not accepting offers to purchase the Securities or has
instructed the Agents to suspend their solicitation of offers to purchase
Securities, then the certificate required to be delivered pursuant to this
Section 4(i) shall not be required until the commencement of the next Offering
Period; and
(j) to offer to any person who has agreed to purchase
Securities as the result of an offer to purchase solicited by such Agent the
right to refuse to purchase and pay for such Securities if, on the related
settlement date fixed pursuant to the Administrative Procedure, any condition
set forth in Section 6(a), 6(e) or 10(b) hereof shall not have been satisfied
(it being understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities shall be
substituted, for purposes of this Section 4(j), for the respective judgments of
an Agent with respect to certain matters referred to in such Sections 6(a),
6(e) and 10(b), and that such Agent shall have no duty or obligation whatsoever
to exercise the judgment permitted under such Sections 6(a), 6(e) and 10(b) on
behalf of any such person).
5. Expenses. The Company covenants and agrees with each
Agent that the Company will pay or cause to be paid the following: (a) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act; and (b)
provided that such expenses have been authorized and approved in advance by the
Company, (i) the fees, disbursements and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and under any Terms Agreement
and the transactions contemplated hereunder and under any Terms Agreement; (ii)
all other expenses in connection with the
<PAGE> 18
18
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to
such Agent; (iii) the cost of printing or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including the fees and disbursements of counsel for the
Agents in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (v) any fees charged by securities rating
services for rating the Securities; (vi) any filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vii) the cost of printing the Securities;
(viii) the fees and expenses of the Trustee and any agent of the Trustee and
any transfer or paying agent of the Company and the fees and disbursements of
counsel for the Trustee or such agent in connection with the Indenture and the
Securities; (ix) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities; and (x) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. Except as provided in
Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs.
6. Conditions. The obligation of any Agent, as agent of the
Company, at any time ("Solicitation Time") to solicit offers to purchase the
Securities and the obligation of any Agent to purchase Securities as principal,
pursuant to any Terms Agreement or otherwise, shall in each case be subject, in
such Agent's discretion, to the condition that all representations and
warranties and other statements of the Company herein (and, in the case of an
obligation of an Agent under a Terms Agreement, in or incorporated in such
Terms Agreement by reference) are true and correct at and as of the Execution
Date and any applicable date referred to in Section 4(h) hereof that is prior
to such Solicitation Time or Time of Delivery, as the case may be, and at and
as of such Solicitation Time or Time of Delivery, as the case may be, the
condition that prior to such Solicitation Time or
<PAGE> 19
19
Time of Delivery, as the case may be, the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) (i) with respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, if the
Prospectus or any amendment or supplement thereto (including the Pricing
Supplement) is required to be filed with the Commission pursuant to Rule 424(b)
under the Act, the Prospectus and any such amendment or supplement shall have
been filed in the manner and within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 4(a) hereof; (ii) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and (iii)
all requests for additional information on the part of the Commission shall
have been complied with to the reasonable satisfaction of such Agent.
(b) Cravath, Swaine & Moore, counsel to the Agents, shall
have furnished to such Agent (i) such opinion or opinions, dated the Execution
Date, with respect to the incorporation of the Company, the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as such Agent may reasonably
request, and (ii) if required pursuant to any Terms Agreement to which such
Agent is a party, or if and to the extent requested by such Agent, on each
applicable date that is on or prior to such Solicitation Time or Time of
Delivery referred to in Section 4(h) hereof with respect to the opinion of the
General Counsel of the Company, if in the reasonable judgment of such Agent,
such amendment or supplement contains information of such a nature that an
opinion of counsel to the Agents should be furnished, an opinion or opinions,
dated such applicable date, to the effect that such Agent may rely on the
opinion or opinions which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were dated the date of
such letter authorizing reliance (except that the statements in such last
opinion or opinions shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in any case, in
lieu of such an opinion or opinions, an opinion or opinions of the same tenor
as the opinion or opinions referred to in clause (i) but modified to relate to
the Registration Statement and the Prospectus as amended and
<PAGE> 20
20
supplemented to such date; and in each case such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters.
(c) John B. Canning, Corporate Secretary and Associate
General Counsel of the Company (or such other counsel as provided in Section
4(h) hereof), shall have furnished to such Agent a written opinion, dated the
Execution Date and each applicable date referred to in Section 4(h) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the case may
be, in form and substance satisfactory to such Agent, to the effect that:
(i) the Company and each of its Significant Subsidiaries has
been duly incorporated or organized and is validly existing in good
standing under the laws of the jurisdiction of its incorporation or
organization, has power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus as amended or supplemented, and, to the
best of such counsel's knowledge and information after reasonable
investigation, is duly qualified to transact business and is in good
standing in each jurisdiction in which it owns or leases properties or
in which the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries considered as a whole;
(ii) all the outstanding shares of capital stock of each
Significant Subsidiary that is a corporation have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding shares of
capital stock or partnership interests of the Significant Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries or partnerships free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the Securities conform to the description
thereof contained in the Prospectus; and, if the Securities are to be
listed on
<PAGE> 21
21
any securities exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of satisfactory
distribution, or the Company has filed a preliminary listing
application and all required supporting documents with respect to the
Securities with such securities exchange and such counsel has no
reason to believe that the Securities will not be authorized for
listing, subject to official notice of issuance and evidence of
satisfactory distribution;
(iv) the Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company in
accordance with the Indenture and such authorization, and paid for by
the purchaser thereof, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and the
Indenture has been duly qualified under the Trust Indenture Act;
(vi) except as set forth, or incorporated by reference, in the
Prospectus, as amended or supplemented as of the date of such opinion,
there is not pending or, to the knowledge of such counsel, threatened,
any action, suit or proceeding (including arbitration), to which the
Company or any of its subsidiaries is a party before or by any court
or governmental agency or body or arbitrator, which would result in
any material adverse change in the condition, financial or otherwise,
earnings, operations or business prospects of the Company and its
subsidiaries, considered as a whole;
(vii) except as set forth, or incorporated by reference in the
Prospectus, as amended or supplemented as of the date of such opinion,
the Company holds all necessary licenses, permits and authorizations
from regulatory authorities required in its operations and for the
marketing of its products, failure to hold
<PAGE> 22
22
which would have a material adverse effect on the condition, financial
or otherwise, earnings, operations or business prospects of the Company
and its subsidiaries, considered as a whole;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required in connection with the
transactions contemplated by this Agreement, any applicable Terms
Agreement, or the Indenture, except such as may be required under the
Act, the Trust Indenture Act, the Rules and Regulations or state
securities or Blue Sky laws; and, to the best of such Counsel's
knowledge and information, the execution and delivery of this
Agreement, the Securities and the Indenture, and the consummation of
the transactions contemplated herein, 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
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument binding upon the Company or any of its subsidiaries,
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 decree;
(ix) the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in the
Prospectus that are not described in the Registration Statement or
Prospectus (or required to be filed under the Exchange Act if upon such
filing they would be incorporated therein, in whole or in part, by
reference) or to be filed as exhibits to the Registration Statement
that are not described and filed as required;
(x) the Registration Statement has become effective under the
Securities Act; any required filing of any Preliminary Prospectus and
the Prospectus, and any Supplements thereto, pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule
424(b); and the Company has not
<PAGE> 23
23
received notification that any stop order suspending the effectiveness
of the Registration Statement has been issued or that any proceedings
for that purpose have been instituted or are pending before or
threatened by the Commission, and, to the best of my knowledge, no
such stop order or proceedings have been issued, instituted or
threatened by the Commission;
(xi) statements set forth in the Prospectus under the headings
"Description of the Debt Securities" and "Plan of Distribution" and in
the Prospectus Supplement under the headings "Description of Notes"
and "Supplemental Plan of Distribution" and in the Registration
Statement under Item 15 insofar as such statements constitute a
summary of the legal matters or documents referred to therein are an
accurate summary of such legal matters or documents;
(xii) such counsel (1) is of the opinion that the Registration
Statement and the Prospectus as amended or supplemented (other than
the financial statements and related schedules and other financial
information therein and the statements set forth in the Prospectus
under the heading "United States Federal Taxation", as to which such
counsel need express no opinion), comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules and regulations
thereunder and (2) such counsel has no reason to believe that the
Registration Statement or any further amendment or supplement thereto
made by the Company prior to the date of such opinion (other than the
statements set forth in the Prospectus under the heading "United
States Federal Taxation" and except for that part of the Registration
Statement that constitutes the Form T-1 hereinafter referred to, as to
which such counsel need express no belief), at the time it became
effective contained and as of the date of such opinion contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of the date of such opinion, the
Prospectus as amended or supplemented (other than the statements set
forth under the heading "United States Federal Taxation", as to which
such counsel need express no belief) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein,
<PAGE> 24
24
in light of the circumstances in which they were made, not misleading;
(xiii) this Agreement and any Terms Agreement have been duly
authorized, executed and delivered by the Company;
(xiv) no holders of securities of the Company have rights to
the registration of such securities under the Registration Statement;
and
(xv) the Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940; as amended.
With respect to paragraphs (i) and (ii) above, such counsel
may rely on an opinion of counsel reasonably satisfactory to Cravath, Swaine &
Moore as to the due incorporation or organization (as the case may be), good
standing, power and authority, capital stock or partnership interests (as the
case may be) and such other matters as Cravath, Swaine & Moore agrees with
regard to any Significant Subsidiary which is incorporated or organized in any
jurisdiction other than the United States of America (or any political
subdivision thereof). With respect to paragraph (xii) above, John B. Canning
(or such other counsel as provided in Section 4(h) hereof) may state that his
opinion and belief are based upon his participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and documents incorporated therein by reference and review and discussion of
the contents thereof, but are without independent check or verification, except
as specified.
(d) Day, Berry & Howard, counsel to the Company (or such
other counsel as provided in Section 4(h) hereof), shall have furnished to such
Agent a written opinion, dated the Execution Date and each applicable date
referred to in Section 4(h) hereof that is on or prior to such Solicitation
Time or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that the statements in the Final
Prospectus under the caption "United States Federal Taxation", insofar as such
statements constitute a summary of the principal United States Federal income
tax consequences to holders of the Securities, provide a fair and accurate
summary thereof.
<PAGE> 25
25
(e) On the Execution Date and each time the Registration
Statement or the Prospectus has been amended or supplemented (other than by a
Pricing Supplement, a supplement relating to debt securities other than the
Securities or for a change that the Agents deem to be immaterial), and each
time that a document filed under the Act or the Exchange Act has been
incorporated by reference into the Prospectus, in either case to set forth
financial information included in or derived from the Company's consolidated
financial statements or accounting records (other than (i) a proxy statement
which, if incorporated by reference into an Annual Report on Form 10-K, was
filed with the Commission on or prior to the date such Annual Report on Form
10-K was filed, (ii) an Annual Report of employee stock purchase, savings and
similar plans on Form 11-K or (iii) a Current Report on Form 8-K filed solely
for the purpose of incorporating a press release announcing the Company's
quarterly or annual results or operations, unless an Agent otherwise reasonably
requested a letter from the independent accountants in connection with such
Current Report), on the date of such amendment or supplement or on the date of
such filing, and each time the Company sells Securities to an Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 6(d) as a condition to the purchase of
Securities pursuant to such Terms Agreement, at the Time of Delivery with
respect to such Securities, the independent public accountants who have
certified the financial statements of the Company and its subsidiaries included
in or incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Execution Date or dated the date of
such amendment, supplement, filing or Time of Delivery, as the case may be, in
form and substance reasonably satisfactory to such Agent containing statements
and information of the type ordinarily included in accountant's "comfort
letters" to underwriters in similar circumstances with respect to the financial
statements and certain financial information contained in or incorporated by
reference in the Registration Statement or Prospectus and confirming that they
are independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder;
provided, however, that if at the time of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may be,
the Company is not accepting offers to purchase the Securities or has
instructed the Agents to suspend their solicitation of offers to purchase
Securities, then the letter required
<PAGE> 26
26
to be delivered pursuant to this Section 4(h) shall not be required until the
commencement of the next Offering Period.
(f) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, as amended or
supplemented, there shall not have been a material adverse change in the
condition, financial or otherwise, earnings, operations or business prospects
of the Company and its subsidiaries considered as a whole, whether or not
arising in the ordinary course of business, the effect of which is in the
judgment of such Agent so material and adverse as to make it impracticable or
inadvisable to proceed with the solicitation by such Agent of offers to
purchase Securities from the Company or the purchase by such Agent of
Securities from the Company as principal, as the case may be, on the terms and
in the manner contemplated in the Prospectus as amended or supplemented.
(g) The Company shall have furnished or caused to be
furnished to such Agent certificates of officers of the Company dated the
Execution Date and each applicable date referred to in Section 4(i) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the case may
be, in such form and executed by such officers of the Company as shall be
reasonably satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the Execution
Date or such applicable date, as the case may be, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to the
Execution Date or such applicable date, as the case may be, as to the matters
set forth in subsections (a) and (e) of this Section 6, and as to such other
matters as such Agent may reasonably request.
7. (a) Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Agent and each person, if any, who controls
any Agent within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
or judgments (including without limiting the foregoing the reasonable legal and
other expenses incurred in connection with any action, suit or proceeding or
any claim asserted) arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus, as amended or supplemented, or caused by any omission or alleged
omission to state therein a material fact required
<PAGE> 27
27
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished in writing to the
Company by such Agent expressly for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have to the
persons referred to above in this subsection.
(b) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus, as amended or supplemented, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Agent furnished to the
Company in writing by such Agent expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (hereinafter called the
indemnified party) shall promptly notify the person against whom such indemnity
may be sought (hereinafter called the indemnifying party) in writing and the
indemnifying party, upon request of the indemnified party, shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others the
indemnifying party may designate and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such action or proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
<PAGE> 28
28
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the reasonable fees and expenses of more than one separate
firm (in addition to any local counsel) for all Agents and all persons, if any,
who control Agents within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act and (b) the reasonable fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Agents and such
control persons of the Agents, such firm shall be designated in writing by the
Agents. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
<PAGE> 29
29
and each Agent on the other from the offering of the Securities to which such
losses, claims, damage or liability relates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and each
Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and each Agent on the other shall be deemed to be
in the same proportion as the total net proceeds from the sale of Securities
(before deducting expenses) received by the Company bear to the total
commissions or discounts received by such Agent in respect thereof. The
relative fault of the Company on the one hand and each Agent on the other shall
be determined by the reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading relates to information supplied by
the Company or by such Agent and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to Section 7 (d) were determined by
per capita allocation (even if all Agents were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of the immediately preceding paragraph, an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities purchased by or through such
Agent were sold exceeds the amount of any damages which such Agent has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the
<PAGE> 30
30
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents to contribute pursuant to Section 7(d) are
several in proportion to the respective purchases made by or through it to
which such loss, claim, damage or liability relates and are not joint.
8. Acting Solely as Agents. Each Agent, in soliciting offers
to purchase Securities from the Company and in performing the other obligations
of such Agent hereunder (other than in respect of any purchase by an Agent as
principal, pursuant to a Terms Agreement or otherwise), is acting solely as
agent for the Company and not as principal. Each Agent will make reasonable
efforts in good faith to assist the Company in obtaining performance by each
purchaser whose offer to purchase Securities from the Company was solicited by
such Agent and has been accepted by the Company, but such Agent shall not have
any liability to the Company in the event such purchase is not consummated for
any reason. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall (i)
hold each Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) notwithstanding such default,
pay to the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
9. Survival. The respective indemnities, agreements,
representations, warranties and other statements by any Agent and the Company
set forth in or made pursuant to this Agreement shall remain in full force and
effect regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Agent or any controlling person of any
Agent, or the Company, or any officer or director or any controlling person of
the Company, and shall survive each delivery of and payment for any of the
Securities.
10. Termination. (a) The provisions of this Agreement
relating to the solicitation of offers to purchase Securities from the Company
may be suspended or terminated at any time by the Company as to any Agent or by
any Agent as to such Agent upon the giving of written notice of such suspension
or termination to such Agent or the Company, as the case may be. In the event
of such suspension or termination with respect to any Agent, (x) this Agreement
<PAGE> 31
31
shall remain in full force and effect with respect to any Agent as to which
such suspension or termination has not occurred, (y) this Agreement shall
remain in full force and effect with respect to the rights and obligations of
any party which have previously accrued or which relate to Securities which are
already issued, agreed to be issued or the subject of a pending offer at the
time of such suspension or termination and (z) in any event, this Agreement
shall remain in full force and effect insofar as the fifth paragraph of Section
2(a), Section 4(d), Section 4(e), Section 5, Section 7, Section 8, Section 9
and Section 10(b) hereof are concerned.
(b) Any agreement by an Agent to purchase Securities as
principal, whether pursuant to a Terms Agreement or otherwise, may be
terminated by such Agent if, since the date of the acceptance of any offer to
purchase Securities or the date of the relevant Terms Agreement, there shall
have occurred any of the following: (i) any outbreak or escalation of
hostilities or other calamity or crisis or material change in existing
financial, political, economic or securities market conditions, the effect of
which is such as to make it, in the reasonable judgment of such Agent,
impracticable or inadvisable in the manner contemplated in the Prospectus to
proceed with the solicitation of the offer to purchase the Securities or to
purchase Securities from the Company as principal, pursuant to the applicable
Terms agreement or otherwise, as the case may be, or enforce contracts for the
sale of the Securities, (ii) trading generally on either the American Stock
Exchange or the New York Stock Exchange has 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
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal or New York authorities or, if the Company's
common stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, trading in the Company's common stock shall have been suspended by the
Commission or an Exchange (as defined in Section 3(a)(i) of the Exchange Act)
which lists or reports such common stock; (iii) any material adverse change in
the condition, financial or otherwise, earnings, operations or business
prospects of the Company and its subsidiaries considered as a whole, whether or
not arising in the ordinary cause of business; (iv) any downgrading in the
rating accorded the Company's debt securities by Moody's Investors Service,
Inc. or Standard & Poor's Corporation (or their successors); or
<PAGE> 32
32
(v) any such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities.
11. Notices. Except as otherwise specifically provided
herein or in the Administrative Procedure, all statements, requests, notices
and advices hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to Lazard Freres & Co. shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
One Rockefeller Plaza, New York, New York 10020, Facsimile Transmission No.
(212) 632-6984, Attention: Head of Syndicate Department; if to Morgan Stanley
& Co. Incorporated shall be sufficient in all respects when delivered or sent
by telex, facsimile transmission or registered mail to 1221 Avenue of the
Americas, New York, New York 10020, Facsimile Transmission No. (212) 764-7490,
Attention: Continuously Offered Products and Morgan Stanley & Co.
Incorporated, 1251 Avenue of the Americas, New York, New York 10020, Facsimile
Transmission No. (212) 703-6476, Attention: Peter Cooper - Investment Banking
Information Center, if to Salomon Brothers Inc shall be sufficient in all
respects when delivered or sent by telex, facsimile transmission or registered
mail to Seven World Trade Center, New York, New York 10048, Facsimile
Transmission No. (212) 783-2274, Attention: Medium-Term Note Department, and if
to the Company shall be sufficient in all respects when delivered or sent by
facsimile transmission (provided that the original of such facsimile
transmission is promptly delivered or sent to the Company by mail) or
registered mail to Rayonier Inc., 1177 Summer Street, Stamford, Connecticut
06904, Facsimile Transmission No. (203) 964-4333, Attention: Corporate
Secretary.
12. Successors. This Agreement and any Terms Agreement shall
be binding upon, and inure solely to the benefit of, each Agent and the
Company, and to the extent provided in Section 7, Section 8 and Section 9
hereof, the officers and directors of the Company and any person who controls
any Agent or the Company, and their respective personal representatives,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any Terms Agreement. No purchaser of
any of the Securities through or from any Agent hereunder shall be deemed a
successor or assign by reason merely of such purchase.
<PAGE> 33
33
13. Time of Essence. Time shall be of the essence in this
Agreement and any Terms Agreement. As used herein, the term "business day"
shall mean any day when the Commission's office in Washington, D.C. is open for
business.
14. GOVERNING LAW. THIS AGREEMENT AND ANY TERMS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
15. Counterparts. This Agreement and any Terms Agreement may
be executed by any one or more of the parties hereto and thereto in any number
of counterparts, each of which shall be an original, but all of such respective
counterparts shall together constitute one and the same instrument.
<PAGE> 34
34
If the foregoing is in accordance with your understanding,
please sign and return to us ten counterparts hereof, whereupon this letter and
the acceptance by each of you thereof shall constitute a binding agreement
between the Company and each of you in accordance with its terms.
Very truly yours,
RAYONIER INC.,
by
--------------------------------
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
- -------------------------------
(Lazard Freres & Co.)
Morgan Stanley & Co. Incorporated,
by
--------------------------
Name:
Title:
Salomon Brothers Inc,
by
--------------------------
Name:
Title:
<PAGE> 1
Exhibit 4.3
________________________________________________________________________________
________________________________________________________________________________
INDENTURE
RAYONIER INC.
to
CHEMICAL BANK
as Trustee
Dated as of April 1, 1994
________________________________________________________________________________
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - Definitions and Other Provisions of General Application . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Compliance Certificate and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.03. Forms of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.04. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.05. Notices, Etc. to Trustee and Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.06. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.07. Conflict With Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.08. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.09. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.10. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.11. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.13. Nonbusiness Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II Security Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.02. Form of Face of Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.03. Form of Reverse of Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.04. Additional Provisions Required in Global Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III The Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.01. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.02. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.03. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.04. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.05. Registration, Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.07. Payment of Interest; Interest Rights Preserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.08. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.09. Cancelation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.10. Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.01. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.02. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.03. Defeasance Upon Deposit of Funds or Government
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.04. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.05. Indemnity for Government Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.04. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.06. Application of Money Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.07. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.09. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.12. Control by Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.15. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VI The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.01. Certain Duties and Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.02. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.03. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.05. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.06. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.07. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.08. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.09. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.10. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.11. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.12. Merger, Conversion, Consolidation or
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Succession to Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.13. Preferential Collection of Claims Against
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VII Holders' Lists and Reports by Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.02. Preservation of Information; Communications
to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.03. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.04. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.01. Company May Consolidate, etc., Only on
Certain Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IX Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.01. Supplemental Indentures Without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.02. Supplemental Indentures with Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.03. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.04. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.05. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.06. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE X Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.01. Payment of Principal, Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.03. Money for Security Payments to be Held in
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.04. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.05. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.06. Statement as to Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.07. Organizational Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.08. Limitations upon Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.09. Limitation on Sale and Lease-Backs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
SECTION 10.10. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XI Redemption of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.01. Applicability of This Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.02. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.03. Selection of Securities to be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.04. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.06. Payment of Securities Called for
Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
<PAGE> 6
RAYONIER, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to 318(a) which, pursuant to
Section 318(c) of the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, are a part of and govern the Indenture whether or
not physically contained therein) and Indenture, dated as of April 1, 1994
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
Sect.310(a)(1), (2) and (5) 6.09
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 6.08
6.10
(c) Not Applicable
Sect.311(a) 6.13(a)
(b) 6.13(b)
(b)(2) 7.03(a)(2)
7.03(b)
Sect.312(a) 7.01
7.02(a)
(b) 7.02(b)
(c) 7.02(c)
Sect.313(a) 7.03(a)
(b) 7.03(b)
(c) 7.03(a),7.03(b)
(d) 7.03(c)
Sect.314(a)(1), (2) and (3) 7.04
(a)(4) 10.06
(b) Not Applicable
(c)(1) 1.02
(c)(2) 1.02
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.02
(f) Not Applicable
Sect.315(a) 6.01(a)
(b) 6.02
7.03(a)(6)
(c) 6.01(b)
(d) 6.01(c)
(d)(1) 6.01(a)(1)
</TABLE>
<PAGE> 7
2
<TABLE>
<S> <C>
(d)(2) 6.01(c)(2)
(d)(3) 6.01(c)(3)
(e) 5.14
Sect.316(a) 1.01
(a)(1)(A) 5.12
(a)(1)(B) 5.13
(a)(2) Not Applicable
(b) 5.08
(c) 1.04(f)
Sect.317(a)(1) 5.03
(a)(2) 5.04
(b) 10.03
Sect.318(a) 1.07
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 8
INDENTURE, dated as of April 1, 1994, between RAYONIER INC., a
North Carolina corporation (hereinafter called the "Company") having its
principal office at 1177 Summer Street, Stamford, Connecticut 06904, and
CHEMICAL BANK, a New York banking corporation, as Trustee (hereinafter called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered.
All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE> 9
6
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles which are generally accepted at the date or time of such
computation; provided, that when two or more principles are so generally
accepted, it shall mean that set of principles consistent with those in use by
the Company; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Board of Directors" means either the board of directors of
the Company or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors, or such committee of the Board of Directors
or officers of the Company to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means every day except a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution of this instrument such
<PAGE> 10
7
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the
written request or order signed in the name of the Company by the President or
a Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities (excluding any thereof which
are by their terms extendible or renewable at the option of the obligor thereon
to a time more than 12 months after the time as of which the amount thereof is
being computed), and (ii) all segregated goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, all
as set forth on the most recent balance sheet of the Company and its
consolidated Subsidiaries and prepared in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the office of the Trustee in
The City of New York, Borough of Manhattan, at which at any particular time its
corporate trust business shall be principally administered, which as of the
date of execution of this Indenture is located at 450 West 33rd Street, New
York, New York 10001, Attention: Corporate Trustee Administration.
"Corporation" includes corporations, associations, companies
and business trusts.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 with respect to such series (or any successor thereto).
<PAGE> 11
8
"Dollars" or the use of "$" shall mean United States dollars.
"Event of Default" unless otherwise specified in the Board
Resolution or supplemental indenture creating a series of Securities, has the
meaning specified in Article V.
"Funded Debt" means all indebtedness for borrowed money having
a maturity of more than 12 months from the date as of which the amount thereof
is to be determined or having a maturity of less than 12 months but by its
terms being renewable or extendible beyond 12 months from such date at the
option of the borrower.
"Global Security" means a Security in the form prescribed in
Section 2.04 evidencing all or part of a series of Securities, issued to the
Depositary or its nominee for such series, and registered in the name of such
Depositary or nominee.
"Government Obligations" means, with respect to the Securities
of any series, securities which are (i) direct obligations of the United States
of America or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed by the United States of America
and which in either case, are full faith and credit obligations of the United
States of America and are not callable or redeemable at the option of the
issuer thereof and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of such depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means a Person in whose name a Security is registered
in the Securities Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable
<PAGE> 12
9
provisions hereof and shall include the terms of each particular series of
Securities established as contemplated by Section 3.01.
"Interest Payment Date" means as to each series of Securities
the Stated Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or
determined as specified in each Security as being the rate of interest payable
on such Security.
"Lien" means any mortgage, pledge, lien, security interest or
other encumbrance.
"Maturity" when used with respect to any Security means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Mortgage" means any mortgage, pledge, lien, encumbrance,
charge or security interest of any kind.
"Officers' Certificate" means a certificate signed by the
President or a Vice President, and by the Treasurer, an Associate Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company.
"Original Issue Date" means the date of issuance specified as
such in each Security.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02.
"Outstanding" means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture,
except:
<PAGE> 13
10
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancelation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been
paid pursuant to Section 3.06, unless proof satisfactory to the
Trustee is presented that any such Securities are held by Holders in
whose hands such Securities are valid, binding and legal obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the
Company to be owned or held by or for the account of the Company, or any other
obligor on the Securities or any Affiliate of the Company or such obligor, and,
subject to the provisions of Section 6.01, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are
Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by
the Company to pay the principal of or interest on any Securities on behalf of
the Company.
<PAGE> 14
11
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment" means, with respect to the Securities of
any series, the place or places where the principal of (and premium, if any)
and interest on the Securities of such series are payable pursuant to Section
3.01.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.06 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Principal Property" means all timberlands, land, buildings,
machinery and equipment, and leasehold interests and improvements in respect of
the foregoing, which would be reflected on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with generally accepted
accounting principles, excluding all such tangible property located outside the
United States, Canada or New Zealand (including their respective territories
and possessions) and excluding any such property which, in the opinion of the
Board of Directors set forth in a Board Resolution, is not material to the
Company and its consolidated Subsidiaries taken as a whole.
"Regular Record Date" for the interest payable on any Interest
Payment Date with respect to the Securities of a series means, unless otherwise
provided pursuant to Section 3.01 with respect to Securities of a series, the
date which is 15 days next preceding such Interest Payment Date (whether or not
a Business Day).
"Responsible Officer" when used with respect to the Trustee
means any officer within the Corporate Trustee Administration Department (or
any successor group) of the Trustee including without limitation any vice
president, any assistant vice president, any assistant secretary, any senior
trust officer, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
<PAGE> 15
12
"Restricted Subsidiary" means a Subsidiary (a) substantially
all of the property of which is located in the United States, Canada or New
Zealand (including their respective territories and possessions) and which owns
a Principal Property, provided that no such Subsidiary shall be a Restricted
Subsidiary if pursuant to this clause (a) (i) the total assets of such
Subsidiary are less than 10% of the total assets of the Company and its
consolidated Subsidiaries (including such Subsidiary) in each case as set forth
on the most recent fiscal year-end balance sheets of such Subsidiary and the
Company and its consolidated Subsidiaries, respectively, and computed in
accordance with generally accepted accounting principles, or (ii) in the
judgment of the Board of Directors, as evidenced by a Board Resolution, such
Subsidiary is not material to the financial condition of the Company and its
consolidated Subsidiaries taken as a whole or (b) that is designated as a
Restricted Subsidiary by the Board of Directors, as evidenced by a Board
Resolution.
"SaleandLease-BackTransactions" means any arrangement with
any bank, insurance company or other lender or investor, or to which any such
lender or investor is a party, providing for the leasing by the Company or a
Restricted Subsidiary for a period, including renewals, in excess of three
years of any Principal Property of the Company or a Restricted Subsidiary
which has been or is to be sold or transferred by the Company or a Restricted
Subsidiary to such lender or investor or to any Person to which funds have
been or are to be advanced by such lender or investor on the security of such
Principal Property.
"Securities" or "Security" means any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 3.05.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of interest is due and payable.
<PAGE> 16
13
"Subsidiary" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the outstanding shares of voting stock
or (ii) any other Person (other than a corporation) in which the Company or one
or more Subsidiaries directly or indirectly owns or controls more than 50% of
the voting interests therein or otherwise has the power to direct the policies,
management and affairs thereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and as in force at the
date as of which this instrument was executed, except as provided in Section
9.05.
"Value" means with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greaterof(i)
the net proceeds of the sale or transfer of the Principal Property leased
pursuant to such Sale and Lease-Back Transaction or (ii) the fair market
value, in the good faith opinion of the Board of Directors, of such
Principal Property at the time of entering into such Sale and Lease-Back
Transaction, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such
term remaining at the time of determination, without regard to any renewal
or extension options contained in the lease.
"Vice President" when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
SECTION 1.02. Compliance Certificate and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent (including
covenants compliance with which constitute a condition precedent), if any,
provided for in this Indenture relating to the proposed
<PAGE> 17
14
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent (including covenants
compliance with which constitute a condition precedent), if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.06) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Forms of Documents Delivered to Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to matters upon which his certificate or
<PAGE> 18
15
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given to or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Company and any agent
of the Trustee or the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a Person acting in other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems
<PAGE> 19
16
sufficient and in accordance with such reasonable rules as the Trustee may
determine.
(d) The ownership of Securities shall be proved by the Securities Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. Except as otherwise provided
herein, such record date shall be the later of 30 days prior to the first
solicitation of such consent or vote or the date of the most recent list of
Securityholders furnished to the Trustee pursuant to Section 7.01 prior to such
solicitation. If a record date is fixed, those persons who were
Securityholders at such record date (or their duly designated proxies) and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date; provided, however, that unless
such vote or consent is obtained from the Holders (or their duly designated
proxies) of the requisite principal amount of Outstanding Securities prior to
the date which is the 120th day after such record date, any such vote or
consent previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
SECTION 1.05. Notices, Etc. to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration or, if given to the
Trustee by the Company by facsimile communications at the
<PAGE> 20
17
Trustee's facsimile number which on the date of execution of this
Indenture is (212) 971-8567 or (212) 971-8568, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section
5.01 hereof) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
and to the attention of the Corporate Secretary or at any other
address previously furnished in writing to the Trustee by the Company
or, if given to the Company by the Trustee by facsimile communications
at the Company's facsimile number which on the date of execution of
this Indenture is (203) 964-4335.
SECTION 1.06. Notice to Holders; Waiver. Where this
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first class postage prepaid, to each Holder affected by such event,
at his address as it appears in the Securities Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.07. Conflict With Trust Indenture Act. If, and to
the extent that, any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by any of, or with another provision (an "incorporated
provision") included in this Indenture by operation of, Sections 310 to 318,
inclusive, of the Trust Indenture Act such imposed duties or incorporated
provision shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
<PAGE> 21
18
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this
Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto, any Paying Agent and their successors and
assigns and the Holders of the Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture and the
Securities shall be governed by and construed in accordance with the laws of
the State of New York.
SECTION 1.13. Nonbusiness Days. In any case where any
Interest Payment Date or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or
the Securities) payment of interest or principal need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date or at the Stated Maturity, and
no interest shall accrue for the period from and after such Interest Payment
Date or Stated Maturity, as the case may be.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities of each series
and the Trustee's certificate of authentication shall be in substantially the
forms set forth in this Article, or in such other form or forms as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as
<PAGE> 22
19
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any such
legends or endorsements shall be furnished to the Trustee in writing. If the
form of Securities of any series is established by action taken pursuant to a
Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 3.03 with respect to the authentication and delivery of
such Securities.
The Trustee's certificates of authentication shall be
substantially in the form set forth in this Article.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods, if required by any
securities exchange on which the Securities may be listed, on a steel engraved
border or steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may
be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 2.02. Form of Face of Security. [If the Security is
an Original Issue Discount Security, insert: For purposes of Section 1271 of
the United States Internal Revenue Code of 1986, as amended, the issue price of
this Security is ___% of its principal amount and the Issue Date is
_____________, 19__].
RAYONIER INC.
[Title of Security]
No. ______
$______________
RAYONIER INC., a corporation organized and existing under the
laws of North Carolina (hereinafter called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________________, or registered
assigns, the principal sum of _______________________________ Dollars on
______________________________ [If the Security is to bear interest prior to
Maturity insert: and to pay interest thereon from ________ or from the most
recent Interest Payment Date to which interest has been paid or duly
<PAGE> 23
20
provided for, semiannually on _________ and _________ in each year,
commencing________ at the rate of ___ per annum, on the basis of a 360-day year
consisting of twelve 30-day months, until the principal hereof is paid or duly
provided for or made available for payment [If applicable insert: and (to the
extent that the payment of such interest shall be legally enforceable) at the
rate of ___% per annum on any overdue principal and premium and on any overdue
instalment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _____ or _____ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for on any Interest Payment
Date (or within any grace period related to such interest payment set forth in
such Indenture) will forthwith cease to be payable to the Holder and may either
be paid to the person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee (notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date) or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture].
[If the Security is not to bear interest prior to Maturity insert: The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]
<PAGE> 24
21
Payment of the principal of (and premium, if any) and [if applicable,
insert: any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in _____, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert: ;
provided, however, that at the option of the Company payment of interest may be
made by (i) check mailed to the address of the Person entitled thereto as such
address shall appear in the Securities Register or (ii) wire transfer upon
terms established from time to time by the Company reasonably satisfactory to
the Paying Agent.]
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: RAYONIER INC.
by __________________________ President
Attest:
__________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
Chemical Bank,
as Trustee
<PAGE> 25
22
By _________________________
Authorized Officer
SECTION 2.03. Form of Reverse of Security. This Security is
one of a duly authorized issue of securities of the Company (herein called the
"Securities"), issued and to be issued in one or more series under an
Indenture, dated as of April 1, 1994 (herein called the "Indenture"), between
the Company and Chemical Bank, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate principal amount to $_________]. The
Securities are general unsecured obligations of the Company and will rank pari
passu with all other Securities issued under the Indenture.
[If applicable, insert: The Securities of this series are not
redeemable prior to the stated maturity of the principal hereof and will not be
subject to any sinking fund.]
[If applicable, insert: The Securities of this series are
subject to redemption upon not less than 30 days' and not more than 60 days'
notice by mail, [if applicable, insert: (1) on __________ in any year
commencing with the year _____ and ending with the year _____ through operation
of the sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [on or after ______ 19__], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
______________, ___ % and if redeemed] during the 12-month period beginning
__________ of the years indicated,
Redemption Redemption
Year Price Year Price
<PAGE> 26
23
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert: (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Date referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert: The Securities of this series are subject to
redemption upon not less than 30 days' and not more than 60 days' notice by
mail, (1) on ___________ in any year commencing with the year ___ and ending
with the year ___________ through operation of the sinking fund for this series
at the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after ___________], as a whole or in part, at
the election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the
12-month period beginning _________ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
<PAGE> 27
20
[If applicable, insert: The sinking fund for this series
provides for the redemption on _________ in each year beginning with the year
______ and ending with the year ____ of [not less than] $________ [("mandatory
sinking fund") and not more than $________ ] aggregate principal amount of
Securities of this series. [Securities of this series acquired or redeemed by
the Company otherwise than through [mandatory] sinking fund payments may be
credited against subsequent [mandatory] sinking fund payments otherwise
required to be made] [in the inverse order in which they become due.]
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancelation hereof.
The Indenture contains provisions for satisfaction, discharge
and defeasance of the entire indebtedness on this Security, upon compliance by
the Company with certain conditions set forth therein.
[If the Security is not an Original Issue Discount Security,
insert: If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,
insert: If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amounts shall be equal to [INSERT FORMULA FOR
DETERMINING THE AMOUNT].
Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of
<PAGE> 28
21
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its written request. After any such payment, Holders
entitled to the money must look only to the Company and not to the Trustee for
payment.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of (and premium, if any) and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $_____ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
<PAGE> 29
22
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Holder waives and releases all such liability. This waiver and
release are part of the consideration for the issue of the Securities.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities. No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only on
the other identification numbers placed thereon.
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The Company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture. Requests may be made
to:
Rayonier Inc.
1177 Summer Street
Stamford, Connecticut 06904
Attention of Corporate Secretary
SECTION 2.04. Additional Provisions Required in Global
Security. Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.02 and 2.03 bear a legend in substantially
the following form:
<PAGE> 30
23
"Unless this certificate is presented by an authorized
representative of the Depositary to the Issuer or its agent for
registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of the nominee of the Depositary or
in such other name as is requested by an authorized representative of
the Depositary (and any payment is made to the nominee of the
Depositary or to such other entity as is requested by an authorized
representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, the nominee of the Depositary, has an
interest herein."
SECTION 2.05. Form of Trustee's Certificate of
Authentication. This is one of the Securities referred to in the within
mentioned Indenture.
Chemical Bank,
as Trustee
by _________________________
Authorized Officer
<PAGE> 31
24
ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors. All Securities of each series under this Indenture
shall in all respects be equally and ratably entitled to the benefits hereof
with respect to such series without preference, priority or distinction on
account of the actual time of the authentication and delivery or Stated
Maturity of the Securities of such series. There shall be established in or
pursuant to a Board Resolution, and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of a series:
(a) the title of the Securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 3.04,
3.05, 3.06, 9.06 or 11.06); provided, however, that the authorized
aggregate principal amount of such series may be increased above such
amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable;
(d) the rate or rates, if any, at which the Securities of such
series shall bear interest, the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date for the interest
payable on any Interest Payment Date;
(e) the place or places where the principal of and interest on
the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration
of transfer or exchange, and the place or places where notices and
demands to or upon the Company in respect of the Securities of such
series may be made;
<PAGE> 32
25
(f) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and
conditions upon which the Securities of such series may be redeemed,
in whole or in part, at the option of the Company;
(g) the obligation, if any, of the Company to redeem, repay or
purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
(h) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(i) the modifications, if any, in the Events of Default or
covenants of the Company set forth herein with respect to the
Securities of such series;
(j) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series which shall be
payable upon declaration of acceleration of the Maturity thereof;
(k) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registerable or not registerable as to principal, and
with or without interest coupons;
(l) any index used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series and
the manner in which such amounts will be determined;
(m) the issuance of a temporary Global Security representing
all of the Securities of such series and exchange of such temporary
Global Security for definitive Securities of such series;
(n) whether the Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and, in
such case, the Depositary for such Global Securities, which Depositary
shall be a clearing agency registered under the Securities Exchange
Act of 1934, as amended;
<PAGE> 33
26
(o) the appointment of any Paying Agent or Agents for the
Securities of such series; and
(p) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this
Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
herein or in or pursuant to such board Resolution and set forth in such
Officers' Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 3.02. Denominations. The Securities of each series
shall be in registered form without coupons and shall be issuable in
denominations of $1,000 and any integral multiple thereof, unless otherwise
specified as contemplated by Section 3.01.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
The Securities of any series shall be executed on behalf of the Company by its
President or one of its Vice Presidents under its corporate seal reproduced or
impressed thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of the execution thereof the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication. Securities may be authenticated on
original issuance from time to time and delivered pursuant to such procedures
acceptable to the Trustee ("Procedures") as may be specified from time to time
by Company Order.
Prior to the delivery of a Security of any series to the
Trustee for authentication, the Company shall deliver to the Trustee the
following:
<PAGE> 34
27
(a) a Company Order requesting the Trustee's authentication
and delivery of all or a portion of the Securities of such series, and
if less than all, setting forth procedures for such authentication;
(b) the Board Resolution by or pursuant to which the form of
such Security has been approved, and the Board Resolution, if any, by
or pursuant to which the terms of the Securities of such series have
been approved, and, if pursuant to a Board Resolution, an Officers'
Certificate describing the action taken;
(c) An Officers' Certificate dated the date such certificate
is delivered to the Trustee, stating that all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of Securities in such form and with such terms have been
complied with; and
(d) An Opinion of Counsel stating that (i) the form of such
Securities has been duly authorized and approved in conformity with
the provisions of this Indenture; (ii) the terms of such Securities
have been duly authorized and determined in conformity with the
provisions of this Indenture, or, if such terms are to be determined
pursuant to Procedures, when so determined such terms shall have been
duly authorized and determined in conformity with the provisions of
this Indenture; and (iii) Securities in such form when completed by
appropriate insertions and executed and delivered by the Company to
the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this
Indenture within the authorization as to aggregate principal amount
established from time to time by the Board of Directors, and sold in
the manner specified in such Opinion of Counsel, will be the legal,
valid and binding obligations of the Company entitled to the benefits
of this Indenture, subject to applicable bankruptcy, reorganization,
insolvency and other similar laws generally affecting creditors'
rights, to general equitable principles and to such other
qualifications as such counsel shall conclude do not materially affect
the rights of Holders of such Securities;
provided, however, that the Trustee shall be entitled to receive the documents
referred to in clauses (b), (c) and (d) above only at or prior to the first
request of the Company to the Trustee to authenticate Securities of such
series.
Each Security shall be dated the date of its authentication.
<PAGE> 35
28
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by the manual signature of one of
its authorized signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation
of definitive Securities of any series, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any denomination, substantially of the tenor of the definitive
Securities of such series in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company in
The City of New York, without charge to the Holder. Upon surrender for
cancelation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations having the same Original Issue Date and Stated Maturity and
having the same terms as such temporary Securities. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.05. Registration, Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers
of Securities. Such register is herein sometimes referred to as the
"Securities Register". The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at
the Place of Payment, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
<PAGE> 36
29
transferees, one or more new Securities of the same series of any authorized
denominations, of a like aggregate principal amount, of the same Original Issue
Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for
other Securities of the same issue and series of any authorized denominations,
of a like aggregate principal amount, of the same Original Issue Date and
Stated Maturity and having the same terms, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or
exchange shall (if so required by the Company or the Securities Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
Notwithstanding any of the foregoing, any Global Security of a
series shall be exchangeable pursuant to this Section 3.05 for Securities
registered in the names of Persons other than the Depositary for such Security
or its nominee only if (i) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or if at
any time such Depositary ceases to be eligible to be a clearing agency under
the Securities Exchange Act of 1934, as amended, and the Company does not
appoint a successor Depositary within 90 days after the Company receives notice
or becomes aware of such unwillingness, inability, or ineligibility, (ii) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Securities of such series.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Securities registered in such names as such
Depositary shall direct.
<PAGE> 37
30
Notwithstanding any other provision in this Indenture, a
Global Security may not be transferred except as a whole by the Depositary with
respect to such Global Security to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary.
Neither the Company nor the Trustee shall be required,
pursuant to the provisions of this Section, (a) to issue, transfer or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities pursuant to
Article XI and ending at the close of business on the day of mailing of notice
of redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
None of the Company, the Trustee, any agent of the Trustee,
any Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security is surrendered to the Trustee together
with such security or indemnity as may be required by the Company or the
Trustee to save each of them harmless, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of
the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity and bearing the same Interest Rate as
such mutilated Security, and bearing a number not contemporaneously
outstanding.
If there be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser, the
issuing Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.
<PAGE> 38
31
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and its agents and
counsel) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date, shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest in respect of Securities of such series, except that, unless otherwise
provided in the Securities of such series, interest payable on the Stated
Maturity of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Security of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in such Security or in the Board Resolution or supplemental
indenture pursuant to Section 3.01 with respect to the related series of
Securities.
Any interest on any Security which is payable, but is not
timely paid or duly provided for, on any Interest Payment Date (or within any
grace period related to such interest payment set forth in Section 5.01(1)
hereof) for Securities of such series (herein called "Defaulted Interest"),
shall forthwith cease to be payable to the registered Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
<PAGE> 39
32
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
in respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first class, postage prepaid, to each Holder of a Security of
such series at his address as it appears in the Securities Register
not less than 10 days prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper,
customarily published in the English language on each Business Day and
of general circulation in the Borough of Manhattan, The City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such
series (or theirrespective Predecessor Securities) are registered on
such Special Record Date and shall no longer be payable pursuant to
the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect
of which interest is in default may be listed, and upon such notice as
may be required by such exchange (or by the Trustee if the Securities
are not listed), if, after notice given by the
<PAGE> 40
33
Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. Prior to due
presentment for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal (and premium, if any) of and (subject to Section
3.07) interest on such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 3.09. Cancelation. All Securities surrendered for
payment, redemption, transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Securities
and Securities surrendered directly to the Trustee for any such purpose shall
be promptly canceled by it. The Company may at any time deliver to the Trustee
for cancelation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities shall be disposed of by the Trustee in
accordance with its customary procedures and the Trustee shall deliver to the
Company a certificate of such disposition.
SECTION 3.10. Computation of Interest. Except as otherwise
specified as contemplated by Section 3.01 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
year of 360 days, consisting of twelve 30-day months.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to any series of
<PAGE> 41
34
Securities (except as to (i) any surviving rights of transfer, substitution and
exchange of Securities, (ii) rights hereunder of Holders to receive payments of
principal of (and premium, if any) and interest on the Securities and other
rights, duties and obligations of the Holders as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee and (iii) the
rights and obligations of the Trustee hereunder) and the Trustee, on written
demand of and at the expense of the Company, shall execute proper instruments
in form and substance reasonably satisfactory to the Company and the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities of that series theretofore
authenticated and delivered (other than (i) Securities of such
series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06 and
(ii) Securities of such series for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee canceled or for cancelation; or
(B) all such Securities of that series not
theretofore canceled or delivered to the Trustee for
cancelation
(i) have become due and payable,
(ii) will become due and payable at their
Stated Maturity within one year of the date of
deposit, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for such purpose an amount sufficient to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee canceled or for
cancelation, for principal (and premium, if any) and interest
to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or
redemption date, as the case may be;
<PAGE> 42
35
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to the Securities of
such series; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to the Securities of such
series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect
to the Securities of such series, the obligations of the Company to the Trustee
under Section 6.07 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 4.02 and the last paragraph of Section 10.03 shall
survive.
SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 or money or Government Obligations deposited
with the Trustee pursuant to Section 4.03, or received by the Trustee in
respect of Government Obligations deposited with the Trustee pursuant to
Section 4.03, shall be held in trust and applied by it, in accordance with the
provisions of the Securities of such series in respect of which it was
deposited and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent), to the
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money or obligations have been deposited with or
received by the Trustee; provided, however, such moneys need not be segregated
from other funds except to the extent required by law.
SECTION 4.03. Defeasance Upon Deposit of Funds or Government
Obligations. (a) Unless pursuant to Section 3.01 provision is made that this
Section shall not be applicable to the Securities of any series then, subject
to Sections 4.03(b) and (c) and 4.06, the Company at any time may terminate (i)
all its obligations under this Indenture with respect to the Securities of any
series ("legal defeasance option") or (ii) its obligations under the covenants
set forth in Sections 8.01(b), 10.04, 10.05, 10.06, 10.07, 10.08 and 10.09, the
operation of any Event of Default based on the failure of the Company to comply
with such covenants, and the operation of clause (7) of Section 5.01 ("covenant
defeasance option"), in each case with respect to the Securities of any series.
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
<PAGE> 43
36
If the Company exercises its legal defeasance option with
respect to the Securities of any series, payment of such Securities may not be
accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option with respect to the Securities of any series,
payment of such Securities may not be accelerated because of an Event of
Default specified in clause (7) of Section 5.01 or because of the failure of
the Company to comply with any of the covenants set forth in Sections 8.01(b),
10.04, 10.05, 10.06, 10.07, 10.08 and 10.09.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(b) Notwithstanding clause (a) above, (i) the Company's
obligations in Sections 3.05, 3.06, 3.07, 3.08, 3.10, 4.02, 4.04, 4.05, 4.06,
6.07, 6.10, 10.02 and 10.03 (in respect of the Securities of any series for
which it has exercised its legal defeasance option) and (ii) all provisions
other than those terminated pursuant to Section 4.03(a)(ii) (in respect of the
Securities of any series for which it has exercised its covenant defeasance
option) shall survive until such Securities have been paid in full.
Thereafter, the Company's obligations in Sections 4.05 and 6.07 with respect to
such Securities shall survive.
(c) The Company may exercise its legal defeasance option or
its covenant defeasance option with respect to the Securities of any series
only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or Government Obligations for the payment of principal and
interest on such Securities to Stated Maturity or redemption, as the
case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment of the deposited Government Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts (but, in the case of the legal defeasance option only,
not more than such amounts) as will be sufficient to pay principal and
interest when due on all such Securities to Stated Maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no event which constitutes or with lapse of time would
<PAGE> 44
37
become an Event of Default specified in Section 5.01(5) or (6) occurs
which is continuing at the end of the period;
(4) no event which constitutes or with notice or lapse of time
would become an Event of Default with respect to such Securities has
occurred and is continuing on the date of such deposit and after
giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the holders of such Securities will not
recognize income, gain or loss for Federal income tax purposes solely
as a result of such legal defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance had not
occurred;
(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the holders of such Securities will not recognize income,
gain or loss for Federal income tax purposes solely as a result of
such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of such
Securities as contemplated by this Article IV have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of such Securities at a future
date in accordance with Article XI.
<PAGE> 45
38
SECTION 4.04. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon written request any
excess money or securities held by them at any time. Such written request
shall be accompanied by an opinion of the type specified in Subsection (2) of
Section 4.03(c) to the effect that such excess exists and the basis for such
conclusion.
SECTION 4.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited Government Obligations or the
principal and interest received on such Government Obligations.
SECTION 4.06. Reinstatement. If the Trustee or Paying Agent
is unable to apply any money or Government Obligations to the payment of the
Securities of any series in accordance with this Article IV by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and such Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article IV until such time as the Trustee or Paying Agent is permitted to
apply all such money or Government Obligations in accordance with this Article
IV; provided, however, that, if the Company has made any payment of interest on
or principal of any such Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or Government
Obligations held by the Trustee or Paying Agent.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default" wherever
used herein with respect to the Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and
continuance of such default for a period of 30 days;
<PAGE> 46
39
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity;
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of
the Securities of such series;
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with)
and continuance of such default or breach for a period of 60
days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder;
(5) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal
or State bankruptcy, insolvency, reorganization or other
similar law, or appointing a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days;
(6) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its
debts generally as they
<PAGE> 47
40
become due and its willingness to be adjudicated a bankrupt,
or the taking of corporate action by the Company in
furtherance of any such action;
(7) an event of default, as defined in any indenture or
instrument evidencing or under which the Company or any
Restricted Subsidiary has at the date of this Indenture or
shall hereafter have outstanding at least $10,000,000
aggregate principal amount of indebtedness for borrowed money,
shall happen and be continuing and such indebtedness shall
have been accelerated so that the same shall be or become due
and payable prior to the date on which the same would
otherwise have become due and payable, and such acceleration
shall not be rescinded or annulled within 30 days after notice
thereof shall have been given to the Company by the Trustee
(if such event be known to it), or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities of that series at the time
Outstanding; provided, however, that for the purposes of this
subsection (7), the Company or any Restricted Subsidiary shall
not be deemed in default if it shall be contesting in good
faith its liability for the payment of the principal in
question, and shall have been advised by its counsel that it
has a meritorious defense thereto; and provided further that
if such event of default under such indenture or instrument
shall be remedied or cured by the Company or such Restricted
Subsidiary (as the case may be) or waived by the holders of
such indebtedness, then the Event of Default hereunder by
reason thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part
of either the Trustee or any of the Holders; or
(8) any other Event of Default with respect to Securities of
that series.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that
series) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if
<PAGE> 48
41
given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all
Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at
the rate borne by the Securities,
(C) to the extent that payment of such interest is
legally enforceable, interest upon overdue installments of
interest at the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of Securities of
that series which has become due solely by such acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of
interest on any Security when such interest becomes due and payable
and such default continues for a period of 30 days;
<PAGE> 49
42
(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof; or
(3) default is made in the payment of any sinking or purchase
fund or analogous obligation when the same becomes due by the terms of
the Securities of any series;
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holder of any such Security (or the Holders
of any such series in the case of Clause (3) above), the whole amount then due
and payable on any such Security (or on the Securities of any such series in
the case of Clause (3) above) for principal (and premium, if any) and interest,
with interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor
by the terms of any such Security (or of Securities of any such series in the
case of Clause (3) above); and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 6.07.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities
<PAGE> 50
43
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal (and premium, if any) or interest) shall
be entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee and any predecessor Trustee under Section 6.07 and of the
Holders allowed in such judicial proceeding;
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and
(iii) unless prohibited by law or applicable regulation, to
vote on behalf of the Holders in any election of a trustee in
bankruptcy or other person performing similar functions;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it and any predecessor Trustee under
Section 6.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession
of Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of all the amounts owing the Trustee and
any predecessor Trustee under Section 6.07,
<PAGE> 51
44
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money
collected or to be applied by the Trustee with respect to a series of
Securities pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid
upon such series of Securities for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such series of Securities for principal (and
premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07. Limitation on Suits. No Holder of any
Securities of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture or for the appointment of
a receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
<PAGE> 52
45
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no written direction inconsistent with such written
request has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Outstanding
Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Securities, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such Holders.
SECTION 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right which is absolute
and unconditional to receive payment of the principal of (and premium, if any)
and (subject to Section 3.07) interest on such Security on the respective
Stated Maturities expressed in such Security and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided in the last paragraph of Section 3.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the
<PAGE> 53
46
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. Except as
otherwise provided in the last paragraph of Section 3.06, no delay or omission
of the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority
in principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series; provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.01, the Trustee
shall have the right to decline to follow such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of
the Trustee, determine that the proceeding so directed would be
unjustly prejudicial to the Holders not joining in any such direction
or would involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default:
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
<PAGE> 54
47
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VI
The Trustee
<PAGE> 55
48
SECTION 6.01. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of Holders of any series
pursuant to Section 5.12 relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the
Securities of such series.
<PAGE> 56
49
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.02. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit by mail to all Holders of Securities of such
series, as their names and addresses appear in the Securities Register, notice
of such default hereunder known to the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest on any
Security of such series the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Securities of such series. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
SECTION 6.03. Certain Rights of Trustee. Subject to the
provisions of Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, Security or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
<PAGE> 57
50
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, indenture, Security or other paper or document,
but the Trustee in its discretion may make such inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying
Agent, Securities Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of
<PAGE> 58
51
Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the
Company with the same rights it would have if it were not Trustee, Paying
Agent, Securities Registrar or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and each of its officers,
directors, attorneys in fact and agents for, and to hold each such
person harmless against, any loss, claim, liability or expense
incurred without negligence or bad faith on such person's part,
arising out of or in connection with the acceptance or administration
of this Indenture or the Procedures or the performance of its duties
hereunder or under the Procedures, including the costs and expenses of
defending itself against any claim or liability and of complying with
any process served upon the Trustee or any of its officers in
connection with the exercise or performance of any of its powers or
duties hereunder. The Company will indemnify and hold the Trustee
harmless against any loss, liability or expense (including attorneys'
fees) resulting from any act or omission to act on the part of the
Company or any such Holder in connection with any agreement related to
a Holder receiving payment by wire transfer or which the Paying Agent
may incur as a result of making any payment in accordance with any
such agreement.
<PAGE> 59
52
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a claim prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of amounts due on the
Securities.
The obligations of the Company under this Section to
compensate and indemnify the Trustee and to reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness under this
Indenture and shall survive the resignation or removal of the Trustee, the
satisfaction and discharge of this Indenture and any rejection or termination
of this Indenture under any applicable bankruptcy law.
If the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.01(5) or (6) has occurred, those
expenses (including the reasonable charges and expenses of its agents and
attorneys) and its compensation for services shall be preferred over the status
of the Holders in any reorganization or similar proceeding and the parties
hereto, and the Holders, by their acceptance of the Securities, hereby agree
that, without limiting any other rights available to the Trustee under any
applicable bankruptcy law, such expenses, compensation and indemnity are
intended to constitute expenses of administration under any applicable
bankruptcy law.
SECTION 6.08. Disqualification; Conflicting Interests. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 310(b) of the Trust Indenture Act. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws
of the United States of America or of any State, Territory or the
District of Columbia, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by Federal,
state, territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
<PAGE> 60
53
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by or under common control with the Company shall serve as Trustee
for the Securities of any series issued hereunder. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
<PAGE> 61
54
(2) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee with respect to
the Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Securities of such series as their names and
addresses appear in the Securities Register. Each notice shall include the
<PAGE> 62
55
name of the successor Trustee with respect to the Securities of such series and
the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a)
In case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of all sums due to the retiring trustee under Section 6.07 hereof,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
which the appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees cotrustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to
<PAGE> 63
56
which the appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall, upon payment of
all sums due to the retiring Trustee under Section 6.07 hereof, duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case
any Securities shall not have been authenticated, any such successor to the
Trustee may authenticate such Securities either in the name of any predecessor
Trustee or in the name of such successor Trustee, and in all cases the
certificate of authentication shall have the full force which it is anywhere in
the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against
Company. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated.
<PAGE> 64
57
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after June 1 and
December 1, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such June 1
and December 1, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the,
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders received by the Trustee in its capacity as
Securities Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) If three or more Holders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Indenture or under the Securities and
is accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five business
days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information
<PAGE> 65
58
preserved at the time by the Trustee in accordance with Section
7.02(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee, in accordance with Section
7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request under Section 7.02(b).
SECTION 7.03. Reports by Trustee. (a) On or before July 15
of each year commencing with the year 1995, the Trustee shall transmit by mail
to all Holders, as their names and addresses appear in the Securities Register,
a brief report dated as of the preceding May 15 with respect to any of the
following events which may have occurred during the twelve months preceding the
date of such report (but if no such event has occurred within such period, no
report need be transmitted):
<PAGE> 66
59
(1) any change to its eligibility under Section 6.09 and its
qualifications under Section 6.08;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such advances
if such advances so remaining unpaid aggregate not more than 1/2 of 1%
of the principal amount of the Securities Outstanding on the date of
such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or by any other
obligor on the Securities) to the Trustee in its individual capacity,
on the date of such report, with a brief description of any property
held as collateral security therefor, except an indebtedness based
upon a creditor relationship arising in any manner described in
Section 311(b)(2), (3), (4) or (6) of the Trust Indenture Act;
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has
not previously reported; and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of
a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 6.02.
(b) The Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Securities Register, a brief report
with respect to the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made by
the Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
<PAGE> 67
60
reimbursement of which it claims or may claim a lien or charge, prior to that
of the Securities, on property or funds held or collected by it as Trustee, and
which it has not previously reported pursuant to this Subsection, except that
the Trustee shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Securities Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed and also with the Commission. The Company will
notify the Trustee whenever the Securities are listed on any stock exchange.
SECTION 7.04. Reports by Company. The Company will
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it will file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(3) transmit by mail, as may be required by the rules and
regulations prescribed from time to time by the Commission, to all
Holders, as their names and addresses appear in the Securities
Register, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required
<PAGE> 68
61
to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain
Terms. (a) The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety
shall be a corporation organized and existing under the laws of the
United States of America or any state or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and
interest on all the Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time,
or both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.01, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.01.
<PAGE> 69
62
(b) If, upon any consolidation or merger of the Company with
or into any other corporation, or upon any conveyance, transfer or lease of its
properties and assets substantially as an entirety to any Person, any of the
property or assets of the Company or of any Restricted Subsidiary would
thereupon become subject to any mortgage, lien or pledge, the Company, prior to
or simultaneously with such consolidation, merger, conveyance, transfer or
lease will secure the Securities of each series outstanding hereunder, equally
and ratably with any other obligations of the Company or any Restricted
Subsidiary then entitled thereto, by a direct lien on all such property and
assets prior to all liens other than any theretofore existing thereon.
SECTION 8.02. Successor Corporation Substituted. Upon any
consolidation or merger by the Company with or into any other corporation, or
any conveyance, transfer or lease by the Company of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.01, the
successor corporation formed by such consolidation or into which the Company is
merged or the Person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation or Person had been named as the Company herein; and in the event of
any such conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor corporation or Person may cause to be signed,
and may issue either in its own name or in the name of the Company, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation or Person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication pursuant to such provisions and any Securities which such
successor corporation or Person thereafter shall cause to be signed and
delivered to the Trustee on its behalf for the purpose pursuant to such
provisions. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
<PAGE> 70
63
In case of any such consolidation, merger, conveyance,
transfer or lease such changes in phraseology and form may be made in the
Securities thereafter to be issued as may be appropriate.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee; or
(3) to provide for the issuance under this Indenture of
Securities in bearer form (including Securities registerable as to
principal only) and to provide for exchangeability of such Securities
for Securities issued hereunder in fully registered form, and to make
all appropriate changes for such purpose; or
(4) to establish the form or terms of Securities of any series
as permitted by Sections 2.01 or 3.01; or
(5) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(6) to add any additional Events of Default; or
(7) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
<PAGE> 71
64
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
materially adversely affect the interest of the Holders of Securities
of any series; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b).
SECTION 9.02. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Outstanding Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02, or change the Place of Payment, or the coin
or currency in which any Outstanding Security or the interest thereon
is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
<PAGE> 72
65
(3) modify any of the provisions of this Section, Section 5.13
or Section 10.10, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Security affected
thereby.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as
<PAGE> 73
66
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
that by no later than 12:00 noon (New York City time) on the date any payment
of principal (and premium, if any) or interest is due, it will duly and
punctually pay the principal of (and premium, if any) and interest on the
Securities of that series in accordance with the terms of such Securities and
this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain in each Place of Payment for any series, an office or agency
where Securities of that series may be presented or surrendered for payment and
an office or agency where Securities may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company initially appoints
the Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the
Company shall fail to maintain such office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all of such purposes, and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation and any change in the location of any such office or agency.
<PAGE> 74
67
SECTION 10.03. Money for Security Payments to be Held in
Trust. If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities in trust for the
benefit of the persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
<PAGE> 75
68
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be paid on Company Request to
the Company, or (if then held by the Company) shall (unless otherwise required
by mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.04. Payment of Taxes and Other Claims. The
Company will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Restricted Subsidiary or upon
the income, profits or property of the Company or any Restricted Subsidiary,
and (2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 10.05. Maintenance of Properties. The Company will
cause all properties used or useful in the conduct of its business or the
business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation and maintenance of any of such properties if such discontinuance is,
in the judgment of the Board of
<PAGE> 76
69
Directors of the Company, desirable in the conduct of its business or the
business of any Restricted Subsidiary and not disadvantageous in any material
respect to the Holders.
SECTION 10.06. Statement as to Compliance. The Company shall
deliver to the Trustee, within 120 days after the end of each calendar year of
the Company ending after the date hereof, a certificate of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company covering the preceding calendar year, stating whether or
not to the best knowledge of the signer thereof the Company is in default in
the performance, observance or fulfillment of or compliance with any of the
terms, provisions, covenants and conditions of this Indenture, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which the signer may have knowledge. For the purpose of this
Section 10.06, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.07. Organizational Existence. Subject to Article
VIII, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect the organizational existence and rights
(charter and statutory) of itself and of each Restricted Subsidiary; provided,
however, that the Company shall not be required to preserve any such right if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company or such
Restricted Subsidiary and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 10.08. Limitations upon Liens. (a) The Company will
not, nor will it permit any Restricted Subsidiary to, issue, assume or
guarantee any indebtedness for money borrowed secured by a Lien upon any
Principal Property of the Company or any Restricted Subsidiary or on any shares
of capital stock of any Restricted Subsidiary (whether such Principal Property
or shares of stock are now owned or hereafter acquired) without in any such
case making or causing to be made effective provision (and the Company
covenants that in any such case it shall make or cause to be made effective
provision) whereby the Securities of each series then Outstanding, other than
series which by their terms are not entitled to the benefits of this Section,
will be secured equally and ratably with, or prior to, such indebtedness or
guarantee; it being understood that in such event the Company may also so
secure any other such indebtedness of the Company or such Restricted Subsidiary
entitled thereto, subject to any applicable priority of payment.
<PAGE> 77
70
(b) The provisions of paragraph (a) of this Section shall
not, however, apply to any indebtedness secured by any one or more of the
following:
(1) Liens on property, or shares of stock of or guaranteed by
any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(2) Liens on property existing at the time of acquisition of
such property by the Company or a Restricted Subsidiary, or Liens on
property which secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the
Company or a Restricted Subsidiary, or Liens on property which secure
any such indebtedness incurred or guaranteed by the Company or a
Restricted Subsidiary incurred or guaranteed for the purpose of
financing all or any part of the purchase price of such property or
the construction of such property (including improvements to existing
property) within 180 days after the latest of the acquisition,
completion of construction (including any improvements on an existing
property) or commencement of operation of such property; provided that
such Lien shall not extend to or cover any property of the Company or
any Restricted Subsidiary other than such property hereafter acquired
or previously unimproved property theretofore owned and the principal
amount of Funded Debt secured by such Lien shall not exceed (a) in the
case of any timberlands or pollution control facility, 100% of the
lesser of (i) the cost of such acquisition, construction or
improvement of such property to the Company or such Restricted
Subsidiary or (ii) the fair value of such acquisition, construction or
improvement of such property at the time of such acquisition,
construction or improvement, and (b) in the case of any other type of
property, 75% of the lesser of (i) the cost of such acquisition,
construction or improvement of such property to the Company or such
Restricted Subsidiary or (ii) the fair value of such acquisition,
construction or improvement of such property at the time of such
acquisition, construction or improvement;
(3) Liens securing such indebtedness of a Restricted
Subsidiary owing to the Company or to a wholly owned Restricted
Subsidiary;
(4) Liens on property of a corporation existing at the time
such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a purchase, lease or other
acquisition of the properties of a corporation or other Person as an
entirety by the Company or a Restricted Subsidiary;
<PAGE> 78
71
(5) Liens on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or
in favor of any other country, or any political subdivision thereof,
to secure any indebtedness incurred or guaranteed for the purpose of
financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens within 180 days
after the latest of the acquisition, completion of construction
(including improvements on existing property) or commencement of
operation of such property; or
(6) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Liens
referred to in the foregoing clauses (1) to (5), inclusive; provided,
however, that the principal amount of such indebtedness secured
thereby shall not exceed the principal amount of such indebtedness so
secured at the time of such extension, renewal or replacement, and
that such extension, renewal or replacement shall be limited to all or
a part of the property which secured the Lien so extended, renewed or
replaced (plus improvements and construction on such property).
(c) Notwithstanding the foregoing provisions of this Section
10.08, the Company and any one or more Restricted Subsidiaries may without
securing any of the Securities issue, assume or guarantee indebtedness secured
by any Lien which would otherwise be subject to the foregoing restrictions in
an aggregate amount which, together with all other indebtedness of the Company
and its Restricted Subsidiaries issued, assumed or guaranteed under the
provisions of this subsection (c) (not including indebtedness permitted to be
secured under clauses (1) through (6) of Section 10.08(b)) plus the Value of
Sale and Lease-Back Transactions (not including any such Sale and Lease-Back
Transaction the proceeds of which have been applied in the manner set forth in
clause (b) of Section 10.09) does not at the time exceed 10% of Consolidated
Net Tangible Assets.
SECTION 10.09. Limitation on Sale and Lease-Backs. The
Company will not itself, and will not permit any Restricted Subsidiary to,
enter into any Sale and Lease-Back Transaction (other than with the Company or
a Restricted Subsidiary) unless either:
(a) the Company or such Restricted Subsidiary could, under
Section 10.08, create Funded Debt secured by a Lien on the Principal
Property to be leased in an amount equal to or exceeding the Value of
<PAGE> 79
72
such Sale and Lease-Back Transaction without equally and ratably
securing the Securities of each series; or
(b) the Company (and in any such case the Company covenants
and agrees that it will do so), within four months after the effective
date of such Sale and Lease-Back Transaction, applies an amount equal
to the greater of (i) the net proceeds of the sale of the Principal
Property leased pursuant to such transaction or (ii) the fair market
value of the Principal Property so leased at the time of entering into
such transaction (as determined by the Board of Directors in good
faith) to the voluntary retirement of Funded Debt of the Company
ranking at least pari passu with the Securities of each series.
SECTION 10.10. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any covenant or condition set
forth in Sections 10.04, 10.05, 10.07, 10.08 and 10.09 with respect to the
Securities of any series if before or after the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company in respect of any such
covenant or condition shall remain in full force and effect.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of This Article. Redemption of
Securities (whether by operation of a sinking fund or otherwise) as permitted
or required by any form of Security issued pursuant to this Indenture shall be
made in accordance with such form of Security and this Article; provided,
however, that if any provision of any such form of Security shall conflict with
any provision of this Article, the provision of such form of Security shall
govern. Except as otherwise set forth in the form of Security for such series,
each Security shall be subject to partial redemption only in the amount of
$1,000 or integral multiples of $1,000.
SECTION 11.02. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any particular series and
<PAGE> 80
73
having the same terms, the Company shall, at least 60 days prior to the date
fixed for redemption (unless a shorter notice shall be satisfactory to the
Trustee) notify the Trustee of such date and of the principal amount of
Securities of that series to be redeemed.
SECTION 11.03. Selection of Securities to be Redeemed. If
less than all the Securities of a particular series and having the same terms
are to be redeemed, the Trustee shall select, not more than 60 days prior to
the date fixed for redemption, in such manner as in its sole discretion it
shall deem appropriate and fair, the Securities or portions thereof of such
series to be redeemed. The Trustee shall promptly notify the Company in
writing of the Securities selected for partial redemption and the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not later than 30
days, and not earlier than 60 days, prior to the date fixed for redemption, to
each Holder of Securities to be redeemed, at his address as it appears on the
Security Register.
With respect to Securities of each series to be redeemed, each
notice of redemption shall state:
(a) the date fixed for redemption for Securities of such
series;
(b) the redemption price at which Securities of such series
are to be redeemed;
(c) if less than all Outstanding Securities of such particular
series and having the same terms are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption
price at which such Securities are to be redeemed will become due and
payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be
surrendered for payment of the redemption price at which such
Securities are to be redeemed; and
<PAGE> 81
74
(f) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The
notice if mailed in the manner herein provided shall be conclusively presumed
to have been duly given, whether or not the Holder receives such notice. In
any case, a failure to give such notice by mail or any defect in the notice to
the Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.05. Deposit of Redemption Price. Prior to 12:00
noon (New York City time) on the redemption date specified in the notice of
redemption given as provided in Section 11.04, the Company will deposit with
the Trustee or with one or more Paying Agents an amount of money sufficient to
redeem on the redemption date all the Securities so called for redemption at
the applicable redemption price.
SECTION 11.06. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.04, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price, and from and after
such date (unless the Company shall default in making the deposit required by
Section 11.05) such Securities or portion thereof shall cease to bear interest.
On presentation and surrender of such Securities at a place of payment in said
notice specified, the said Securities or the specified portions thereof shall
be paid and redeemed by the Company at the applicable redemption price.
Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities of
the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the
same Original Issue Date, Stated Maturity and terms. If a Global Security is
so surrendered, such new Security will also be a new Global Security.
<PAGE> 82
75
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
RAYONIER INC.
by ---------------------------
Name:
Title:
Attest:
- --------------------------
CHEMICAL BANK,
as Trustee,
by ---------------------------
Name:
Title:
Attest:
- --------------------------
<PAGE> 1
Exhibit 4.4
RAYONIER INC.
[__% Debenture Due ___]
No.
----------------
$
------------------
RAYONIER INC., a corporation organized and existing under the laws of
North Carolina (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________, or registered assigns,
the principal sum of ___________________________________ Dollars on
________________________________ and to pay interest thereon from ________ or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on _________ and _________ in each year,
commencing ________ at the rate of ___ per annum, on the basis of a
360-day year consisting of twelve 30-day months, until the principal hereof is
paid or duly provided for or made available for payment and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of
___% per annum on any overdue principal and premium and on any overdue
instalment of interest. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Debenture (or one or
more Predecessor Debentures) is registered at the close of business on the
Regular Record Date for such interest, which shall be the _____ or _____
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for on any Interest Payment Date (or within any grace period related
to such interest payment set forth in such Indenture) will forthwith cease to
be payable to the Holder and may either be paid to the person in whose name
this Debentures (or one or more Predecessor Debentures) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee (notice whereof shall be given to
Holders of Debentures of this series not less than 10 days prior to such
Special Record Date) or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Debentures of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture].
Payment of the principal of (and premium, if any) and any such
interest on this Debenture will be made at the office or agency of the
Company maintained for that purpose in New York, New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by (i) check mailed to
the address of the Person entitled thereto as such address shall appear in the
Debenture Register or (ii) wire transfer upon terms established from time to
time by the Company reasonably satisfactory to the Paying Agent.
<PAGE> 2
-2-
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: RAYONIER INC.
by
-------------------------
President
Attest:
- -------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned Indenture.
Chemical Bank,
as Trustee
By
-------------------------
Authorized Officer
<PAGE> 3
Form of Reverse of Debenture ___%
Debenture Due ___. This Debenture is one of a duly authorized
issue of securities of the Company (herein called the "Debentures"), issued
and to be issued in one or more series under an Indenture, dated as of
April 1, 1994 (herein called the "Indenture"), between the Company and
Chemical Bank, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Debentures and of the
terms upon which the Debentures are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $_________. The Debentures are
general unsecured obligations of the Company and will rank pari passu with
all other Securities issued under the Indenture.
[If applicable, insert: The Debentures of this series are not
redeemable prior to the stated maturity of the principal hereof and will not
be subject to any sinking fund.]
[If applicable, insert: The Debentures of this series are subject to
redemption upon not less than 30 days' and not more than 60 days' notice by
mail, [if applicable, insert: (1) on __________ in any year commencing with
the year _____ and ending with the year _____ through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [on or after ______ 19__], as a whole
or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [on
or before ______________, ___ % and if redeemed] during the 12-month period
beginning __________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert: (whether
through operation of the sinking fund or otherwise)] with accrued interest
to the Redemption Date, but interest installments whose Stated Maturity is
on or prior to such Redemption Date will be payable to the Holders of
such Debentures, or one or more Predecessor Debentures, of record at the
close of business on the relevant Record Date referred to on the face hereof,
all as provided in the Indenture.]
[If applicable, insert: The Debentures of this series are subject to
redemption upon not less than 30 days' and not more than 60 days' notice by
mail, (1) on ___________ in any year
<PAGE> 4
-2-
commencing with the year ___ and ending with the year ___________ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on
or after ___________], as a whole or in part, at the election of the Company,
at the Redemption Prices for redemption otherwise than through operation of
the sinking fund (expressed as percentages of the principal amount) set
forth in the table below: If redeemed during the 12-month period beginning
_________ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ----------------- -------------------
and thereafter at a Redemption Price equal to ___% of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Debentures, or one or more Predecessor Debentures, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert: The sinking fund for this series provides for
the redemption on _________ in each year beginning with the year ______ and
ending with the year ____ of [not less than] $________ [("mandatory sinking
fund") and not more than $________ ] aggregate principal amount of Debentures
of this series. [Debentures of this series acquired or redeemed by the
Company otherwise than through [mandatory] sinking fund payments may be
credited against subsequent [mandatory] sinking fund payments otherwise
required to be made] [in the inverse order in which they become due.]
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancelation hereof.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness on this Debenture, upon compliance
by the Company with certain conditions set forth therein.
If an Event of Default with respect to Debentures of this series shall
occur and
<PAGE> 5
-3-
be continuing, the principal of the Debentures of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of
the principal of and interest, if any, on the Debentures of this series shall
terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Debentures or of others of
each series to be affected under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority in principal
amount of the Debentures or of others at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Debentures or of
others of each series at the time Outstanding, on behalf of the Holders of
all Debentures or of others of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Debenture shall be conclusive and binding upon such Holder and upon
all future Holders of this Debenture and of any Debenture issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Debenture at the times, place and rate,
and in the coin or currency, herein prescribed.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request. After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee for payment.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture is registerable in the
Debentures Register, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company in any place where the
principal of (and premium, if any) and interest on this Debenture are
payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debentures Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of this series, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and
<PAGE> 6
- 4 -
subject to certain limitations therein set forth, Debentures of this series are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Debentures or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Debenture,
each Holder waives and releases all such liability. This waiver and release are
part of the consideration for the issue of the Debentures.
Pursuant to a recommendation promulgated by the Committee on Uniform
Debenture Identification Procedures the Company has caused CUSIP numbers to be
printed on the Debentures. No representation is made as to the accuracy of
such numbers as printed on the Debentures and reliance may be placed only on
the other identification numbers placed thereon.
This Debenture shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Debenture.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture. Requests may be made to:
Rayonier Inc.
1177 Summer Street
Stamford, Connecticut 06904
Attention of Corporate Secretary
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--
Custodian
-------- --------
TEN ENT--as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to
Minors Act
JT TEN--as joint tenants with
right of survivorship and not as
tenants in common
---------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
<PAGE> 8
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[Please Insert Social Security or
other Identifying Number of Assignee]
- ----------------------------
- -----------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE]
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
the within Debenture of Rayonier, Inc. and all rights thereunder, hereby
irrevocably constituting and appointing such person attorney to transfer
said Debenture on the books of the Company, with full power of substitution in
the premises.
Date:
------------------ ----------------------------------------------------
----------------------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Debenture in every particular without
alteration or enlargement or any other change whatsoever.
<PAGE> 1
EXHIBIT 4.5
[Form of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
RAYONIER INC.
SERIES B MEDIUM-TERM FIXED RATE NOTE
Due Nine Months or More from Date of Issue
[ ] Check this box if the Note is a Global Note.
Applicable if the Note is a Global Note: [UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & Co. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
<TABLE>
<CAPTION>
ORIGINAL ISSUE DATE: INTEREST RATE PER STATED MATURITY:
ANNUM:
<S> <C>
ISSUE PRICE: % REDEEMABLE ON OR AFTER: (AT
OPTION OF THE COMPANY)
INITIAL DATE ON WHICH
THE NOTE IS REPAYABLE
AT THE OPTION OF THE
HOLDER:
INITIAL REDEMPTION
PERCENTAGE:
</TABLE>
<PAGE> 2
2
<TABLE>
<S> <C>
ANNUAL REDEMPTION DEFAULT RATE: (Only applicable
PERCENTAGE REDUCTION: if Note issued at
original issue discount)
DEPOSITARY: (Only applicable if
Note is a Global Note)
INTEREST PAYMENT DATES:
REGULAR RECORD DATES:
OID DEFAULT AMOUNTS: (Only SINKING FUND:
applicable if Note issued
at original issue discount)
AUTHORIZED DENOMINATIONS:
OTHER TERMS:
</TABLE>
RAYONIER INC., a corporation organized and existing under the laws of
North Carolina (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
, or registered assigns, the principal
sum of Dollars at the office or agency of the Company in
the Borough of Manhattan, The City of New York (the "Paying Agent"), on the
Stated Maturity specified above (the "Stated Maturity"), or if such date is not
a Business Day (as defined below), the next succeeding Business Day, in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on said principal sum at said office or agency at the rate per annum
(computed on the basis of a 360-day year of twelve 30-day months) specified
above, in
<PAGE> 3
3
like coin or currency, from and including the Original Issue Date specified
above or from and including the most recent Interest Payment Date to which
interest has been paid or duly provided for, on the Interest Payment Date(s)
specified above in each year following the Original Issue Date and at Maturity
until the principal sum hereof has been paid or duly provided for. The first
payment of interest on a Note originally issued and dated between a Regular
Record Date and an Interest Payment Date will be due and payable on the
Interest Payment Date following the next succeeding Regular Record Date to the
Holder at the close of business on such next succeeding Regular Record Date.
Payments of interest on this Note due on any Interest Payment Date shall
include interest accrued to but excluding such Interest Payment Date. Subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, the interest so payable on any Interest Payment Date shall be paid to
the Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date (specified
above) next preceding such Interest Payment Date and interest payable at
Maturity shall be paid to the Person to whom said principal sum is payable.
Payment of interest on this Note due on any Interest Payment Date
(other than interest on this Note due to the Holder hereof at Maturity) shall
be made by check
<PAGE> 4
4
mailed to the address of the person entitled thereto as it appears in the
Security Register or by wire transfer to those persons holding Notes with an
aggregate principal amount of greater than $5 million to such account as may
have been appropriately designated by such Holder as set forth herein. Payment
of the principal of, premium, if any, and interest, if any, on this Note due to
the Holder hereof at Maturity shall be made, in immediately available funds,
upon presentation of this Note for surrender at the office of the Paying Agent
in the Borough of Manhattan, The City of New York.
Any designation for wire transfer purposes shall be made by filing the
appropriate written information with the Paying Agent in the Borough of
Manhattan, The City of New York, by no later than the Regular Record Date
immediately preceding the applicable Interest Payment Date and, unless revoked
by written notice to the Paying Agent received by the Paying Agent on or prior
to the Regular Record Date immediately preceding the applicable Interest
Payment Date, shall remain in effect with respect to any further payments with
respect to this Note payable to such Holder.
The Company shall pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge
<PAGE> 5
5
imposed upon such payments shall be borne by the Holder or Holders of this Note
in respect of which such payments are made. Any payment on this Note due on
any day which is not a Business Day in The City of New York need not be made on
such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on the due date and no interest shall accrue on
such payment for the period from and after such due date to such next
succeeding Business Day.
If this Note is a Global Note as specified above, the following legend
is applicable: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY."
"Business Day" shall mean, as used herein with respect to any
particular location, every day except a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further
<PAGE> 6
6
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
RAYONIER INC.,
by
--------------------------------
Senior Vice President
Attest:
- -----------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to
in the within-mentioned Indenture.
Bankers Trust Company,
as Trustee
by
-------------------------
Authorized Signatory
Dated:
<PAGE> 7
[Reverse of Note]
RAYONIER INC.
SERIES B MEDIUM-TERM FIXED RATE NOTE
Due Nine Months or More from Date of Issue
This Note is one of a duly authorized issue of securities of
the Company (herein the "Securities"), issued and to be issued in one or more
series under an indenture dated as of September 1, 1992, as supplemented and
amended (herein called the "Indenture"), between the Company and Bankers Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The Securities are
general unsecured obligations of the Company and will rank pari passu with all
other Securities issued under the Indenture. This Note is one of a series of
the Securities, which series is limited in aggregate initial principal amount
to $174,000,000, designated as the Series B Medium-Term Notes (the "Notes") of
the Company. The Notes may mature at different times,
<PAGE> 8
2
bear interest, if any, at different rates, be redeemable at different times or
not at all, be repayable at the option of the holder at different times or not
at all and be issued at an original issue discount.
If this Note is not issued with an original issue discount and
if an Event of Default, as defined in the Indenture, with respect to the Notes
of this series shall occur and be continuing, the principal of the Notes of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
If so provided on the face of this Note under the heading
"Redeemable on or after (at option of the Company)", this Note may be redeemed
by the Company on and after the date so indicated on the face hereof. Notice
of redemption shall be given not later than 30 days and not earlier than 60
days prior to the date fixed for redemption. On and after the date, if any,
from which this Note may be redeemed, this Note may be redeemed in whole or in
part, at the option of the Company, at a redemption price equal to the product
of the principal amount of this Note to be redeemed multiplied by the
Redemption Percentage as defined herein. The "Redemption Percentage" shall
initially equal the Initial Redemption Percentage specified on the face of this
Note, and shall decline at each anniversary of the
<PAGE> 9
3
initial date that this Note is redeemable by the amount of the Annual
Redemption Percentage Reduction specified on the face of this Note, until the
Redemption Percentage is equal to 100%.
If so provided above, this Note will be repayable in whole or
in part in increments of $1,000, provided that the remaining principal amount
of any Note surrendered for partial repayment shall be at least $1,000, on any
Business Day on or after the "Initial Date on Which the Note is Repayable at
the Option of the Holder" (as stated on the face hereof) at the option of the
Holder, at 100% of the principal amount to be repaid, plus accrued interest, if
any, to the repayment date. In order for the exercise of the option to be
effective and the Notes to be repaid, the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place
or places of which the Company shall from time to time notify the Holder of
this Note, on or before the fifteenth, but not earlier than the twenty-fifth,
calendar day or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, either (i) this Note, with the form
below entitled "Option to Elect Repayment" duly completed, or (ii) a telegram,
telex, facsimile transmission, or letter from a member of a national securities
exchange or the
<PAGE> 10
4
National Association of Securities Dealers, Inc., or a commercial bank or a
trust company in the United States of America setting forth (a) the name,
address and telephone number of the Holder of this Note, (b) the principal
amount of this Note and the amount of this Note to be repaid, (c) a statement
that the option to elect repayment is being exercised thereby, and (d) a
guarantee stating that the Company will receive this Note, with the form below
entitled "Option to Elect Repayment" duly completed, not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and this Note and form duly completed are received by the Paying Agent
on behalf of the Company by such fifth Business Day). Any such election shall
be irrevocable. The address to which such deliveries are to be made is Bankers
Trust Company, Four Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group (or at such other places as the Company shall
notify the Holders of the Notes). All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final
and binding.
In the event of redemption or repayment of this Note in part
only, a new Note or Notes of this series for
<PAGE> 11
5
the parts hereof not redeemed or repaid will be issued in the name of the
Holder hereof upon the cancelation hereof.
If this Note is issued with an original issue discount, (i) if
an Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of principal of this Note which may be declared due and
payable in the manner, with the effect and subject to the conditions provided
in the Indenture, shall be determined in the manner set forth under the heading
"OID Default Amount" on the face hereof, and (ii) in the case of a default of
payment in principal upon acceleration, redemption, repayment at the option of
the holder or at the Stated Maturity hereof, in lieu of any interest otherwise
payable, the overdue principal of this Note shall bear interest at a rate of
interest per annum equal to the Default Rate specified on the face hereof (to
the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such acceleration, redemption, repayment at
the option of the holder or Stated Maturity, as the case may be, to the date
payment has been made or duly provided for or such default has been waived in
accordance with the terms of the Indenture. Upon payment (A) of the amount of
principal so declared due and payable and (B) of interest on any overdue
principal and overdue interest (in each case to
<PAGE> 12
6
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on the Notes of this series shall terminate.
If this Note is a Global Note (as specified on the face
hereof) this Note is exchangeable only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for this
Global Note or if at any time the Depositary ceases to be a clearing agency
under the Securities Exchange Act of 1934, as amended, and the Company does not
appoint a successor Depositary (in any case in which the Company may appoint a
successor Depositary) within 90 days after the Company receives notice or
becomes aware of such unwillingness, inability or ineligibility, (y) the
Company executes and delivers to the Trustee a Company Order that such Global
Note shall be exchangeable or (z) there shall have occurred and be continuing
an Event of Default with respect to the Notes represented hereby. If this Note
is exchangeable pursuant to the preceding sentence, it shall be exchangeable
for definitive Notes in registered form, bearing interest (if any) at the same
rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, Stated Maturity and other terms and of differing
<PAGE> 13
7
authorized denominations aggregating a like amount. Any Global Note that is
exchangeable pursuant to the second preceding sentence shall be exchangeable
for Notes registered in such names as such Depositary shall direct.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.
<PAGE> 14
8
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
The Indenture contains provisions for satisfaction, discharge
and defeasance of the entire indebtedness on this Note, upon compliance by the
Company with certain conditions set forth therein.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its written request. After any such payment, Holders
entitled to the money must look only to the Company and not to the Trustee for
payment.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registerable in the
Securities Register, upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
<PAGE> 15
9
Company and the Securities Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Notes of this series are exchangeable for a like aggregate principal
amount of Notes of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and
<PAGE> 16
10
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note,
each Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Notes.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Notes. No representation is made as to the accuracy of
such numbers as printed on the Notes and reliance may be placed only on the
other identification numbers placed thereon.
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
Capitalized terms used herein which are defined in the
Indenture and not defined herein shall have the respective meanings assigned
thereto in the Indenture.
<PAGE> 17
11
The company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture. Requests may be made
to:
Rayonier Inc.
1177 Summer Street
Stamford, Connecticut 06904
Attention of Corporate Secretary
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 18
12
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion thereof specified below) pursuant
to its terms at a price equal to the principal amount thereof, together with
interest to the repayment date, to the undersigned, at
(please print or type name and address of the
undersigned).
For this Note to be repaid the Company must receive at the
applicable address of the Trustee set forth above or at such other place or
places of which the Company shall from time to time notify the holder of the
within Note, on or before the fifteenth, but not earlier than the twenty-fifth,
calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) this Note, with this "Option to
Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of securities Dealers, Inc., or a commercial bank or a
trust
<PAGE> 19
13
company in the United States of America setting forth (a) the name, address and
telephone number of the Holder of the Note, (b) the principal amount of the
Note and the amount of the Note to be repaid, (c) a statement that the option
to elect repayment is being exercised hereby, and (d) a guarantee stating that
the Note to be repaid with the form entitled "Option to Elect Repayment" on the
addendum to the Note duly completed will be received by the Company not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter (and such Note and form duly completed are received by
the Paying Agent on behalf of the Company by such fifth Business Day).
Exercise of the repayment option by the Holder shall be irrevocable.
If less than the entire principal amount of the within Note is
to be repaid, specify the portion thereof (which shall be an integral multiple
of $1,000) which the Holder elects to have repaid: _________________ (in the
absence of any such specification, the entire principal amount of the Note will
be repaid); and specify the denomination or denominations (which shall be
$1,000 or an integral multiple of $1,000 in excess thereof) of the Note or
Notes to be issued to the Holder for the portion of the within Note not being
repaid (in the absence of any
<PAGE> 20
14
specification, one such Note will be issued for the portion not being repaid):
_______________.
Date:
------------------------------------
Notice: The signature on this
Option to Elect Repayment must
correspond with the name as written
upon the face of the Note in every
particular without alteration or
enlargement or any other change
whatsoever.
<PAGE> 21
15
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--
Custodian
TEN ENT--as tenants by the ------- ---------
entireties (Cust) (Minor)
Under Uniform Gifts to
Minors Act
JT TEN--as joint tenants with
right of survivorship and not as
tenants in common --------------------------
(State)
Additional abbreviations may also be used though not in the
above list.
<PAGE> 22
16
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
[Please Insert Social Security or
Other Identifying Number of Assignee]
- ------------------------
- ------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE]
- ------------------------------------------------------------
- ------------------------------------------------------------
the within Note of Rayonier Inc. and all rights thereunder, hereby irrevocably
constituting and appointing such person attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.
Dated:
-------------- -----------------------------------
-----------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular without alteration
or enlargement or any other change whatsoever.
<PAGE> 1
EXHIBIT 4.6
[Form of Note]
CUSIP NO. PRINCIPAL AMOUNT:
REGISTERED NO.
RAYONIER INC.
SERIES B MEDIUM-TERM FLOATING RATE NOTE
Due Nine Months or More from Date of Issue
[ ] Check box if the Note is a Global Note.
Applicable if the Note is a Global Note: [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: STATED MATURITY
INTEREST RATE BASIS: INDEX MATURITY:
REDEEMABLE ON OR AFTER (AT SPREAD MULTIPLIER: SPREAD: +
OPTION OF COMPANY): -
INITIAL REDEMPTION INTEREST RATE RESET PERIOD:
PERCENTAGE:
<PAGE> 2
2
CALCULATION AGENT: ANNUAL REDEMPTION DEPOSITARY: (Only applicable if
PERCENTAGE REDUCTION: this Note is a Global Note)
INITIAL DATE ON WHICH MAXIMUM INTEREST RATE:
THE NOTE IS REPAYABLE
AT THE OPTION OF THE
HOLDER: MINIMUM INTEREST RATE:
SINKING FUND:
INTEREST PAYMENT DATES: DEFAULT RATE: (Only
applicable if Note issued
at original issue discount)
INTEREST CALCULATION OID DEFAULT AMOUNTS: (Only
DATES: ten calendar days applicable if Note issued
after the Interest at original issue discount)
Determination Date, unless
otherwise stated
AUTHORIZED DENOMINATIONS:
OTHER TERMS:
RAYONIER INC., a corporation organized and existing under the laws
of North Carolina (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to or registered assigns, the
principal sum of Dollars at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(the "Paying Agent"), on the Stated Maturity specified above (the "Stated
Maturity"), or if such date is not a Business Day (as defined herein), the next
succeeding Business Day, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of public
and private debts, and to pay interest on said principal sum at said office or
agency in like coin or
<PAGE> 3
3
currency on the Interest Payment Date(s) specified above in each year following
the Original Issue Date and at Maturity, at a rate per annum equal to the
Initial Interest Rate specified above until the first Interest Reset Date (as
defined herein) following the Original Issue Date and thereafter at a rate per
annum determined in accordance with the provisions on the reverse hereof under
the heading "Determination of Interest Rate Per Annum for Commercial Paper Rate
Notes", "Determination of Interest Rate Per Annum for LIBOR Notes",
"Determination of Interest Rate Per Annum for Treasury Rate Notes",
"Determination of Interest Rate Per Annum for CD Rate Notes" or "Determination
of Interest Rate Per Annum for Federal Funds Rate Notes", depending upon
whether the Interest Rate Basis is the Commercial Paper Rate, Prime Rate,
LIBOR, Treasury Rate, CD Rate or Federal Funds Rate, as specified above until
the principal sum hereof has been paid or duly provided for; provided, however,
that if any Interest Payment Date would otherwise fall on a day that is not a
Business Day, unless such Interest Payment Date is also the date of Maturity,
such Interest Payment Date will be the next succeeding Business Day, except
that in the event that the Interest Rate Basis for this Note is LIBOR, if such
day falls in the next
<PAGE> 4
4
succeeding calendar month, such Interest Payment Date will be the next
preceding day that is a Business Day.
If the date of Maturity for this Note falls on a day which is not a
Business Day, payment of principal and any premium and interest need not be made
on such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on the due date and no interest shall accrue on such
payment for the period from and after such due date to such next succeeding
Business Day.
Interest on this Note shall accrue (a) if the rate at which interest on
this Note is payable shall be adjusted monthly, quarterly, semiannually or
annually, as specified above under "Interest Rate Reset Period" and as
determined in accordance with the provisions on the reverse hereof, from the
Interest Payment Date next preceding the date of this Note to which interest
has been paid, unless the date hereof is an Interest Payment Date to which
interest has been paid, in which case from the date of this Note, or unless no
interest has been paid on this Note, in which case from the Original Issue Date
specified above, until the principal sum hereof has been paid or duly provided
for or (b) if the rate at which interest on this Note is payable shall be
adjusted daily or weekly, as specified above under
<PAGE> 5
5
"Interest Rate Reset Period" and as determined in accordance with the
provisions on the reverse hereof, from the date after the Regular Record Date
next preceding the date of this Note through which interest has been paid,
unless the date hereof is a Regular Record Date through which interest has been
paid, in which case from the day after the date of this Note, or unless no
interest has been paid on this Note, in which case from the Original Issue Date
specified above, until the principal sum hereof has been paid or duly provided
for; provided, however, that if the date of this Note is after any Regular
Record Date preceding any Interest Payment Date and before such Interest
Payment Date, interest on this Note shall accrue from such Interest Payment
Date unless the rate at which interest on this Note is payable shall be
adjusted daily or weekly, as provided above under "Interest Rate Reset Period"
and as determined in accordance with the provisions on the reverse hereof, in
which case interest on this Note shall accrue from the day after such Regular
Record Date, or, in either case, if no interest has been paid on this Note,
from the Original Issue Date specified above. The first payment of interest on
a Note originally issued and dated between a Regular Record Date and an
Interest Payment Date will be due and payable on the Interest Payment Date
following the next succeeding Regular
<PAGE> 6
6
Record Date to the Holder at the close of business on such next succeeding
Regular Record Date.
Interest payments hereon will include interest accrued to but excluding
the applicable Interest Payment Date; provided, however, that if the rate at
which interest on this Note is payable shall be adjusted daily or weekly as
specified on the face hereof under "Interest Rate Reset Period" and as
determined in accordance with the provisions hereof, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal hereof is payable, will include interest accrued to and including the
Regular Record Date next preceding such Interest Payment Date. Accrued
interest hereon from the Original Issue Date or from the last date to which
interest hereon has been paid, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest factor
calculated for each day from the Original Issue Date or from the last date to
which interest shall have been paid or duly provided for, as the case may be,
up to but excluding the date for which accrued interest is being calculated.
The interest factor (expressed as a decimal calculated to seven decimal places,
without rounding) for each such day shall be computed by dividing
<PAGE> 7
7
the interest rate per annum (expressed as a decimal calculated to seven decimal
places without rounding) applicable to such day by 360 if the Interest Rate
Basis specified on the face hereof is Prime Rate, LIBOR, Commercial Paper Rate,
CD Rate or Federal Funds Rate or by the actual number of days in the year if
the Interest Rate Basis specified on the face hereof is Treasury Rate. Subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, the interest so payable on any Interest Payment Date shall be paid to
the Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date, and interest payable at Maturity shall be paid to
the Person to whom said principal sum is payable. "Regular Record Date" shall
mean the fifteenth calendar day prior to any Interest Payment Date. "Business
Day" shall mean, as used herein with respect to any particular location, each
Monday, Tuesday, Wednesday, Thursday and Friday which is (a) not a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to close and (b) in the event that the Interest Rate Basis
for this Note is LIBOR, a London Business Day. "London Business Day"
<PAGE> 8
8
shall mean any Business Day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.
Payment of interest on this Note due on any Interest Payment Date
(other than interest on this Note due to the Holder hereof at Maturity) shall
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register or by wire transfer to those Persons holding
Notes with an aggregate principal amount of greater than $5 million to such
account as may have been appropriately designated by such Holder as set forth
herein. Payment of the principal of and any premium and interest on this Note
due to the Holder hereof at Maturity shall be made in immediately available
funds upon presentation of this Note for surrender at the office of the Paying
Agent in the Borough of Manhattan, The City of New York.
Any designation for wire transfer purposes shall be made by filing the
appropriate information with the Trustee at its Corporate Trust Office in the
Borough of Manhattan, The City of New York by no later than the Regular Record
Date immediately preceding the applicable Interest Payment Date and, unless
revoked by written notice to the Paying Agent received by the Paying Agent on
or prior to the Regular Record Date immediately preceding the applicable
<PAGE> 9
9
Interest Payment Date, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
The Company shall pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon such payments shall be borne by the Holder or
Holders of this Note in receipt of which such payments are made.
If this Note is a Global Note as specified above, the following legend
is applicable: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY."
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse
<PAGE> 10
10
hereof by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, The Company has caused this instrument to
be duly executed under its corporate seal.
RAYONIER INC.,
by
-----------------------
Senior Vice President
Attest:
- ---------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to
in the within-mentioned Indenture
BANKERS TRUST COMPANY, as Trustee,
by
----------------------
Authorized Signatory
Dated:
<PAGE> 11
[Reverse of Note]
RAYONIER INC.
SERIES B MEDIUM-TERM FLOATING RATE NOTE
Due Nine Months or More from Date of Issuane
This Note is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture dated as of September 1, 1992, as supplemented
and amended (herein called the "Indenture"), between the Company and Bankers
Trust Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The Securities are
general unsecured obligations of the Company and will rank pari passu with all
other Securities issued under the Indenture. This Note is one of a series of
the Securities, which series is limited in aggregate initial principal amount
to $174,000,000, designated as the Series B Medium-Term Notes (the "Notes") of
the Company. The Notes may mature at different times,
<PAGE> 12
2
bear interest, if any, at different rates, be redeemable at different times or
not at all, be repayable at the option of the Holder at different times or not
at all and be issued at an original issue discount.
The interest rate in effect from the Original Issue Date to
the first Interest Reset Date (as defined herein) following the Original Issue
Date shall be the Initial Interest Rate specified on the face hereof.
Commencing on the first Interest Reset Date following the Original Issue Date,
the rate at which interest on this Note is payable shall be adjusted daily,
weekly, monthly, quarterly, semi-annually or annually as specified on the face
hereof under "Interest Rate Reset Period"; provided, however, that the interest
rate in effect hereon for the 10 calendar days immediately prior to the
Maturity hereof shall be that in effect on the tenth calendar day next
preceding Maturity. Each such adjusted rate shall be applicable from and
including the Interest Reset Date to which it relates but not including the
next succeeding Interest Reset Date or until Maturity, as the case may be.
Subject to applicable provisions of law and except as specified herein, on each
Interest Reset Date, the rate of interest on this Note shall be the rate
determined with respect to the Interest Determination Date (as defined
<PAGE> 13
3
herein) next preceding such Interest Reset Date in accordance with the
provisions of the applicable heading below.
Unless the Interest Rate Basis specified on the face hereof is
Treasury Rate, the Interest Determination Date with respect to any Interest
Reset Date shall be the second Business Day immediately preceding such Interest
Reset Date. If the Interest Rate Basis specified on the face hereof is
Treasury Rate, the Interest Determination Date with respect to any Interest
Reset Date shall be the day of the week on which Treasury bills are normally
sold at auction. If, as a result of a legal holiday, the auction of Treasury
bills with respect to any week is held on the preceding Friday, such Friday
shall be the Interest Determination Date with respect to the Interest Reset
Date occurring in the next succeeding week. If the Interest Reset Period
specified on the face hereof is daily, the Interest Reset Dates with respect to
this Note shall be each Business Day. If the Interest Rate Reset Period
specified on the face hereof is weekly, the Interest Reset Dates with respect
to this Note shall be Wednesday of each week; provided, however, that if the
Interest Rate Basis specified on the face hereof is the Treasury Rate, the
Interest Reset
<PAGE> 14
4
Dates with respect to this Note shall be the Tuesday of each week. If the
Interest Rate Reset Period specified on the face hereof is monthly, the
Interest Reset Dates with respect to this Note shall be the third Wednesday of
each month. If the Interest Rate Reset Period specified on the face hereof is
quarterly, the Interest Reset Dates with respect to this Note shall be the
third Wednesday of March, June, September and December of each year. If the
Interest Rate Reset Period specified on the face hereof is semiannually, the
Interest Reset Dates with respect to this Note shall be the third Wednesday of
the two months in each year specified on the face hereof under Interest Rate
Reset Period. If the Interest Rate Reset Period specified on the face hereof
is annually, the Interest Reset Dates with respect to this Note shall be the
third Wednesday of the month in each year specified on the face hereof under
Interest Rate Reset Period. If the Interest Rate Basis specified on the face
hereof is Treasury Rate and any Interest Reset Date with respect to this Note
falls on a day on which Treasury bills are to be auctioned, then such Interest
Reset Date shall be postponed to the next succeeding Business Day. If any
Interest Reset Date with respect to this Note would otherwise be a day that is
not a Business Day, such Interest Reset Date shall be postponed to
<PAGE> 15
5
the next succeeding Business Day; provided, however, if the Interest Rate Basis
specified on the face hereof is LIBOR, if such succeeding Business Day is in
the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
If an Interest Calculation Date falls on a day which is not a
Business Day, such Interest Calculation Date shall be the next succeeding
Business Day.
Determination of Interest Rate Per Annum for Prime Rate Notes.
If the Interest Rate Basis specified on the face hereof is Prime Rate, the
interest rate per annum determined with respect to any Interest Determination
Date shall equal the rate, adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof, and calculated to one
hundred-thousandth of a percentage point, rounded up, set forth for the
relevant Interest Determination Date in "Statistical Release H.15(519),
Selected Interest Rates", published by the Board of Governors of the Federal
Reserve System under the heading "Bank Prime Loan", or any successor
publication ("Release H.15(519)"). In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Interest Calculation
Date (specified on the
<PAGE> 16
6
face hereof) pertaining to such Interest Determination Date, then the Prime
Rate with respect to such Interest Reset Date shall be the arithmetic mean
(adjusted or multiplied and calculated by the Calculation Agent as described
above) of the rates of interest publicly announced by each bank that appears on
the display designated as page "NYMF" on the Reuters Monitor Money Rates
Service (or such other page as may replace the NYMF page on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks) ("Reuters Screen NYMF Page") as such bank's prime rate or base
lending rate as in effect for such Interest Determination Date as quoted on the
Reuters Screen NYMF Page on such Interest Determination Date. If fewer than
four such rates appear on the Reuters Screen NYMF Page on such Interest
Determination Date, the Prime Rate with respect to such Interest Reset Date
shall be the arithmetic mean (adjusted or multiplied and calculated by the
Calculation Agent as described above) of the prime rates or base lending rates
(quoted on the basis of the actual number of days in the year divided by a
360-day year) as of the close of business on such Interest Determination Date
by three major banks in The City of New York selected by the Calculation Agent;
provided, however, that if fewer than three banks selected as aforesaid by the
Calculation Agent
<PAGE> 17
7
are quoting as mentioned in this sentence, the interest rate per annum hereon
with respect to such Interest Reset Date shall be the Prime Rate in effect
hereon on such Interest Determination Date.
Determination of Interest Rate Per Annum For LIBOR Notes. If
the Interest Rate Basis specified on the face hereof is LIBOR, the interest
rate per annum determined with respect to any Interest Determination Date shall
equal the arithmetic mean (as calculated by the Calculation Agent specified on
the face hereof to one hundred-thousandth of a percentage point, rounded up) of
offered rates for deposits of not less than U.S. $1,000,000 having the Index
Maturity specified on the face hereof, commencing on the second Business Day
immediately following such Interest Determination Date, which appear on the
Designated Libor Page (as defined herein) as of 11:00 A.M., London time, on
such Interest Determination Date, adjusted by the addition or subtraction of
the Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
that if fewer than two such offered rates so appear on the Designated Libor
Page, the Calculation Agent shall, commencing on the second Business Day
immediately following such Interest Determination Date, request the principal
<PAGE> 18
8
London office of each of four major banks in the London interbank market,
selected by the Calculation Agent, to provide a quotation of the rate at which
such bank offered to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination Date,
deposits in U.S. dollars having the Index Maturity specified on the face hereof
and in a principal amount equal to an amount of not less than U.S. $1,000,000
that in the Calculation Agent's judgment is representative for a single
transaction in such market at such time, and the interest rate per annum hereon
shall equal the arithmetic mean (adjusted or multiplied and calculated as
described above) of (a) such quotations, if at least two quotations are
provided, or (b) if fewer than two such quotations are provided, the rates
quoted at approximately 11:00 A.M., New York City time on such Interest
Determination Date by three major banks in The City of New York, selected by
the Calculation Agent, for loans in U.S. dollars to leading European banks
having the Index Maturity specified on the face hereof and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that in the
Calculation Agent's judgment is representative for a single transaction in such
market at such time, in either case, adjusted or multiplied and calculated as
<PAGE> 19
9
described above; provided, however, that if not all of the three banks selected
by the Calculation Agent pursuant to clause (b) above are quoting as described
above, the interest rate per annum hereon with respect to such Interest Reset
Date shall be the LIBOR in effect hereon on such Interest Determination Date.
"Designated LIBOR Page" means "LIBOR Telerate", which shall be the display
designated as page "3750" on the Dow Jones Telerate Service (or such other page
as may replace page "3750" on such service or such other service as may be
nominated by the British Bankers' Association for the purpose of displaying the
London interbank offered rates of major banks), unless "LIBOR Reuters" is
designated in the applicable Pricing Supplement, in which case "Designated
LIBOR Page" means the display designated as page "LIBO" on the Reuters Monitor
Money Rates Service (or such other page as may replace the LIBO page on such
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates of
major banks).
Determination of Interest Rate Per Annum for Treasury Rate
Notes. If the Interest Rate Basis specified on the face hereof is Treasury
Rate, the interest rate per annum determined with respect to any Interest
Determination Date shall equal the rate for the auction on such Interest
<PAGE> 20
10
Determination Date of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified on the face hereof as published in
Release H.15(519), under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New
York City time, on the Interest Calculation Date (specified on the face hereof)
pertaining to such Interest Determination Date, the auction average rate
(expressed as a bond equivalent, calculated to one hundred-thousandth of a
percentage point, rounded up, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
reported by the United States Department of the Treasury, in either case,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified
on the face hereof. In the event that the results of such auction of Treasury
bills are not published or reported as provided by 3:00 P.M., New York City
time, on such Interest Calculation Date or if no such auction is held by the
applicable Interest Determination Date, then the interest rate per annum shall
be the rate set forth in Release H.15(519) with respect to such Interest
Determination Date for the specified Index Maturity under the heading "U.S.
<PAGE> 21
11
Government Securities/Treasury Bills/Secondary Market", adjusted or multiplied
and calculated as described above. In the event such rate is not published by
3:00 P.M., New York City time, on the relevant Interest Calculation Date, then
the interest rate per annum hereon shall be calculated by the Calculation Agent
and shall be the yield to maturity (expressed as a bond equivalent, calculated
to one hundredthousandth of a percentage point, without rounding, on the basis
of a year of 365 or 366 days, as applicable, and applied on a daily basis) of
the arithmetic mean (adjusted or multiplied and calculated as described above)
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York, selected by the
Calculation Agent, for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof, adjusted or
multiplied and calculated as described above; provided, however, that if fewer
than three dealers selected as aforesaid by the Calculation Agent are quoting
as described in this sentence, the interest rate per annum hereon with respect
to such Interest Reset Date shall be the Treasury Rate in effect hereon on such
Interest Determination Date.
<PAGE> 22
12
Determination of Interest Rate Per Annum for Commercial Paper
Rate Notes. If the Interest Rate Basis specified on the face hereof is
Commercial Paper Rate, the interest rate per annum determined with respect to
any Interest Determination Date shall equal the Money Market Yield (as defined
herein) (quoted on a bank discount basis) on such Interest Determination Date
of the rate for commercial paper having the Index Maturity specified on the
face hereof, (i) as such rate is published in Release H.15(519), under the
heading "Commercial Paper", or (ii) of such rate is not published at or prior
to 9:00 A.M., New York City time, on the Interest Calculation Date the Money
Market Yield of such rate on such date, as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 P.M.
Quotations for U.S. Government Securities", or any successor publication of the
Federal Reserve Bank of New York ("Composite Quotations"), under the heading
"Commercial Paper". If by 3:00 P.M., New York City time, on such Interest
Calculation Date, such rate is not published in either of such publications,
the interest rate per annum determined with respect to such Interest
Determination Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean (calculated to one
hundred-thousandth of a percentage
<PAGE> 23
13
point, rounded up) of the offered rates (quoted on a bank discount basis), as
of 11:00 A.M., New York City time, on such Interest Determination Date, of
three leading dealers of commercial paper in The City of New York, selected by
the Calculation Agent, for commercial paper having the Index Maturity specified
on the face hereof placed for industrial issuers whose bond rating is "AA", or
the equivalent, from a nationally recognized rating agency, in each of the
above cases adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof; provided, however, that if fewer than three
such dealers are quoting as described above, the interest rate per annum hereon
with respect to such Interest Reset Date shall be the Commercial Paper Rate in
effect hereon on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a
percentage) calculated in accordance with the following formula:
Money Market Yield = 100 x 360 x D
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal calculated to seven decimal places,
without rounding; and
<PAGE> 24
14
"M" refers to the actual number of days in the interest period for which
interest is being calculated.
Determination of Interest Rate Per Annum for CD Rate Notes. If the
Interest Rate Basis specified on the face hereof is CD Rate, the interest rate
per annum determined with respect to any Interest Determination Date shall
equal the rate, adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof and calculated to one hundred-thousandth of a
percentage point, rounded up, for the relevant Interest Determination Date for
negotiable certificates of deposit having the specified Index Maturity as
published in Release H.15(519) under the heading "CDs (Secondary Market)". In
the event that such rate is not published prior to 9:00 A.M., New York City
time, on the Interest Calculation Date (specified on the face hereof)
pertaining to such Interest Determination Date, then the CD Rate with respect
to such Interest Reset Date shall be the rate (adjusted or multiplied and
calculated as described above) on such Interest Determination Date for
negotiable certificates of deposit having the specified Index Maturity as
published in Composite Quotations under the heading "Certificates of Deposit".
If by 3:00 P.M., New York City
<PAGE> 25
15
time, on such Interest Calculation Date such rate is not published in either
Release H.15(519) or Composite Quotations, the CD Rate with respect to such
Interest Reset Date shall be calculated by the Calculation Agent and shall be
the arithmetic mean (adjusted or multiplied and calculated as described above)
of the secondary market offered rates, as of 10:00 A.M., New York City time, on
such Interest Determination Date, of three leading nonbank dealers of
negotiable U.S. dollar certificates of deposit in The City of New York,
selected by the Calculation Agent, for negotiable certificates of deposit of
major United States money center banks with a remaining maturity closest to the
specified Index Maturity in a denomination of U.S $5,000,000; provided,
however, that, if fewer than three dealers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the interest rate
per annum hereon with respect to such Interest Reset Date shall be the CD Rate
in effect hereon on such Interest Determination Date.
Determination of Interest Rate Per Annum for Federal Funds
Rate Notes. If the Interest Rate Basis specified on the face hereof is Federal
Funds Rate, the interest rate per annum determined with respect to any Interest
Determination Date shall equal the rate, adjusted
<PAGE> 26
16
by the addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified on the
face hereof and calculated to one hundred-thousandth of a percentage point,
rounded up, on the relevant Interest Determination Date for Federal Funds as
published in Release H.15(519) under the heading "Federal Funds (Effective)".
In the event that such rate is not published prior to 9:00 A.M., New York City
time, on the Interest Calculation Date (specified on the face hereof)
pertaining to such Interest Determination Date, then the Federal Funds Rate
with respect to such Interest Reset Date shall be the rate (adjusted or
multiplied and calculated as described above) on such Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate". If by 3:00 P.M., New York City time, on such Interest
Calculation Date such rate is not published in either Release H.15(519) or
Composite Quotations, the Federal Funds Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and shall be the
arithmetic mean (adjusted or multiplied and calculated as described above) of
the rates, as of 9:00 A.M., New York City time, on such Interest Determination
Date, for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal
<PAGE> 27
17
Funds transactions in The City of New York, selected by the Calculation Agent;
provided, however, that if fewer than three brokers selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the interest
rate per annum hereon with respect to such Interest Reset Date shall be the
Federal Funds Rate in effect hereon on such Interest Determination Date.
Notwithstanding the foregoing, the interest rate per annum
hereon shall not be greater than the Maximum Interest Rate, if any, or less
than the Minimum Interest Rate, if any, specified on the face hereof. The
Calculation Agent shall calculate the interest rate hereon in accordance with
the foregoing on or before each Interest Calculation Date, or if such date is
not a Business Day, the next succeeding Business Day.
The interest rate on this Note will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by
United States law of general application.
At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate hereon then in effect and,
if determined, the interest rate which will become effective on the next
Interest Reset Date.
<PAGE> 28
18
If this Note is not issued with an original issue discount and
if an Event of Default, as defined in the Indenture, with respect to the Notes
of this series shall occur and be continuing, the principal of the Notes of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
If so provided on the face of this Note, this Note may be
redeemed by the Company on and after the date so indicated on the face hereof.
Notice of redemption shall be given not later than 30 days and not earlier than
60 days prior to the date fixed for redemption. On and after the date, if any,
from which this Note may be redeemed, this Note may be redeemed in whole or in
part, at the option of the Company at a Redemption Price equal to the product
of the principal amount of this Note to be redeemed multiplied by the
Redemption Percentage as defined herein. The "Redemption Percentage" shall
initially equal the Initial Redemption Percentage specified on the face of this
Note, and shall decline at each anniversary of the initial date that this Note
is redeemable by the amount of the Annual Redemption Percentage Reduction
specified on the face of this Note, until the Redemption Percentage is equal to
100%.
If so provided on the face of this Note, this Note will be
repayable in whole or in part in increments of
<PAGE> 29
19
$1,000 provided that the remaining principal amount of any amount of any Note
surrendered for partial repayment shall be at least $1,000, on any Business Day
on or after the "Initial Date on Which the Note is Repayable at the Option of
the Holder" (as stated on the face hereof), at the option of the Holder, at
100% of the principal amount to be repaid, plus accrued interest, if any, to
the repayment date. In order for the exercise of the option to be effective
and the Note to be repaid, the Company must receive at the applicable address
of the Paying Agent set forth below or at such other place or places of which
the Company shall from time to time notify the Holder of this Note, on or
before the fifteenth, but not earlier than the twenty-fifth, calendar day, or,
if such day is not a Business Day, the next succeeding Business Day, prior to
the repayment date, either (i) this Note, with the form below entitled "Option
to Elect Repayment" duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a commercial bank or a
trust company in the United States of America setting forth (a) the name,
address and telephone number of the Holder of this Note, (b) the principal
amount of this Note and the amount of this Note to be repaid, (c) a statement
that the option
<PAGE> 30
20
to elect repayment is being exercised thereby, and (d) a guarantee stating that
the Paying Agent on behalf of the Company will receive this Note, with the form
below entitled "Option to Elect Repayment" duly completed, not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and this Note and form duly completed are received by the Payment Agent
on behalf of the Company by such fifth Business Day). Any such election shall
be irrevocable. The address of the Paying Agent to which such deliveries are
to be made is Bankers Trust Company, Four Albany Street, New York, New York
10006 Attention: Corporate Trust and Agency Group (or at such other places as
the Company shall notify the Holders of the Notes). All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note
for repayment will be determined by the Company, whose determination will be
final and binding.
In the event of redemption or repayment of this Note in part
only, a new Note or Notes of this series for the portion hereof not redeemed or
repaid will be issued in the name of the Holder hereof upon the cancellation
hereof.
If this Note is issued with an original issue discount, (i) if
an Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of
<PAGE> 31
21
principal of this Note which may be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture, shall
be determined in the manner set forth under the heading "OID Default Amounts"
on the face hereof, and (ii) in the case of a default of payment in principal
upon acceleration, redemption, repayment at the option of the holder or at the
Stated Maturity hereof, in lieu of any interest otherwise payable, the overdue
principal of this Note shall bear interest at a rate of interest per annum
equal to the Default Rate specified on the face hereof (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such acceleration, redemption, repayment at the option of the
holder or Stated Maturity, as the case may be, to the date payment has been
made or duly provided for or such default has been waived in accordance with
the terms of the Indenture. Upon payment (A) of the amount of principal so
declared due and payable and (B) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Notes of this
series shall terminate.
<PAGE> 32
22
If this Note is a Global Note (as specified on the face
hereof), this Note is exchangeable only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for this
Global Note or if at any time the Depositary ceases to be a clearing agency
under the Securities Exchange Act of 1934, as amended, and the Company does not
appoint a successor Depositary (in any case in which the Company may appoint a
successor Depositary) within 90 days after the Company receives notice or
becomes aware of such unwillingness, inability or ineligibility, (y) the
Company executes and delivers to the Trustee a Company Order that such Global
Note shall be exchangeable or (z) there shall have occurred and be continuing
an Event of Default with respect to the Notes represented hereby. If this Note
is exchangeable pursuant to the preceding sentence, it shall be exchangeable
for definitive Notes in registered form, bearing interest at the same rate or
pursuant to the same formula, having the same date of issuance, redemption
provisions, if any, Stated Maturity and other terms and of differing authorized
denominations aggregating like amount. Any Global Note that is exchangeable
pursuant to the second preceding sentence shall be exchangeable for Notes
registered in such names as such Depositary shall direct.
<PAGE> 33
23
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any)
<PAGE> 34
24
and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness on this Note, upon compliance by the
Company with certain conditions set forth therein.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request. After any such payment, Holders entitled to the money
must look only to the Company and not to the Trustee for payment.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registerable in the Securities
Register, upon surrender of this Note for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
this series, of authorized denominations and for the same aggregate
<PAGE> 35
25
principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Notes of this series are exchangeable for a like aggregate principal
amount of Notes of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the
<PAGE> 36
26
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each Holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes. No representation is made as to the
accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers placed thereon.
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
Capitalized terms used herein which are defined in the
Indenture and not defined herein shall have the respective meanings assigned
thereto in the Indenture.
The Company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture. Requests may be made
to:
Rayonier Inc.
1177 Summer Street
Stamford, Connecticut 06904
Attention of Corporate Secretary
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 37
27
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion thereof specified below) pursuant
to its terms at a price equal to the principal amount thereof, together with
interest to the repayment date, to the undersigned, at
__________________________________________________________ (please print or
type name and address of the undersigned).
For the within Note to be repaid the Company must receive at the
applicable address of the Trustee set forth in the Note or at such other place
or places of which the Company shall from time to time notify the Holder of the
within Note, on or before the fifteenth, but not earlier than the twenty-fifth,
calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) the Note, with this "Option to
Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust
<PAGE> 38
28
company in the United States of America setting forth (a) the name, address and
telephone number of the Holder of the Note, (b) the principal amount of the
Note and the amount of the Note to be repaid, (c) a statement that the option
to elect repayment is being exercised hereby, and (d) a guarantee stating that
the Note to be repaid with this form duly completed will be received by the
Paying Agent on behalf of the Company not later than five Business Days after
the date of such telegram, telex, facsimile transmission or letter (and such
Note and form duly completed are received by the Paying Agent on behalf of the
Company such fifth Business Day). Exercise of the repayment option by the
Holder shall be irrevocable.
If less than the entire principal amount of the within Note is
to be repaid, specify the portion thereof (which shall be an integral multiple
of $1,000) which the Holder elects to have repaid: (in the absence of
any such specification, the entire principal amount of the Note will be
repaid); and specify the denomination or denominations (which shall be $1,000
or an integral multiple of $1,000 in excess thereof) of the Note or Notes to be
issued to the Holder for the portion of the within Note not
<PAGE> 39
29
being repaid (in the absence of any specification, one such Note will be issued
for the portion not being repaid): ____________________.
Date: -----------------------------------
Notice: The signature on this Option
to Elect Repayment must correspond
with the name as written upon the
face of the Note in every particular
without alteration or enlargement or
any other change whatsoever.
<PAGE> 40
30
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--
Custodian
------- ---------
TEN ENT--as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to
Minors Act
JT TEN--as joint tenants with
right of survivorship and not as -------------------------
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
<PAGE> 41
31
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
[Please Insert Social Security or
Other Identifying Number of Assignee]
- ----------------------
- -------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Note of Rayonier Inc. and all rights thereunder, hereby irrevocably
constituting and appointing such person attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.
Dated: --------------- ---------------------------------------------
---------------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular without alteration
or enlargement or any other change whatsoever.
<PAGE> 1
Exhibit 5
March 25, 1994
Rayonier Inc.
1177 Summer Street
Stamford, Connecticut 06904
Dear Sirs:
I am Corporate Secretary and Associate General Counsel of Rayonier
Inc., a North Carolina corporation (the "Company"). In that capacity I have
acted as counsel for the Company in connection with the preparation and filing
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), of the Registration Statement
(No. 33- ) on Form S-3 (the "Registration Statement"), relating to
the proposed issuance by the Company from time to time of up to $150,000,000
aggregate principal amount of debt securities ("Debt Securities") on terms to
be determined at the time of offering. The Debt Securities, which may be
issued in one or more series, will be issued under an Indenture, dated as of
April 1, 1994 (the "Indenture"), between the Company and Chemical Bank, as
Trustee (the "Trustee").
I have examined the Company's Amended and Restated Articles of
Incorporation and the Company's By-Laws, as amended to date, records of the
corporate proceedings of the Board of Directors of the Company with respect to
the Debt Securities, the Registration Statement and the offering it
contemplates and such other documents, and have made such examination of law,
as I have deemed relevant and necessary in order to render my opinion.
In rendering the opinion set forth below, I have assumed the
authority of the Trustee to enter into and perform the Indenture and the due
authorization, execution, and delivery of the Indenture by the Trustee.
Based on the foregoing, I am of the following opinion:
<PAGE> 2
1. When (a) the terms, issuance, execution and delivery by the
Company of any of the Debt Securities have been duly authorized by all
necessary corporate action of the Company and as contemplated by the Indenture,
and (b) such Debt Securities have been duly executed and delivered by the
Company, authenticated by the Trustee and sold as contemplated by each of the
Registration Statement, the Prospectus, the supplement or supplements to the
Prospectus relating to such Debt Securities and the Indenture, assuming that
the terms of such Debt Securities are in compliance with then-applicable law
and the Indenture, such Debt Securities will be validly issued and will
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms except that (i) enforcement of the
Debt Securities may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, and (ii) enforceability of the Debt Securities may be limited by
general principles of equity.
I am a member of the bar of the States of New York and Connecticut and
express no opinion to any matter relating to any law other than the law of the
states of New York and Connecticut, the Federal law of the United States and
the North Carolina Business Corporation Act.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to me in the Prospectus and
prospectus supplement under the captions "Legal Matters" and "Validity of
Notes," respectively. In giving this consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the Act, or
the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ John B. Canning
--------------------
John B. Canning, Esq.
<PAGE> 1
EXHIBIT 23.1
CONSENT
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 1, 1994
included in Rayonier Inc.'s Form 10-K for the year ended December 31, 1993 and
to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN & CO.
Stamford, Connecticut
March 28, 1994
II-5
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints GERALD J. POLLACK and JOHN B. CANNING his or her
true and lawful attorneys-in-fact, with full power in each to act without the
other and with full power of substitution and resubstitution to sign in the name
of such person and in each of his or her offices and capacities in Rayonier Inc.
(the "Company") a Registration Statement of the Company on Form S-3 relating to
Debt Securities and constituting post-effective Amendment No. 1 to the Company's
Registration Statement on Form S-3 (No. 33-51972) and all amendments (including
post-effective amendments) and supplements to such Registration Statement, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission.
Dated: March 21, 1994
<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------------------------- ---------
<S> <C>
/s/ WILLIAM J. ALLEY Director
- -------------------------------------------------
William J. Alley
/s/ RAND V. ARASKOG Director
- -------------------------------------------------
Rand V. Araskog
/s/ DONALD W. GRIFFIN Director
- -------------------------------------------------
Donald W. Griffin
/s/ PAUL G. KIRK JR. Director
- -------------------------------------------------
Paul G. Kirk Jr.
/s/ KATHERINE D. ORTEGA Director
- -------------------------------------------------
Katherine D. Ortega
/s/ BURNELL R. ROBERTS Director
- -------------------------------------------------
Burnell R. Roberts
/s/ GORDON I. ULMER Director
- -------------------------------------------------
Gordon I. Ulmer
</TABLE>
<PAGE> 1
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) ____
----------------------------------------
CHEMICAL 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)
---------------------------------------------------------
RAYONIER INC.
(Exact name of obligor as specified in its charter)
North Carolina 13-2607329
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.
1177 Summer Street
Stamford, Connecticut 06904
(Address of principal executive offices) (Zip Code)
------------------------------------------
Debt Securities
(Title of the indenture securities)
------------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and 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.
No such affiliation exists. Additionally, neither the trustee, the
trustee's parent or any affiliate of the trustee is an obligor on the indenture
securities nor is any such person directly or indirectly controlling,
controlled by, or under common control with such obligor.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None.
(b) If the Trustee is a trustee under another indenture under which
any other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of such default.
None.
-2-
<PAGE> 3
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 and December 2, 1991 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 33-50010, 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).
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. 33-46892, 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).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applciable.
- 3 -
<PAGE> 4
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said item is based upon incomplete information. Item 2 may, however, be
considered correct unless amended by an amendment to this Form T-1.
In answering any items in this Statement of Eligibility which relate to
matters peculiar within the knowledge of the obligor, or its directors or
officers, the Trustee will rely upon information to be furnished to it by the
obligor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical 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 16TH day of MARCH, 1994.
CHEMICAL BANK
By /s/ P.J. Gilkeson
------------------------------
P.J. Gilkeson
Vice President
- 4 -
<PAGE> 5
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 December 31, 1993, published 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 ................................. $ 4,371
Interest-bearing balances ......................... 5,829
Securities ............................................. 21,834
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 ................................ 2,125
Securities purchased under agreements to resell ... 900
Loans and lease financing receivables:
Loans and leases, net of unearned income $60,826
Less: Allowance for loan and lease losses 2,326
Less: Allocated transfer risk reserve ... 121
------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 58,379
Assets held in trading accounts ........................ 8,556
Premises and fixed assets (including capitalized
Leases)............................................ 1,238
Other real estate owned ................................ 713
Investments in unconsolidated subsidiaries and
associated companies............................... 112
Customer's liability to this bank on acceptance
outstanding ....................................... 1,063
Intangible assets ...................................... 526
Other assets ........................................... 9,864
-----
TOTAL ASSETS ........................................... $ 115,510
=========
</TABLE>
- 5 -
<PAGE> 6
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices .................................. $ 51,611
Noninterest-bearing ...........................$19,050
Interest-bearing .............................. 32,561
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ............................................ 24,886
Noninterest-bearing ...........................$ 136
Interest-bearing .............................. 24,750
------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased .............................. 8,496
Securities sold under agreements to repurchase ....... 514
Demand notes issued to the U.S. Treasury .................. 1,501
Other Borrowed money ...................................... 8,538
Mortgage indebtedness and obligations under capitalized
leases ............................................... 20
Bank's liability on acceptances executed and outstanding 1,084
Subordinated notes and debentures ........................ 3,500
Other liabilities ......................................... 7,419
TOTAL LIABILITIES ......................................... 107,569
--------
</TABLE>
EQUITY CAPITAL
<TABLE>
<S> <C>
Common stock .............................................. 620
Surplus ................................................... 4,501
Undivided profits and capital reserves .................... 2,663
Less: Net unrealized loss on marketable equity
securities......................................... (159)
Cumulative foreign currency translation adjustments ....... (2)
TOTAL EQUITY CAPITAL ...................................... 7,941
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................. $115,510
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 6 -
