<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
KELSEY-HAYES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-3084488
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
11878 HUBBARD ROAD
LIVONIA, MICHIGAN 48150
(313) 513-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
VARITY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-3091314
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
672 DELAWARE AVENUE
BUFFALO, NEW YORK 14209
(716) 888-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
KENNETH L. WALKER, ESQ.
VARITY CORPORATION
672 DELAWARE AVENUE
BUFFALO, NEW YORK 14209
(716) 888-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES TO:
ROBERT USADI, ESQ. EMANUEL S. CHERNEY, ESQ.
CAHILL GORDON & REINDEL ANDREWS & KURTH L.L.P.
80 PINE STREET 425 LEXINGTON AVENUE
NEW YORK, NY 10005 NEW YORK, NY 11007
(212) 701-3000 (212) 850-2800
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES BEING TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) FEE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities......... $100,000,000 100% $100,000,000 $34,482.76
- ----------------------------------------------------------------------------------------
Guarantees of Debt Secu-
rities(3).............. N/A N/A N/A N/A
========================================================================================
</TABLE>
(1) Or, if any securities are issued with original issue discount, such greater
amount as shall result in an initial aggregate offering price of
$100,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) No additional registration fee is payable in respect of the registration of
the Guarantees.
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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 23, 1995
PROSPECTUS
KELSEY-HAYES COMPANY
DEBT SECURITIES
Guaranteed as to Payment of Principal and Interest by
VARITY CORPORATION
-----------
VARITY CORPORATION
DEBT SECURITIES
-----------
Kelsey-Hayes Company ("Kelsey-Hayes" or the "Issuer") and/or Varity
Corporation ("Varity" or the "Company" or the "Issuer" and together with
Kelsey-Hayes, the "Issuers") may offer from time to time pursuant to this
Prospectus, in one or more series, up to $100,000,000 aggregate principal
amount of their respective unsecured debt securities which may be either senior
debentures, notes, bonds and/or other evidences of indebtedness ("Senior
Securities") or subordinated debentures, notes, bonds and/or other evidences of
indebtedness ("Subordinated Securities") in amounts, at prices and upon terms
to be determined in light of market conditions at the time of sale. The Senior
Securities and the Subordinated Securities are collectively referred to herein
as the "Securities". The Issuer of each issue of Securities will be identified
in a supplement hereto.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the applicable Issuer and the Subordinated Securities
will be subordinated to all existing and future senior indebtedness of the
applicable Issuer in the manner and to the extent described herein.
Varity (sometimes referred to herein as the "Guarantor"), Kelsey-Hayes'
indirect parent, will unconditionally guarantee payment of the principal of and
interest on the Kelsey-Hayes Securities. The guarantee of the Kelsey-Hayes
Securities will rank equally with all other unsubordinated and unsecured
indebtedness of Varity, but will be effectively subordinated to all
liabilities, including trade payables, of subsidiaries of Varity.
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in one or more supplements to this Prospectus
(each, a "Prospectus Supplement"), that, among other things, will set forth the
aggregate principal amount, maturity or maturities, rate (or method for
determining the rate) and time of payment of interest, any redemption
provisions, initial public offering price, proceeds to the Issuer and any other
specific terms in connection with the offering and sale of a series of
Securities.
The Prospectus Supplement will also contain information, where applicable,
about certain U.S. federal income tax, accounting and other considerations
relating to, and any listing on a securities exchange of, the Securities
covered by such Prospectus Supplement.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------
The Securities may be sold directly by the Issuer, or through agents
designated from time to time, or through underwriters or dealers. If any agents
of the Issuer or any underwriters are involved in the sale of the Securities,
the names of such agents or underwriters and any applicable fees, commissions
or discounts and the net proceeds to the Issuer (if other than as described
herein) from such sale will be set forth in a Prospectus Supplement. See "Plan
of Distribution."
THE DATE OF THIS PROSPECTUS IS , 1995
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY KELSEY-
HAYES, VARITY OR ANY OTHER PERSON. THIS PROSPECTUS DOES 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 NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF KELSEY-HAYES OR VARITY SINCE SUCH DATE.
AVAILABLE INFORMATION
Varity is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at its regional offices, 7 World Trade
Center, New York, New York 10048, and Suite 140, Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661. Such material is also
available for inspection at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
Kelsey-Hayes and Varity have filed a Registration Statement on Form S-3 with
the SEC under the Securities Act of 1933, as amended, with respect to the Debt
Securities offered hereby. This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted
pursuant to the rules and regulations of the SEC. For further information,
reference is made to the Registration Statement and the exhibits thereto, which
may be inspected without charge at the office of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549 and copies of which may be obtained from the SEC
at prescribed rates.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Varity with the SEC are hereby
incorporated by reference herein:
1. Varity's Annual Report on Form 10-K for the fiscal year ended January
31, 1994 ("fiscal 1993").
2. Varity's Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 1994 (the "April 1994 10-Q").
3. Varity's Quarterly Report on Form 10-Q for the fiscal quarter ended
July 31, 1994 (the "July 1994 10-Q").
4. Varity's Quarterly Report on Form 10-Q for the fiscal quarter ended
October 31, 1994 (the "October 1994 10-Q").
5. Varity's Current Report on Form 8-K dated July 13, 1994.
6. All documents filed by Varity with the SEC pursuant to Section 13(a),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior
to the termination of this offering of Debt Securities shall be deemed to
be incorporated by reference herein and to be part hereof from the date of
filing of such documents.
Any statement contained herein or contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
or in any subsequently filed document which is also deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.
Varity hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, on the written or oral request of
such person, a copy of any or all of the documents referred to above which have
been incorporated in this Prospectus by reference (other than exhibits to such
documents). Requests should be made to the Secretary, Varity Corporation, 672
Delaware Avenue, Buffalo, New York 14209, telephone number (716) 888-8000.
3
<PAGE>
THE COMPANY
General. Varity, founded in 1847, together with its subsidiaries, is a major
international industrial company with core manufacturing and distribution
businesses in automotive components and diesel engines. Varity conducts and
manages its businesses principally under two separate operating groups: the
Automotive Products Group and the Engines Group. Varity's products are marketed
in more than 160 countries. Through a series of transactions completed between
January, 1992 and June, 1994, Varity sold its worldwide Massey Ferguson farm
machinery business to AGCO Corporation.
The Automotive Products Group. The Automotive Products Group is a leading
producer of brake components for passenger cars and light trucks through
Kelsey-Hayes Company ("Kelsey-Hayes") and engineered brake and wheel products
for medium and heavy trucks and trailers through Dayton Walther Corporation.
The most significant automotive products manufactured and marketed by Kelsey-
Hayes are anti-lock braking systems ("ABS"), disc and drum brakes, disc brake
rotors, hubs and drums for passenger cars and light trucks. Kelsey-Hayes is one
of the leaders in the production of ABS, supplying both two-wheel and four-
wheel systems. Kelsey-Hayes is the leading manufacturer of two-wheel ABS in
North America for light trucks. Kelsey-Hayes has been successful in developing
new ABS products for both light trucks and passenger cars and has introduced a
new generation of four-wheel ABS that is compatible with virtually any size
passenger car or light truck and any brake configuration. In order to meet
increased ABS demand, Varity recently completed construction of new plants in
Fowlerville, Michigan and Heerlen, The Netherlands. Production at the
Fowlerville, Michigan plant has commenced and production at the Heerlen, The
Netherlands plant is scheduled to commence in the first quarter of 1995. In
addition, Varity believes that Kelsey-Hayes is a leader in the production of
foundation (conventional) brakes, and benefits from its strategic position as a
major supplier of both ABS and foundation brakes for light trucks, vans and
sport utility vehicles. North American production of these vehicles increased
15% in fiscal 1993.
Varity owns, through a subsidiary, 46.3% of the outstanding common stock of
Hayes Wheels International, Inc. ("Hayes Wheels"), which Varity believes is the
largest supplier of cast aluminum wheels in Europe, the second largest supplier
of cast aluminum wheels in North America and the largest independent supplier
of fabricated steel wheels in North America. Varity believes that its ownership
interest in Hayes Wheels is an important and continuing element of the
Automotive Products Group. Prior to December 1992, Varity owned 100% of the
outstanding common stock of Hayes-Wheels and references to Kelsey-Hayes prior
to December 1992 include all of the operations of Hayes Wheels' business. In
fiscal 1993, the Automotive Products Group accounted for approximately 63% of
Varity's consolidated total sales and revenues.
The Engines Group. The Engines Group, together with its associate companies
and licensees, is one of the leading producers of diesel engines other than
those used as original equipment in passenger cars. Based in the United
Kingdom, the Engines Group designs, produces and markets a comprehensive array
of multi-cylinder water-cooled diesel engines and adapts its basic engine
designs to meet the specific requirements of its diverse customer base. As a
result, the Engines Group's engines are used as original equipment in virtually
every application for which diesel engines are suitable, including agricultural
tractors, industrial and construction machinery, material handling equipment,
generators, passenger cars, trucks, vans, buses and other commercial vehicles,
pleasure and commercial boats, armored personnel carriers and battle tanks. In
fiscal 1993, 10% of the Engines Group's sales were to the Massey Ferguson
group. Perkins Group Limited and the Engines Group will continue to supply AGCO
Corporation, the company that acquired the Massey Ferguson group, pursuant to a
long term supply contract expiring in 2003. In fiscal 1993, the Engines Group
accounted for approximately 35% of consolidated total sales and revenues.
Varity's principal executive office is located at 672 Delaware Avenue,
Buffalo, New York 14209, telephone number (716) 888-8000. Kelsey-Hayes'
principal executive office is located at 11878 Hubbard Road, Livonia, Michigan
48150, telephone number (313) 513-5000.
4
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
applicable Issuer intends to use the net proceeds from the sale of the
Securities for its general corporate purposes which may include the declaration
of a dividend by Kelsey-Hayes to Varity or the repayment of intercompany debt,
including repayments to Varity. Any proceeds paid to Varity will be used by
Varity for its general corporate purposes. Pending ultimate application, the
net proceeds may be used to make short-term investments or reduce short-term
borrowings.
5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following unaudited selected consolidated financial data should be read
in conjunction with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1994 (the "1994 10-K") and the Company's quarterly reports on Form
10-Q for the quarters ended April 30, 1994, July 31, 1994 and October 31, 1994.
As a result of the June 1994 sale of the Company's worldwide Massey Ferguson
farm machinery business to AGCO Corporation, financial data for all periods
prior to October 31, 1994, have been restated to present the farm equipment
segment as a discontinued operation. The net assets of the discontinued
operation have been classified as current assets for all periods subsequent to
January 31, 1993. The unaudited selected consolidated financial data for the
nine months ended October 31, 1993 and 1994, contain, in the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the consolidated financial position and
consolidated results of operations of the Company for those periods. Results of
operations for the nine months ended October 31, 1994, are not necessarily
indicative of results anticipated for the entire year.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------------------------- -------------------
1990(1) 1991 1992 1993(2) 1994(2) 1993 1994
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(NOT COVERED BY INDEPENDENT AUDITORS' REPORTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total sales and reve-
nues.................. $1,098.1 $2,232.2 $2,037.1 $2,233.9 $1,827.4 $1,341.2 $1,628.2
Cost of goods sold..... 884.0 1,811.6 1,713.8 1,836.6 1,514.9 1,111.8 1,339.1
Marketing, general and
administration........ 116.5 183.7 171.2 192.5 150.3 109.7 125.2
Engineering and product
development........... 20.6 63.9 60.6 64.0 65.5 49.3 63.0
Interest, net.......... 40.3 93.5 100.9 99.1 32.0 23.6 16.1
Exchange (gains) loss-
es.................... 6.7 0.7 9.6 5.6 (1.6) (.4) (1.0)
Other (income) expense,
net................... (12.2) (4.2) 2.2 (5.4) (2.9) (.2) .2
Losses on sales of
businesses and other
restructuring
charges(3)............ -- 7.8 63.8 -- -- -- --
Non-recurring (gain)
charge(4)............. -- 15.5 -- (17.3) -- -- --
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes, earnings
of associated compa-
nies, discontinued op-
eration, extraordinary
loss and cumulative
effect of changes in
accounting principles. 42.2 59.7 (85.0) 58.8 69.2 47.4 85.6
Income tax provision... (18.7) (18.4) (10.5) (9.9) (11.6) (8.1) (15.3)
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
earnings of associated
companies, discontin-
ued operation, ex-
traordinary loss and
cumulative effect of
changes in accounting
principles............ 23.5 41.3 (95.5) 48.9 57.6 39.3 70.3
Equity in earnings of
associated companies.. -- -- -- 0.6 11.5 7.8 10.2
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
discontinued opera-
tion, extraordinary
loss and cumulative
effect of changes in
accounting principles. 23.5 41.3 (95.5) 49.5 69.1 47.1 80.5
Earnings (loss) from
discontinued opera-
tion.................. 70.8 53.1 (82.5) (16.1) 7.2 2.2 4.4
Gain on sale of discon- -- -- -- -- -- -- 23.2
tinued operation...... -------- -------- -------- -------- -------- -------- --------
Income (loss) before
extraordinary loss and
cumulative effect of
changes in accounting
principles............ 94.3 94.4 (178.0) 33.4 76.3 49.3 108.1
Extraordinary loss(5).. -- -- -- (6.4) (1.7) (1.7) --
Cumulative effect of
changes in accounting
principles............ -- -- -- -- (146.1) (146.1) --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)...... $ 94.3 $ 94.4 $ (178.0) $ 27.0 $ (71.5) $ (98.5) $ 108.1
======== ======== ======== ======== ======== ======== ========
PER SHARE DATA:
Income (loss) before
discontinued opera-
tion, extraordinary
loss and cumulative
effect of changes in
accounting principles:
Primary............... $ 0.25 $ 0.93 $(4.57) $ 1.18 $ 1.60 $ 1.09 $ 1.78
Fully diluted......... $ 0.25* $ 0.93* $(4.57)* $ 1.17 $ 1.56 $ 1.08 $ 1.78
Net income (loss):
Primary............... $ 3.57 $ 3.06 $(7.87) $ 0.32 $(2.23) $(3.17) $ 2.40
Fully diluted......... $ 3.11 $ 2.77 $(7.87)* $ 0.32 $(2.23)* $(3.17)* $ 2.40
OTHER DATA:
Capital expenditures... $ 43.7 $ 98.1 $ 97.5 $ 88.9 $ 135.8 $ 86.9 $ 121.3
Depreciation and amor-
tization.............. $ 52.7 $ 85.3 $ 92.2 $ 99.4 $ 65.4 $ 49.0 $ 56.3
Ratio of earnings to
fixed charges(6)...... 1.77x 1.48x -- 1.53x 2.60x 2.43x 4.52x
BALANCE SHEET DATA (AT
PERIOD END):
Current assets......... $1,003.5 $ 903.9 $ 815.2 $ 617.5 $ 807.3 $ 740.2 $ 814.4
Fixed assets........... $ 765.1 $ 809.2 $ 810.0 $ 515.6 $ 522.2 $ 493.6 $ 612.4
Total assets........... $2,731.3 $2,756.4 $2,521.4 $1,804.8 $1,759.6 $1,666.4 $1,887.2
Current liabilities.... $ 835.1 $ 998.5 $ 933.6 $ 663.4 $ 563.7 $ 510.5 $ 570.9
Long-term debt......... $ 805.3 $ 609.3 $ 717.2 $ 305.2 $ 185.5 $ 228.8 $ 163.7
Stockholders' equi-
ty(7)................. $ 618.0 $ 720.0 $ 495.1 $ 548.5 $ 630.7 $ 577.8 $ 811.2
</TABLE>
- -------
*Anti-dilutive.
(footnotes on following page)
6
<PAGE>
(1) Financial data reported for the fiscal year ended January 31, 1990 (fiscal
1989), and thereafter reflect the acquisition of K-H Corporation effective
November 30, 1989.
(2) Financial data as of January 31, 1993, and for the fiscal year ended
January 31, 1994 (fiscal 1993), are not readily comparable to the financial
data for the same periods of the prior year as a result of the Company's
disposition in the fourth quarter of the fiscal year ended January 31, 1993
(fiscal 1992), of Hayes Wheels, which is no longer included in the
Company's consolidated results, as is described in Note 15 of the Notes to
Consolidated Financial Statements for fiscal 1993.
(3) Losses on sales of businesses and other restructuring charges of $7.8
million and $63.8 million in the fiscal years ended January 31, 1991
(fiscal 1990), and January 31, 1992, respectively, relate primarily to
provisions for employment reductions and anticipated losses on the
divestment of certain non-core businesses.
(4) The non-recurring charge for fiscal 1990 and gain for fiscal 1992 are
described in Note 4 of the Notes to Consolidated Financial Statements for
fiscal 1992.
(5) The extraordinary losses in fiscal 1992, fiscal 1993 and for the nine
months ended October 31, 1993, relate to the early extinguishment of debt
as described in Note 10(d) and 10(h) of the Notes to Consolidated Financial
Statements for fiscal 1993.
(6) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" are computed by adding the net earnings from continuing
operations, the provision for income taxes and fixed charges. "Fixed
charges" consist of interest expense and a portion of operating lease rent
expense deemed to be representative of interest. Earnings for the fiscal
year ended January 31, 1992 were insufficient to cover fixed charges by
$85,000,000; however, adjusted to eliminate depreciation and amortization,
such earnings would have exceeded fixed charges by $7,000,000.
(7) No dividends on the Common Stock were paid during the periods presented.
7
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Securities sets forth certain
general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms and provisions of any series of
Securities offered by any Prospectus Supplement (the "Offered Securities") and
the extent to which such general provisions may apply to the Offered Securities
will be described in a Prospectus Supplement relating to such Offered
Securities.
The Senior Securities, consisting of notes, debentures, bonds or other
evidences of indebtedness (the "Senior Securities"), will constitute unsecured
senior obligations of the applicable Issuer and the Subordinated Securities,
consisting of notes, debentures, bonds or other evidences of indebtedness (the
"Subordinated Securities" and, together with the Senior Securities, the
"Securities"), will constitute unsecured subordinated obligations of the
applicable Issuer. The Senior Securities to be issued by Kelsey-Hayes will be
issued under an Indenture (the "K-H Senior Indenture") executed by Kelsey-
Hayes, Varity and Manufacturers and Traders Trust Company (the "Senior
Trustee") and the Subordinated Securities to be issued by Kelsey-Hayes will be
issued under an Indenture (the "K-H Subordinated Indenture" and, together with
the K-H Senior Indenture, the "K-H Indentures") executed by Kelsey-Hayes,
Varity and Manufacturers and Traders Trust Company (the "Subordinated Trustee"
and, together with the Senior Trustee, the "Trustees"). The Senior Securities
to be issued by Varity will be issued under an Indenture (the "Varity Senior
Indenture") executed by Varity and the Senior Trustee and the Subordinated
Securities to be issued by Varity will be issued under an Indenture (the
"Varity Subordinated Indenture" and, together with the Varity Senior Indenture,
the "Varity Indentures") executed by Varity and the Subordinated Trustee. The
K-H Indentures and the Varity Indentures are collectively referred to herein as
the "Indentures." The Securities to be issued by Kelsey-Hayes are sometimes
referred to herein as the "Kelsey-Hayes Securities" and the Securities to be
issued by Varity are sometimes referred to herein as the "Varity Securities."
The terms of the Securities include those stated in the relevant Indenture
and those made part of such Indenture by reference to the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and holders of the Securities
are referred to the relevant Indenture and the Trust Indenture Act for a
statement thereof. A copy of the form of each Indenture is filed as an exhibit
to the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Securities and the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Securities and the Indenture,
including the definitions therein of certain terms that are not otherwise
defined in this Prospectus. Wherever particular provisions or defined terms of
the Indentures are referred to, such provisions or defined terms are
incorporated herein by reference.
GENERAL
The Indentures provide that Securities may be issued thereunder from time to
time as a single series or in two or more separate series up to the aggregate
principal amount from time to time authorized by the applicable Issuer for each
series. The applicable Issuer and the particular terms of each series of
Securities offered by a Prospectus Supplement or Prospectus Supplements will be
described in such Prospectus Supplement or Prospectus Supplements.
The applicable Prospectus Supplement or Prospectus Supplements will describe,
among other things, the following terms of the Offered Securities, if
applicable to such Offered Securities; (i) the title of the Offered Securities;
(ii) the aggregate principal amount of the Offered Securities; (iii) the price
or prices (expressed as a percentage of the principal amount thereof) at which
the Offered Securities will be issued; (iv) the date or dates (which may be
fixed or extendible) on which the principal of the Offered Securities is
payable or the method of determination thereof; (v) the rate or rates (which
may be fixed or variable) at which the Offered Securities will bear interest,
if any, and the date or dates from which such interest, if any, will accrue;
(vi) the interest payment dates, if any, on which any interest on the Offered
Securities will be payable, and the regular record date for any interest
payable on any Offered Securities; (vii) the right or obligation, if any, of
the
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applicable Issuer to redeem or purchase the Offered Securities pursuant to any
optional redemption, sinking fund or analogous provisions or at the option of
the holder thereof or otherwise, the conditions, if any, giving rise to such
right or obligation, and the period or periods within which, and the price or
prices at which and the terms and conditions upon which the Offered Securities
shall be redeemed or purchased, in whole or in part, and any provisions for the
remarketing of such Offered Securities; (viii) if the amount of payments of
principal of, premium, if any, and interest, if any, on the Offered Securities
is to be determined by reference to an index, formula or other method, the
manner in which such amounts are to be determined and the calculation agent, if
any, with respect thereto; (ix) if other than the principal amount thereof, the
portion of the principal amount of the Offered Securities that will be payable
upon declaration of acceleration of the maturity thereof pursuant to an Event
of Default; (x) any listing of the Offered Securities on a securities exchange;
(xi) any covenants of Kelsey-Hayes or Varity applicable to the Offered
Securities in addition to those described in this Prospectus; (xii) any Events
of Default applicable to the Offered Securities in addition to the Events of
Default described in this Prospectus; (xiii) any provision for defeasance, if
different from those described in this Prospectus; (xiv) whether such
Securities are to be represented in whole or in part by a Security in global
form and, if so, the identity of the depositary ("Depositary") for any global
Security; and (xv) any other material terms of the Offered Securities, which
terms may modify or delete any provision of the relevant Indenture as it
relates to the Offered Securities.
If so provided in the applicable Prospectus Supplement, Securities may be
issued as original issue discount securities, which are securities sold at a
discount below their principal amount. Certain United States federal income tax
considerations and other special considerations applicable to Securities, if
any, issued with original issue discount may be described in the applicable
Prospectus Supplement.
GLOBAL SECURITIES
The registered Securities of a series may be issued in the form of one or
more fully registered global Securities (a "Global Security") that will be
deposited with a depositary (a "Depositary") identified in the Prospectus
Supplement relating to such series or with a nominee for a Depositary and
registered in the name of the Depositary or a nominee thereof. In such case,
one or more Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding registered Securities of the series to be represented by such
Global Security or Global Securities. Unless and until it is exchanged in whole
or in part for Securities in definitive registered form, a Global Security may
not be transferred except as a whole by the Depositary for such Global Security
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
The specific terms of the depository arrangement with respect to any portion
of a series of Securities to be represented by a Global Security will be
described in the Prospectus Supplement relating to such series. The Issuers
anticipate that the following provisions will apply to all depository
arrangements.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the Depositary for such Global Security. The
Depositary for such Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Securities represented by such Global Security beneficially
owned by such participants. The accounts to be credited will be designated by
any dealers, underwriters or agents participating in the distribution of such
Securities.
Ownership of beneficial interests will be effected only through records
maintained by the Depositary for such Global Security (with respect to
interests of participants) and on the records of participants (with respect to
interests of persons holding through participants). The laws of some states may
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 own, transfer or pledge beneficial interests in Global Securities.
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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 Securities
represented by such Global Security for all purposes under the applicable
Indenture. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to have the Securities represented by such
Global Security registered in their names, and will not receive or be entitled
to receive physical delivery of such Securities in definitive form and will not
be considered the owners or Holders thereof under the applicable Indenture.
Accordingly, each person owning a beneficial interest in a Global Security must
rely on the procedures of the Depositary for such Global Security 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
applicable Indenture. Each Issuer understands that under existing industry
practices, if such Issuer requests any action of Holders or if any Holder is
entitled to give any consent or take any action under the applicable Indenture,
the Depositary for such Global Security would authorize the participants
holding Securities of the relevant beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instruction of beneficial owners holding through them.
Payments of principal of, premium, if any, and any interest on Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of the Issuers, the
Guarantor, the Trustees or any other agent of the Issuers or agent of the
Trustee will have any responsibility or liability for any aspects of the
records relating to or payments made on account of beneficial ownership
interests in such Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Each Issuer expects that the Depositary for any Securities represented by a
Global Security, upon receipt of any payment of principal, premium on, if any,
or any interest in respect of such Global Security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interest in such Global Security as shown on the records
of such Depositary. Each Issuer also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing customer instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If the Depositary for any Securities represented by a Global Security
notifies the applicable Issuer that it is at any time unwilling or unable to
continue as Depositary or ceases to be a clearing agency registered under the
Exchange Act, and a successor Depositary registered as a clearing agency under
the Exchange Act is not appointed by the applicable Issuer within 90 days, the
applicable Issuer will issue such Securities in definitive form in exchange for
such Global Security or Global Securities representing such Securities. Any
Securities issued in definitive form in exchange for a Global Security will be
registered in such name or names as the Depositary shall instruct the
applicable Trustee. It is expected that such instructions will be based upon
directions received by the Depositary from participants with respect to
ownership of beneficial interests in such Global Security.
RANKING
Senior Securities. The Senior Securities will be general unsecured
obligations of the applicable Issuer and will rank pari passu in right of
payment with other unsubordinated and unsecured indebtedness of the applicable
Issuer.
Subordinated Securities. The payment of the principal of, and premium, if
any, and interest on the Subordinated Securities will be expressly subordinated
to all Senior Indebtedness of the applicable Issuer.
Upon any distribution to creditors of the applicable Issuer in a liquidation
or dissolution of the applicable Issuer or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the
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applicable Issuer or its property or in an assignment for the benefit of
creditors or any marshalling of the assets and liabilities of the applicable
Issuer: (1) holders of Senior Indebtedness shall be entitled to receive payment
in full of all Obligations with respect to the Senior Indebtedness (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Senior Indebtedness, whether or not such interest is an
allowable claim in any such proceeding) before holders of Subordinated
Securities shall be entitled to receive any payment of any Obligations with
respect to the Subordinated Securities; and (2) until all Obligations with
respect to Senior Indebtedness (as provided in subsection (1) above) are paid
in full, any distribution to which holders of Subordinated Securities would be
entitled but for this subordination provision shall be made to holders of
Senior Indebtedness, as their interests may appear, except that holders of
Subordinated Securities may receive securities that are subordinate to at least
the same extent as the Subordinated Securities to Senior Indebtedness.
The applicable Issuer may not make any payment or distribution to the
applicable Subordinated Trustee or any holder of Subordinated Securities in
respect of Obligations with respect to the Subordinated Securities and may not
acquire from the applicable Subordinated Trustee or any holder of Subordinated
Securities any Subordinated Securities for cash or property (other than
indebtedness which is subordinated to at least the same extent as the
Subordinated Securities to Senior Indebtedness), until all Obligations with
respect to the Senior Indebtedness have been paid in full if: (i) there occurs
and is continuing a default in the payment of any Obligations with respect to
the Senior Indebtedness at the final scheduled maturity thereof or that permits
holders of such Senior Indebtedness to accelerate its maturity or the maturity
of which has been accelerated; or (ii) there occurs and is continuing an event
of default, other than a payment default, on any Senior Indebtedness that
permits holders of Senior Indebtedness to accelerate its maturity, and such
event of default is the subject of judicial proceedings or the applicable
Issuer receives a notice of the default pursuant to the applicable Indenture.
If the applicable Issuer receives any such notice, a subsequent notice received
within 360 days thereafter relating to Senior Indebtedness or which relates to
a default in existence at the date of such prior notice shall not be effective
for purposes of the restriction in this paragraph. The applicable Issuer may
resume payments on and distributions in respect of the Subordinated Securities
and may acquire them when (1) the default is cured or waived or has ceased to
exist or such notice has been rescinded or annulled, or (2) in the case of a
default referred to in (ii) above, 179 days pass after the applicable
Subordinated Trustee receives written notice of such default and the holders of
Senior Indebtedness as to which such default relates have not declared such
Senior Indebtedness to be immediately due and payable, if the applicable
Indenture otherwise permits the payment or acquisition at the time of such
payment or acquisition.
By reason of the subordination provisions described above, in the event of
insolvency, funds which would otherwise be payable to holders of Subordinated
Securities shall be paid to the holders of Senior Indebtedness to the extent
necessary to pay the Senior Indebtedness in full. The aggregate principal
amount of Senior Indebtedness outstanding for the applicable Issuer as of a
recent date will be set forth in the applicable Prospectus Supplement.
"Senior Indebtedness" means all Indebtedness of the applicable Issuer.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (i) any Indebtedness of the applicable Issuer to any of its
subsidiaries, or (ii) any Indebtedness created or evidenced pursuant to an
instrument that expressly provides that such Indebtedness is not superior in
right of payment to the Subordinated Securities.
GUARANTEE
Varity will unconditionally guarantee (the "Guarantee") to each holder of a
Kelsey-Hayes Security issued under either of the K-H Indentures the payment of
the principal of, premium, if any, and interest on such Kelsey-Hayes Security
when the same becomes due and payable, whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise, according to the
terms of such Kelsey-Hayes Security and of the applicable K-H Indenture. In
case of the default by Kelsey-Hayes in the payment of any such principal,
premium or interest, Varity will punctually make such payment. The obligations
of Varity thereunder will be absolute and unconditional. Varity's obligations
on the Guarantee will not be discharged
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as to any such Kelsey-Hayes Security except by payment in full of the principal
of, premium, if any, and interest thereon.
The Guarantee of the Kelsey-Hayes Securities will be unsecured and will rank
on a parity with all other unsecured and unsubordinated debt of Varity. At
October 31, 1994, the amount of Varity indebtedness which would be pari passu
with the guarantee of the Kelsey-Hayes Securities was approximately $28.5
million and there was approximately $223.5 million available under various
credit facilities of Varity's subsidiaries which Varity has guaranteed.
However, since Varity is a holding company, all of the indebtedness, amounts
due trade creditors and other liabilities of Varity's subsidiaries, whether or
not guaranteed by Varity, are effectively senior to the guarantees of the
Kelsey-Hayes Securities as to assets of a particular subsidiary.
Although Varity has in the recent past obtained financing directly, through
the sale of 5.75 million shares and 4.6 million shares of its common stock in
public offerings in December 1992 and June 1993, respectively, as a holding
company with no significant manufacturing or sales operations of its own,
Varity has historically been dependent primarily on its subsidiaries to meet
its cash requirements. However, Varity's ability to obtain cash from its
operating subsidiaries is in certain instances restricted by the financial
condition, operating requirements and loan agreements of these subsidiaries.
These loan agreements do not directly restrict the transfer of funds to Varity;
however, such loan agreements contain net worth tests, interest coverage ratio
tests and other financial tests which may have the effect of restricting
subsidiary dividends.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Securities will be issuable in definitive form solely as registered
Securities. The Indenture provides that registered Securities of a series may
be issuable in global form. See "Global Securities." Unless otherwise indicated
in the Prospectus Supplement, registered Securities will be issued in
denominations of $1,000 and whole multiples thereof. Registered Securities of
any series will be exchangeable for other registered Securities of the same
series of authorized denominations and of a like aggregate principal amount,
tenor and terms.
Securities may be presented for exchange as provided above, and registered
Securities may be presented for registration of transfer (duly endorsed or
accompanied by a satisfactory written instrument of transfer), at the office of
the Registrar or at the office of any transfer agent designated by the
applicable Issuer for such purpose with respect to such series of Securities,
without service charge and upon payment of any taxes and other governmental
charges. If the applicable Prospectus Supplement refers to any transfer agent
(in addition to the Registrar) initially designated by the applicable Issuer
with respect to any series of Securities, the applicable Issuer 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 (or Registrar) acts, except
that, if Securities of a series are issuable solely as registered Securities,
the applicable Issuer will be required to maintain a transfer agent in each
place of payment for such series. Unless otherwise indicated in the Prospectus
Supplement, the Trustee under each Indenture will be designated as the
Registrar under such Indenture for registered Securities. The applicable Issuer
may at any time designate additional transfer agents with respect to any series
of Securities.
The applicable Issuer shall not be required (i) to issue, register the
transfer of or exchange Securities of any particular series to be redeemed for
a period of 15 days preceding the first publication of the relevant notice of
redemption or, if registered Securities are outstanding and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any registered Security so selected for
redemption or exchange in whole or in part, except the unredeemed or
unexchanged portion of any registered Security being redeemed or exchanged in
part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium, if any, and interest, if any, on registered
Securities will be made at the office of such Paying Agent
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or Paying Agents as the applicable Issuer may designate from time to time,
except that at the option of the applicable Issuer payment of principal or
interest may be made by check to an account maintained by the payee. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on registered Securities will be made to the person in
whose name such Security is registered at the close of business on the regular
record date of such interest. Unless otherwise indicated in an applicable
Prospectus Supplement, the Trustee under each Indenture will be designated as
the applicable Issuer's sole Paying Agent for payment with respect to
registered Securities issued under such Indenture. Any other Paying Agent
initially designated by the applicable Issuer for the Offered Securities will
be named in an applicable Prospectus Supplement.
CERTAIN COVENANTS
Limitations on Liens. The applicable Issuer will covenant that it will not
issue, incur, create, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, incur, create, assume or guarantee, any Indebtedness
secured by a Lien upon any Principal Property of the applicable Issuer or any
Restricted Subsidiary or upon any shares of stock or Indebtedness of any
Restricted Subsidiary held by the applicable Issuer (whether such Principal
Property, shares or Indebtedness are now existing or owed or hereafter created
or acquired) without in any such case effectively providing concurrently with
the issuance, incurrence, creation, assumption or guaranty of any such secured
Indebtedness, or the grant of a Lien with respect to any such Indebtedness of
such Restricted Subsidiary, that the Securities (together with, if the
applicable Issuer shall so determine, any other Indebtedness of or guarantee by
the applicable Issuer or such Restricted Subsidiary) shall be secured by a Lien
ranking equally and ratably with (or, at the option of the applicable Issuer,
prior to) such secured debt so long as such other Indebtedness is so secured.
The foregoing restriction, however, will not apply to: (a) Liens on property,
shares of stock or Indebtedness or other assets of any corporation existing at
the time such corporation becomes a Restricted Subsidiary; provided that such
Liens are not incurred in anticipation of such corporation becoming a
Restricted Subsidiary; (b) Liens on property, shares of stock or Indebtedness
existing at the time of acquisition thereof by the applicable Issuer or a
Restricted Subsidiary or Liens on property, shares of stock or Indebtedness to
secure any Indebtedness for borrowed money incurred prior to, at the time of,
or within 270 days after, the latest of the acquisition thereof, or, in the
case of property, the completion of construction, the completion of
improvements or the commencement of substantial commercial operation of such
property, for the purpose of financing all or any part of the purchase price
thereof, such construction or the making of such improvements; (c) Liens to
secure Indebtedness owing to the applicable Issuer or the Guarantor or to a
Restricted Subsidiary; (d) Liens existing at the date of the initial issuance
of the Securities of such series; (e) Liens on property of a corporation
existing at the time such corporation is merged into or consolidated with the
applicable Issuer or a Restricted Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation as an entirety or
substantially as an entirety to the applicable Issuer or a Restricted
Subsidiary; provided that such Lien was not incurred in anticipation of such
merger or consolidation or sale, lease or other disposition; (f) Liens created
in connection with a project financed with, and created to secure, a
Nonrecourse Obligation; or (g) extensions, renewals or replacements of any
Liens permitted by any of the foregoing clauses (a) through (f); provided,
however, that any Liens permitted by any of the foregoing clauses (a) through
(f) shall not extend to or cover any property of the applicable Issuer or such
Restricted Subsidiary, as the case may be, other than the property specified in
such clauses and improvements thereto.
Limitations on Sale and Lease-Back Transactions. The applicable Issuer will
covenant that it will not, nor will it permit any Restricted Subsidiary to,
enter into any Sale and Lease-Back Transaction with respect to any Principal
Property, other than any such transaction involving a lease for a term of not
more than three years or any such transaction between the applicable Issuer and
a Restricted Subsidiary or between Restricted Subsidiaries, unless: (a) the
applicable Issuer or such Restricted Subsidiary would be entitled to incur
Indebtedness secured by a mortgage on the Principal Property involved in such
transaction at least equal in amount to the Attributable Debt with respect to
such Sale and Lease-Back Transaction, without equally and ratably securing the
Securities, pursuant to the limitation in the applicable Indenture on Liens;
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or (b) the applicable Issuer shall apply an amount equal to the greater of the
net proceeds of such sale or the Attributable Debt with respect to such Sale
and Lease-Back Transaction within 270 days of such sale to either (or a
combination of) the retirement (other than any mandatory retirement, mandatory
prepayment or sinking fund payment or by payment at maturity) of Indebtedness
of the applicable Issuer or a Restricted Subsidiary that matures more than
twelve months after the creation of such Indebtedness or the purchase,
construction or development of other comparable property.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used the
Indentures. Reference is made to the Indentures for the full definition of all
such terms.
"Attributable Debt" when used in connection with a Sale and Lease-Back
Transaction involving a Principal Property shall mean, at the time of
determination, the lesser of: (a) the fair value of such property (as
determined in good faith by the Board of Directors of the applicable Issuer);
or (b) the present value of the total net amount of rent required to be paid
under such lease during the remaining term thereof (including any renewal term
or period for which such lease has been extended), discounted at the rate of
interest set forth or implicit in the terms of such lease or, if not
practicable to determine such rate, the weighted average interest rate per
annum borne by the Securities of each series outstanding pursuant to the
applicable Indenture compounded semi-annually. For purposes of the foregoing
definition, rent shall not include amounts required to be paid by the lessee,
whether or not designated as rent or additional rent, on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of
the net amount determined assuming termination upon the first date such lease
may be terminated (in which case the net amount shall also include the amount
of the penalty, but no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated) or
the net amount determined assuming no such termination.
"Indebtedness" means, with respect to any person, without duplication, (i)
all obligations for borrowed money, (ii) all obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable and accrued
expenses arising in the ordinary course of business), (v) all fixed
unconditional obligations issued or contracted for as payment in consideration
of the purchase by such person of the stock or substantially all the assets of
another person or a merger or consolidation, (vi) all obligations for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction which secure Indebtedness of a person other than the
issuer of the letter of credit or the accepting bank, (vii) all obligations of
the type referred to in clauses (i) through (vi) of other persons guaranteed by
such person to the extent of the guarantee; and (viii) all obligations of the
type referred to in clauses (i) through (vii) of other persons which are
secured by any Lien on any property or asset of such person, the amount of such
obligation being deemed to be the lesser of the value of such property or asset
at the time the Lien is created or the amount of the obligation so secured.
"Material Subsidiary" means, at any particular time, any Subsidiary of any
person that (a) accounted for more than 10% of the consolidated revenues of
such person and its Subsidiaries on a consolidated basis for the most recently
completed fiscal year of such person or (b) was the owner of more than 10% of
the consolidated assets of such person and its Subsidiaries on a consolidated
basis as at the end of such fiscal year, all as shown on the consolidated
financial statements of such person and its Subsidiaries for such fiscal year.
"Nonrecourse Obligation" means Indebtedness or other obligations
substantially related to (i) the acquisition of assets not previously owned by
the applicable Issuer or any Restricted Subsidiary or (ii) the financing of a
project involving the development or expansion of properties of the applicable
Issuer or any
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Restricted Subsidiary, as to which the obligee with respect to such
Indebtedness or obligation has no recourse to the applicable Issuer or any
Restricted Subsidiary or any assets of the applicable Issuer or any Restricted
Subsidiary other than the assets which were acquired with the proceeds of such
transaction or the project financed with the proceeds of such transaction (and
the proceeds thereof).
"Principal Property" shall mean the land, land improvements, buildings and
fixtures (to the extent they constitute real property interests) (including any
leasehold interest therein) constituting the principal corporate office, any
manufacturing plant or any manufacturing facility (whether now owned or
hereafter acquired) which: (a) is owned by the applicable Issuer or any of its
Subsidiaries; (b) is located within any of the present 50 States of the United
States of America (or the District of Columbia); (c) has not been determined in
good faith by the Board of Directors of the applicable Issuer not to be
materially important to the total business conducted by the applicable Issuer
and its Subsidiaries taken as a whole; and (d) has a book value on the date as
of which the determination is being made in excess of 1%, in the case of
Kelsey-Hayes, or .5%, in the case of Varity, of consolidated total assets of
the applicable Issuer as most recently determined on or prior to such date.
"Restricted Subsidiary" shall mean any Subsidiary of the applicable Issuer
which owns any Principal Property.
"Sale and Lease-Back Transaction" shall mean any sale or transfer by the
applicable Issuer or one of its Restricted Subsidiaries of any Principal
Property that is being sold or transferred by such person more than 270 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof, if such sale or transfer is made with the intent of
leasing, or as part of an arrangement involving the lease of, such Principal
Property to the applicable Issuer or one of its Restricted Subsidiaries.
"Subsidiary" means, with respect to any person, (i) a corporation a majority
of whose Voting Stock is at the time, directly or indirectly, owned by such
person, by one or more Subsidiaries of such person or by such person and one or
more Subsidiaries thereof and (ii) any other person (other than a corporation),
including, without limitation, a joint venture, in which such person, one or
more Subsidiaries thereof or such person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof, have at least a
majority ownership interest entitled to vote in the election of directors,
managers or trustees thereof (or other persons performing similar functions).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures will provide that neither Kelsey-Hayes or Varity, in the case
of the K-H Indentures, nor Varity, in the case of the Varity Indentures, will,
in any transaction or series of transactions, merge or consolidate with or
into, or sell, assign, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to, any person or
persons, unless at the time and after giving effect thereto (i) either (A)
Kelsey-Hayes or Varity, as the case may be, shall be the surviving person of
such merger or (B) the successor corporation shall be a corporation organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia, (ii) the successor corporation if other than
Kelsey-Hayes or Varity, as the case may be, shall expressly assume by a
supplemental indenture executed and delivered to the Trustee under the
applicable Indenture, in form satisfactory to such Trustee, all the obligations
of Kelsey-Hayes and Varity, in the case of the K-H Indentures, and Varity, in
the case of the Varity Indentures, as the case may be, under the applicable
Indenture and Securities and Guarantees, as the case may be, issued thereunder,
and in each case, such Indenture shall remain in full force and effect and
(iii) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event of
Default shall have occurred and be continuing with respect to Securities of any
series under such Indenture.
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EVENTS OF DEFAULT
Under each Indenture, an Event of Default is defined as, with respect to each
series of Securities issued under such Indenture individually, any of the
following: (i) default in the payment of the principal of or premium, if any,
on any of the Securities of such series when due and payable, at maturity, upon
redemption or acceleration or otherwise; (ii) default in the payment of an
installment of interest on any of the Securities of such series when the same
becomes due and payable and any such default continues for a period of 30 days
or more; (iii) default in the performance or observance of any other term,
covenant or agreement contained in the Securities of such series or the
relevant Indenture for the benefit of the holders of Securities of such series
(other than a default specified in (i) or (ii) above) for a period of 60 days
after the applicable Issuer or the Guarantor, in the case of the Kelsey-Hayes
Securities, receives written notice of such failure from the Trustee under such
Indenture or the holders of at least 25% in aggregate principal amount of the
Securities of such series then outstanding; (iv) default under one or more
evidences of Indebtedness of the applicable Issuer, the Guarantor, in the case
of the Kelsey-Hayes Securities, or any Material Subsidiary of the Guarantor, in
the case of the Kelsey-Hayes Securities, or any Material Subsidiary of the
applicable Issuer in a principal amount of $10 million or more individually or
$20 million or more in the aggregate (or, in each case, the equivalent thereof
in any other currency), and either (a) such Indebtedness is already due and
payable in full or (b) such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness and such acceleration is not
annulled within 30 days after due notice; (v) one or more judgments for the
payment of money of $10 million or more individually or $20 million or more in
the aggregate (or, in each case, the equivalent thereof in any other currency),
shall be entered against the applicable Issuer, the Guarantor, in the case of
the Kelsey-Hayes Securities, or any Material Subsidiary of the Guarantor, in
the case of the Kelsey-Hayes Securities, or any Material Subsidiary of the
applicable Issuer and shall not be discharged or fully bonded and there shall
have been a period of 60 days after the date on which any period for appeal has
expired and during which a stay of enforcement of such judgment, order or
decree shall not be in effect; and (vi) certain events of bankruptcy,
insolvency or reorganization relating to the applicable Issuer, the Guarantor,
in the case of the Kelsey-Hayes Securities, or any Material Subsidiary of the
Guarantor, in the case of the Kelsey-Hayes Securities, or any Material
Subsidiary of the applicable Issuer.
Each Indenture provides that if an Event of Default specified therein (other
than an Event of Default specified in clause (vi) of the preceding paragraph
with respect to the applicable Issuer or the Guarantor) shall have occurred and
be continuing with respect to any series of the Securities issued thereunder,
the Trustee under such Indenture or the holders of at least 25% in aggregate
principal amount of the outstanding Securities of such series may declare
immediately due and payable the unpaid principal amount of the Securities of
such series (or, if any of the Securities are original issue discount
Securities, such portion of the principal amount of the Securities of such
series as may be specified in the terms thereof) and accrued interest, if any,
to the date of payment of the Securities of such series. If an Event of Default
specified in clause (vi) of the preceding paragraph with respect to the
applicable Issuer or the Guarantor occurs with respect to any series of
Securities, the amount specified in the previous sentence of this paragraph
shall become immediately due and payable without any declaration or other act
on the part of the Trustee under the relevant Indenture or any holder of such
Securities.
After a declaration of acceleration under the Indenture in respect of a
series of Securities, but before a judgment or decree for payment of the money
due has been obtained by the Trustee under such Indenture, the holders of a
majority in aggregate outstanding principal amount of such series of
Securities, by written notice to the applicable Issuer and such Trustee, may
rescind such declaration if (a) the applicable Issuer has paid or deposited
with such Trustee a sum sufficient to pay (i) all sums paid or advanced by such
Trustee under such Indenture and the reasonable compensation, expenses,
disbursements and advances of such Trustee, its agent and counsel, (ii) all
overdue interest, if any, on such series of Securities (iii) the principal of
and premium, if any, on such series of Securities which have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate borne by such series of Securities, and (iv) to the extent that payment of
such interest is lawful, interest upon overdue interest at the rate borne by
such series of Securities which has become due otherwise than by such
declaration of acceleration; (b) the rescission would not conflict
16
<PAGE>
with any judgment or decree of a court of competent jurisdiction; and (c) all
Events of Default with respect to such series of Securities, other than the
non-payment of principal of, premium, if any, and interest on such series of
securities that have become due solely by such declaration of acceleration,
have been cured or waived.
The holders of not less than a majority in aggregate outstanding principal
amount of a series of Securities may on behalf of all holders of such series of
Securities waive any existing Defaults or Events of Default with respect to
such series under the relevant Indenture, except a default in the payment of
the principal of, premium, if any, or interest on any Security of such series,
or in respect of a covenant or provision which under the relevant Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Security of such series affected thereby.
Holders of Securities of any series may not enforce the provisions of the
Indenture or the Securities except as provided in the applicable Indenture.
Subject to certain provisions concerning the rights of the Trustee under the
relevant Indenture, the holders of a majority in aggregate outstanding
principal amount of any series of Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to such
Trustee, or exercising any trust or power conferred on such Trustee under such
Indenture, in respect of such series. Except in the case of a Default or an
Event of Default in payment of principal of, premium, if any, or interest, if
any, on any series of Securities, the Trustee under the relevant Indenture may
withhold the notice to the holders of such series if a committee of its trust
officers in good faith determines that withholding the notice is in the
interest of such holders.
Kelsey-Hayes and the Guarantor, in the case of the K-H Indentures, and
Varity, in the case of the Varity Indentures, are required to furnish to the
Trustee under each Indenture annual statements as to the performance by Kelsey-
Hayes and Varity of their respective obligations under such Indentures and as
to any default in such performance. Kelsey-Hayes and the Guarantor, in the case
of the K-H Indentures, and Varity, in the case of the Varity Indentures, are
also required to notify the Trustee under each Indenture within ten days of any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to any series of Securities issued under such
Indenture.
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
Unless otherwise indicated in a Prospectus Supplement, the applicable Issuer
may, at its option and at any time after complying with the conditions
specified in the applicable Indenture, terminate its obligations with respect
to any series of outstanding Securities ("defeasance"). Such defeasance means
that the applicable Issuer shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Securities of such series,
except for (i) the rights of holders of such series of outstanding Securities
to receive payment in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (ii) the applicable
Issuer's obligations to issue temporary Securities of such series, register the
transfer or exchange of any Securities of such series, replace mutilated,
destroyed, lost or stolen Securities of such series and maintain an office or
agency for payments in respect of the Securities of such series, (iii) the
rights, powers, trusts, duties and immunities of the Trustee under the relevant
Indenture and (iv) the defeasance provisions of such Indenture. In addition,
unless otherwise indicated in a Prospectus Supplement, the applicable Issuer
may, at its option and at any time after complying with the conditions
specified in the applicable Indenture, elect to terminate its obligations with
respect to certain covenants that are set forth in either Indenture or in a
Prospectus Supplement, and any omission to comply with such obligation shall
not constitute a Default or an Event of Default with respect to such series of
Securities ("covenant defeasance").
In order to exercise either defeasance or covenant defeasance with respect to
any series of Securities (i) the applicable Issuer must irrevocably deposit
with the Trustee under the relevant Indenture, in trust, for the benefit of the
holders of Securities of such series cash, Government Obligations (as defined
in such Indenture), or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest on
the outstanding Securities of such series to redemption or maturity; (ii) the
applicable Issuer shall have
17
<PAGE>
delivered to such Trustee an opinion of counsel to the effect that the holders
of the outstanding Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to federal income tax on the same amounts, and
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred (in the case of defeasance,
such opinion must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax laws); (iii) no Default or
Event of Default with respect to such series shall have occurred and be
continuing on the date of such deposit; (iv) such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the applicable Issuer is a party or by which it is bound; and (v) the
applicable Issuer shall have delivered to such Trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent under
such Indenture to either defeasance or covenant defeasance, as the case may be,
have been complied with.
SATISFACTION AND DISCHARGE
Unless otherwise indicated in a Prospectus Supplement, the provisions of the
Indenture applicable to any series of Securities will be discharged and will
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of Securities of such series, as expressly provided for in
the Indenture or a supplemental indenture) as to all outstanding Securities of
such series when (i) either (a) all the Securities of such series theretofore
authenticated and delivered (except lost, stolen or destroyed Securities which
have been replaced or paid and Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
applicable Issuer and thereafter repaid to the applicable Issuer or discharged
from such trust) have been delivered to the Trustee under such Indenture for
cancellation or (b) all Securities of such series not theretofore delivered to
such Trustee for cancellation have become due and payable and the applicable
Issuer has irrevocably deposited or caused to be deposited with such Trustee
funds in an amount sufficient to pay and discharge the entire Indebtedness on
the Securities of such series not theretofore delivered to such Trustee for
cancellation, for principal of, premium, if any, and interest on the Securities
of such series to the date of deposit together with irrevocable instructions
from the applicable Issuer directing such Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be; (ii) no Default
or Event of Default with respect to the applicable Indenture or the Securities
of such series shall have occurred and be continuing on the date of such
deposit or shall occur as a result thereof and such deposit will not result in
a breach or violation of, or constitute a default under, any other instrument
to which the applicable Issuer is a party or by which it is bound; (iii) the
applicable Issuer has paid all other sums payable under such Indenture by the
applicable Issuer; and (iv) the applicable Issuer has delivered to such Trustee
an officers' certificate and an opinion of counsel stating that all conditions
precedent under such Indenture relating to the satisfaction and discharge of
such Indenture applicable to Securities of such series have been complied with.
AMENDMENTS AND WAIVERS
From time to time, the applicable Issuer, when authorized by a resolution of
its Board of Directors, and the Trustee under the applicable Indenture may,
without the consent of the holders of any outstanding Securities thereunder,
amend, waive or supplement such Indenture or the Securities thereunder for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, qualifying, or maintaining the qualification of,
such Indenture under the Trust Indenture Act or making any change that does not
adversely affect the rights of any holder of Securities thereunder. Other
amendments and modifications of the applicable Indenture as it relates to any
series of Securities may be made by the applicable Issuer and the relevant
Trustee with the consent of the holders of not less than a majority of the
aggregate outstanding principal amount of the series of Securities thereunder
so affected; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Security thereunder
affected thereby, (i) reduce the principal amount or extend the fixed maturity
or alter the redemption provisions of any Security thereunder or reduce the
principal amount of any outstanding original issue discount Security thereunder
that would be due and payable upon declaration of acceleration of maturity
18
<PAGE>
thereof; (ii) reduce the percentage in principal amount of outstanding
Securities of such series that must consent to an amendment, supplement or
waiver or consent to any action under such Indenture or such Security
thereunder; (iii) waive a default in payment with respect to any Security
thereunder; (iv) reduce the rate or change the time for payment of interest on
any Security thereunder; (v) in the case of Subordinated Securities modify or
change any provision affecting the subordination of such Subordinated
Securities in a manner adverse to the holders of such Securities; (vi) in the
case of the K-H Indentures, release the Guarantor from its obligations; or
(vii) make such other changes as may require such consent pursuant to any
supplemental indenture.
THE TRUSTEES
Each Indenture provides that, except during the continuance of an Event of
Default, the Trustee thereunder will perform only such duties as are
specifically set forth in such Indenture. If an Event of Default under such
Indenture has occurred and is continuing, the Trustee thereunder will exercise
such rights and powers vested in it under such Indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
Each Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee thereunder,
should it become a creditor of Kelsey-Hayes or Varity, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. Each Trustee will be
permitted to engage in other transactions; provided, however, that if its
acquires any conflicting interest (as defined), it must eliminate such conflict
or resign. Manufacturers and Traders Trust Company also serves as trustee for
Varity's 11 3/8% Senior Notes due 1998.
GOVERNING LAW
The Indentures, the Securities and the Guarantees will be governed by the
laws of the State of New York, without regard to the principles of conflicts of
law.
PLAN OF DISTRIBUTION
Each Issuer may sell Securities in any of the following ways: (1) through
underwriters or dealers; (2) directly to one or more purchasers; or (3) through
agents. The Prospectus Supplement with respect to the Securities being offered
thereby will set forth the terms of the offering of such Securities, including
the name or names of any underwriters or agents, the purchase price of such
Securities and the proceeds to the Issuer from such sale, any underwriting
discounts, commissions and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which such
Securities may be listed. Any underwriter or agent may be deemed to be an
underwriter as that term is defined in the Securities Act of 1933, as amended
(the "Act").
If underwriters are used in the sale of Securities, such 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 Securities may be offered to the public either through underwriting
syndicates (which may be represented by managing underwriters designated by the
Issuer), or directly by one or more underwriters acting alone. The obligations
of the underwriters to purchase the Securities offered thereby will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all such Securities if any are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
The Securities may be sold directly by the applicable Issuer or through
agents designated by such Issuer from time to time. The Prospectus Supplement
with respect to any Securities sold in this manner will set
19
<PAGE>
forth the name of any agent involved in the offer or sale of the Securities as
well as any commissions payable by the applicable Issuer to such agent. Unless
otherwise indicated in the Prospectus Supplement, any such agent is acting on a
best efforts basis for the period of its appointment.
If dealers are utilized in the sale of any Securities, the applicable Issuer
will sell the Securities to the dealers, as principal. Any dealer may then
resell the Securities to the public at varying prices to be determined by the
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to the
Securities being offered thereby.
If so indicated in the Prospectus Supplement, the Issuer of the Securities
will authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Securities from the applicable Issuer at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. The obligations of any purchaser under any such contract
will be subject to the condition that the purchase of the offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject.
It has not been determined whether any Securities will be listed on a
securities exchange. Underwriters will not be obligated to make a market in any
Securities. The Company cannot predict the activity of trading in, or liquidity
of, any Securities.
Agents, underwriters and dealers may be entitled, under agreements entered
into with Kelsey-Hayes and/or Varity, to indemnification by Kelsey-Hayes and/or
Varity against certain civil liabilities, including liabilities under the Act
or to contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof. Agents, underwriters and
dealers may be customers of, engage in transactions with, or perform services
for Kelsey-Hayes, Perkins and/or Varity in the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the Securities and the Guarantees will
be passed upon for Kelsey-Hayes and Varity by Cahill Gordon & Reindel (a
partnership including a professional corporation), 80 Pine Street, New York,
New York 10005 and for the underwriters by Andrews & Kurth L.L.P., 425
Lexington Avenue, New York, New York 10017.
EXPERTS
The consolidated financial statements and financial statement schedules of
Varity and its subsidiaries as of January 31, 1994, and January 31, 1993, and
for each of the years in the three year period ended January 31, 1994, are
incorporated herein by reference to Varity's Annual Report on Form 10-K for the
fiscal year ended January 31, 1994, in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated herein by
reference, and upon the authority of said firm as experts in accounting and
auditing.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table sets forth an itemized statement of all estimated
expenses to be paid in connection with the issuance and distribution of the
securities being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.......... $ 34,482.76
Accounting Fees and Expenses................................. 185,000.00
Legal Fees and Expenses...................................... 250,000.00
Printing and Engraving Expenses.............................. 300,000.00
Blue Sky Fees and Expenses................................... 15,000.00
Trustees' Fees and Expenses.................................. 6,000.00
Miscellaneous................................................ 14,517.24
-----------
Total...................................................... $805,000.00
===========
</TABLE>
- --------
* Except for the Securities and Exchange Commission registration fee, all
expenses are estimated.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Kelsey-Hayes and Varity
Each of Kelsey-Hayes and Varity, both Delaware corporations, is empowered by
Section 145 of the Delaware General Corporation Law, subject to the procedures
and limitations stated therein, to indemnify any person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in the defense of any threatened, pending or
completed action, suit or proceeding in which such person is made a party by
reason of his or her being or having been a director or officer of Kelsey-Hayes
or Varity, as the case may be. The statute provides that such indemnification
is not exclusive of other rights or indemnification to which a person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Certificate of Incorporation and Bylaws of each of
Kelsey-Hayes and Varity provide that Kelsey-Hayes and Varity, respectively,
shall indemnify its directors and officers to the full extent permitted by the
Delaware General Corporation Law.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits.
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<C> <S>
1.1 Form of Kelsey-Hayes Standard Underwriting Agreement Provisions for
Debt Securities.
1.2 Form of Varity Standard Underwriting Agreement Provisions for Debt
Securities.
1.3 Form of Kelsey-Hayes Agency Agreement.
1.4 Form of Varity Agency Agreement.
4.1 Form of Senior Indenture relating to Kelsey-Hayes Senior Debt
Securities.
4.2 Form of Subordinated Indenture relating to Kelsey-Hayes Subordinated
Debt Securities.
4.3 Form of Senior Indenture relating to Varity Senior Debt Securities.
4.4 Form of Subordinated Indenture relating to Varity Subordinated Debt
Securities.
5.1 Opinion of Cahill Gordon & Reindel, special counsel to Kelsey-Hayes.
5.2 Opinion of Cahill Gordon & Reindel, special counsel to Varity.
12 Calculation of Ratio of Earnings to Fixed Charges for Varity.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cahill Gordon & Reindel (included in Exhibits 5.1 and 5.2).
24.1 Power of Attorney relating to Kelsey-Hayes (included on page II-4).
24.3 Power of Attorney relating to Varity (included on page II-5).
25.1 Form T-1 of Manufacturers and Traders Trust Company, as Trustee under
the Kelsey-Hayes Senior Indenture.
25.2 Form T-1 of Manufacturers and Traders Trust Company, as Trustee under
the Kelsey-Hayes Subordinated Indenture.
25.3 Form T-1 of Manufacturers and Traders Trust Company, as Trustee under
the Varity Senior Indenture.
25.4 Form T-1 of Manufacturers and Traders Trust Company, as Trustee under
the Varity Subordinated Indenture.
</TABLE>
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by Varity pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants 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 Registrants 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 of
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(c) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Varity'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.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, KELSEY-HAYES
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 LIVONIA, MICHIGAN, ON JANUARY 20, 1995.
Kelsey-Hayes Company
/s/ E.J. Gulda
By __________________________________
NAME: E.J. Gulda
TITLE: President
POWER OF ATTORNEY
Each person whose signature appears below appoints Neil D. Arnold, Kevin C.
Shanahan and Kenneth L. Walker, and each of them, as his attorney-in-fact and
agent, with full power of substitution and resubstitution, to sign and file
with the Securities and Exchange Commission any amendments to this Registration
Statement (including post-effective amendments) and to file with the Securities
and Exchange Commission one or more supplements to any prospectus included in
any of the foregoing, and generally to do anything else necessary and proper in
connection therewith.
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.
SIGNATURE TITLE DATE
/s/ E.J. Gulda President and January 20, 1995
- --------------------------------- Director (Principal
E.J. GULDA Executive Officer)
/s/ K.C. Shanahan Vice President, January 20, 1995
- --------------------------------- Finance (Principal
K. C. SHANAHAN Financial Officer
and Principal
Accounting Officer)
/s/ J.E. Utley Chairman and January 20, 1995
- --------------------------------- Director
J.E. UTLEY
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, VARITY
CORPORATION 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 BUFFALO, NEW YORK, ON JANUARY 20, 1995.
Varity Corporation
/s/ Kenneth L. Walker
By___________________________________
NAME: KENNETH L. WALKER
TITLE: VICE PRESIDENT, LEGAL
POWER OF ATTORNEY
Each person whose signature appears below appoints Neil D. Arnold, Kevin C.
Shanahan and Kenneth L. Walker, and each of them, as his attorney-in-fact and
agent, with full power of substitution and resubstitution, to sign and file
with the Securities and Exchange Commission any amendments to this Registration
Statement (including post-effective amendments) and to file with the Securities
and Exchange Commission one or more supplements to any prospectus included in
any of the foregoing, and generally to do anything else necessary and proper in
connection therewith.
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.
SIGNATURE TITLE DATE
/s/ Victor A. Rice Chairman of the January 20, 1995
- --------------------------------- Board, Chief
VICTOR A. RICE Executive Officer
and Director
(Principal
Executive Officer)
/s/ Neil D. Arnold Senior Vice January 20, 1995
- --------------------------------- President and Chief
NEIL D. ARNOLD Financial Officer
(Principal
Financial Officer)
/s/ Kevin C. Shanahan Vice President, January 20, 1995
- --------------------------------- Controller
KEVIN C. SHANAHAN (Principal
Accounting Officer)
/s/ Vince D. Laurenzo Vice Chairman of the January 20, 1995
- --------------------------------- Board and Director
VINCE D. LAURENZO
/s/ William A. Corbett Director January 20, 1995
- -------------------------------
WILLIAM A. CORBETT
II-5
<PAGE>
SIGNATURE TITLE DATE
/s/ Thomas N. Davidson Director January 20, 1995
- -----------------------------------
THOMAS N. DAVIDSON
/s/ Robert M. Gates Director January 20, 1995
- -----------------------------------
ROBERT M. GATES
/s/ Luiz F. Kahl Director January 20, 1995
- -----------------------------------
LUIZ F. KAHL
/s/ W. Darcy McKeough Director January 20, 1995
- -----------------------------------
W. DARCY MCKEOUGH
/s/ Sir Bryan Nicholson Director January 20, 1995
- -----------------------------------
SIR BRYAN NICHOLSON
/s/ Warren S. Rustand Director January 20, 1995
- -----------------------------------
WARREN S. RUSTAND
/s/ William R. Teschke Director January 20, 1995
- -----------------------------------
WILLIAM R. TESCHKE
/s/ The Hon. Robin H. Warrender Director January 20, 1995
- -----------------------------------
THE HON. ROBIN H. WARRENDER
/s/ Paul M. F. Cheng Director January 20, 1995
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PAUL M. F. CHENG
II-6
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
1.1 Form of Kelsey-Hayes Standard Underwriting Agreement
Provisions for Debt Securities.
1.2 Form of Varity Standard Underwriting Agreement Provisions for
Debt Securities.
1.3 Form of Kelsey-Hayes Agency Agreement.
1.4 Form of Varity Agency Agreement.
4.1 Form of Senior Indenture relating to Kelsey-Hayes Senior Debt
Securities.
4.2 Form of Subordinated Indenture relating to Kelsey-Hayes
Subordinated Debt Securities.
4.3 Form of Senior Indenture relating to Varity Senior Debt
Securities.
4.4 Form of Subordinated Indenture relating to Varity Subordinated
Debt Securities.
5.1 Opinion of Cahill Gordon & Reindel, special counsel to Kelsey-
Hayes.
5.2 Opinion of Cahill Gordon & Reindel, special counsel to Varity.
12 Calculation of Ratio of Earnings to Fixed Charges for Varity.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cahill Gordon & Reindel (included in Exhibits 5.1
and 5.2).
24.1 Power of Attorney relating to Kelsey-Hayes (included on page
II-4).
24.3 Power of Attorney relating to Varity (included on page II-5).
25.1 Form T-1 of Manufacturers and Traders Trust Company, as
Trustee under the Kelsey-Hayes Senior Indenture.
25.2 Form T-1 of Manufacturers and Traders Trust Company, as
Trustee under the Kelsey-Hayes Subordinated Indenture.
25.3 Form T-1 of Manufacturers and Traders Trust Company, as
Trustee under the Varity Senior Indenture.
25.4 Form T-1 of Manufacturers and Traders Trust Company, as
Trustee under the Varity Subordinated Indenture.
</TABLE>
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EXHIBIT 1.1
KELSEY-HAYES COMPANY
DEBT SECURITIES
Guaranteed as to Payment of Principal
and Interest by
VARITY CORPORATION
STANDARD UNDERWRITING AGREEMENT PROVISIONS
------------------------------------------
Kelsey-Hayes Company, a Delaware corporation (the
"Company"), proposes to issue and sell from time to time its
debt securities, consisting of (i) unsecured senior debt
securities (the "Senior Debt Securities") and (ii) unsecured
subordinated debt securities (the "Subordinated Debt
Securities" and, together with the Senior Debt Securities, the
"Securities"). The Securities are registered under the
registration statement referred to in Section 1 hereof.
Payment of principal of and interest on the Securities will be
guaranteed (the "Guarantee") by Varity Corporation, a Delaware
corporation (the "Guarantor"). The Senior Debt Securities will
be issued under an indenture (as amended or supplemented, the
"Senior Indenture") to be entered into among the Company, the
Guarantor and Manufacturers and Traders Trust Company, as
trustee (the "Senior Trustee"). The Subordinated Debt
Securities will be issued under an indenture (as amended or
supplemented, the "Subordinated Indenture" and, together with
the Senior Indenture, the "Indentures") among the Company,
the Guarantor and Manufacturers and Traders Trust Company, as
trustee (the "Subordinated Trustee" and, together with the
Senior Trustee, the "Trustees"). The Securities may be issued
in one or more series and may have varying designations,
denominations, interest rates and payment dates, maturities,
redemption provisions, selling prices and other terms. The
basic provisions set forth herein are intended to be
incorporated by reference in a terms agreement of the type
referred to below relating to the designation and series of
Securities to be issued and sold by the Company pursuant
thereto (the "Offered Securities") to the underwriter or
several underwriters named therein (the "Underwriters"). The
Terms Agreement, which shall be in the form of
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Exhibit I hereto relating to the Offered Securities (the
"Terms Agreement"), together with the provisions hereof
incorporated therein by reference (which provisions shall
not become effective until so incorporated by reference), is
herein referred to as this "Agreement." If the Underwriters
consist only of the firm or firms referred to in the Terms
Agreement as Representative or Representatives, then the
terms "Underwriters" and "Representatives," as used herein,
shall each be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and
the Company to sell, the Offered Securities are evidenced by
the Terms Agreement delivered at the time the Company
determines to sell the Offered Securities. The Terms Agreement
specifies the firm or firms which will be Underwriters, the
amount of the Offered Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters
for the Offered Securities, the public offering price, if any,
of the Offered Securities and any terms of the Offered
Securities not otherwise specified in the applicable Indenture
(including, but not limited to, designations, denominations,
covenants, interest rates and payment dates, maturity,
redemption provisions and sinking fund requirements). The
Terms Agreement specifies any details of the terms of the
offering that should be reflected in a post-effective amendment
to the applicable Registration Statement or the Prospectus
Supplement (each as hereinafter defined).
1. Registration Statement and Prospectus. The
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Company and the Guarantor have prepared and filed with the
Securities and Exchange Commission (the "Commission"), in
accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Act"), a joint registration
statement on Form S-3 (the "registration statement"), including
a prospectus relating to the Offered Securities and the
Guarantees. The term "Registration Statement," as used in this
Agreement, means the registration statement (including all
financial schedules and exhibits), as amended at the time it
becomes effective, and as thereafter amended by any
post-effective amendment at the date of any Terms Agreement.
The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement,
as supplemented to reflect the terms of the Offered Securities
and the plan of distribution thereof, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b).
Any reference in this Agreement to the registration statement,
the Registration Statement or any
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Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of the registration
statement, the Registration Statement or any Prospectus, as the
case may be, and any reference to any amendment or supplement to
the registration statement, the Registration Statement or any
Prospectus shall be deemed to refer to and include any documents
filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which, upon filing, are
incorporated by reference therein, as required by paragraph (b)
of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated
by reference in the registration statement, the Registration
Statement, any Prospectus, or any amendment or supplement
thereto, but does not include any documents incorporated by
reference in the Registration Statement, any Prospectus, or any
amendment or supplement thereto subsequent to the Closing Date
(as defined in Section 2 hereof).
2. Sale and Delivery to the Underwriters; Closing.
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The obligation of the Underwriters to purchase the Offered
Securities will be evidenced by a Terms Agreement at the time
the Company determines to sell the Securities. The Terms
Agreement will incorporate by reference the provisions of this
Agreement, except as otherwise provided therein, and will
specify (1) the firm or firms which will be Underwriters,
(2) the names of any Representatives, (3) the principal amount
of Offered Securities to be purchased by each Underwriter and
the purchase price to be paid by the Underwriters, (4) the
terms of the Offered Securities not already specified in the
Indenture, (5) whether any of the Offered Securities may be
sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below), (6) the time and date on which
delivery of the Offered Securities will be made to the
Representatives for the accounts of the several Underwriters
against payment by the several Underwriters through the
Representatives of the purchase price in New York Clearing
House funds (such time and date, or such other time and date
not later than seven full business days thereafter as the
Representatives and the Company agree to as to time and date
for payment and delivery, being herein and in the Terms
Agreement referred to as the "Closing Date") and (7) the place
of delivery and payment.
The obligations of the Underwriters to purchase the
Offered Securities will be several and not joint. The Offered
Securities delivered to the Underwriters on the Closing Date
will be in definitive fully registered form, in such
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denominations and registered in such names as the
Representatives may request.
Certificates for the Offered Securities shall be
registered in such names and in such denominations as the
Representatives shall request by written notice, it being
understood that a facsimile transmission shall be deemed
written notice for such purpose, prior to 1:00 P.M., New York
City time, on the third business day preceding the Closing
Date.
If the Terms Agreement provides for sales of
Securities pursuant to Delayed Delivery Contracts, the Company
authorizes the Underwriters to solicit offers to purchase
Securities pursuant to delayed delivery contracts substantially
in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings
banks, insurance companies, pension funds, investment companies
and educational and charitable institutions. On the Closing
Date, the Company will pay, as compensation, to the
Representatives for the accounts of the Underwriters, the fee
(expressed as a discount) set forth in such Terms Agreement in
respect of the principal amount of Securities to be sold
pursuant to Delayed Delivery Contracts ("Contract Securities").
The Underwriters will not have any responsibility in respect of
the validity or the performance of any Delayed Delivery
Contract. If the Company executes and delivers a Delayed
Delivery Contract, the Contract Securities will be deducted
from the Securities to be purchased by the several Underwriters
and the aggregate principal amount of Securities to be
purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Securities set forth
opposite each Underwriter's name in such Terms Agreement,
except to the extent that the Representatives determine that
such reduction shall be otherwise than pro rata and so advise
the Company. The Company will advise the Representatives not
later than the business day prior to the Closing Date of the
principal amount of Contract Securities.
3. Agreements of the Company and the Guarantor.
-------------------------------------------
The Company and the Guarantor agree with each Underwriter as
follows:
(a) If, at the time any Terms Agreement is executed
and delivered, it is necessary for a post-effective
amendment to the Registration Statement to be declared
effective before the offering of the Offered Securities may
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commence, the Company and the Guarantor will endeavor
to cause such post-effective amendment to become effective
as soon as possible and will advise the Underwriters
promptly and, if requested, will confirm such advice in
writing, when the Company or the Guarantor receives notice
(written or oral) that such post-effective amendment has
become effective.
(b) The Company and the Guarantor will advise the
Underwriters promptly and, if requested, will confirm such
advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the Registration
Statement or any Prospectus or for additional information;
(ii) upon knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of
qualification of the Offered Securities for offering or
sale in any jurisdiction or of the initiation of any
proceeding for such purpose; and (iii) within the period
of time referred to in paragraph (e) below, of any change
in the Company's or the Guarantor's financial condition,
business, prospects, properties, net worth or results of
operations, or of the happening of any event, including
the filing of any information, documents or reports
pursuant to the Exchange Act, that makes any statement
made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration
Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required
by the Act to be stated therein or necessary in order to
make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any
stop order suspending the effectiveness of the
Registration Statement, the Company and the Guarantor,
upon knowledge thereof, will make every reasonable effort
to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company and the Guarantor will furnish to
each of the Representatives and to counsel to the
Representatives, without charge (i) one signed copy of the
registration statement as originally filed with the
Commission and of each amendment thereto, including
financial statements and all exhibits to the Registration
Statement, and (ii) such number of conformed copies of the
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Registration Statement as originally filed and of each
amendment thereto, but without exhibits, as the
Representatives may reasonably request.
(d) Neither the Company nor the Guarantor will file
any amendment to the Registration Statement or make any
amendment or supplement to the Prospectus of which the
Representatives shall not previously have been advised or
to which the Representatives shall reasonably object in
writing after being so advised.
(e) If during the period when the Prospectus is
required to be delivered under the Act any event shall
occur that in the judgment of the Company or the Guarantor
or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
or if it is necessary to supplement or amend the
Prospectus in order to comply with the Act or any other
law, the Company and the Guarantor will forthwith prepare
and, subject to the provisions of paragraph (d) above,
file with the Commission an appropriate supplement or
amendment thereto, and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies
thereof.
(f) The Company and the Guarantor will cooperate
with the Underwriters and with counsel for the
Underwriters in connection with the registration or
qualification of the Offered Securities for offering and
sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably designate and will file
such consents to service of process or other documents
necessary or appropriate in order to effect such
registration or qualification; provided that in no event
shall the Company or the Guarantor be obligated to qualify
to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to
service of process in suits, other than those arising out
of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(g) The Company and the Guarantor will make
generally available to its security holders a consolidated
earnings statement, which need not be audited, covering a
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twelve-month period commencing after the effective date of
the Registration Statement and ending not later than 15
months thereafter, as soon as reasonably practicable after
the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of
the Act and Rule 158 thereunder.
(h) During the period of two years hereafter, the
Company will furnish to the Underwriters (i) as soon as
available, a copy of each report of the Guarantor (and, if
applicable, the Company) mailed to stockholders or filed
with the Commission or the New York Stock Exchange, and
(ii) from time to time such other information concerning
the Company and the Guarantor as the Underwriters may
reasonably request.
(i) Between the date of any Terms Agreement and the
Closing Date specified in such agreement, the Company will
not, without the Representatives' prior consent, offer,
sell, contract to sell or otherwise dispose of debt
securities of the Company having a maturity of more than
one year from the date of issue covered by the
Registration Statement or another registration statement
filed by the Company under the Act, except that the
Company may offer, sell, contract to sell or otherwise
dispose of obligations of the Company in respect of
industrial revenue bonds or similar securities exempt from
federal income taxes.
(j) The Company will apply the net proceeds from the
sale of the Offered Securities hereunder substantially in
accordance with the description set forth in the
Prospectus.
4. Representations and Warranties of the Company
---------------------------------------------
and the Guarantor. The Company and the Guarantor, jointly and
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severally, represent and warrant to each Underwriter that:
(a) The Registration Statement and any post-
effective amendment thereto have been declared effective
by 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) Each Prospectus included as part of the
registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to
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Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act and did
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
except that this representation and warranty does not
apply to statements in or omissions from such Prospectus
(or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the
Company or the Guarantor in writing by an Underwriter
expressly for use therein. The Commission has not issued
any order preventing or suspending the use of any
Prospectus.
(c) The Company, the Guarantor and the transactions
contemplated by this Agreement meet the requirements for
using Form S-3 under the Act. The registration statement
in the form in which it became effective and also in such
form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions
of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and will not at any such
times contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; except that this representation and warranty
does not apply to statements in or omissions from the
registration statement or the Prospectus made in reliance
upon and in conformity with information furnished to the
Company or the Guarantor in writing by an Underwriter
expressly for use therein.
(d) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was
filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such
document when it was filed (or, if any amendment with
respect to any such document was filed, when such
amendment was filed),
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contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary in order to make the statements
therein not misleading; and no such further document, when
it is filed, will contain an untrue statement of a material
fact or will omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading.
(e) Each of the Company and the Guarantor is a
corporation duly organized and validly existing in good
standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate
its properties and to conduct its business, and is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register or qualify does not have a material adverse
effect on the financial condition, business, properties,
net worth or results of operations of the Guarantor and
its subsidiaries taken as a whole or of the Company and
its subsidiaries taken as a whole (a "Material Adverse
Effect").
(f) Each Material Subsidiary (as defined below) is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its organization, with
full corporate power and authority to own, lease and
operate its properties and to conduct its business, except
where the failure of a Material Subsidiary to be duly
organized and existing or to have full corporate power and
authority would not have a Material Adverse Effect; each
Material Subsidiary is duly registered, qualified or
licensed to conduct its business and is in good standing
in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register, be licensed or qualify would not have a
Material Adverse Effect; all the outstanding shares of
capital stock of each Material Subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable, and are owned by the Guarantor directly, or
indirectly through one of its other subsidiaries, free and
clear of any lien, adverse claim, security interest,
equity, or other encumbrance; and there are no outstanding
rights, warrants or options to acquire, or instruments
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convertible into or exchangeable for, shares of capital
stock or other equity interests in any Material
Subsidiary. As used herein, the term "Material
Subsidiaries" means the following subsidiaries of the
Guarantor: Varity Holdings Limited and Perkins Group
Limited, each a corporation organized under the laws of
the United Kingdom; Dayton Walther Corporation, an Ohio
corporation; K-H Corporation, a Delaware corporation; and
the Company.
(g) The Offered Securities have been duly authorized
by the Company and, when executed by the Company and
authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due
authorization, execution and delivery thereof by the
Trustee thereunder), and delivered to and paid for by the
Underwriters in accordance with the terms of this
Agreement and the Terms Agreement and the applicable
Indenture, will constitute the valid and binding
obligations of the Company enforceable against the Company
in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law).
(h) There are no legal or governmental proceedings
pending or, to the knowledge of the Company or the
Guarantor, threatened, against the Company, the Guarantor
or any of their respective subsidiaries which are
reasonably likely to have a Material Adverse Effect, or to
which the Company, the Guarantor or any of their
respective subsidiaries, or to which any of their
respective properties, is subject which are material to
the Company and its subsidiaries or the Guarantor and its
subsidiaries, in each case taken as a whole, that are
required to be described in the Registration Statement or
the Prospectus, but are not described as required, and
there are no agreements, contracts, indentures, leases or
other instruments relating to the Company, the Guarantor
or their respective subsidiaries that are required to be
described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement
or any Incorporated Document that are not described or
filed as required by the Act or the Exchange Act. The
descriptions of the terms of any such contracts or
documents contained in the
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Registration Statement, the Prospectus or any Incorporated
Documents are correct in all material respects.
(i) Neither the Company, the Guarantor nor any of
their respective subsidiaries is (i) in violation of its
certificate or articles of incorporation or bylaws, or
other organizational documents, (ii) in violation of any
law, ordinance, administrative or governmental rule or
regulation applicable to the Company, the Guarantor or any
of their respective subsidiaries or of any decree of any
court or governmental agency or body having jurisdiction
over the Company, the Guarantor or any of their respective
subsidiaries or any of their respective properties, or
(iii) in default in any material respect in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture,
lease or instrument to which the Company, the Guarantor or
any of their respective subsidiaries is a party or by
which any of them or any of their respective properties
may be bound, and no condition or state of facts exists,
which, with the passage of time or the giving of notice or
both, would constitute such a default, except in the case
of clauses (i), (ii) and (iii) where any such violation or
default, or violations and defaults in the aggregate,
would not have a Material Adverse Effect.
(j) None of the issuance and sale of the Offered
Securities, the execution, delivery or performance of this
Agreement, the Terms Agreement, the Indenture relating to
the Offered Securities and any Delayed Delivery Contract
by the Company or the Guarantor, to the extent each is a
party thereto, or the consummation by the Company and the
Guarantor of the transactions contemplated hereby and
thereby to be consummated by the Company and the Guarantor
(i) requires any consent, approval, authorization or other
order of or registration or filing with, any court,
regulatory body, administrative agency or other
governmental body, agency or official (except such as may
be required for the registration of the Securities and the
Guarantee under the Act and the Exchange Act, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected
in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
documents, of the Company,
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the Guarantor or any of their respective subsidiaries or
(ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any material
agreement, indenture, lease or instrument to which the
Company, the Guarantor or any of their respective
subsidiaries is a party or by which any of them or any of
their respective properties may be bound, or violates or
will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the
Company, the Guarantor or any of their respective
subsidiaries or any of their respective properties, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the
Guarantor or any of their respective subsidiaries pursuant
to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is
subject, except in the case of clauses (i) and (ii) where
any such conflict, breach, default or violation, or
conflicts, breaches, defaults or violations in the
aggregate, would not have a Material Adverse Effect.
(k) The accountants who have certified or shall
certify the financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) were
or shall be, for the periods in which they certified or
certify such financial statements, independent public
accountants as required by the Act.
(l) The historical financial statements, together
with related schedules and notes, included or incorporated
by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position,
results of operations, cash flows and changes in
stockholders' equity of the Guarantor and its subsidiaries
on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which
they apply; such statements and related schedules and
notes have been prepared in accordance with United States
generally accepted accounting principles (as described in
the Prospectus) consistently applied throughout the
periods involved, except as disclosed therein; and the
other financial and statistical information and data
included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto) are
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accurately presented and prepared on a basis consistent
with such financial statements and the books and records of
the Guarantor and its subsidiaries.
(m) The execution and delivery of, and the
performance by the Company and the Guarantor of their
respective obligations under, each of this Agreement, the
Terms Agreement, the Indenture relating to the Offered
Securities and any Delayed Delivery Contract have been
duly and validly authorized, executed and delivered by the
Company and the Guarantor, to the extent each is a party
thereto, and constitutes the valid and legally binding
agreement of the Company and the Guarantor, to the extent
each is a party thereto, enforceable against the Company
and the Guarantor, to the extent each is a party thereto,
in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law). The Indenture has been duly qualified under the
Trust Indenture Act.
(n) The Guarantee of the Offered Securities has been
duly authorized by the Guarantor and, when the Offered
Securities have been executed and authenticated in
accordance with the terms of the applicable Indenture and
delivered to and duly paid for by the purchasers thereof,
the Guarantee will be a valid and binding obligation of
the Guarantor, enforceable against the Guarantor in
accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
(o) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), none of the Company, the Guarantor or
any of their respective subsidiaries has incurred any
liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of
business, that
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is material to the Company and its subsidiaries taken as a
whole or the Guarantor and its subsidiaries taken as a
whole, and there has not been any material change in the
capital stock of the Company or the Guarantor, or material
increase in the short-term debt or long-term debt of the
Company, the Guarantor and any of their respective
subsidiaries taken as a whole, or any Material Adverse
Effect.
(p) Each of the Company, the Guarantor and their
respective subsidiaries has good and marketable title to
all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all
liens, claims, security interests or other encumbrances,
except such as are described in the Registration Statement
and the Prospectus or in a document filed as an exhibit to
the Registration Statement and all the property described
in the Prospectus as being held under lease by each of the
Company, the Guarantor and their respective subsidiaries
is held by it under valid, subsisting and enforceable
leases, in each case with only such exceptions as in the
aggregate would not have a Material Adverse Effect.
(q) The Company, the Guarantor and each of their
respective subsidiaries has such permits, licenses,
franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own
its respective properties and to conduct its business in
the manner described in the Prospectus, except where the
failure to have any such Permit would not have a Material
Adverse Effect and subject to such qualifications as may
be set forth in the Prospectus; the Company, the Guarantor
and each of their respective subsidiaries has fulfilled
and performed all its material obligations with respect to
such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or results in any other material
impairment of the rights of the holder of any such Permit,
except where such action would not have a Material Adverse
Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such Permits contains
any restriction that is materially burdensome to the
Company and its subsidiaries, taken as a whole, or the
Guarantor and its subsidiaries, taken as a whole.
(r) The Company, the Guarantor and their respective
subsidiaries own or possess all patents, trademarks,
<PAGE>
-15-
trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the
Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses,
except where the lack of such ownership or possession
would not have a Material Adverse Effect, and neither the
Company nor the Guarantor is aware of any claim to the
contrary or any challenge by any other person to the
rights of the Company, the Guarantor or any of their
respective subsidiaries with respect to the foregoing.
5. Indemnification and Contribution. (a) The
--------------------------------
Company and the Guarantor agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages, liabilities,
judgments and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based
upon 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, except insofar as
such losses, claims, damages, liabilities, judgments or
expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the
Company or the Guarantor by or on behalf of any Underwriter;
provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any such loss,
claim, damage, liability, judgment or expense arising from the
sale of the Offered Securities by such Underwriter to any
person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by
the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged
omission of a material fact contained in any preliminary
prospectus was corrected in the Prospectus. The foregoing
indemnity agreement shall be in addition to any liability which
the Company and the Guarantor may otherwise have.
<PAGE>
-16-
(b) If any action, suit or proceeding shall be
brought against any Underwriter or any person controlling any
Underwriter in respect of which indemnity may be sought against
the Company or the Guarantor, such Underwriter or such
controlling person shall promptly notify the Company and the
Guarantor, and the Company and the Guarantor shall assume the
defense thereof, including the employment of counsel and
payment of all reasonable fees and expenses of such counsel.
Any such Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but
the reasonable fees and expenses of such counsel shall be at
the expense of such Underwriter or such controlling person,
rather than the Company or the Guarantor, unless (i) the
Company or the Guarantor has agreed in writing to pay such fees
and expenses, (ii) the Company or the Guarantor has failed to
assume the defense and employ counsel, or (iii) the named
parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such
controlling person and the Company or the Guarantor and such
Underwriter or such controlling person shall have been advised
by its counsel that representation of such indemnified party
and the Company or the Guarantor by the same counsel would be
inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing
interests between them (in which case the Company and the
Guarantor shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter
or such controlling person). It is understood, however, that
the Company and the Guarantor shall, in connection with any one
such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses
of only one separate firm of attorneys (in addition to any
local counsel, not more than one per jurisdiction) at any time
for all such Underwriters and controlling persons, which firm
shall be designated in writing by the Underwriters, and that
all such fees and expenses shall be reimbursed promptly as they
are incurred. Neither the Company nor the Guarantor shall be
liable for any settlement of any such action, suit or
proceeding effected without either of their written consent,
but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or
proceeding, the Company and the Guarantor agree, jointly and
severally, to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding
<PAGE>
-17-
paragraph, and any such controlling person from and against any
loss, claim, damage, liability, judgment or expense by reason of
such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Underwriter or any person controlling
an Underwriter is entitled to employ separate counsel pursuant to
the second sentence of this Section 5(b) and shall have requested
the Company and the Guarantor in writing to reimburse such
Underwriter or such controlling person for fees and expenses of
counsel, the Company and the Guarantor agree that they shall be
liable, jointly and severally, for any settlement of any
proceeding effected by such Underwriter or such controlling
person and for which the Company and the Guarantor are liable
pursuant to Section 5(a) without its written consent if (i) such
settlement is entered into more than ten (10) business days after
receipt by the Company and the Guarantor of the aforesaid request
or (ii) neither the Company nor the Guarantor shall have
reimbursed such Underwriter or such controlling person in
accordance with such request prior to the date of such
settlement. Neither the Company nor the Guarantor shall, without
the prior written consent of such Underwriter or such controlling
person, effect any settlement of any pending or threatened
proceeding in respect of which any Underwriter or any person
controlling an Underwriter is or could have been a party and
indemnity could have been sought hereunder by such Underwriter or
such controlling person, unless such settlement includes an
unconditional release of such Underwriter or such controlling
person from all liability on claims that are subject matter of
such proceeding.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company and the
Guarantor, their respective directors, officers who sign the
Registration Statement, and any person who controls either the
Company or the Guarantor within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company and the Guarantor
to each Underwriter, but only with respect to information
relating to such Underwriter furnished in writing by or on
behalf of such Underwriter through the Representative(s)
expressly for use in the Registration Statement, the Prospectus
or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company or the
Guarantor, any of their respective directors, officers, or any
such controlling person based on the Registration Statement,
the Prospectus or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter
shall
<PAGE>
-18-
have the rights and duties given to the Company or the
Guarantor by paragraph (b) above (except that if the Company or
the Guarantor shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of such Underwriter), and the Company and the
Guarantor, their respective directors, officers, and any such
controlling person shall have the rights and duties given to
the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which
the Underwriters may otherwise have.
(d) If the indemnification provided for in this
Section 5 is unavailable to, or insufficient to hold harmless,
an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities, judgments
or expenses referred to therein, then an 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, judgments
or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantor
on the one hand and the Underwriters on the other hand from the
offering of the Offered Securities, or (ii) if the allocation
provided by clause (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 and the Guarantor on the one
hand and the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses,
claims, damages, liabilities, judgments or expenses, as well as
any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantor on the one
hand and the Underwriters on the other hand shall be deemed to
be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company
and the Guarantor bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Guarantor on the one hand
and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company or the Guarantor on the one hand or by
the Underwriters on the other hand and the parties' relative
<PAGE>
-19-
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company, the Guarantor and the Underwriters
agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by a pro rata
allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities, judgments and expenses referred to in paragraph
(d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating any claim or defending any such action, suit
or proceeding. Notwithstanding the provisions of this
Section 5, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the
Offered Securities underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 5 are several in proportion
to their underwriting obligations and not joint.
(f) Any losses, claims, damages, liabilities,
judgments or expenses for which an indemnified party is
entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the
indemnified party promptly as such losses, claims, damages,
liabilities, judgments or expenses are incurred. The indemnity
and contribution agreements contained in this Section 5 and the
representations and warranties of the Company and the Guarantor
set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by
or on behalf of any Underwriter or any person controlling any
Underwriter, the Company or the Guarantor, their respective
directors or officers, or any person controlling the Company or
the Guarantor, (ii) acceptance of any Offered Securities and
payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company or the
Guarantor,
<PAGE>
-20-
their respective directors or officers, or any person controlling
the Company or the Guarantor, shall be entitled to the benefits
of the indemnity, contribution and reimbursement agreements
contained in this Section 5.
6. Conditions of Underwriters' Obligations. The
---------------------------------------
several obligations of the Underwriters to purchase the Offered
Securities hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement
or a post-effective amendment thereto to be declared
effective before the offering of the Offered Securities
may commence, the registration statement or such post-
effective amendment shall have become effective not later
than 5:30 P.M., New York City time, on the first business
day following the date of the applicable Terms Agreement,
or at such later date and time as shall be consented to in
writing by the Representatives, and all filings, if any,
required by Rule 424 under the Act shall have been timely
made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or,
to the knowledge of the Company, the Guarantor or any
Underwriter, threatened by the Commission, and any request
of the Commission for additional information (to be
included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with.
(b) Subsequent to the execution of any applicable
Terms Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change,
in or affecting the financial condition, business,
properties, net worth, or results of operations of the
Company and its subsidiaries taken as a whole, or the
Guarantor and its subsidiaries taken as a whole, from the
date of the latest balance sheet included or incorporated
by reference in the Prospectus in each case not
contemplated by the Prospectus, which is material and
adverse; (ii) any downgrading in, or notice of any
proposal to downgrade, the rating of the Company's or the
Guarantor's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any public announcement
that any such organization has under surveillance or
review with negative implications the rating of the
Company's or the Guarantor's debt securities; (iii) any
suspension or
<PAGE>
-21-
limitation of trading in securities generally on or by the
New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the
Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, or any setting of
minimum prices for trading on such exchange; (iv) any
suspension of trading of any securities of the Company or
the Guarantor on any exchange; (v) any banking moratorium
declared by Federal or New York authorities; or (vi) the
outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a
national emergency or war, if the effect of any such event
set forth in (i) through (vi), in the judgment of the
Representatives, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated by
the Prospectus.
(c) The Underwriters shall have received on the
Closing Date, an opinion of Cahill Gordon & Reindel (a
partnership including a professional corporation), counsel
for the Company and the Guarantor, dated the Closing Date
and addressed to the Underwriters, to the effect that:
(i) Each of the Company and the Guarantor is a
corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware
with full corporate power and authority to own, lease
and operate its properties and to conduct its
business as described in the Prospectus;
(ii) Any Delayed Delivery Contract has been duly
authorized, executed and delivered by the Company and
the Guarantor;
(iii) The Indenture relating to the Offered
Securities has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed
and delivered by the Company and the Guarantor and is
a valid and binding agreement of the Company and the
Guarantor, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer and similar laws
affecting creditors' rights generally and by general
equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
<PAGE>
-22-
(iv) The Offered Securities have been duly
authorized and, when executed and authenticated in
accordance with the Indenture and delivered to the
Underwriters against payment therefor in accordance
with the terms of this Agreement, will be valid and
binding obligations of the Company, enforceable in
accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, fraudulent
transfer and similar laws affecting creditors' rights
generally and by general equitable principles
(regardless of whether enforcement is sought in a
proceeding in equity or at law) and will be entitled
to the benefits of the Indenture;
(v) The Registration Statement and all post-
effective amendments, if any, have become effective
under the Act and, to the best knowledge of such
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance
with Rule 424(b);
(vi) The Company and the Guarantor have all
requisite corporate power and authority to enter into
this Agreement, the Terms Agreement, the Indenture
relating to the Offered Securities, and any Delayed
Delivery Contract to which either of them is a party
and to issue and deliver the Offered Securities and
the Guarantee, respectively, to the Underwriters;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company and the
Guarantor and is a valid, legal and binding agreement
of the Company and the Guarantor, enforceable against
the Company and the Guarantor in accordance with its
terms, except (A) as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and (B) that rights to indemnity
and contribution hereunder may be limited by Federal
or state securities laws or the public policy
underlying such laws;
<PAGE>
-23-
(viii) The Offered Securities and the Indenture
conform in all material respects to the descriptions
thereof contained in the Registration Statement and
the Prospectus;
(ix) None of the offer, sale, or delivery of the
Offered Securities or the Guarantee, or the
execution, delivery or performance of this Agreement,
the Indenture relating to the Offered Securities, and
any Delayed Delivery Contract, nor compliance by the
Company or the Guarantor with all the provisions of
this Agreement and the Indenture applicable to it,
nor consummation by the Company or the Guarantor of
the transactions contemplated hereby conflicts or
will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate of
incorporation or bylaws of the Company or the
Guarantor or any indenture or other debt instrument or
any other material agreement or lease, known to such
counsel, to which the Company or the Guarantor is a
party or by which any of them or any of their respective
properties is bound or that is an exhibit to the
Registration Statement or to any Incorporated Document,
which conflict, breach or default would have a
Material Adverse Effect, or, except as disclosed in
the Registration Statement, will result in the
creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or the Guarantor under any such indenture, debt
instrument, agreement or lease which lien, charge or
encumbrance would have a Material Adverse Effect,
nor will any such action result in any violation of
any existing law, regulation, ruling (assuming
compliance with all applicable state securities and
Blue Sky laws), judgment, injunction, order or decree
known to such counsel after reasonable inquiry,
applicable to the Company or the Guarantor or any
of their respective properties, which violation
would have a Material Adverse Effect;
(x) The Guarantee of the Offered Securities has
been duly authorized by the Guarantor and, when the
Offered Securities have been executed and
authenticated in accordance with the Indenture and
delivered to and duly paid for by the Underwriters,
the Guarantee will be a valid and binding obligation
of the Guarantor as to the Offered Securities,
enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization,
fraudulent
<PAGE>
-24-
transfer and similar laws affecting creditors' rights
generally and by general equitable principles
(regardless of whether enforcement is sought in a
proceeding in equity or at law);
(xi) No consent, approval, authorization or
other order of, or registration or filing with, any
Delaware, New York State or Federal court, regulatory
body, administrative agency or other governmental
body, agency, or official is required on the part of
the Company or the Guarantor (except as have been
obtained or made under the Act and the Exchange Act
or such as may be required under state securities or
Blue Sky laws governing the purchase and distribution
of the Securities) for the valid issuance and sale of
the Offered Securities to the Underwriters as
contemplated by this Agreement; and
(xii) The Registration Statement and the
Prospectus and any supplements or amendments thereto
(except for the financial statements, schedules and
notes thereto and other financial and statistical
data included therein, as to which such counsel need
not express any opinion) comply as to form in all
material respects with the requirements of the Act;
and each of the Incorporated Documents (except for
the financial statements, schedules and notes thereto
and other financial and statistical data included
therein, as to which such counsel need not express
any opinion), when they were filed (or, if an
amendment with respect to any Incorporated Document
was filed, when such amendment was filed) complied as
to form in all material respects with the Exchange
Act.
In addition, such counsel shall state that such
counsel participated in conferences with officers and
other representatives of the Guarantor and the Company,
representatives of the independent public accountants and
representatives of the Underwriters at which the contents
of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in
the Registration Statement and Prospectus (except as
otherwise indicated above) on the basis of the foregoing
(relying as to materiality to a large extent upon the
opinions of officers and representatives of the Guarantor
and the Company), no facts have come to the attention of
such counsel
<PAGE>
-25-
which lead them to believe that either the Registration
Statement or any amendment thereto, at the time the
Registration Statement or amendment became effective,
contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein not misleading or that the Prospectus as of its
date or any supplement thereto as of its date, or the
Registration Statement or the Prospectus and any amendment
or supplement thereto as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (it being understood that such counsel need
express no opinion with respect to the financial statements
and schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
The opinion of such counsel may be limited to the
laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the
United States. In rendering their opinion as aforesaid,
such counsel may, as to factual matters, rely upon written
certificates or statements of officers of the Company and
the Guarantor and public officials.
(d) The Underwriters shall have received letters
dated the date of the Terms Agreement and the Closing Date
from KPMG Peat Marwick LLP, independent certified public
accountants, substantially in the forms heretofore
approved by the Underwriters.
(e) The Underwriters shall have received on the
Closing Date, an opinion of Andrews & Kurth L.L.P.,
counsel for the Underwriters, dated the Closing Date and
addressed to the Underwriters, in form and substance
satisfactory to the Underwriters.
(f) (i) No stop order suspending the effectiveness
of the Registration Statement shall have been issued and
no proceedings for that purpose shall be pending or, to
the knowledge of the Company or the Guarantor, shall be
contemplated by the Commission at the Closing Date;
(ii) there shall not have been any material change in the
capital stock of the Company or the Guarantor nor any
material increase in the short-term or long-term debt of
the Company or the Guarantor (other than in the ordinary
course of business) from that set forth or contemplated in
<PAGE>
-26-
the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not
have been, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto),
except as may otherwise be stated in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), any material adverse change in the
financial condition, business, prospects, properties, net
worth or results of operations of the Company and its
subsidiaries or the Guarantor and its subsidiaries taken
as a whole; and (iv) all the representations and
warranties of the Company and the Guarantor contained in
this Agreement shall be true and correct on and as of the
date of the Terms Agreement and on and as of the Closing
Date as if made on and as of the Closing Date, and the
Underwriters shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and
the chief financial officer of each of the Company and the
Guarantor (or such other officers as are acceptable to the
Underwriters), to the effect set forth in this Section
6(f) and in Section 6(g) hereof.
(g) The Company and the Guarantor shall not have
failed at or prior to the Closing Date to have performed
or complied with any of its agreements herein contained
and required to be performed or complied with by them
hereunder at or prior to the Closing Date.
(h) The Company and the Guarantor shall have
furnished or caused to be furnished to the Underwriters
such further certificates and documents as the
Representatives shall have reasonably requested.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to the Underwriters and their counsel.
Any certificate or document signed by any officer of
the Company or the Guarantor and delivered to the
Underwriters or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company and
the Guarantor to each Underwriter as to the statements
made therein. Any certificate delivered by the Company
and the Guarantor to its counsel for purposes of enabling
such counsel to render the opinions referred to in this
<PAGE>
-27-
Section 6 will also be furnished to the Underwriters and
counsel for the Underwriters.
7. Expenses. The Company and the Guarantor agree
--------
to pay the following costs and expenses and all other costs and
expenses incident to the performance by them of their
obligations hereunder: (i) the preparation, printing (or
reproduction), and filing with the Commission of the
registration statement (including financial statements and
exhibits thereto), each Prospectus and each amendment or
supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the
registration statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with the
offering and sale of the Offered Securities, (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Offered Securities, including any stamp
taxes in connection with the original issuance and sale of the
Offered Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, the Indenture, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection
with the offering of the Offered Securities; (vi) the
registration or qualification of the Offered Securities for
offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 3(f) hereof (including
the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing (or
reproduction), and delivery of the preliminary and supplemental
Blue Sky Memoranda and such registration and qualification);
(vii) the filing fees of the Underwriters in connection with
any filings required to be made with the National Association
of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of the Guarantor and
Company representatives (other than the Underwriters) in
connection with presentations to prospective purchasers of the
Offered Securities; and (ix) the fees and expenses of the
Company's and the Guarantor's accountants and the fees and
expenses of counsel (including local and special counsel) for
the Company and the Guarantor.
8. Defaulting Underwriters. If any one or more of
-----------------------
the Underwriters shall fail or refuse to purchase the Offered
Securities which it or they have agreed to purchase under the
Terms Agreement, and the aggregate principal amount of Offered
Securities which such defaulting Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the
<PAGE>
-28-
aggregate principal amount of the Offered Securities, each non-
defaulting Underwriter shall be obligated, severally, in the
proportion which the aggregate principal amount of Offered
Securities set forth opposite its name in the Terms Agreement
bears to the aggregate principal amount of Offered Securities
set forth opposite the names of all non-defaulting
Underwriters, to purchase the Offered Securities that such
defaulting Underwriter or Underwriters agreed, but failed or
refused, to purchase. If any Underwriter or Underwriters shall
fail or refuse to purchase Offered Securities and the aggregate
principal amount of Offered Securities with respect to which
such default occurs is more than one-tenth of the total
principal amount of Offered Securities and arrangements
satisfactory to the Representatives and the Company for the
purchase of such Offered Securities by one or more non-
defaulting Underwriters or other party or parties are not made
within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting
Underwriters or the Company and the Guarantor. In any such
case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such
Underwriter under this Agreement.
The agreements set forth in this Section will not
apply if the Terms Agreement specifies that such agreements
will not apply.
9. Survival of Certain Representations and
---------------------------------------
Obligations. The respective indemnities, agreements,
- -----------
representations, warranties and other statements of the
Company, the Guarantor or their officers and of the several
Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any
investigation, or statement as to the result thereof, made by
or on behalf of any Underwriter, the Company, the Guarantor or
any of their respective representatives, officers or directors
or any controlling person, and will survive delivery of and
payment for the Offered Securities. If the Terms Agreement is
terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Underwriters under
the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 7 and the respective obligations of the
Company, the Guarantor
<PAGE>
-29-
and the Underwriters pursuant to Section 5 shall remain in
effect. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than the
termination of the Terms Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv), (v), or
(vi) of Section 6(b), the Company will reimburse the Underwriters
for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Miscellaneous. All notices and other
-------------
communications hereunder shall be in writing and shall be
deemed to have been given if mailed or transmitted by any
standard form of telecommunication. Notices to the Company
shall be directed to Kelsey-Hayes Company, 11878 Hubbard Road,
Livonia, Michigan 48150, Attention: Corporate Secretary;
notices to the Guarantor shall be directed to Varity
Corporation, 672 Delaware Avenue, Buffalo, New York 14209,
Attention: Corporate Secretary; notices to the Underwriters
shall be directed to the Underwriters at the address set forth
in the Terms Agreement.
11. Parties. This Agreement and the Terms Agreement
-------
shall each inure to the benefit of and be binding upon each
Underwriter, the Company and the Guarantor and their respective
successors, heirs and legal representatives. Nothing expressed
or mentioned in this Agreement or the Terms Agreement is
intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the
Guarantor and their respective successors, heirs and legal
representatives and the controlling persons and officers and
directors referred to in Section 5 and their heirs and legal
representatives, any legal or equitable right, remedy or claim
under, by virtue of or in respect of this Agreement or the
Terms Agreement or any provision herein or therein contained.
This Agreement and the Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the Underwriters, the Company and the
Guarantor and their respective successors, heirs and legal
representatives, and said controlling persons and officers and
directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No
purchaser of Offered Securities from an Underwriter shall be
deemed to be a successor or assign by reason merely of such
purchase.
12. Applicable Law; Counterparts. This Agreement
----------------------------
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
<PAGE>
-30-
performed entirely within the State of New York. This
Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
<PAGE>
EXHIBIT I
KELSEY-HAYES COMPANY
DEBT SECURITIES
Guaranteed as to Payment of Principal
and Interest by
VARITY CORPORATION
TERMS AGREEMENT
---------------
[Date]
Kelsey-Hayes Company
11878 Hubbard Road
Livonia, Michigan 48150
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Attention: [ ]
Ladies and Gentlemen:
Referring to the Debt Securities of Kelsey-Hayes
Company (the "Company") guaranteed as to payment of principal
and interest by Varity Corporation (the "Guarantor") covered by
the joint Registration Statement on Form S-3 (No. 33- ) (the
"Registration Statement") filed by the Company and the
Guarantor with the Securities and Exchange Commission,
on the basis of the representations, warranties and
agreements contained or incorporated by reference in
this Agreement, and subject to the terms and conditions
herein set forth, the Underwriters named in the list
attached hereto agree to purchase, severally and not jointly,
and the Company and the Guarantor agree to sell to the
Underwriters, $_______ aggregate principal amount of the
Company's ___% __________ Due _______ guaranteed by the
Guarantor (the "Securities") in the respective principal
amounts set forth opposite the names of the Underwriters on the
list attached hereto.
The price at which the Securities shall be purchased
from the Company by the Underwriters shall be ___% of the
principal amount thereof. The Closing Date shall be _________,
199_, at ___ A.M., at the offices of ____________________.
<PAGE>
-2-
The Securities will have the following terms:
Title:
Maturity:
Interest Rate:
Interest Payment Dates:
Additional Terms:
All provisions contained in the Kelsey-Hayes Company
Standard Underwriting Agreement Provisions ("Standard
Provisions"), a copy of which you have previously received, are
herein incorporated by reference in their entirety and shall be
deemed to be a part of this Terms Agreement to the same extent
as if the Standard Provisions had been set forth in full herein
[except that the obligations and agreements set forth in
Section 8 ("Default of Underwriters") of the Underwriting
Agreement shall not apply to the obligations of the
Underwriters to purchase the above Securities]. Terms defined
in the Standard Provisions are used herein as therein defined.
The Securities will be made available for checking
and packaging at the office of ________________________ at
least 24 hours prior to the Closing Date.
We represent that we are authorized to act for the
several Underwriters named in Schedule A hereto in connection
with this financing and any action under this Agreement by any
of us will be binding upon all the Underwriters.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to us
the enclosed duplicate hereof, whereupon it will become a
binding agreement among the Company, the Guarantor and the
several Underwriters in accordance with its terms.
Very truly yours,
[Names of Representatives]
On behalf of themselves and
as Representatives of the
Several Underwriters
By:__________________________
Name:
Title:
<PAGE>
-3-
The foregoing Terms Agreement
is hereby confirmed as of the
date first above written
KELSEY-HAYES COMPANY
By___________________________
Name:
Title:
VARITY CORPORATION
By___________________________
Name:
Title:
<PAGE>
ANNEX I
DELAYED DELIVERY CONTRACT
-------------------------
, 199
Kelsey-Hayes Company
11878 Hubbard Road
Livonia, Michigan 48150
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Attention: [ ]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from
Kelsey-Hayes Company, a Delaware corporation (the "Company"),
and Varity Corporation, a Delaware corporation (the
"Guarantor"), and the Company and the Guarantor agree to sell
to the undersigned,
$
principal amount of the Company's [insert title of securities]
(the "Securities") guaranteed as to payment of principal and
interest by the Guarantor, offered by the Company's and the
Guarantor's Prospectus dated , 1995 and a Prospectus
Supplement dated , 199 relating thereto, receipt
of copies of which is hereby acknowledged, at % of the
principal amount thereof plus accrued interest, if any, from
, 199 , and on the further terms and conditions set
forth in this Delayed Delivery Contract ("Contract").
The undersigned will purchase from the Company and
the Guarantor as of the date hereof, for delivery on the dates
set forth below, Securities in the principal amounts set forth
below:
Delivery Date Principal Amount
------------- ----------------
Each of such delivery dates is hereinafter referred to as a
"Delivery Date."
<PAGE>
-2-
Payment for the Securities that the undersigned has
agreed to purchase for delivery on each Delivery Date shall be
made to the Company or its order by certified or official bank
check in New York Clearing House (next day) funds at the office
of at 10:00 A.M. on such
Delivery Date upon delivery to the undersigned of the
Securities to be purchased by the undersigned on such Delivery
Date in definitive fully registered form and in such
denominations and registered in such names as the undersigned
shall designate by written or telegraphic communication
addressed to the Company not less than five business days prior
to such Delivery Date.
It is expressly agreed that the provisions for
delayed delivery and payment are for the sole convenience of
the undersigned; that the purchase hereunder of Securities is
to be regarded in all respects as a purchase as of the date of
this Contract subject to the first paragraph hereof with
respect to the accrual of interest; that the obligation of the
Company and the Guarantor to make delivery of and accept
payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on each Delivery
Date shall be subject only to the conditions that
(1) investment in the Securities shall not at such Delivery
Date be prohibited under the laws of any jurisdiction in the
United States to which the undersigned is subject and (2) the
Company shall have sold to the Underwriters the principal
amount of the Securities less the principal amount thereof
covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of
the date hereof, prohibited under the laws of any jurisdiction
to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the
Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be
binding upon the parties hereto and their respective successors
and permitted assigns, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the acceptance of any such
Contract is in the Company's and the Guarantor's sole
discretion and, without limiting the foregoing, need not be on
a first-come, first-served basis. If this Contract is
acceptable to the Company and the Guarantor, it is requested
that the Company
<PAGE>
-3-
and the Guarantor sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract
between the Company, the Guarantor and the undersigned when such
counterpart is so mailed or delivered.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable
to contracts made and to be performed entirely within the State
of New York.
Very truly yours,
___________________________
(NAME OF PURCHASER)
By_________________________
Name:
Title:
___________________________
___________________________
(Address of Purchaser)
Accepted, as of the above date
KELSEY-HAYES COMPANY
By____________________________
Name:
Title:
VARITY CORPORATION
By____________________________
Name:
Title:
<PAGE>
EXHIBIT 1.2
VARITY CORPORATION
DEBT SECURITIES
STANDARD UNDERWRITING AGREEMENT PROVISIONS
------------------------------------------
Varity Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell from time to time its
debt securities, consisting of (i) unsecured senior debt
securities (the "Senior Debt Securities") and (ii) unsecured
subordinated debt securities (the "Subordinated Debt
Securities" and, together with the Senior Debt Securities, the
"Securities"). The Securities are registered under the
registration statement referred to in Section 1 hereof. The
Senior Debt Securities will be issued under an indenture (as
amended or supplemented, the "Senior Indenture") to be entered
into between the Company and Manufacturers and Traders Trust
Company, a New York banking corporation, as trustee (the
"Senior Trustee"). The Subordinated Debt Securities will be
issued under an indenture (as amended or supplemented, the
"Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures") between the Company and
Manufacturers and Traders Trust Company, a New York banking
corporation, as trustee (the "Subordinated Trustee" and,
together with the Senior Trustee, the "Trustees"). The
Securities may be issued in one or more series and may have
varying designations, denominations, interest rates and payment
dates, maturities, redemption provisions, selling prices and
other terms. The basic provisions set forth herein are
intended to be incorporated by reference in a terms agreement
of the type referred to below relating to the designation and
series of Securities to be issued and sold by the Company
pursuant thereto (the "Offered Securities") to the underwriter
or several underwriters named therein (the "Underwriters").
The Terms Agreement, which shall be in the form of Exhibit I
hereto relating to the Offered Securities (the "Terms Agree-
ment"), together with the provisions hereof incorporated
therein by reference (which provisions shall not become
effective until so incorporated by reference), is herein
referred to as this "Agreement." If the Underwriters consist
only of the firm or firms referred to in the Terms Agreement as
Representative or Representatives, then the terms "Underwriters" and
<PAGE>
-2-
"Representatives," as used herein, shall each be deemed to
refer to such firm or firms.
The obligations of the Underwriters to purchase, and
the Company to sell, the Offered Securities are evidenced by
the Terms Agreement delivered at the time the Company
determines to sell the Offered Securities. The Terms Agreement
specifies the firm or firms which will be Underwriters, the
amount of the Offered Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters
for the Offered Securities, the public offering price, if any,
of the Offered Securities and any terms of the Offered
Securities not otherwise specified in the applicable Indenture
(including, but not limited to, designations, denominations,
covenants, interest rates and payment dates, maturity,
redemption provisions and sinking fund requirements). The
Terms Agreement specifies any details of the terms of the
offering that should be reflected in a post-effective amendment
to the applicable Registration Statement or the Prospectus
Supplement (each as hereinafter defined).
1. Registration Statement and Prospectus. The
-------------------------------------
Company and Kelsey-Hayes Company, a subsidiary of the Company,
have prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder
(collectively, the "Act"), a joint registration statement on
Form S-3 (the "registration statement"), including a prospectus
relating to the Offered Securities. The term "Registration
Statement," as used in this Agreement, means the registration
statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, and as thereafter
amended by any post-effective amendment at the date of any
Terms Agreement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement, as supplemented to reflect the terms of
the Offered Securities and the plan of distribution thereof, in
the form in which it shall be filed with the Commission
pursuant to Rule 424(b). Any reference in this Agreement to
the registration statement, the Registration Statement or any
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of the registration
statement, the Registration Statement or any Prospectus, as the
case may be, and any reference to any amendment or supplement
to the registration statement, the Registration Statement or
any Prospectus shall be deemed to
<PAGE>
-3-
refer to and include any documents filed after such date under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which, upon filing, are incorporated by reference therein, as required
by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are
incorporated by reference in the registration statement, the
Registration Statement, any Prospectus, or any amendment or supplement
thereto, but does not include any documents incorporated by reference
in the Registration Statement, any Prospectus, or any amendment or
supplement thereto subsequent to the Closing Date (as defined in
Section 2 hereof).
2. Sale and Delivery to the Underwriters; Closing.
----------------------------------------------
The obligation of the Underwriters to purchase the Offered
Securities will be evidenced by a Terms Agreement at the time
the Company determines to sell the Securities. The Terms
Agreement will incorporate by reference the provisions of this
Agreement, except as otherwise provided therein, and will
specify (1) the firm or firms which will be Underwriters,
(2) the names of any Representatives, (3) the principal amount
of Offered Securities to be purchased by each Underwriter and
the purchase price to be paid by the Underwriters, (4) the
terms of the Offered Securities not already specified in the
Indenture, (5) whether any of the Offered Securities may be
sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below), (6) the time and date on which
delivery of the Offered Securities will be made to the
Representatives for the accounts of the several Underwriters
against payment by the several Underwriters through the
Representatives of the purchase price in New York Clearing
House funds (such time and date, or such other time and date
not later than seven full business days thereafter as the
Representatives and the Company agree to as to time and date
for payment and delivery, being herein and in the Terms
Agreement referred to as the "Closing Date") and (7) the place
of delivery and payment.
The obligations of the Underwriters to purchase the
Offered Securities will be several and not joint. The Offered
Securities delivered to the Underwriters on the Closing Date
will be in definitive fully registered form, in such
denominations and registered in such names as the
Representatives may request.
Certificates for the Offered Securities shall be
registered in such names and in such denominations as the
Representatives shall request by written notice, it being understood
<PAGE>
-4-
that a facsimile transmission shall be deemed written notice for
such purpose, prior to 1:00 P.M., New York City time, on the third
business day preceding the Closing Date.
If the Terms Agreement provides for sales of
Securities pursuant to Delayed Delivery Contracts, the Company
authorizes the Underwriters to solicit offers to purchase
Securities pursuant to delayed delivery contracts substantially
in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings
banks, insurance companies, pension funds, investment companies
and educational and charitable institutions. On the Closing
Date, the Company will pay, as compensation, to the
Representatives for the accounts of the Underwriters, the fee
(expressed as a discount) set forth in such Terms Agreement in
respect of the principal amount of Securities to be sold
pursuant to Delayed Delivery Contracts ("Contract Securities").
The Underwriters will not have any responsibility in respect of
the validity or the performance of any Delayed Delivery
Contract. If the Company executes and delivers a Delayed
Delivery Contract, the Contract Securities will be deducted
from the Securities to be purchased by the several Underwriters
and the aggregate principal amount of Securities to be
purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Securities set forth
opposite each Underwriter's name in such Terms Agreement,
except to the extent that the Representatives determine that
such reduction shall be otherwise than pro rata and so advise
the Company. The Company will advise the Representatives not
later than the business day prior to the Closing Date of the
principal amount of Contract Securities.
3. Agreements of the Company. The Company agrees
-------------------------
with each Underwriter as follows:
(a) If, at the time any Terms Agreement is executed
and delivered, it is necessary for a post-effective
amendment to the Registration Statement to be declared
effective before the offering of the Offered Securities
may commence, the Company will endeavor to cause such
post-effective amendment to become effective as soon as
possible and will advise the Underwriters promptly and, if
requested, will confirm such advice in writing, when the
Company receives notice (written or oral) that such
post-effective amendment has become effective.
<PAGE>
-5-
(b) The Company will advise the Underwriters
promptly and, if requested, will confirm such advice in
writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement
or any Prospectus or for additional information; (ii) upon
knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or of the suspension of
qualification of the Offered Securities for offering or
sale in any jurisdiction or of the initiation of any
proceeding for such purpose; and (iii) within the period
of time referred to in paragraph (e) below, of any change
in the Company's financial condition, business, prospects,
properties, net worth or results of operations, or of the
happening of any event, including the filing of any
information, documents or reports pursuant to the Exchange
Act, that makes any statement made in the Registration
Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any
additions to or changes in the Registration Statement or
the Prospectus (as then amended or supplemented) in order
to state a material fact required by the Act to be stated
therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If
at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration
Statement, the Company, upon knowledge thereof, will make
every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(c) The Company will furnish to each of the
Representatives and to counsel to the Representatives,
without charge (i) one signed copy of the registration
statement as originally filed with the Commission and of
each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and (ii) such
number of conformed copies of the Registration Statement
as originally filed and of each amendment thereto, but
without exhibits, as the Representatives may reasonably
request.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement
to the Prospectus of which the Representatives shall not
previously have been advised or to which the
<PAGE>
-6-
Representatives shall reasonably object in writing after
being so advised.
(e) If during the period when the Prospectus is
required to be delivered under the Act any event shall
occur that in the judgment of the Company or in the
opinion of counsel for the Underwriters is required to be
set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to
make the statements therein, in the light of the
circumstances under which they were made, not misleading,
or if it is necessary to supplement or amend the
Prospectus in order to comply with the Act or any other
law, the Company will forthwith prepare and, subject to
the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto,
and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof.
(f) The Company will cooperate with the Underwriters
and with counsel for the Underwriters in connection with
the registration or qualification of the Offered
Securities for offering and sale by the several
Underwriters and by dealers under the securities or Blue
Sky laws of such jurisdictions as the Representatives may
reasonably designate and will file such consents to
service of process or other documents necessary or
appropriate in order to effect such registration or
qualification; provided that in no event shall the Company
be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action
which would subject it to service of process in suits,
other than those arising out of the offering or sale of
the Securities, in any jurisdiction where it is not now so
subject.
(g) The Company will make generally available to its
security holders a consolidated earnings statement, which
need not be audited, covering a twelve-month period
commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter,
as soon as reasonably practicable after the end of such
period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(h) During the period of two years hereafter, the
Company will furnish to the Underwriters (i) as soon as
<PAGE>
-7-
available, a copy of each report of the Company mailed to
stockholders or filed with the Commission or the New York
Stock Exchange, and (ii) from time to time such other
information concerning the Company as the Underwriters may
reasonably request.
(i) Between the date of any Terms Agreement and the
Closing Date specified in such agreement, the Company will
not, without the Representatives' prior consent, offer,
sell, contract to sell or otherwise dispose of debt
securities of the Company having a maturity of more than
one year from the date of issue covered by the
Registration Statement or another registration statement
filed by the Company under the Act, except that the
Company may offer, sell, contract to sell or otherwise
dispose of obligations of the Company in respect of
industrial revenue bonds or similar securities exempt from
federal income taxes.
(j) The Company will apply the net proceeds from the
sale of the Offered Securities hereunder substantially in
accordance with the description set forth in the
Prospectus.
4. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to each Underwriter that:
(a) The Registration Statement and any post-
effective amendment thereto have been declared effective
by 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) Each Prospectus included as part of the
registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act and did
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
except that this representation and warranty does not
apply to statements in or omissions from such Prospectus
(or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use
<PAGE>
-8-
therein. The Commission has not issued any order
preventing or suspending the use of any Prospectus.
(c) The Company and the transactions contemplated by
this Agreement meet the requirements for using Form S-3
under the Act. The registration statement in the form in
which it became effective and also in such form as it may
be when any post-effective amendment thereto shall become
effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under
Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and will not at any such times contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading; except that
this representation and warranty does not apply to
statements in or omissions from the registration statement
or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by an
Underwriter expressly for use therein.
(d) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was
filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such
document when it was filed (or, if any amendment with
respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading; and no such further
document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a
material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the
State of Delaware with full corporate power and authority
to own, lease and operate its properties and to conduct
<PAGE>
-9-
its business, and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure so to register or
qualify does not have a material adverse effect on the
financial condition, business, properties, net worth or
results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect").
(f) Each Material Subsidiary (as defined below) is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its organization, with
full corporate power and authority to own, lease and
operate its properties and to conduct its business, except
where the failure of a Material Subsidiary to be duly
organized and existing or to have full corporate power and
authority would not have a Material Adverse Effect; each
Material Subsidiary is duly registered, qualified or
licensed to conduct its business and is in good standing
in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register, be licensed or qualify would not have a
Material Adverse Effect; all the outstanding shares of
capital stock of each Material Subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or
indirectly through one of its other subsidiaries, free and
clear of any lien, adverse claim, security interest,
equity, or other encumbrance; and there are no outstanding
rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, shares of capital
stock or other equity interests in any Material
Subsidiary. As used herein, the term "Material
Subsidiaries" means the following subsidiaries of the
Company: Varity Holdings Limited and Perkins Group
Limited, each a corporation organized under the laws of
the United Kingdom; Dayton Walther Corporation, an Ohio
corporation; K-H Corporation, a Delaware corporation; and
Kelsey-Hayes Company, a Delaware corporation.
(g) The Offered Securities have been duly authorized
by the Company and, when executed by the Company and
authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due
authorization, execution and delivery thereof by the
<PAGE>
-10-
Trustee thereunder), and delivered to and paid for by the
Underwriters in accordance with the terms of this
Agreement and the Terms Agreement and the applicable
Indenture, will constitute the valid and binding
obligations of the Company enforceable against the Company
in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law).
(h) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened,
against the Company or any of its subsidiaries which are
reasonably likely to have a Material Adverse Effect, or to
which the Company or any of its subsidiaries, or to which
any of their respective properties, is subject which are
material to the Company and its subsidiaries, taken as a
whole, that are required to be described in the
Registration Statement or the Prospectus, but are not
described as required, and there are no agreements,
contracts, indentures, leases or other instruments
relating to the Company or its subsidiaries that are
required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that
are not described or filed as required by the Act or the
Exchange Act. The descriptions of the terms of any such
contracts or documents contained in the Registration
Statement, the Prospectus or any Incorporated Documents
are correct in all material respects.
(i) Neither the Company nor any of its subsidiaries
is (i) in violation of its certificate or articles of
incorporation or bylaws, or other organizational
documents, (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries or of
any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, or
(iii) in default in any material respect in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture,
lease or instrument to which the Company or any of its
subsidiaries is a party or by which
<PAGE>
-11-
any of them or any of their respective properties may be
bound, and no condition or state of facts exists, which,
with the passage of time or the giving of notice or both,
would constitute such a default, except in the case of
clauses (i), (ii) and (iii) where any such violation or
default, or violations and defaults in the aggregate,
would not have a Material Adverse Effect.
(j) None of the issuance and sale of the Offered
Securities, the execution, delivery or performance of this
Agreement, the Terms Agreement, the Indenture relating to
the Offered Securities and any Delayed Delivery Contract
by the Company, or the consummation by the Company of the
transactions contemplated hereby and thereby to be
consummated by the Company (i) requires any consent,
approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official
(except such as may be required for the registration of
the Securities under the Act and the Exchange Act, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected
in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
documents, of the Company or any of its subsidiaries or
(ii) conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, any
material agreement, indenture, lease or instrument to
which the Company or any of its subsidiaries is a party or
by which any of them or any of their respective properties
may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of its
subsidiaries or any of their respective properties, or
will 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 the terms
of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any
of the property or assets of any of them is subject,
except in the case of clauses (i) and (ii) where any such
conflict, breach, default or violation, or conflicts,
breaches, defaults or violations in the aggregate, would
not have a Material Adverse Effect.
<PAGE>
-12-
(k) The accountants who have certified or shall
certify the financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) were
or shall be, for the periods in which they certified or
certify such financial statements, independent public
accountants as required by the Act.
(l) The historical financial statements, together
with related schedules and notes, included or incorporated
by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position,
results of operations, cash flows and changes in
stockholders' equity of the Company and its subsidiaries
on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which
they apply; such statements and related schedules and
notes have been prepared in accordance with United States
generally accepted accounting principles (as described in
the Prospectus) consistently applied throughout the
periods involved, except as disclosed therein; and the
other financial and statistical information and data
included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and
the books and records of the Company and its subsidiaries.
(m) The execution and delivery of, and the
performance by the Company of its obligations under, each
of this Agreement, the Terms Agreement, the Indenture
relating to the Offered Securities and any Delayed
Delivery Contract have been duly and validly authorized,
executed and delivered by the Company and constitutes the
valid and legally binding agreement of the Company
enforceable against the Company, in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and
remedies generally and subject to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). The Indenture has been
duly qualified under the Trust Indenture Act.
<PAGE>
-13-
(n) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of its
subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to
the Company and its subsidiaries taken as a whole, and
there has not been any material change in the capital
stock of the Company, or material increase in the
short-term debt or long-term debt of the Company and any
of its subsidiaries taken as a whole, or any Material
Adverse Effect.
(o) The Company and each of its subsidiaries has
good and marketable title to all property (real and
personal) described in the Prospectus as being owned by
it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are
described in the Registration Statement and the Prospectus
or in a document filed as an exhibit to the Registration
Statement and all the property described in the Prospectus
as being held under lease by each of the Company and its
subsidiaries is held by it under valid, subsisting and
enforceable leases, in each case with only such exceptions
as in the aggregate would not have a Material Adverse
Effect.
(p) The Company and each of its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits") as are
necessary to own its respective properties and to conduct
its business in the manner described in the Prospectus,
except where the failure to have any such Permit would not
have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectus; the
Company and each of its subsidiaries has fulfilled and
performed all its material obligations with respect to
such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or results in any other material
impairment of the rights of the holder of any such Permit,
except where such action would not have a Material Adverse
Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such Permits contains
any
<PAGE>
-14-
restriction that is materially burdensome to the Company and
its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries own or possess
all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any
of them or necessary for the conduct of their respective
businesses, except where the lack of such ownership or
possession would not have a Material Adverse Effect, and
the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the
Company or any of its subsidiaries with respect to the
foregoing.
5. Indemnification and Contribution. (a) The
--------------------------------
Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims,
damages, liabilities, judgments and expenses (including
reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus
or in any amendment or supplement thereto, or arising out of or
based upon 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, except insofar as
such losses, claims, damages, liabilities, judgments or
expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the
Company by or on behalf of any Underwriter; provided, however,
that the indemnification contained in this paragraph (a) with
respect to any Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage,
liability, judgment or expense arising from the sale of the
Offered Securities by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations
thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact
contained in any preliminary prospectus was corrected in the
Prospectus.
<PAGE>
-15-
The foregoing indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be
brought against any Underwriter or any person controlling any
Underwriter in respect of which indemnity may be sought against
the Company, such Underwriter or such controlling person shall
promptly notify the Company, and the Company shall assume the
defense thereof, including the employment of counsel and
payment of all reasonable fees and expenses of such counsel.
Any such Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but
the reasonable fees and expenses of such counsel shall be at
the expense of such Underwriter or such controlling person,
rather than the Company, unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has
failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such
controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company by the
same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by
the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company
shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the
Company shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of only one separate firm
of attorneys (in addition to any local counsel, not more than
one per jurisdiction) at any time for all such Underwriters and
controlling persons, which firm shall be designated in writing
by the Underwriters, and that all such fees and expenses shall
be reimbursed promptly as they are incurred. The Company shall
not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled
with such written consent, or if there be a final judgment for
the plaintiff in any such action, suit or proceeding, the
Company agrees to indemnify and hold harmless any Underwriter,
to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage,
<PAGE>
-16-
liability, judgment or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any
time an Underwriter or any person controlling an Underwriter is
entitled to employ separate counsel pursuant to the second
sentence of this Section 5(b) and shall have requested the
Company in writing to reimburse such Underwriter or such
controlling person for fees and expenses of counsel, the
Company agrees that it shall be liable for any settlement of
any proceeding effected by such Underwriter or such controlling
person and for which the Company is liable pursuant to Section
5(a) without its written consent if (i) such settlement is
entered into more than ten (10) business days after receipt by
the Company of the aforesaid request or (ii) the Company shall
not have reimbursed such Underwriter or such controlling person
in accordance with such request prior to the date of such
settlement. The Company shall not, without the prior written
consent of such Underwriter or such controlling person, effect
any settlement of any pending or threatened proceeding in
respect of which any Underwriter or any person controlling an
Underwriter is or could have been a party and indemnity could
have been sought hereunder by such Underwriter or such
controlling person, unless such settlement includes an
unconditional release of such Underwriter or such controlling
person from all liability on claims that are subject matter of
such proceeding.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, officers who sign the Registration Statement, and
any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to
such Underwriter furnished in writing by or on behalf of such
Underwriter through the Representative(s) expressly for use in
the Registration Statement, the Prospectus or any amendment or
supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, officers, or
any such controlling person based on the Registration
Statement, the Prospectus or any amendment or supplement
thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to the
Company by paragraph (b) above (except that if the Company
shall have assumed the defense thereof such Underwriter shall
not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter), and the
<PAGE>
-17-
Company, its directors, officers, and any such controlling
person shall have the rights and duties given to the Underwriters
by paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this
Section 5 is unavailable to, or insufficient to hold harmless,
an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities, judgments
or expenses referred to therein, then an 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, judgments
or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand
and the Underwriters on the other hand from the offering of the
Offered Securities, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above, but also the relative
fault of the Company on the one hand and the Underwriters on
the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages, liabilities,
judgments or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company on the one hand or by the Underwriters
on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to
this Section 5 were determined by a pro rata allocation (even
if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in
<PAGE>
-18-
paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities, judgments and expenses referred to in paragraph
(d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating any claim or defending any such action, suit
or proceeding. Notwithstanding the provisions of this
Section 5, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the
Offered Securities underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 5 are several in proportion
to their underwriting obligations and not joint.
(f) Any losses, claims, damages, liabilities,
judgments or expenses for which an indemnified party is
entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the
indemnified party promptly as such losses, claims, damages,
liabilities, judgments or expenses are incurred. The indemnity
and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the
Company, its directors or officers, or any person controlling
the Company, (ii) acceptance of any Offered Securities and
payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors
or officers, or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 5.
6. Conditions of Underwriters' Obligations. The
---------------------------------------
several obligations of the Underwriters to purchase the Offered
Securities hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement
<PAGE>
-19-
or a post-effective amendment thereto to be declared
effective before the offering of the Offered Securities
may commence, the registration statement or such post-
effective amendment shall have become effective not later
than 5:30 P.M., New York City time, on the first business
day following the date of the applicable Terms Agreement,
or at such later date and time as shall be consented to in
writing by the Representatives, and all filings, if any,
required by Rule 424 under the Act shall have been timely
made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or,
to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the
Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise)
shall have been complied with.
(b) Subsequent to the execution of any applicable
Terms Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change,
in or affecting the financial condition, business,
properties, net worth, or results of operations of the
Company and its subsidiaries taken as a whole, from the
date of the latest balance sheet included or incorporated
by reference in the Prospectus in each case not
contemplated by the Prospectus, which is material and
adverse; (ii) any downgrading in, or notice of any
proposal to downgrade, the rating of the Company's debt
securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule
436(g) under the Act) or any public announcement that any
such organization has under surveillance or review with
negative implications the rating of the Company's debt
securities; (iii) any suspension or limitation of trading
in securities generally on or by the New York Stock
Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, or any setting of minimum prices
for trading on such exchange; (iv) any suspension of
trading of any securities of the Company on any exchange;
(v) any banking moratorium declared by Federal or New York
authorities; or (vi) the outbreak or escalation of
hostilities involving the United States or the declaration
by the United States of a national emergency or war, if
the effect of any such event set forth in (i) through
(vi), in the judgment of the
<PAGE>
-20-
Representatives, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated
by the Prospectus.
(c) The Underwriters shall have received on the
Closing Date, an opinion of Cahill Gordon & Reindel (a
partnership including a professional corporation), counsel
for the Company, dated the Closing Date and addressed to
the Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing
under the laws of the State of Delaware with full
corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus;
(ii) Any Delayed Delivery Contract has been duly
authorized, executed and delivered by the Company;
(iii) The Indenture relating to the Offered
Securities has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in
accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, fraudulent
transfer and similar laws affecting creditors' rights
generally and by general equitable principles
(regardless of whether enforcement is sought in a
proceeding in equity or at law);
(iv) The Offered Securities have been duly
authorized and, when executed and authenticated in
accordance with the Indenture and delivered to the
Underwriters against payment therefor in accordance
with the terms of this Agreement, will be valid and
binding obligations of the Company, enforceable in
accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, fraudulent
transfer and similar laws affecting creditors' rights
generally and by general equitable principles
(regardless of whether enforcement is sought in a
proceeding in equity or at law) and will be entitled
to the benefits of the Indenture;
<PAGE>
-21-
(v) The Registration Statement and all post-
effective amendments, if any, have become effective
under the Act and, to the best knowledge of such
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance
with Rule 424(b);
(vi) The Company has all requisite corporate
power and authority to enter into this Agreement, the
Terms Agreement, the Indenture relating to the
Offered Securities, and any Delayed Delivery Contract
to which it is a party and to issue and deliver the
Offered Securities to the Underwriters;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid,
legal and binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except (A) as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and (B) that rights to indemnity
and contribution hereunder may be limited by Federal
or state securities laws or the public policy
underlying such laws;
(viii) The Offered Securities and the Indenture
conform in all material respects to the descriptions
thereof contained in the Registration Statement and
the Prospectus;
(ix) None of the offer, sale, or delivery of the
Offered Securities, or the execution, delivery or
performance of this Agreement, the Indenture relating
to the Offered Securities, and any Delayed Delivery
Contract, nor compliance by the Company with all the
provisions of this Agreement and the Indenture
applicable to it, nor consummation by the Company of
the transactions contemplated hereby conflicts or
will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate of
<PAGE>
-22-
incorporation or bylaws of the Company or any
indenture or other debt instrument or any other
material agreement or lease, known to such counsel,
to which the Company is a party or by which any
of them or any of their respective properties is
bound or that is an exhibit to the Registration
Statement or to any Incorporated Document, which
conflict, breach or default would have a Material
Adverse Effect, or, except as disclosed in the
Registration Statement, will result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company under any such
indenture, debt instrument, agreement or lease which
lien, charge or encumbrance would have a Material
Adverse Effect, nor will any such action result in
any violation of any existing law, regulation,
ruling (assuming compliance with all applicable
state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel
after reasonable inquiry, applicable to the
Company or any of its properties, which violation
would have a Material Adverse Effect;
(x) No consent, approval, authorization or
other order of, or registration or filing with, any
Delaware, New York State or Federal court, regulatory
body, administrative agency or other governmental
body, agency, or official is required on the part of
the Company (except as have been obtained or made
under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws
governing the purchase and distribution of the
Securities) for the valid issuance and sale of the
Offered Securities to the Underwriters as
contemplated by this Agreement; and
(xi) The Registration Statement and the
Prospectus and any supplements or amendments thereto
(except for the financial statements, schedules and
notes thereto and other financial and statistical
data included therein, as to which such counsel need
not express any opinion) comply as to form in all
material respects with the requirements of the Act;
and each of the Incorporated Documents (except for
the financial statements, schedules and notes thereto
and other financial and statistical data included
therein, as to which such counsel need not express
any opinion), when they were filed (or, if an
amendment with respect to any Incorporated Document was
<PAGE>
-23-
filed, when such amendment was filed) complied as to
form in all material respects with the Exchange Act.
In addition, such counsel shall state that such
counsel participated in conferences with officers and
other representatives of the Company, representatives of
the independent public accountants and representatives of
the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement
and Prospectus (except as otherwise indicated above) on
the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and
representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that
either the Registration Statement or any amendment
thereto, at the time the Registration Statement or
amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement
thereto as of its date, or the Registration Statement or
the Prospectus and any amendment or supplement thereto as
of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(it being understood that such counsel need express no
opinion with respect to the financial statements and
schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
The opinion of such counsel may be limited to the
laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the
United States. In rendering their opinion as aforesaid,
such counsel may, as to factual matters, rely upon written
certificates or statements of officers of the Company and
public officials.
(d) The Underwriters shall have received letters
dated the date of the Terms Agreement and the Closing Date
from KPMG Peat Marwick LLP, independent certified public
accountants, substantially in the forms heretofore
approved by the Underwriters.
<PAGE>
-24-
(e) The Underwriters shall have received on the
Closing Date, an opinion of Andrews & Kurth L.L.P.,
counsel for the Underwriters, dated the Closing Date and
addressed to the Underwriters, in form and substance
satisfactory to the Underwriters.
(f) (i) No stop order suspending the effectiveness
of the Registration Statement shall have been issued and
no proceedings for that purpose shall be pending or, to
the knowledge of the Company, shall be contemplated by the
Commission at the Closing Date; (ii) there shall not have
been any material change in the capital stock of the
Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary
course of business) from that set forth or contemplated in
the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not
have been, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto),
except as may otherwise be stated in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), any material adverse change in the
financial condition, business, prospects, properties, net
worth or results of operations of the Company and its
subsidiaries taken as a whole; and (iv) all the
representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the
date of the Terms Agreement and on and as of the Closing
Date as if made on and as of the Closing Date, and the
Underwriters shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and
the chief financial officer of the Company (or such other
officers as are acceptable to the Underwriters), to the
effect set forth in this Section 6(f) and in Section 6(g)
hereof.
(g) The Company shall not have failed at or prior to
the Closing Date to have performed or complied with any of
its agreements herein contained and required to be
performed or complied with by them hereunder at or prior
to the Closing Date.
(h) The Company shall have furnished or caused to be
furnished to the Underwriters such further certificates
and documents as the Underwriters shall have reasonably
requested.
<PAGE>
-25-
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to the Underwriters and their counsel.
Any certificate or document signed by any officer of
the Company and delivered to the Underwriters or to
counsel for the Underwriters, shall be deemed a
representation and warranty by the Company to each
Underwriter as to the statements made therein. Any
certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinions
referred to in this Section 6 will also be furnished to
the Underwriters and counsel for the Underwriters.
7. Expenses. The Company agrees to pay the
--------
following costs and expenses and all other costs and expenses
incident to the performance by it of its obligations hereunder:
(i) the preparation, printing (or reproduction), and filing
with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prospectus and
each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies
of the registration statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with the
offering and sale of the Offered Securities, (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Offered Securities, including any stamp
taxes in connection with the original issuance and sale of the
Offered Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, the Indenture, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection
with the offering of the Offered Securities; (vi) the
registration or qualification of the Offered Securities for
offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 3(f) hereof (including
the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing (or
reproduction), and delivery of the preliminary and supplemental
Blue Sky Memoranda and such registration and qualification);
(vii) the filing fees of the Underwriters in connection with
any filings required to be made with the National Association
of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of the Company
<PAGE>
-26-
representatives (other than the Underwriters) in connection
with presentations to prospective purchasers of the Offered
Securities; and (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including
local and special counsel) for the Company.
8. Defaulting Underwriters. If any one or more of
-----------------------
the Underwriters shall fail or refuse to purchase the Offered
Securities which it or they have agreed to purchase under the
Terms Agreement, and the aggregate principal amount of Offered
Securities which such defaulting Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Offered Securities, each non-
defaulting Underwriter shall be obligated, severally, in the
proportion which the aggregate principal amount of Offered
Securities set forth opposite its name in the Terms Agreement
bears to the aggregate principal amount of Offered Securities
set forth opposite the names of all non-defaulting
Underwriters, to purchase the Offered Securities that such
defaulting Underwriter or Underwriters agreed, but failed or
refused, to purchase. If any Underwriter or Underwriters shall
fail or refuse to purchase Offered Securities and the aggregate
principal amount of Offered Securities with respect to which
such default occurs is more than one-tenth of the total
principal amount of Offered Securities and arrangements
satisfactory to the Representatives and the Company for the
purchase of such Offered Securities by one or more non-
defaulting Underwriters or other party or parties are not made
within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting
Underwriters or the Company. In any such case that does not
result in termination of this Agreement, either the
Underwriters or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such
Underwriter under this Agreement.
The agreements set forth in this Section will not
apply if the Terms Agreement specifies that such agreements
will not apply.
9. Survival of Certain Representations and
---------------------------------------
Obligations. The respective indemnities, agreements,
- -----------
representations, warranties and other statements of the
Company or its
<PAGE>
-27-
officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the
result thereof, made by or on behalf of any Underwriter, the
Company, or any of its representatives, officers or directors
or any controlling person, and will survive delivery of and
payment for the Offered Securities. If the Terms Agreement is
terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Underwriters under
the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 7 and the respective obligations of the
Company and the Underwriters pursuant to Section 5 shall remain
in effect. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than the
termination of the Terms Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv), (v),
or (vi) of Section 6(b), the Company will reimburse the Under-
writers for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) reasonably incurred by them
in connection with the offering of the Offered Securities.
10. Miscellaneous. All notices and other
-------------
communications hereunder shall be in writing and shall be
deemed to have been given if mailed or transmitted by any
standard form of telecommunication. Notices to the Company
shall be directed to Varity Corporation, 672 Delaware Avenue,
Buffalo, New York 14209, Attention: Corporate Secretary;
notices to the Underwriters shall be directed to the
Underwriters at the address set forth in the Terms Agreement.
11. Parties. This Agreement and the Terms Agreement
-------
shall each inure to the benefit of and be binding upon each
Underwriter, the Company and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in
this Agreement or the Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than
the Underwriters, the Company and their respective successors,
heirs and legal representatives and the controlling persons and
officers and directors referred to in Section 5 and their heirs
and legal representatives, any legal or equitable right, remedy
or claim under, by virtue of or in respect of this Agreement or
the Terms Agreement or any provision herein or therein
contained. This Agreement and the Terms Agreement and all
conditions and provisions hereof and thereof are intended to be
for the sole and exclusive benefit of the Underwriters, the
Company and their respective successors, heirs and legal
<PAGE>
-28-
representatives, and said controlling persons and officers and
directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No
purchaser of Offered Securities from an Underwriter shall be
deemed to be a successor or assign by reason merely of such
purchase.
12. Applicable Law; Counterparts. This Agreement
----------------------------
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed entirely within the State of New York. This
Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
<PAGE>
EXHIBIT I
VARITY CORPORATION
DEBT SECURITIES
TERMS AGREEMENT
---------------
[Date]
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Attention: [ ]
Ladies and Gentlemen:
Referring to the Debt Securities of Varity
Corporation (the "Company") covered by the joint Registration
Statement on Form S-3 (No. 33- ) (the "Registration
Statement") filed by the Company and Kelsey-Hayes Company, a
subsidiary of the Company, with the Securities and Exchange
Commission, on the basis of the representations, warranties
and agreements contained or incorporated by reference in this
Agreement, and subject to the terms and conditions herein set
forth, the Underwriters named in the list attached hereto
agree to purchase, severally and not jointly, and the Company
agrees to sell to the Underwriters, $_______ aggregate
principal amount of the Company's ___% __________ Due _______
(the "Securities") in the respective principal amounts set
forth opposite the names of the Underwriters on the list
attached hereto.
The price at which the Securities shall be purchased
from the Company by the Underwriters shall be ___% of the
principal amount thereof. The Closing Date shall be _________,
199_, at ___ A.M., at the offices of ____________________.
The Securities will have the following terms:
Title:
Maturity:
Interest Rate:
Interest Payment Dates:
Additional Terms:
All provisions contained in the Varity Corporation
Standard Underwriting Agreement Provisions ("Standard
Provisions"), a copy of which you have previously received, are
<PAGE>
-2-
herein incorporated by reference in their entirety and shall be
deemed to be a part of this Terms Agreement to the same extent
as if the Standard Provisions had been set forth in full herein
[except that the obligations and agreements set forth in
Section 8 ("Default of Underwriters") of the Underwriting
Agreement shall not apply to the obligations of the
Underwriters to purchase the above Securities]. Terms defined
in the Standard Provisions are used herein as therein defined.
The Securities will be made available for checking
and packaging at the office of ________________________ at
least 24 hours prior to the Closing Date.
We represent that we are authorized to act for the
several Underwriters named in Schedule A hereto in connection
with this financing and any action under this Agreement by any
of us will be binding upon all the Underwriters.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to us
the enclosed duplicate hereof, whereupon it will become a
binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
[Names of Representatives]
On behalf of themselves and
as Representatives of the
Several Underwriters
By:__________________________
Name:
Title:
The foregoing Terms Agreement
is hereby confirmed as of the
date first above written
VARITY CORPORATION
By__________________________
Name:
Title:
<PAGE>
ANNEX I
DELAYED DELIVERY CONTRACT
-------------------------
, 199
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Attention: [ ]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Varity
Corporation, a Delaware corporation (the "Company"), and the
Company agrees to sell to the undersigned,
$
principal amount of the Company's [insert title of securities]
(the "Securities") offered by the Company's Prospectus dated
, 1995 and a Prospectus Supplement dated
, 199 relating thereto, receipt of copies of which
is hereby acknowledged, at % of the principal amount
thereof plus accrued interest, if any, from , 199 ,
and on the further terms and conditions set forth in this
Delayed Delivery Contract ("Contract").
The undersigned will purchase from the Company as of
the date hereof, for delivery on the dates set forth below,
Securities in the principal amounts set forth below:
Delivery Date Principal Amount
------------- ----------------
Each of such delivery dates is hereinafter referred to as a
"Delivery Date."
Payment for the Securities that the undersigned has
agreed to purchase for delivery on each Delivery Date shall be
made to the Company or its order by certified or official bank
check in New York Clearing House (next day) funds at the office
of at 10:00 A.M. on such
Delivery Date upon delivery to the undersigned of the
Securities to be purchased by the undersigned on such Delivery
Date in definitive fully registered form and in such denominations
<PAGE>
-2-
and registered in such names as the undersigned shall designate
by written or telegraphic communication addressed to the Company
not less than five business days prior to such Delivery Date.
It is expressly agreed that the provisions for
delayed delivery and payment are for the sole convenience of
the undersigned; that the purchase hereunder of Securities is
to be regarded in all respects as a purchase as of the date of
this Contract subject to the first paragraph hereof with
respect to the accrual of interest; that the obligation of the
Company to make delivery of and accept payment for, and the
obligation of the undersigned to take delivery of and make
payment for, Securities on each Delivery Date shall be subject
only to the conditions that (1) investment in the Securities
shall not at such Delivery Date be prohibited under the laws of
any jurisdiction in the United States to which the undersigned
is subject and (2) the Company shall have sold to the
Underwriters the principal amount of the Securities less the
principal amount thereof covered by this and other similar
Contracts. The undersigned represents that its investment in
the Securities is not, as of the date hereof, prohibited under
the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the
Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be
binding upon the parties hereto and their respective successors
and permitted assigns, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the acceptance of any such
Contract is in the Company's sole discretion and, without
limiting the foregoing, need not be on a first-come, first-
served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance
below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a
binding contract between the Company and the undersigned when
such counterpart is so mailed or delivered.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable
<PAGE>
-3-
to contracts made and to be performed entirely within the State
of New York.
Very truly yours,
___________________________
(NAME OF PURCHASER)
By_________________________
Name:
Title:
___________________________
___________________________
(Address of Purchaser)
Accepted, as of the above date
VARITY CORPORATION
By____________________________
Name:
Title:
<PAGE>
EXHIBIT 1.3
KELSEY-HAYES COMPANY
MEDIUM-TERM NOTES
Guaranteed as to Payment of Principal
and Interest by
VARITY CORPORATION
AGENCY AGREEMENT
----------------
__________, 199_
[Names and Addresses of Agents]
Dear Sirs:
Kelsey-Hayes Company, a Delaware corporation (the
"Company"), confirms its agreement with [Name of Agents] (each
an "Agent" and collectively, the "Agents") with respect to the
issue and sale from time to time by the Company of up to
$________ aggregate principal amount of its Medium-Term Notes
(the "Notes"). The Notes are registered under the registration
statement referred to in Section 1 hereof. Payment of
principal of and interest on the Notes will be guaranteed (the
"Guarantee") by Varity Corporation, a Delaware corporation (the
"Guarantor"). The Notes will be issued as a series under an
indenture (as amended or supplemented, the "Indenture"), dated
as of ______________, as supplemented from time to time, among
the Company, the Guarantor and Manufacturers and Traders Trust
Company, as trustee (the "Trustee"). The Notes shall have the
designations, denominations, interest rates, payment dates,
maturities, redemption provisions, selling prices and other
terms set forth in the Prospectus referred to in Section 1 as
it may be supplemented from time to time. The Notes will be
issued, and the terms thereof established, from time to time by
the Company in accordance with the Indenture, the Notes and the
Procedures (as defined in Section 2(d) hereof).
1. Registration Statement and Prospectus. The
-------------------------------------
Company and the Guarantor have prepared and filed with the
Securities and Exchange Commission (the "Commission"), in
accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Act"), a joint registration
statement on Form S-3 (the "registration statement"), including
a prospectus
<PAGE>
-2-
relating to the Notes and the Guarantees. The term
"Registration Statement," as used in this Agreement, means the
registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective, and as
thereafter amended by any post-effective amendment at the date
hereof. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration
Statement, as supplemented to reflect the terms of the Notes
and the plan of distribution thereof, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b). Any
reference in this Agreement to the registration statement, the
Registration Statement or any Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of the registration statement, the Registration
Statement or any Prospectus, as the case may be, and any
reference to any amendment or supplement to the registration
statement, the Registration Statement or any Prospectus shall
be deemed to refer to and include any documents filed after
such date under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents"
means the documents which at the time are incorporated by
reference in the registration statement, the Registration
Statement, any Prospectus, or any amendment or supplement
thereto. Any reference herein to any amendment or supplement to
the Registration Statement or Prospectus shall be deemed to
include any documents incorporated by reference in the
Registration Statement, any Prospectus, or any amendment or
supplement thereto subsequent to the date hereof.
2. Appointment as Agents; Solicitations as Agents;
-----------------------------------------------
Purchases as Principal. (a) Appointment of Agents. Subject to
- ---------------------- ---------------------
the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly
on its own behalf, without the consent of the Agents, the
Company hereby (i) appoints the Agents as the agents for the
purpose of soliciting purchases of the Notes from the Company
by others and (ii) agrees that whenever the Company determines
to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter
defined) relating to such sale in accordance with the
provisions hereof.
(b) Solicitations as Agents. On the basis of the
-----------------------
representations and warranties herein contained, but subject to
<PAGE>
-3-
the terms and conditions herein set forth, each Agent, upon
receipt of instructions from the Company, agrees, as an agent
of the Company, to use its best efforts consistent with
industry practice to solicit offers to purchase the Notes upon
the terms and conditions set forth herein and in the
Prospectus.
The Company reserves the right, in its sole
discretion, to suspend solicitation of purchases of the Notes
through one or more of the Agents, commencing at any time for
any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation
of purchases of Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, in
the form of a discount, equal to the applicable percentage of
the price to the public of each Note sold by the Company as a
result of a solicitation made by such Agent as set forth in
Exhibit A hereto. It is understood that no commission will be
payable with respect to any offer to purchase Notes accepted by
the Company in the event that the Company tenders such Note and
delivery of such Note is not accepted by the purchaser or the
purchaser fails to make timely payment and the sale is not
consummated as a result of such failure.
The purchase price, interest rate, maturity date and
other terms of the Notes shall be agreed upon by the Company
and the applicable Agent and set forth in a pricing supplement
to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as
may be otherwise provided in such supplement to the Prospectus,
the Notes will be issued in denominations of U.S. $10,000 or
any amount in excess thereof which is an integral multiple of
U.S. $1,000. All Notes sold through an Agent as agent will be
sold at 100% of their principal amount unless otherwise agreed
to by the Company and such Agent.
Each Agent will communicate to the Company, orally or
in writing, each offer to purchase Notes, other than those
offers rejected by such Agent. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of such Agent's
agreement contained herein. The Company may accept or reject
any proposed purchase of the Notes, in whole or in part.
<PAGE>
-4-
In soliciting purchases of the Notes on behalf of the
Company, each Agent shall act solely as agent for the Company
and not as principal. Each Agent shall make reasonable efforts
to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by
such Agent and accepted by the Company; provided that such
--------
Agent shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. The
Agents shall not have any obligation to purchase Notes from the
Company as principal, but an Agent may agree from time to time
to purchase Notes as principal. Any such purchase of Notes by
an Agent as principal shall be made pursuant to a Terms
Agreement in accordance with the provisions of Section 2(c)
hereof.
(c) Purchases as Principal. Each sale of Notes to
----------------------
an Agent as principal shall be made in accordance with the
terms contained herein and pursuant to a separate agreement
which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such
separate agreement (which may be an oral agreement and
confirmed in writing as described below between the applicable
Agent and the Company) is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed
to include any applicable Terms Agreement between the Company
and the applicable Agent. Each such Terms Agreement whether
oral (and confirmed in writing, which may be by facsimile
transmission) or in writing, shall be with respect to such
information (as applicable) as is specified in Exhibit B
hereto. An Agent's commitment to purchase Notes as principal
pursuant to any Terms Agreement shall be deemed to have been
made on the basis of the representations and warranties of the
Company and the Guarantor herein contained and shall be subject
to the terms and conditions herein set forth. Each Terms
Agreement shall specify the principal amount of Notes to be
purchased by the applicable Agent pursuant thereto, the price
to be paid to the Company for such Notes, the time and place of
delivery of and payment for such Notes, any provisions relating
to rights of, and default by purchasers acting together with the
Agent in the reoffering of the Notes, and such other provisions
(including further terms of the Notes) as may be mutually agreed
upon. The Agent may utilize a selling or dealer group in
connection with the resale of the Notes purchased. Such Terms
Agreement shall also specify the requirements for the opinions
of counsel, officers' certificate, comfort letter and stand-off
agreement pursuant to Sections 9(b), 9(c), 9(d) and 3(i),
respectively, hereof.
<PAGE>
-5-
(d) Administrative Procedures. The Notes will be
-------------------------
issued and the terms thereof established, in accordance with
the Indenture and the Medium-Term Note Administrative
Procedures attached hereto as Exhibit C (the "Procedures").
The Procedures may only be amended by written agreement of the
Company and each Agent, after notice to the Trustee.
3. Agreements of the Company and the Guarantor.
-------------------------------------------
The Company and the Guarantor agree with each Agent as follows:
(a) The Company and the Guarantor will advise the
Agents promptly and, if requested, will confirm such
advice in writing: (i) of the filing and effectiveness of
any amendment to the Registration Statement (other than by
virtue of the Company's filing of any report to be filed
under the Exchange Act), (ii) of the transmittal to the
Commission for filing of any supplement to the Prospectus,
(iii) of any request by the Commission for amendment of or
a supplement to the Registration Statement or any
Prospectus or for additional information; (iv) upon
knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or of the suspension of
qualification of the Offered Securities for offering or
sale in any jurisdiction or of the initiation of any
proceeding for such purpose; and (v) within the period of
time referred to in paragraph (e) below, of the happening
of any event, including the filing of any information,
documents or reports pursuant to the Exchange Act, that
makes any statement made in the Registration Statement or
the Prospectus (as then amended or supplemented) untrue or
which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then
amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in
order to make the statements therein not misleading, or of
the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or
any other law. If at any time the Commission shall issue
any stop order suspending the effectiveness of the
Registration Statement, the Company and the Guarantor,
upon knowledge thereof, will make every reasonable effort
to obtain the withdrawal of such order at the earliest
possible time.
(b) Except as otherwise provided in Section 3(k)
hereof, neither the Company nor the Guarantor will file
<PAGE>
-6-
any amendment to the Registration Statement or supplement
to the Prospectus unless the Company or the Guarantor, as
the case may be, has furnished the Agents with a copy for
their review prior to filing and given each Agent a
reasonable opportunity to comment on any such proposed
amendment or supplement; provided that the foregoing
--------
requirement shall not apply to periodic or current reports
filed under the Exchange Act, copies of which filings the
Company or the Guarantor will cause to be delivered to
each Agent promptly after being mailed or otherwise forwarded
for filing with the Commission; provided, further, that the
-------- -------
Company need only provide the opportunity to comment on a
pricing supplement to the particular Agent or Agents which,
in the judgment of the Company, is/are involved in the
solicitation or purchase which leads to the filing of such
supplement.
(c) The Company and the Guarantor will furnish to
each Agent and to counsel to the Agents, without charge
(i) one signed copy of the registration statement as
originally filed with the Commission and of each amendment
thereto, including financial statements and all exhibits
to the Registration Statement, and (ii) such number of
conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but
without exhibits, as the Agents may reasonably request.
The Company will furnish to the Agents as many copies of
the Prospectus (as amended or supplemented) (other than an
amendment or supplement which relates exclusively to an
offering of debt securities under the Registration
Statement other than the Notes) as the Agents shall
reasonably request so long as the Agents are required to
deliver a Prospectus in connection with sales and
solicitations of offers to purchase the Notes.
(d) The Company will prepare, with respect to any
Notes to be sold through or to the Agents pursuant to this
Agreement, a pricing supplement with respect to such Notes
in a form previously approved by the Agents and will file
such supplement pursuant to Rule 424(b) under the Act
within the time period prescribed.
(e) Except as otherwise provided in Section 3(k)
hereof, if during the term of this Agreement any event
shall occur that in the judgment of the Company or the
Guarantor or in the opinion of counsel for the Agents is
required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in
<PAGE>
-7-
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
or if it is necessary to supplement or amend the
Prospectus in order to comply with the Act or any other
law, the Company shall give immediate notice to the Agents
to cease the solicitation of offers to purchase the Notes
in their capacity as Agents and to cease sales of any
Notes an Agent may then own as principal pursuant to a
Terms Agreement, and the Company and the Guarantor will
forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto, and will
expeditiously furnish to the Agents a reasonable number of
copies thereof.
(f) The Company and the Guarantor will cooperate
with the Agents and with counsel for the Agents in
connection with the registration or qualification of the
Notes for offering and sale under the securities or Blue
Sky laws of such jurisdictions as the Agents may
reasonably designate and will file such consents to
service of process or other documents necessary or
appropriate in order to effect such registration or
qualification; provided that in no event shall the Company
or the Guarantor be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to
take any action which would subject it to service of
process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(g) The Company and the Guarantor will make
generally available to its security holders a consolidated
earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of
the Registration Statement and ending not later than 15
months thereafter, as soon as reasonably practicable after
the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of
the Act and Rule 158 thereunder.
(h) The Company and the Guarantor, during the period
when the Prospectus is required to be delivered under the
Act, will file promptly all documents required to be filed
with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act and will furnish each of the
Agents with copies of such documents. Except as otherwise
provided in Section 3(k) hereof, on or prior to the date on
<PAGE>
-8-
which there shall be released to the general public
interim financial statement information related to the
Company or the Guarantor with respect to the first three
fiscal quarters of any fiscal year or preliminary
financial statement information with respect to any fiscal
year, the Company and the Guarantor shall furnish such
information to the Agents.
(i) If required by the terms of any Terms Agreement,
between the date of any Terms Agreement and the related
Settlement Date (as defined below) specified in such
agreement, the Company will not, without the applicable
Agent's prior consent, offer, sell, contract to sell or
otherwise dispose of debt securities of the Company having
a maturity of more than one year from the date of issue
covered by the Registration Statement or another
registration statement filed by the Company under the Act
(other than the Notes being offered pursuant to such Terms
Agreement), except that the Company may offer, sell,
contract to sell or otherwise dispose of obligations of
the Company in respect of industrial revenue bonds or
similar securities exempt from federal income taxes.
(j) The Company will apply the net proceeds from the
sale of the Notes substantially in accordance with the
description set forth in the Prospectus.
(k) Neither the Company nor the Guarantor shall be
required to comply with the provisions of subsections (a),
(b), (c), (e) or (h) of this Section or the provisions of
Section 9 hereof during any period from the time (i) the
Agents shall have received written notification from the
Company or the Guarantor to suspend solicitations of
purchasers of the Notes in their capacity as agents and
(ii) the earlier of the date on which no Agent shall then
hold Notes as principal purchased pursuant to a Terms
Agreement and the date which is fifteen days (nine months
with respect to subsections (e) and (h) of this Section)
from the date on which the Agents shall have received written
notice from the Company or the Guarantor to suspend
solicitations of purchases of the Notes, to the time the
Company shall determine that solicitation of purchases of
the Notes should be resumed or shall subsequently enter
into a new Terms Agreement with the Agents.
4. Representations and Warranties of the Company
---------------------------------------------
and the Guarantor. The Company and the Guarantor, jointly and
- -----------------
<PAGE>
-9-
severally, represent and warrant to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an
offer for the purchase of Notes (whether through the Agents as
agents or to one or more of the Agents as principal), as of the
date of each delivery of Notes (whether through the Agents as
agents or to one or more of the Agents as principal) (the date
of each such delivery to one or more Agents as principal being
hereafter referred to as a "Settlement Date"), and as of any
time that the Registration Statement or the Prospectus shall be
amended or supplemented (it being understood that such
representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus, each as amended or
supplemented as of each such date) that:
(a) The Registration Statement and any post-
effective amendment thereto have been declared effective
by 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) Each Prospectus included as part of the
registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act and did
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
except that this representation and warranty does not
apply to statements in or omissions from such Prospectus
(or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the
Company or the Guarantor in writing by an Agent expressly
for use therein. The Commission has not issued any order
preventing or suspending the use of any Prospectus.
(c) The Company, the Guarantor and the transactions
contemplated by this Agreement meet the requirements for
using Form S-3 under the Act. The registration statement
in the form in which it became effective and also in such
form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions
of the
<PAGE>
-10-
Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and will not at any such
times contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; except that this representation and warranty
does not apply to statements in or omissions from the
registration statement or the Prospectus made in reliance
upon and in conformity with information furnished to the
Company or the Guarantor in writing by an Agent expressly
for use therein.
(d) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was
filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such
document when it was filed (or, if any amendment with
respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading; and no such further
document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a
material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(e) Each of the Company and the Guarantor is a
corporation duly organized and validly existing in good
standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate
its properties and to conduct its business, and is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register or qualify does not have a material adverse
effect on the financial condition, business, properties,
net worth or results of operations of the Guarantor and
its subsidiaries taken as a whole or of the Company and
its subsidiaries taken as a whole (a "Material Adverse
Effect").
<PAGE>
-11-
(f) Each Material Subsidiary (as defined below) is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its organization, with
full corporate power and authority to own, lease and
operate its properties and to conduct its business, except
where the failure of a Material Subsidiary to be duly
organized and existing or to have full corporate power and
authority would not have a Material Adverse Effect; each
Material Subsidiary is duly registered, qualified or
licensed to conduct its business and is in good standing
in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register, be licensed or qualify would not have a
Material Adverse Effect; all the outstanding shares of
capital stock of each Material Subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable, and are owned by the Guarantor directly, or
indirectly through one of its other subsidiaries, free and
clear of any lien, adverse claim, security interest,
equity, or other encumbrance; and there are no outstanding
rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, shares of capital
stock or other equity interests in any Material
Subsidiary. As used herein, the term "Material
Subsidiaries" means the following subsidiaries of the
Guarantor: Varity Holdings Limited and Perkins Group
Limited, each a corporation organized under the laws of
the United Kingdom; Dayton Walther Corporation, an Ohio
corporation; K-H Corporation, a Delaware corporation; and
the Company.
(g) When the Notes are issued and delivered pursuant
to this Agreement, such Notes will have been duly
authorized by the Company and, when executed by the
Company and authenticated by the applicable Trustee in
accordance with the terms of the applicable Indenture
(assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), and delivered to and
paid for by the purchasers thereof, will be entitled to
the benefits of the Indenture and will constitute the
valid and binding obligations of the Company enforceable
against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
<PAGE>
-12-
(h) There are no legal or governmental proceedings
pending or, to the knowledge of the Company or the
Guarantor, threatened, against the Company, the Guarantor
or any of their respective subsidiaries which are
reasonably likely to have a Material Adverse Effect, or to
which the Company, the Guarantor or any of their
respective subsidiaries, or to which any of their
respective properties, is subject which are material to
the Company and its subsidiaries or the Guarantor and its
subsidiaries, in each case taken as a whole, that are
required to be described in the Registration Statement or
the Prospectus, but are not described as required, and
there are no agreements, contracts, indentures, leases or
other instruments relating to the Company, the Guarantor
or their respective subsidiaries that are required to be
described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement
or any Incorporated Document that are not described or
filed as required by the Act or the Exchange Act. The
descriptions of the terms of any such contracts or
documents contained in the Registration Statement, the
Prospectus or any Incorporated Documents are correct in
all material respects.
(i) Neither the Company, the Guarantor nor any of
their respective subsidiaries is (i) in violation of its
certificate or articles of incorporation or bylaws, or
other organizational documents, (ii) in violation of any
law, ordinance, administrative or governmental rule or
regulation applicable to the Company, the Guarantor or any
of their respective subsidiaries or of any decree of any
court or governmental agency or body having jurisdiction
over the Company, the Guarantor or any of their respective
subsidiaries or any of their respective properties, or
(iii) in default in any material respect in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture,
lease or instrument to which the Company, the Guarantor or
any of their respective subsidiaries is a party or by
which any of them or any of their respective properties
may be bound, and no condition or state of facts exists,
which, with the passage of time or the giving of notice or
both, would constitute such a default, except in the case
of clauses (i), (ii) and (iii) where any such violation or
default, or violations and defaults in the aggregate,
would not have a Material Adverse Effect.
<PAGE>
-13-
(j) None of the issuance and sale of the Notes, the
execution, delivery or performance of this Agreement, any
Terms Agreement and the Indenture relating to the Notes by
the Company or the Guarantor, to the extent each is a
party thereto, or the consummation by the Company and the
Guarantor of the transactions contemplated hereby and
thereby to be consummated by the Company and the Guarantor
(i) requires any consent, approval, authorization or other
order of or registration or filing with, any court,
regulatory body, administrative agency or other
governmental body, agency or official (except such as may
be required for the registration of the Securities and the
Guarantee under the Act and the Exchange Act, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected
in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
documents, of the Company, the Guarantor or any of their
respective subsidiaries or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a
default under, any material agreement, indenture, lease or
instrument to which the Company, the Guarantor or any of
their respective subsidiaries is a party or by which any
of them or any of their respective properties may be
bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or
decree applicable to the Company, the Guarantor or any of
their respective subsidiaries or any of their respective
properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or
assets of the Company, the Guarantor or any of their
respective subsidiaries pursuant to the terms of any
agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of the
property or assets of any of them is subject, except in
the case of clauses (i) and (ii) where any such conflict,
breach, default or violation, or conflicts, breaches,
defaults or violations in the aggregate, would not have a
Material Adverse Effect.
(k) The accountants who have certified or shall
certify the financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) were
or shall be, for the periods in which they certified or
certify such
<PAGE>
-14-
financial statements, independent public accountants as
required by the Act.
(l) The historical financial statements, together
with related schedules and notes, included or incorporated
by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position,
results of operations, cash flows and changes in
stockholders' equity of the Guarantor and its subsidiaries
on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which
they apply; such statements and related schedules and
notes have been prepared in accordance with United States
generally accepted accounting principles (as described in
the Prospectus) consistently applied throughout the
periods involved, except as disclosed therein; and the
other financial and statistical information and data
included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and
the books and records of the Guarantor and its
subsidiaries.
(m) The execution and delivery of, and the
performance by the Company and the Guarantor of their
respective obligations under, each of this Agreement, any
Terms Agreement and the Indenture have been duly and
validly authorized, executed and delivered by the Company
and the Guarantor, to the extent each is a party thereto,
and constitutes the valid and legally binding agreement of
the Company and the Guarantor, to the extent each is a
party thereto, enforceable against the Company and the
Guarantor, to the extent each is a party thereto, in
accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law). The Indenture has been duly qualified under the
Trust Indenture Act.
(n) The Guarantee of the Notes has been duly
authorized by the Guarantor and, when the Notes have been
executed and authenticated in accordance with the terms of
the Indenture and delivered to and duly paid for by the
purchasers thereof, the Guarantee will be a valid and
<PAGE>
-15-
binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and remedies gener-
ally and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law).
(o) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), none of the Company, the Guarantor or
any of their respective subsidiaries has incurred any
liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of
business, that is material to the Company and its
subsidiaries taken as a whole or the Guarantor and its
subsidiaries taken as a whole, and there has not been any
material change in the capital stock of the Company or the
Guarantor, or material increase in the short-term debt or
long-term debt of the Company, the Guarantor and any of
their respective subsidiaries taken as a whole, or any
Material Adverse Effect.
(p) Each of the Company, the Guarantor and their
respective subsidiaries has good and marketable title to
all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all
liens, claims, security interests or other encumbrances,
except such as are described in the Registration Statement
and the Prospectus or in a document filed as an exhibit to
the Registration Statement and all the property described
in the Prospectus as being held under lease by each of the
Company, the Guarantor and their respective subsidiaries
is held by it under valid, subsisting and enforceable
leases, in each case with only such exceptions as in the
aggregate would not have a Material Adverse Effect.
(q) The Company, the Guarantor and each of their
respective subsidiaries has such permits, licenses,
franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own
its respective properties and to conduct its business in
the manner described in the Prospectus, except where the
failure to have any such Permit would not have a Material
<PAGE>
-16-
Adverse Effect and subject to such qualifications as may
be set forth in the Prospectus; the Company, the Guarantor
and each of their respective subsidiaries has fulfilled
and performed all its material obligations with respect to
such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or results in any other material
impairment of the rights of the holder of any such Permit,
except where such action would not have a Material Adverse
Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such Permits contains
any restriction that is materially burdensome to the
Company and its subsidiaries, taken as a whole, or the
Guarantor and its subsidiaries, taken as a whole.
(r) The Company, the Guarantor and their respective
subsidiaries own or possess all patents, trademarks,
trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the
Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses,
except where the lack of such ownership or possession
would not have a Material Adverse Effect, and neither the
Company nor the Guarantor is aware of any claim to the
contrary or any challenge by any other person to the
rights of the Company, the Guarantor or any of their
respective subsidiaries with respect to the foregoing.
5. Indemnification and Contribution. (a) The
--------------------------------
Company and the Guarantor agree, jointly and severally, 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, judgments and
expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon 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, except insofar as such losses, claims, damages,
liabilities, judgments or expenses arise out of or are based
upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted
therefrom in reliance upon and in
<PAGE>
-17-
conformity with the information furnished in writing to the
Company or the Guarantor by or on behalf of any Agent;
provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prospectus shall not inure to
the benefit of any Agent (or to the benefit of any person
controlling such Agent) on account of any such loss, claim,
damage, liability, judgment or expense arising from the sale of
the Notes by such Agent to any person if a copy of the
Prospectus shall not have been delivered or sent to such person
within the time required by the Act and the regulations
thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact
contained in any preliminary prospectus was corrected in the
Prospectus. The foregoing indemnity agreement shall be in
addition to any liability which the Company and the Guarantor
may otherwise have.
(b) If any action, suit or proceeding shall be
brought against any Agent or any person controlling any Agent
in respect of which indemnity may be sought against the Company
or the Guarantor, such Agent or such controlling person shall
promptly notify the Company and the Guarantor, and the Company
and the Guarantor shall assume the defense thereof, including
the employment of counsel and payment of all reasonable fees
and expenses of such counsel. Any such Agent or any such
controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of such Agent
or such controlling person, rather than the Company or the
Guarantor, unless (i) the Company or the Guarantor has agreed
in writing to pay such fees and expenses, (ii) the Company or
the Guarantor has failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such
Agent or such controlling person and the Company or the
Guarantor and such Agent or such controlling person shall have
been advised by its counsel that representation of such
indemnified party and the Company or the Guarantor by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company and
the Guarantor shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Agent or such
controlling person). It is understood, however, that the
Company and the Guarantor shall, in connection with any one
such action, suit or proceeding or separate but substantially
similar or related
<PAGE>
-18-
actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of only one separate firm
of attorneys (in addition to any local counsel, not more than
one per jurisdiction) at any time for all such Agents and
controlling persons, which firm shall be designated in writing
by the Agents, and that all such fees and expenses shall be
reimbursed promptly as they are incurred. Neither the Company
nor the Guarantor shall be liable for any settlement of any
such action, suit or proceeding effected without either of
their written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in
any such action, suit or proceeding, the Company and the
Guarantor agree, jointly and severally, to indemnify and hold
harmless any Agent, to the extent provided in the preceding
paragraph, and any such controlling person from and against any
loss, claim, damage, liability, judgment or expense by reason
of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Agent or any person controlling an
Agent is entitled to employ separate counsel pursuant to the
second sentence of this Section 5(b) and shall have requested
the Company and the Guarantor in writing to reimburse such
Agent or such controlling person for fees and expenses of
counsel, the Company and the Guarantor agree that they shall be
liable, jointly and severally, for any settlement of any
proceeding effected by such Agent or such controlling person
and for which the Company and the Guarantor are liable pursuant
to Section 5(a) without its written consent if (i) such
settlement is entered into more than ten (10) business days
after receipt by the Company and the Guarantor of the aforesaid
request or (ii) neither the Company nor the Guarantor shall
have reimbursed such Agent or such controlling person in
accordance with such request prior to the date of such
settlement. Neither the Company nor the Guarantor shall,
without the prior written consent of such Agent or such
controlling person, effect any settlement of any pending or
threatened proceeding in respect of which any Agent or any
person controlling an Agent is or could have been a party and
indemnity could have been sought hereunder by such Agent or
such controlling person, unless such settlement includes an
unconditional release of such Agent or such controlling person
from all liability on claims that are subject matter of such
proceeding.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantor,
their respective directors, officers who sign the Registration
Statement, and any person who controls either the Company or
<PAGE>
-19-
the Guarantor within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to each
Agent, but only with respect to information relating to such
Agent furnished in writing by or on behalf of such Agent
expressly for use in the Registration Statement, the Prospectus
or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company or the
Guarantor, any of their respective directors, officers, or any
such controlling person based on the Registration Statement,
the Prospectus or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Agent
pursuant to this paragraph (c), such Agent shall have the
rights and duties given to the Company or the Guarantor by
paragraph (b) above (except that if the Company or the
Guarantor shall have assumed the defense thereof such Agent
shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such
Agent), and the Company and the Guarantor, their respective
directors, officers, and any such controlling person shall have
the rights and duties given to the Agents by paragraph (b)
above. The foregoing indemnity agreement shall be in addition
to any liability which the Agents may otherwise have.
(d) If the indemnification provided for in this
Section 5 is unavailable to, or insufficient to hold harmless,
an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities, judgments
or expenses referred to therein, then an 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, judgments
or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantor
on the one hand and the Agents on the other hand from the
offering of the Notes, 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 and the Guarantor on the one hand and the
Agents on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages,
liabilities, judgments or expenses, as well as any other
relevant equitable considerations. The relative benefits
received by the Company and the Guarantor on the one hand and
the Agents on the other hand shall be deemed to be in the same
proportion as
<PAGE>
-20-
the total net proceeds from the offering (before deducting expenses)
received by the Company and the Guarantor bear to the total
underwriting discounts and commissions received by the Agents, in each
case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and the Guarantor on the one
hand and the Agents on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company or the Guarantor on the one hand or by
the Agents on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company, the Guarantor and the Agents agree
that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by a pro rata
allocation (even if the Agents were treated as one entity for
such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities, judgments and expenses referred to in paragraph
(d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating any claim or defending any such action, suit
or proceeding. Notwithstanding the provisions of this
Section 5, no Agent shall be required to contribute any amount
in excess of the amount by which the total price of the Notes
sold by it and distributed to the public 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 meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities,
judgments or expenses for which an indemnified party is
entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the
indemnified party promptly as such losses, claims, damages,
liabilities, judgments or expenses are incurred. The indemnity
and contribution agreements contained in this Section 5 and the
representations and warranties of the Company and the Guarantor
set forth in
<PAGE>
-21-
this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on
behalf of any Agent or any person controlling any Agent, the
Company or the Guarantor, their respective directors or
officers, or any person controlling the Company or the
Guarantor, (ii) acceptance of any Notes and payment therefor
hereunder, and (iii) any termination of this Agreement. A
successor to any Agent or any person controlling any Agent, or
to the Company or the Guarantor, their respective directors or
officers, or any person controlling the Company or the
Guarantor, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this
Section 5.
6. Conditions of Obligations. The obligations of
-------------------------
the Agents to solicit offers to purchase the Notes as agent of
the Company, and each Agent's obligation to purchase Notes as
principal pursuant to any Terms Agreement, will be subject to
the accuracy of the representations and warranties of the
Company and the Guarantor contained herein on the date hereof,
and to the accuracy of the statements of the Company's and the
Guarantor's officers made in any certificate, to the extent
contemplated in such certificate, to the performance by the
Company and the Guarantor of their respective obligations
hereunder and to the following additional conditions:
(a) All filings, if any, required by Rule 424 under
the Act shall have been timely made; no stop order
suspending the effectiveness of the registration statement
shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the
Company, the Guarantor or any Underwriter, threatened by
the Commission, and any request of the Commission for
additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been
complied with.
(b) Subsequent to the execution of any applicable
Terms Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change,
in or affecting the financial condition, business,
properties, net worth, or results of operations of the
Company and its subsidiaries taken as a whole, or the
Guarantor and its subsidiaries taken as a whole, from the
date of the latest balance sheet included or incorporated
by reference in the Prospectus in each case not
contemplated by the Prospectus, which is material and
adverse; (ii) any downgrading in, or notice of any
proposal to downgrade,
<PAGE>
-22-
the rating of the Company's or the Guarantor's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under
the Act) or any public announcement that any such
organization has under surveillance or review with negative
implications the rating of the Company's or the Guarantor's
debt securities; (iii) any suspension or limitation of
trading in securities generally on or by the New York Stock
Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, or any setting of minimum prices
for trading on such exchange; (iv) any suspension of
trading of any securities of the Company or the Guarantor
on any exchange; (v) any banking moratorium declared by
Federal or New York authorities; or (vi) the outbreak or
escalation of hostilities involving the United States or
the declaration by the United States of a national
emergency or war, if the effect of any such event set forth
in (i) through (vi), in the judgment of the Agents, makes
it impractical or inadvisable to proceed with the
solicitation of purchases of the Notes.
(c) The Agents shall have received on the date
hereof, an opinion of Cahill Gordon & Reindel (a
partnership including a professional corporation), counsel
for the Company and the Guarantor, dated the date hereof
and addressed to the Agents, to the effect that:
(i) Each of the Company and the Guarantor is a
corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware
with full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus;
(ii) The Indenture relating to the Notes has
been duly qualified under the Trust Indenture Act and has
been duly authorized, executed and delivered by the
Company and the Guarantor and is a valid and binding
agreement of the Company and the Guarantor, enforceable
in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, fraudulent
transfer and similar laws affecting creditors' rights
generally and by general equitable principles (regardless
of whether enforcement is sought in a proceeding in
equity or at law);
<PAGE>
-23-
(iii) The Notes have been duly authorized and,
when executed and authenticated in accordance with the
Indenture and delivered to the purchasers thereof against
payment therefor in accordance with the terms of this
Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms,
except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer and similar laws
affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law) and will
be entitled to the benefits of the Indenture;
(iv) The Registration Statement and all post-
effective amendments, if any, have become effective under
the Act and, to the best knowledge of such counsel after
reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);
(v) The Company and the Guarantor have all
requisite corporate power and authority to enter into
this Agreement, any Terms Agreement and the Indenture
relating to the Notes to which either of them is a party
and to issue and deliver the Notes and the Guarantee,
respectively, to the purchasers thereof;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor
and is a valid, legal and binding agreement of the
Company and the Guarantor, enforceable against the
Company and the Guarantor in accordance with its terms,
except (A) as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer and similar laws
affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (B)
that rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws or the
public policy underlying such laws;
<PAGE>
-24-
(vii) The Notes and the Indenture conform in all
material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus;
(viii) None of the offer, sale, or delivery of the
Notes or the Guarantee, or the execution, delivery or
performance of this Agreement and the Indenture relating
to the Notes, nor compliance by the Company or the
Guarantor with all the provisions of this Agreement and
the Indenture applicable to it, nor consummation by the
Company or the Guarantor of the transactions contemplated
hereby conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the
certificate of incorporation or bylaws of the Company or
the Guarantor or any indenture or other debt instrument
or any other material agreement or lease to which the
Company or the Guarantor is a party or by which any of
them or any of their respective properties is bound that
is an exhibit to the Registration Statement or to any
Incorporated Document, which conflict, breach or default
would have a Material Adverse Effect, or, except as
disclosed in the Registration Statement, will result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
the Guarantor under any such indenture, debt instrument,
agreement or lease which lien, charge or encumbrance
would have a Material Adverse Effect, nor will any such
action result in any violation of any existing law,
regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel after
reasonable inquiry, applicable to the Company or the
Guarantor or any of their respective properties, which
violation would have a Material Adverse Effect;
(ix) The Guarantee of the Notes has been duly
authorized by the Guarantor and, when the Notes have been
executed and authenticated in accordance with the
Indenture and delivered to and duly paid for by the
purchasers thereof, the Guarantee will be a valid and
binding obligation of the Guarantor as to the Notes,
enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization,
fraudulent transfer and similar laws affecting creditors'
rights generally and by general
<PAGE>
-25-
equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law);
(x) No consent, approval, authorization or other
order of, or registration or filing with, any Delaware,
New York State or Federal court, regulatory body,
administrative agency or other governmental body, agency,
or official is required on the part of the Company or the
Guarantor (except as have been obtained or made under the
Act and the Exchange Act or such as may be required under
state securities or Blue Sky laws governing the purchase
and distribution of the Securities) for the valid
issuance and sale of the Notes to the purchasers thereof
as contemplated by this Agreement; and
(xi) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the
financial statements, schedules and notes thereto and
other financial and statistical data included therein, as
to which such counsel need not express any opinion)
comply as to form in all material respects with the
requirements of the Act; and each of the Incorporated
Documents (except for the financial statements, schedules
and notes thereto and other financial and statistical
data included therein, as to which such counsel need not
express any opinion), when they were filed (or, if an
amendment with respect to any Incorporated Document was
filed, when such amendment was filed) complied as to form
in all material respects with the Exchange Act.
In addition, such counsel shall state that such counsel
participated in conferences with officers and other
representatives of the Guarantor and the Company,
representatives of the independent public accountants and
representatives of the Agents at which the contents of the
Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement and Prospectus (except as otherwise indicated
above) on the basis of the foregoing (relying as to
materiality to a large extent upon the opinions of officers
and representatives of the Guarantor and the Company), no
facts have come to the attention of such counsel which lead
them to believe that either the Registration Statement or
any amendment thereto, at the time the
<PAGE>
-26-
Registration Statement or amendment became effective,
contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein not misleading or that the Prospectus as of its
date or any supplement thereto as of its date, or the
Registration Statement or the Prospectus and any amendment
or supplement thereto as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (it being understood that such counsel need
express no opinion with respect to the financial statements
and schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
The opinion of such counsel may be limited to the
laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the
United States. In rendering their opinion as aforesaid,
such counsel may, as to factual matters, rely upon written
certificates or statements of officers of the Company and
the Guarantor and public officials.
(d) The Agents shall have received letters dated the
date hereof from KPMG Peat Marwick LLP, independent
certified public accountants, substantially in the forms
heretofore approved by the Agents.
(e) The Agents shall have received on the date
hereof, an opinion of Andrews & Kurth L.L.P., counsel for
the Agents, dated the date hereof and addressed to the
Agents, in form and substance satisfactory to the Agents.
(f) You shall have received a certificate signed by
the chief executive officer and the chief financial
officer of each of the Company and the Guarantor (or such
other officers as are acceptable to you) that: (i) no
stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or, to the
knowledge of the Company or the Guarantor, shall be
contemplated by the Commission at the date hereof;
(ii) there shall not have been, since the respective dates
as of which information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in
the Registration Statement and the
<PAGE>
-27-
Prospectus (or any amendment or supplement thereto), any
material adverse change in the financial condition,
business, prospects, properties, net worth or results of
operations of the Company and its subsidiaries or the
Guarantor and its subsidiaries taken as a whole; (iii) all
the representations and warranties of the Company and the
Guarantor contained in this Agreement shall be true and
correct on and as of the date hereof; and (iv) the Company
and the Guarantor have performed or complied with its
agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the date of
such certificate.
(g) The Company and the Guarantor shall have
furnished or caused to be furnished to you such further
certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to the Agents and their counsel.
Any certificate or document signed by any officer of
the Company or the Guarantor and delivered to you or to
counsel for the Agents, shall be deemed a representation
and warranty by the Company and the Guarantor to each
Agent as to the statements made therein. Any certificate
delivered by the Company and the Guarantor to its counsel
for purposes of enabling such counsel to render the
opinions referred to in this Section 6 will also be
furnished to you and counsel for the Agents.
7. Expenses. The Company and the Guarantor agree
--------
to pay the following costs and expenses and all other costs and
expenses incident to the performance by them of their
obligations hereunder: (i) the preparation, printing (or
reproduction), and filing with the Commission of the
registration statement (including financial statements and
exhibits thereto), each Prospectus and each amendment or
supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the
registration statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with the
offering and sale of the Notes, (iii) the preparation,
printing, authentication, issuance and delivery of certificates
for the Notes, including
<PAGE>
-28-
any stamp taxes in connection with the original issuance and
sale of the Notes; (iv) the printing (or reproduction) and
delivery of this Agreement, the Indenture, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection
with the offering of the Notes; (vi) the registration or
qualification of the Notes for offer and sale under the
securities or Blue Sky laws of the several states as provided
in Section 3(f) hereof (including the reasonable fees, expenses
and disbursements of counsel for the Underwriters relating to
the preparation, printing (or reproduction), and delivery of
the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees of the
Underwriters in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.; and
(viii) the fees and expenses of the Company's and the
Guarantor's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the
Guarantor.
8. Delivery of and Payment for Notes Sold through
----------------------------------------------
the Agents. Delivery of Notes sold through an Agent as agent
- ----------
shall be made by the Company to such Agent for the account of
any purchaser only against payment therefor in immediately
available funds. In the event that a purchaser shall fail
either to accept delivery of or to make payment for a Note on
the date fixed for settlement, the applicable Agent shall
promptly notify the Company and deliver the Note to the Company
and, if such Agent has theretofore paid the Company for such
Note, the Company will promptly return such funds to such
Agent. If such failure occurred for any reason other than
default by the applicable Agent in the performance of its
obligations hereunder, the Company will reimburse such Agent on
an equitable basis for its loss of the use of the funds for the
period such funds were credited to the Company's account.
9. Additional Covenants of the Company and the
-------------------------------------------
Guarantor. The Company and the Guarantor covenant and agree
- ---------
with the Agents that:
(a) Reaffirmation of Representations and Warranties.
-----------------------------------------------
Each acceptance by the Company of an offer for the purchase
of Notes, and each delivery of Notes to an Agent pursuant to
a Terms Agreement, shall be deemed to be an affirmation
that the representations and warranties of the Company and
the Guarantor contained in this Agreement and, to the
extent therein provided, in any certificate theretofore
delivered to the Agents pursuant hereto are true and
<PAGE>
-29-
correct at the time of such acceptance or sale, as the
case may be, and an undertaking that such representations
and warranties will be true and correct at the time of
delivery to the purchaser or his agent, or to the Agents,
of the Notes relating to such acceptance or sale, as the
case may be, as though made at and as of each such time
(and it is understood that such representations and
warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Subject to
-----------------------------------
the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by the filing of an
Annual Report on Form 10-K, a Quarterly Report on Form
10-Q and any Current Report on Form 8-K or an amendment or
supplement providing solely for a change in the interest
rate of Notes (excluding any change in the formulas by
which such interest rates may be determined) or similar
changes, and other than by an amendment or supplement
which relates exclusively to an offering of debt
securities other than the Notes), or (2) there is filed
with the Commission any document incorporated by reference
into the Prospectus (other than any Current Report on
Form 8-K, except upon the reasonable request of the Agents
therefor), or (3) (if required pursuant to the terms of a
Terms Agreement) the Company sells Notes to an Agent
pursuant to a Terms Agreement, the Company and the
Guarantor shall furnish or cause to be furnished to the
Agents forthwith a certificate dated the date of filing
with the Commission of such supplement or document, the
date of effectiveness of such amendment or the applicable
Settlement Date, as the case may be, in form and substance
satisfactory to the Agents to the effect that the
statements contained in the certificate referred to in
Section 6(f) hereof which were last furnished to the
Agents are true and correct at the time of such amendment,
supplement, filing or sale, as the case may be, as though
made at and as of such time (except that such statements
shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said
Section 6(f), modified as necessary to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.
<PAGE>
-30-
(c) Subsequent Delivery of Legal Opinions. Subject
-------------------------------------
to the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by an amendment or
supplement providing solely for a change in the interest
rates of the Notes (excluding any change in the formulas
by which such interest rates may be determined) or similar
changes or solely for the inclusion of additional
financial information, other than by an amendment by the
filing of a Quarterly Report on Form 10-Q and any Current
Report on Form 8-K (except in the circumstances
hereinafter described) and other than by an amendment or
supplement which relates exclusively to an offering of
debt securities other than the Notes) or (2) there is
filed with the Commission the Company's Annual Report on
Form 10-K and such Annual Report is incorporated by
reference into the Prospectus or (3) (if required pursuant
to the terms of a Terms Agreement) the Company sells Notes
to an Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the
Agents the written opinion of Cahill Gordon & Reindel,
special counsel for the Company and the Guarantor or
other counsel satisfactory to the Agents (which shall be
deemed to include the General Counsel of the Guarantor,
unless otherwise specified by the Agents), and, only when
required pursuant to an applicable Terms Agreement
pursuant to clause (3) above, the written opinion of
counsel for the Agents, in each case dated the date of
filing with the Commission of such supplement or document,
the date of effectiveness of such amendment or the
applicable Settlement Date, as the case may be, in form
and substance satisfactory to the Agents, of the same
tenor as the opinions referred to in Section 6(c) hereof,
but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinions or, in lieu of
such opinions, counsel last furnishing such opinions to
the Agents shall each furnish the Agents with a letter to
the effect that the Agents may rely on such last opinion
to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in
such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter
authorizing reliance). If one or more of the Agents
reasonably determine that the information included in a
filing by the Company in a Quarterly Report filed on
Form 10-Q or a Current Report filed on Form 8-K is of such
importance that legal opinion should be delivered to the
Agents in
<PAGE>
-31-
conjunction therewith, such Agent or Agents shall notify
the Company promptly upon such determination (and in any
event not later than 30 days after such filing) and the
Company will thereupon furnish or cause to be furnished
the opinions described above.
(d) Subsequent Delivery of Comfort Letters. Subject
--------------------------------------
to the provisions of Section 3(k) hereof, each time that
the Registration Statement or the Prospectus shall be
amended or supplemented (other than by incorporation by
reference) to include additional financial information or
there is filed with the Commission any document
incorporated by reference into the Prospectus which
contains additional financial information or (if required
pursuant to the terms of a Terms Agreement) the Company
sells Notes to an Agent pursuant to a Terms Agreement, the
Company and the Guarantor shall cause KPMG Peat Marwick
LLP or their successors forthwith to furnish the Agents a
letter, dated the date of filing with the Commission of
such supplement or document, the date of effectiveness of
such amendment, or the applicable Settlement Date, as the
case may be, in form and substance satisfactory to the Agents,
of the same tenor as the the letter referred to in Section 6(d)
hereof but modified to relate to the Registration
Statement and the Prospectus, as amended and supplemented
to the date of such letter; provided, however, that if the
-------- -------
Registration Statement or the Prospectus is amended or
supplemented solely to include financial information as of
and for a fiscal quarter, KPMG Peat Marwick LLP or their
successors may limit the scope of such letter to the
unaudited financial statements included in such amendment
or supplement unless any other information included
therein of an accounting, financial or statistical nature
is of such a nature that, in the reasonable judgment of
the Agents, such letter should cover such other
information.
10. Survival of Certain Representations and
---------------------------------------
Obligations. The respective indemnities, agreements,
- -----------
representations, warranties and other statements of the
Company, the Guarantor or their officers and of the several
Agents set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any
investigation, or statement as to the result thereof, made by
or on behalf of any Agent, the Company, the Guarantor or any of
their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment
for any of the Notes.
<PAGE>
-32-
11. Termination. (a) Termination of this
----------- -------------------
Agreement. This Agreement (excluding any Terms Agreement) may
- ---------
be terminated for any reason, at any time by either the Company
with respect to one or more Agents, the Guarantor or an Agent,
as to itself, upon the giving of 30 days' written notice of such
termination to the other parties hereto.
(b) General. In the event of any such termination,
-------
neither party will have any liability to the other party
hereto, except that (i) each Agent shall be entitled to any
commission with respect to Notes sold by the Company as a
result of a solicitation made by such Agent and earned in
accordance with the third paragraph of Section 2(b) hereof,
(ii) if at the time of termination (a) an Agent shall own any
Notes purchased pursuant to a Terms Agreement with the
intention of reselling them or (b) an offer to purchase any of
the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes
relating thereto has not occurred, the covenants set forth in
Sections 3 and 9 hereof shall remain in effect until such Notes
are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 3(g) hereof, the provisions of
Section 6 hereof, the indemnity and contribution agreements set
forth in Section 5 hereof, and the provisions of Section 10 and
13 hereof shall remain in effect.
12. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Company shall be directed to
Kelsey-Hayes Company, 11878 Hubbard Road, Livonia, Michigan
48150, Attention: Corporate Secretary; notices to the Guarantor
shall be directed to Varity Corporation, 672 Delaware Avenue,
Buffalo, New York 14209, Attention: Corporate Secretary;
notices to the Agents shall be directed to:
[ ].
13. Parties. This Agreement shall inure to the
-------
benefit of and be binding upon each Agent, the Company and the
Guarantor and their respective successors, heirs and legal
representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Agents, the Company and the
Guarantor and their respective successors, heirs and legal
representatives and the controlling persons and officers and
directors referred to in Section 5 and their heirs and legal
representatives, any legal or equitable right, remedy or claim
under, by virtue of or in respect of this Agreement or any
provision
<PAGE>
-33-
herein or therein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and
exclusive benefit of the Agents, the Company and the
Guarantor and their respective successors, heirs and legal
representatives, and said controlling persons and officers and
directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor or assign
by reason merely of such purchase.
14. Applicable Law; Counterparts. This Agreement
----------------------------
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed entirely within the State of New York. This
Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to us
the enclosed duplicate hereof.
Very truly yours,
KELSEY-HAYES COMPANY
By:__________________________
Name:
Title:
VARITY CORPORATION
By:__________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed as of the
date first above written
[NAME OF AGENT]
By__________________________
Name:
Title:
<PAGE>
Exhibit A
to Agency Agreement
[Agent's Commission Schedule]
<PAGE>
Exhibit B
to Agency Agreement
Terms to be agreed to by the Company, the Guarantor
and the Agents in a Terms Agreement.
<PAGE>
Exhibit C
to Agency Agreement
Exhibit C to the Agency Agreement will be added at
the time the Agency Agreement is signed and will consist of
Administrative Procedures agreed on by the Company, the
Guarantor and the Agents.
<PAGE>
EXHIBIT 1.4
VARITY CORPORATION
MEDIUM-TERM NOTES
AGENCY AGREEMENT
----------------
__________, 199_
[Names and Addresses of Agents]
Dear Sirs:
Varity Corporation, a Delaware corporation (the
"Company"), confirms its agreement with [Name of Agents] (each
an "Agent" and collectively, the "Agents") with respect to the
issue and sale from time to time by the Company of up to
$________ aggregate principal amount of its Medium-Term Notes
(the "Notes"). The Notes are registered under the registration
statement referred to in Section 1 hereof. The Notes will be
issued as a series under an indenture (as amended or
supplemented, the "Indenture"), dated as of ______________, as
supplemented from time to time, between the Company and
Manufacturers and Traders Trust Company, as trustee (the
"Trustee"). The Notes shall have the designations,
denominations, interest rates, payment dates, maturities,
redemption provisions, selling prices and other terms set forth
in the Prospectus referred to in Section 1 as it may be
supplemented from time to time. The Notes will be issued, and
the terms thereof established, from time to time by the Company
in accordance with the Indenture, the Notes and the Procedures
(as defined in Section 2(d) hereof).
1. Registration Statement and Prospectus. The
-------------------------------------
Company and Kelsey-Hayes Company, a subsidiary of the Company,
have prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder
(collectively, the "Act"), a joint registration statement on
Form S-3 (the "registration statement"), including a prospectus
relating to the Notes. The term "Registration Statement," as
used in this Agreement, means the registration statement
(including all financial schedules and exhibits), as amended at
the time it becomes effective, and as thereafter amended by any
post-effective amendment at the date hereof. The term "Prospectus"
as used in this Agreement means the prospectus in the
<PAGE>
-2-
form included in the Registration Statement, as supplemented to
reflect the terms of the Notes and the plan of distribution
thereof, in the form in which it shall be filed with the Commission
pursuant to Rule 424(b). Any reference in this Agreement to the
registration statement, the Registration Statement or any
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the registration statement, the
Registration Statement or any Prospectus, as the case may be, and
any reference to any amendment or supplement to the registration
statement, the Registration Statement or any Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which, upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the registration
statement, the Registration Statement, any Prospectus, or any
amendment or supplement thereto. Any reference herein to any
amendment or supplement to the Registration Statement or Prospectus
shall be deemed to include any documents incorporated by reference
in the Registration Statement, any Prospectus, or any amendment or
supplement thereto subsequent to the date hereof.
2. Appointment as Agents; Solicitations as Agents;
-----------------------------------------------
Purchases as Principal. (a) Appointment of Agents. Subject
- ---------------------- ---------------------
to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly
on its own behalf, without the consent of the Agents, the
Company hereby (i) appoints the Agents as the agents for the
purpose of soliciting purchases of the Notes from the Company
by others and (ii) agrees that whenever the Company determines
to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter
defined) relating to such sale in accordance with the
provisions hereof.
(b) Solicitations as Agents. On the basis of the
-----------------------
representations and warranties herein contained, but subject to
the terms and conditions herein set forth, each Agent, upon
receipt of instructions from the Company, agrees, as an agent
of the Company, to use its best efforts consistent with
industry practice to solicit offers to purchase the Notes upon
the terms and conditions set forth herein and in the
Prospectus.
<PAGE>
-3-
The Company reserves the right, in its sole
discretion, to suspend solicitation of purchases of the Notes
through one or more of the Agents, commencing at any time for
any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation
of purchases of Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, in
the form of a discount, equal to the applicable percentage of
the price to the public of each Note sold by the Company as a
result of a solicitation made by such Agent as set forth in
Exhibit A hereto. It is understood that no commission will be
payable with respect to any offer to purchase Notes accepted by
the Company in the event that the Company tenders such Note and
delivery of such Note is not accepted by the purchaser or the
purchaser fails to make timely payment and the sale is not
consummated as a result of such failure.
The purchase price, interest rate, maturity date and
other terms of the Notes shall be agreed upon by the Company
and the applicable Agent and set forth in a pricing supplement
to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as
may be otherwise provided in such supplement to the Prospectus,
the Notes will be issued in denominations of U.S. $10,000 or
any amount in excess thereof which is an integral multiple of
U.S. $1,000. All Notes sold through an Agent as agent will be
sold at 100% of their principal amount unless otherwise agreed
to by the Company and such Agent.
Each Agent will communicate to the Company, orally or
in writing, each offer to purchase Notes, other than those
offers rejected by such Agent. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of such Agent's
agreement contained herein. The Company may accept or reject
any proposed purchase of the Notes, in whole or in part.
In soliciting purchases of the Notes on behalf of the
Company, each Agent shall act solely as Agent for the Company
and not as principal. Each Agent shall make reasonable efforts
to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by
such Agent and accepted by the Company; provided that such Agent
--------
<PAGE>
-4-
shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. The
Agents shall not have any obligation to purchase Notes from the
Company as principal, but an Agent may agree from time to time
to purchase Notes as principal. Any such purchase of Notes by
an Agent as principal shall be made pursuant to a Terms
Agreement in accordance with the provisions of Section 2(c)
hereof.
(c) Purchases as Principal. Each sale of Notes to
----------------------
an Agent as principal shall be made in accordance with the
terms contained herein and pursuant to a separate agreement
which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such
separate agreement (which may be an oral agreement and
confirmed in writing as described below between the applicable
Agent and the Company) is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed
to include any applicable Terms Agreement between the Company
and the applicable Agent. Each such Terms Agreement whether
oral (and confirmed in writing, which may be by facsimile
transmission) or in writing, shall be with respect to such
information (as applicable) as is specified in Exhibit B
hereto. An Agent's commitment to purchase Notes as principal
pursuant to any Terms Agreement 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 principal amount of Notes to be purchased by the
applicable Agent pursuant thereto, the price to be paid to the
Company for such Notes, the time and place of delivery of and
payment for such Notes, any provisions relating to rights of,
and default by purchasers acting together with the Agent in the
reoffering of the Notes, and such other provisions (including
further terms of the Notes) as may be mutually agreed upon. The
Agent may utilize a selling or dealer group in connection with
the resale of the Notes purchased. Such Terms Agreement shall
also specify the requirements for the opinions of counsel,
officers' certificate, comfort letter and stand-off agreement
pursuant to Sections 9(b), 9(c), 9(d) and 3(i), respectively,
hereof.
(d) Administrative Procedures. The Notes will be
-------------------------
issued and the terms thereof established, in accordance with
the Indenture and the Medium-Term Note Administrative
Procedures attached hereto as Exhibit C (the "Procedures").
The Procedures may only be amended by written agreement of the
Company and each Agent, after notice to the Trustee.
<PAGE>
-5-
3. Agreements of the Company. The Company agrees
-------------------------
with each Agent as follows:
(a) The Company will advise the Agents promptly and,
if requested, will confirm such advice in writing: (i) of
the filing and effectiveness of any amendment to the
Registration Statement (other than by virtue of the
Company's filing of any report to be filed under the
Exchange Act), (ii) of the transmittal to the Commission
for filing of any supplement to the Prospectus, (iii) of
any request by the Commission for amendment of or a
supplement to the Registration Statement or any Prospectus
or for additional information; (iv) upon knowledge
thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the
Offered Securities for offering or sale in any
jurisdiction or of the initiation of any proceeding for
such purpose; and (v) within the period of time referred
to in paragraph (e) below, of the happening of any event,
including the filing of any information, documents or
reports pursuant to the Exchange Act, that makes any
statement made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or
which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then
amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in
order to make the statements therein not misleading, or of
the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or
any other law. If at any time the Commission shall issue
any stop order suspending the effectiveness of the
Registration Statement, the Company, upon knowledge
thereof, will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(b) Except as otherwise provided in Section 3(k)
hereof, the Company will not file any amendment to the
Registration Statement or supplement to the Prospectus
unless the Company has furnished the Agents with a copy
for their review prior to filing and given each Agent a
reasonable opportunity to comment on any such proposed
amendment or supplement; provided that the foregoing
--------
requirement shall not apply to periodic or current reports
filed under the Exchange Act, copies of which filings the
Company will cause to be delivered to each Agent promptly
after being mailed or otherwise forwarded for filing with
the Commission;
<PAGE>
-6-
provided, further, that the Company need only provide the
-------- -------
opportunity to comment on a pricing supplement to the
particular Agent or Agents which, in the judgment of the
Company, is/are involved in the solicitation or purchase
which leads to the filing of such supplement.
(c) The Company will furnish to each Agent and to
counsel to the Agents, without charge (i) one signed copy
of the registration statement as originally filed with the
Commission and of each amendment thereto, including
financial statements and all exhibits to the Registration
Statement, and (ii) such number of conformed copies of the
Registration Statement as originally filed and of each
amendment thereto, but without exhibits, as the Agents may
reasonably request. The Company will furnish to the
Agents as many copies of the Prospectus (as amended or
supplemented) (other than an amendment or supplement which
relates exclusively to an offering of debt securities
under the Registration Statement other than the Notes) as
the Agents shall reasonably request so long as the Agents
are required to deliver a Prospectus in connection with
sales and solicitations of offers to purchase the Notes.
(d) The Company will prepare, with respect to any
Notes to be sold through or to the Agents pursuant to this
Agreement, a pricing supplement with respect to such Notes
in a form previously approved by the Agents and will file
such supplement pursuant to Rule 424(b) under the Act
within the time period prescribed.
(e) Except as otherwise provided in Section 3(k)
hereof, if during the term of this Agreement any event
shall occur that in the judgment of the Company or in the
opinion of counsel for the Agents is required to be set
forth in the Prospectus (as then amended or supplemented)
or should be set forth therein in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus in order
to comply with the Act or any other law, the Company shall
give immediate notice to the Agents to cease the
solicitation of offers to purchase the Notes in their
capacity as Agents and to cease sales of any Notes an
Agent may then own as principal pursuant to a Terms
Agreement, and the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment
thereto, and will
<PAGE>
-7-
expeditiously furnish to the Agents a reasonable number of
copies thereof.
(f) The Company will cooperate with the Agents and
with counsel for the Agents in connection with the
registration or qualification of the Notes for offering
and sale under the securities or Blue Sky laws of such
jurisdictions as the Agents may reasonably designate and
will file such consents to service of process or other
documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to
take any action which would subject it to service of
process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(g) The Company will make generally available to its
security holders a consolidated earnings statement, which
need not be audited, covering a twelve-month period
commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter,
as soon as reasonably practicable after the end of such
period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(h) The Company, during the period when the
Prospectus is required to be delivered under the Act, will
file promptly all documents required to be filed with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act and will furnish each of the Agents with
copies of such documents. Except as otherwise provided in
Section 3(k) hereof, on or prior to the date on which
there shall be released to the general public interim
financial statement information related to the Company
with respect to the first three fiscal quarters of any
fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish
such information to the Agents.
(i) If required by the terms of any Terms Agreement,
between the date of any Terms Agreement and the related
Settlement Date (as defined below) specified in such
agreement, the Company will not, without the applicable
Agent's prior consent, offer, sell, contract to sell or
<PAGE>
-8-
otherwise dispose of debt securities of the Company having
a maturity of more than one year from the date of issue
covered by the Registration Statement or another
registration statement filed by the Company under the Act
(other than the Notes being offered pursuant to such Terms
Agreement), except that the Company may offer, sell,
contract to sell or otherwise dispose of obligations of
the Company in respect of industrial revenue bonds or
similar securities exempt from federal income taxes.
(j) The Company will apply the net proceeds from the
sale of the Notes substantially in accordance with the
description set forth in the Prospectus.
(k) The Company shall not be required to comply with
the provisions of subsections (a), (b), (c), (e) or (h) of
this Section or the provisions of Section 9 hereof during
any period from the time (i) the Agents shall have
received written notification from the Company to suspend
solicitations of purchasers of the Notes in their capacity
as agents and (ii) the earlier of the date on which no
Agent shall then hold Notes as principal purchased
pursuant to a Terms Agreement and the date which is
fifteen days (nine months with respect to subsections (e)
and (h) of this Section) from the date on which the Agents
shall have received written notice from the Company to
suspend solicitations of purchases of the Notes, to the
time the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with the
Agents.
4. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to each Agent as of the
date hereof, as of the date of each acceptance by the Company
of an offer for the purchase of Notes (whether through the
Agents as agents or to one or more of the Agents as principal),
as of the date of each delivery of Notes (whether through the
Agents as agents or to one or more of the Agents as principal)
(the date of each such delivery to one or more Agents as
principal being hereafter referred to as a "Settlement Date"),
and as of any time that the Registration Statement or the
Prospectus shall be amended or supplemented (it being
understood that such representations and warranties shall be
deemed to relate to the Registration Statement and the
Prospectus, each as amended or supplemented as of each such
date) that:
<PAGE>
-9-
(a) The Registration Statement and any post-
effective amendment thereto have been declared effective
by 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) Each Prospectus included as part of the
registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act and did
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
except that this representation and warranty does not
apply to statements in or omissions from such Prospectus
(or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the
Company in writing by an Agent expressly for use therein.
The Commission has not issued any order preventing or
suspending the use of any Prospectus.
(c) The Company and the transactions contemplated by
this Agreement meet the requirements for using Form S-3
under the Act. The registration statement in the form in
which it became effective and also in such form as it may
be when any post-effective amendment thereto shall become
effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under
Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and will not at any such times contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading; except that
this representation and warranty does not apply to
statements in or omissions from the registration statement
or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by an
Agent expressly for use therein.
(d) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was
<PAGE>
-10-
filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such
document when it was filed (or, if any amendment with
respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading; and no such further
document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a
material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the
State of Delaware with full corporate power and authority
to own, lease and operate its properties and to conduct
its business, and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure so to register or
qualify does not have a material adverse effect on the
financial condition, business, properties, net worth or
results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect").
(f) Each Material Subsidiary (as defined below) is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its organization, with
full corporate power and authority to own, lease and
operate its properties and to conduct its business, except
where the failure of a Material Subsidiary to be duly
organized and existing or to have full corporate power and
authority would not have a Material Adverse Effect; each
Material Subsidiary is duly registered, qualified or
licensed to conduct its business and is in good standing
in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register, be licensed or qualify would not have a
Material Adverse Effect; all the outstanding shares of
capital stock of each Material Subsidiary have been duly
<PAGE>
-11-
authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or
indirectly through one of its other subsidiaries, free and
clear of any lien, adverse claim, security interest,
equity, or other encumbrance; and there are no outstanding
rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, shares of capital
stock or other equity interests in any Material
Subsidiary. As used herein, the term "Material
Subsidiaries" means the following subsidiaries of the
Company: Varity Holdings Limited and Perkins Group
Limited, each a corporation organized under the laws of
the United Kingdom; Dayton Walther Corporation, an Ohio
corporation; K-H Corporation, a Delaware corporation; and
Kelsey-Hayes Company, a Delaware corporation.
(g) When the Notes are issued and delivered pursuant
to this Agreement, such Notes will have been duly
authorized by the Company and, when executed by the
Company and authenticated by the applicable Trustee in
accordance with the terms of the applicable Indenture
(assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), and delivered to and
paid for by the purchasers thereof, will be entitled to
the benefits of the Indenture and will constitute the
valid and binding obligations of the Company enforceable
against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
(h) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened,
against the Company or any of its subsidiaries which are
reasonably likely to have a Material Adverse Effect, or to
which the Company or any of its subsidiaries, or to which
any of their respective properties, is subject which are
material to the Company and its subsidiaries taken as a
whole, that are required to be described in the
Registration Statement or the Prospectus, but are not
described as required, and there are no agreements,
contracts, indentures, leases or other instruments
relating to the Company or its subsidiaries that are
required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the
Registration Statement or any
<PAGE>
-12-
Incorporated Document that are not described or filed as
required by the Act or the Exchange Act. The descriptions
of the terms of any such contracts or documents contained
in the Registration Statement, the Prospectus or any
Incorporated Documents are correct in all material respects.
(i) Neither the Company nor any of its subsidiaries
is (i) in violation of its certificate or articles of
incorporation or bylaws, or other organizational
documents, (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries or of
any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, or
(iii) in default in any material respect in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture,
lease or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of
their respective properties may be bound, and no condition
or state of facts exists, which, with the passage of time
or the giving of notice or both, would constitute such a
default, except in the case of clauses (i), (ii) and (iii)
where any such violation or default, or violations and
defaults in the aggregate, would not have a Material
Adverse Effect.
(j) None of the issuance and sale of the Notes, the
execution, delivery or performance of this Agreement, any
Terms Agreement and the Indenture relating to the Notes by
the Company or the consummation by the Company of the
transactions contemplated hereby and thereby to be
consummated by the Company (i) requires any consent,
approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official
(except such as may be required for the registration of
the Securities under the Act and the Exchange Act, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected
in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
documents, of the Company or any of its subsidiaries or
(ii) conflicts or will
<PAGE>
-13-
conflict with or constitutes or will constitute a breach of,
or a default under, any material agreement, indenture, lease
or instrument to which the Company or any of its subsidiaries
is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of its
subsidiaries or any of their respective properties, or
will 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 the terms
of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any
of the property or assets of any of them is subject,
except in the case of clauses (i) and (ii) where any such
conflict, breach, default or violation, or conflicts,
breaches, defaults or violations in the aggregate, would
not have a Material Adverse Effect.
(k) The accountants who have certified or shall
certify the financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) were
or shall be, for the periods in which they certified or
certify such financial statements, independent public
accountants as required by the Act.
(l) The historical financial statements, together
with related schedules and notes, included or incorporated
by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position,
results of operations, cash flows and changes in
stockholders' equity of the Company and its subsidiaries
on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which
they apply; such statements and related schedules and
notes have been prepared in accordance with United States
generally accepted accounting principles (as described in
the Prospectus) consistently applied throughout the
periods involved, except as disclosed therein; and the
other financial and statistical information and data
included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and
the books and records of the Company and its subsidiaries.
<PAGE>
-14-
(m) The execution and delivery of, and the
performance by the Company of its obligations under, each
of this Agreement, any Terms Agreement and the Indenture
have been duly and validly authorized, executed and
delivered by the Company and constitutes the valid and
legally binding agreement of the Company enforceable
against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and remedies gener-
ally and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law). The Indenture has been
duly qualified under the Trust Indenture Act.
(n) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of its
subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to
the Company and its subsidiaries taken as a whole, and
there has not been any material change in the capital
stock of the Company, or material increase in the
short-term debt or long-term debt of the Company and any
of its subsidiaries taken as a whole, or any Material
Adverse Effect.
(o) Each of the Company and its subsidiaries has
good and marketable title to all property (real and
personal) described in the Prospectus as being owned by
it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are
described in the Registration Statement and the Prospectus
or in a document filed as an exhibit to the Registration
Statement and all the property described in the Prospectus
as being held under lease by each of the Company and its
subsidiaries is held by it under valid, subsisting and
enforceable leases, in each case with only such exceptions
as in the aggregate would not have a Material Adverse
Effect.
(p) The Company and each of its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits") as are
necessary to own its respective properties and to conduct
<PAGE>
-15-
its business in the manner described in the Prospectus,
except where the failure to have any such Permit would not
have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectus; the
Company and each of its subsidiaries has fulfilled and
performed all its material obligations with respect to
such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or results in any other material
impairment of the rights of the holder of any such Permit,
except where such action would not have a Material Adverse
Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such Permits contains
any restriction that is materially burdensome to the
Company and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries own or possess
all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any
of them or necessary for the conduct of their respective
businesses, except where the lack of such ownership or
possession would not have a Material Adverse Effect, and
the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the
Company or any of its subsidiaries with respect to the
foregoing.
5. Indemnification and Contribution. (a) 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,
judgments and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based
upon 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, except insofar as
such losses, claims, damages, liabilities, judgments or
expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity
<PAGE>
-16-
with the information furnished in writing to the Company by or
on behalf of any Agent; provided, however, that the
indemnification contained in this paragraph (a) with respect to
any Prospectus shall not inure to the benefit of any Agent (or
to the benefit of any person controlling such Agent) on account
of any such loss, claim, damage, liability, judgment or expense
arising from the sale of the Notes by such Agent to any person
if a copy of the Prospectus shall not have been delivered or
sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material
fact contained in any preliminary prospectus was corrected in
the Prospectus. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be
brought against any Agent or any person controlling any Agent
in respect of which indemnity may be sought against the
Company, such Agent or such controlling person shall promptly
notify the Company, and the Company shall assume the defense
thereof, including the employment of counsel and payment of all
reasonable fees and expenses of such counsel. Any such Agent
or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of such Agent
or such controlling person, rather than the Company, unless
(i) the Company has agreed in writing to pay such fees and
expenses, (ii) the Company has failed to assume the defense and
employ counsel, or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include
both such Agent or such controlling person and the Company and
such Agent or such controlling person shall have been advised
by its counsel that representation of such indemnified party
and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such
Agent or such controlling person). It is understood, however,
that the Company shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel,
<PAGE>
-17-
not more than one per jurisdiction) at any time for all such
Agents and controlling persons, which firm shall be designated
in writing by the Agents, and that all such fees and expenses
shall be reimbursed promptly as they are incurred. The Company
shall not be liable for any settlement of any such action, suit
or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless
any Agent, to the extent provided in the preceding paragraph,
and any such controlling person from and against any loss,
claim, damage, liability, judgment or expense by reason of such
settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Agent or any person controlling an
Agent is entitled to employ separate counsel pursuant to the
second sentence of this Section 5(b) and shall have requested
the Company in writing to reimburse such Agent or such
controlling person for fees and expenses of counsel, the
Company agrees that it shall be liable for any settlement of
any proceeding effected by such Agent or such controlling
person and for which the Company is liable pursuant to Section
5(a) without its written consent if (i) such settlement is
entered into more than ten (10) business days after receipt by
the Company of the aforesaid request or (ii) the Company shall
not have reimbursed such Agent or such controlling person in
accordance with such request prior to the date of such
settlement. The Company shall not, without the prior written
consent of such Agent or such controlling person, effect any
settlement of any pending or threatened proceeding in respect
of which any Agent or any person controlling an Agent is or
could have been a party and indemnity could have been sought
hereunder by such Agent or such controlling person, unless such
settlement includes an unconditional release of such Agent or
such controlling person from all liability on claims that are
subject matter of such proceeding.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors,
officers who sign the Registration Statement, and any person
who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Agent, but
only with respect to information relating to such Agent
furnished in writing by or on behalf of such Agent expressly
for use in the Registration Statement, the Prospectus or any
amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its
directors, officers, or any such controlling person based on the
<PAGE>
-18-
Registration Statement, the Prospectus or any amendment or
supplement thereto, and in respect of which indemnity may be
sought against any Agent pursuant to this paragraph (c), such
Agent shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Agent shall not be required to
do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Agent), and the
Company, its directors, officers, and any such controlling
person shall have the rights and duties given to the Agents by
paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which the Agents may otherwise
have.
(d) If the indemnification provided for in this
Section 5 is unavailable to, or insufficient to hold harmless,
an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities, judgments
or expenses referred to therein, then an 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, judgments
or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand
and the Agents on the other hand from the offering of the
Notes, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above, but also the relative fault of the
Company on the one hand and the Agents on the other hand in
connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities, judgments or
expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company
on the one hand and the Agents on the other hand shall be
deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and
commissions received by the Agents, in each case as set forth
in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Agents on the
other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on
the one hand or by the Agents on the other hand and the parties'
relative intent, knowledge, access
<PAGE>
-19-
to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and the Agents agree that it would
not be just and equitable if contribution pursuant to this
Section 5 were determined by a pro rata allocation (even if the
Agents were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities, judgments and
expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the
provisions of this Section 5, no Agent shall be required to
contribute any amount in excess of the amount by which the
total price of the Notes sold by it and distributed to the
public 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
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities,
judgments or expenses for which an indemnified party is
entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the
indemnified party promptly as such losses, claims, damages,
liabilities, judgments or expenses are incurred. The indemnity
and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Agent or any person controlling any Agent, the Company, its
directors or officers, or any person controlling the Company,
(ii) acceptance of any Notes and payment therefor hereunder,
and (iii) any termination of this Agreement. A successor to
any Agent or any person controlling any Agent, or to the
Company, its directors or officers, or any person controlling
the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained
in this Section 5.
<PAGE>
-20-
6. Conditions of Obligations. The obligations of
-------------------------
the Agents to solicit offers to purchase the Notes as agent of
the Company, and each Agent's obligation to purchase Notes as
principal pursuant to any Terms Agreement, will be subject to
the accuracy of the representations and warranties of the
Company contained herein on the date hereof, and to the
accuracy of the statements of the Company's officers made in
any certificate, to the extent contemplated in such
certificate, to the performance by the Company of its
obligations hereunder and to the following additional
conditions:
(a) All filings, if any, required by Rule 424 under
the Act shall have been timely made; no stop order
suspending the effectiveness of the registration statement
shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional
information (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied
with.
(b) Subsequent to the execution of any applicable
Terms Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change,
in or affecting the financial condition, business,
properties, net worth, or results of operations of the
Company and its subsidiaries taken as a whole from the
date of the latest balance sheet included or incorporated
by reference in the Prospectus in each case not
contemplated by the Prospectus, which is material and
adverse; (ii) any downgrading in, or notice of any
proposal to downgrade, the rating of the Company's debt
securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule
436(g) under the Act) or any public announcement that any
such organization has under surveillance or review with
negative implications the rating of the Company's debt
securities; (iii) any suspension or limitation of trading
in securities generally on or by the New York Stock
Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, or any setting of minimum prices
for trading on such exchange; (iv) any suspension of
trading of any securities of the Company on any exchange;
(v) any banking moratorium declared by Federal or New York
authorities; or (vi) the outbreak or escalation of
hostilities involving the United States or the
<PAGE>
-21-
declaration by the United States of a national emergency
or war, if the effect of any such event set forth in (i)
through (vi), in the judgment of the Agents, makes it
impractical or inadvisable to proceed with the solicitation
of purchases of the Notes.
(c) The Agents shall have received on the date
hereof, an opinion of Cahill Gordon & Reindel (a
partnership including a professional corporation), counsel
for the Company, dated the date hereof and addressed to
the Agents, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing
under the laws of the State of Delaware with full
corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus;
(ii) The Indenture relating to the Notes has
been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer and similar laws
affecting creditors' rights generally and by general
equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
(iii) The Notes have been duly authorized and,
when executed and authenticated in accordance with
the Indenture and delivered to the purchasers thereof
against payment therefor in accordance with the terms
of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance
with their terms, except as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and will be entitled to the
benefits of the Indenture;
(iv) The Registration Statement and all post-
effective amendments, if any, have become effective
under the Act and, to the best knowledge of such
<PAGE>
-22-
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance
with Rule 424(b);
(v) The Company has all requisite corporate
power and authority to enter into this Agreement, any
Terms Agreement and the Indenture relating to the
Notes and to issue and deliver the Notes to the
purchasers thereof;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid,
legal and binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except (A) as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and (B) that rights to indemnity
and contribution hereunder may be limited by Federal
or state securities laws or the public policy
underlying such laws;
(vii) The Notes and the Indenture conform in all
material respects to the descriptions thereof
contained in the Registration Statement and the
Prospectus;
(viii) None of the offer, sale, or delivery of the
Notes, or the execution, delivery or performance of
this Agreement and the Indenture relating to the
Notes, nor compliance by the Company with all the
provisions of this Agreement and the Indenture
applicable to it, nor consummation by the Company of
the transactions contemplated hereby conflicts or
will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate of
incorporation or bylaws of the Company or any
indenture or other debt instrument or any other
material agreement or lease to which the Company is a
party or by which the Company or any of its
properties is bound that is an exhibit to the
Registration
<PAGE>
-23-
Statement or to any Incorporated Document, which
conflict, breach or default would have a Material
Adverse Effect, or, except as disclosed in the
Registration Statement, will result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company under any such
indenture, debt instrument, agreement or lease which
lien, charge or encumbrance would have a Material
Adverse Effect, nor will any such action result in any
violation of any existing law, regulation, ruling
(assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable
inquiry, applicable to the Company or any of its
properties, which violation would have a Material
Adverse Effect;
(ix) No consent, approval, authorization or
other order of, or registration or filing with, any
Delaware, New York State or Federal court, regulatory
body, administrative agency or other governmental
body, agency, or official is required on the part of
the Company (except as have been obtained or made
under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws
governing the purchase and distribution of the
Securities) for the valid issuance and sale of the
Notes to the purchasers thereof as contemplated by
this Agreement; and
(x) The Registration Statement and the
Prospectus and any supplements or amendments thereto
(except for the financial statements, schedules and
notes thereto and other financial and statistical
data included therein, as to which such counsel need
not express any opinion) comply as to form in all
material respects with the requirements of the Act;
and each of the Incorporated Documents (except for
the financial statements, schedules and notes thereto
and other financial and statistical data included
therein, as to which such counsel need not express
any opinion), when they were filed (or, if an
amendment with respect to any Incorporated Document
was filed, when such amendment was filed) complied as
to form in all material respects with the Exchange
Act.
<PAGE>
-24-
In addition, such counsel shall state that such
counsel participated in conferences with officers and
other representatives of the Company, representatives of
the independent public accountants and representatives of
the Agents at which the contents of the Registration
Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement
and Prospectus (except as otherwise indicated above) on
the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and
representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that
either the Registration Statement or any amendment
thereto, at the time the Registration Statement or
amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement
thereto as of its date, or the Registration Statement or
the Prospectus and any amendment or supplement thereto as
of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(it being understood that such counsel need express no
opinion with respect to the financial statements and
schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
The opinion of such counsel may be limited to the
laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the
United States. In rendering their opinion as aforesaid,
such counsel may, as to factual matters, rely upon written
certificates or statements of officers of the Company and
public officials.
(d) The Agents shall have received letters dated the
date hereof from KPMG Peat Marwick LLP, independent
certified public accountants, substantially in the forms
heretofore approved by the Agents.
(e) The Agents shall have received on the date
hereof, an opinion of Andrews & Kurth L.L.P., counsel for
<PAGE>
-25-
the Agents, dated the date hereof and addressed to the
Agents, in form and substance satisfactory to the Agents.
(f) You shall have received a certificate signed by
the chief executive officer and the chief financial
officer of the Company (or such other officers as are
acceptable to you) that: (i) no stop order suspending the
effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, shall be
contemplated by the Commission at the date hereof;
(ii) there shall not have been, since the respective dates
as of which information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in
the Registration Statement and the Prospectus (or any
amendment or supplement thereto), any material adverse
change in the financial condition, business, prospects,
properties, net worth or results of operations of the
Company and its subsidiaries taken as a whole; (iii) all
the representations and warranties of the Company
contained in this Agreement shall be true and correct on
and as of the date hereof; and (iv) the Company has
performed or complied with its agreements herein contained
and required to be performed or complied with by it
hereunder at or prior to the date of such certificate.
(g) The Company shall have furnished or caused to be
furnished to you such further certificates and documents
as you shall have reasonably requested.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to the Agents and their counsel.
Any certificate or document signed by any officer of
the Company and delivered to you or to counsel for the
Agents, shall be deemed a representation and warranty by
the Company to each Agent as to the statements made
therein. Any certificate delivered by the Company to its
counsel for purposes of enabling such counsel to render
the opinions referred to in this Section 6 will also be
furnished to you and counsel for the Agents.
7. Expenses. The Company agrees to pay the
--------
following costs and expenses and all other costs and expenses
<PAGE>
-26-
incident to the performance by them of their obligations
hereunder: (i) the preparation, printing (or reproduction),
and filing with the Commission of the registration statement
(including financial statements and exhibits thereto), each
Prospectus and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the registration statement, the
Prospectus, the Incorporated Documents, and all amendments or
supplements to any of them, as may be reasonably requested for
use in connection with the offering and sale of the Notes,
(iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes, including any stamp
taxes in connection with the original issuance and sale of the
Notes; (iv) the printing (or reproduction) and delivery of this
Agreement, the Indenture, the preliminary and supplemental Blue
Sky Memoranda and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of
the Notes; (vi) the registration or qualification of the Notes
for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 3(f) hereof (including
the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing (or
reproduction), and delivery of the preliminary and supplemental
Blue Sky Memoranda and such registration and qualification);
(vii) the filing fees of the Underwriters in connection with
any filings required to be made with the National Association
of Securities Dealers, Inc.; and (viii) the fees and expenses
of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company.
8. Delivery of and Payment for Notes Sold through
----------------------------------------------
the Agents. Delivery of Notes sold through an Agent as agent
- ----------
shall be made by the Company to such Agent for the account of
any purchaser only against payment therefor in immediately
available funds. In the event that a purchaser shall fail
either to accept delivery of or to make payment for a Note on
the date fixed for settlement, the applicable Agent shall
promptly notify the Company and deliver the Note to the Company
and, if such Agent has theretofore paid the Company for such
Note, the Company will promptly return such funds to such
Agent. If such failure occurred for any reason other than
default by the applicable Agent in the performance of its
obligations hereunder, the Company will reimburse such Agent on
an equitable basis for its loss of the use of the funds for the
period such funds were credited to the Company's account.
<PAGE>
-27-
9. Additional Covenants of the Company. The
-----------------------------------
Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties.
-----------------------------------------------
Each acceptance by the Company of an offer for the purchase
of Notes, and each delivery of Notes to an Agent pursuant to
a Terms Agreement, shall be deemed to be an affirmation
that the representations and warranties of the Company
contained in this Agreement and, to the extent therein
provided, in any certificate theretofore delivered to the
Agents pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will
be true and correct at the time of delivery to the
purchaser or his agent, or to the Agents, of the Notes
relating to such acceptance or sale, as the case may be,
as though made at and as of each such time (and it is
understood that such representations and warranties shall
relate to the Registration Statement and Prospectus as
amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Subject to
-----------------------------------
the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by the filing of an
Annual Report on Form 10-K, a Quarterly Report on Form
10-Q and any Current Report on Form 8-K or an amendment or
supplement providing solely for a change in the interest
rate of Notes (excluding any change in the formulas by
which such interest rates may be determined) or similar
changes, and other than by an amendment or supplement
which relates exclusively to an offering of debt
securities other than the Notes), or (2) there is filed
with the Commission any document incorporated by reference
into the Prospectus (other than any Current Report on
Form 8-K, except upon the reasonable request of the Agents
therefor), or (3) (if required pursuant to the terms of a
Terms Agreement) the Company sells Notes to an Agent
pursuant to a Terms Agreement, the Company shall furnish
or cause to be furnished to the Agents forthwith a
certificate dated the date of filing with the Commission
of such supplement or document, the date of effectiveness
of such amendment or the Applicable Settlement date, as
the case may be, in form and substance satisfactory to the
Agents to the effect that the statements contained in the
certificate referred to in Section 6(f) hereof which were
last furnished to the Agents are true and correct at the
time of
<PAGE>
-28-
such amendment, supplement, filing or sale, as the
case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the
certificate referred to in said Section 6(f), modified as
necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of
delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Subject
-------------------------------------
to the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by an amendment or
supplement providing solely for a change in the interest
rates of the Notes (excluding any change in the formulas
by which such interest rates may be determined) or similar
changes or solely for the inclusion of additional
financial information, other than by an amendment by the
filing of a Quarterly Report on Form 10-Q and any Current
Report on Form 8-K (except in the circumstances
hereinafter described) and other than by an amendment or
supplement which relates exclusively to an offering of
debt securities other than the Notes) or (2) there is
filed with the Commission the Company's Annual Report on
Form 10-K and such Annual Report is incorporated by
reference into the Prospectus or (3) (if required pursuant
to the terms of a Terms Agreement) the Company sells Notes
to an Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the
Agents the written opinion of Cahill Gordon & Reindel,
special counsel for the Company, or other counsel
satisfactory to the Agents (which shall be deemed to
include the General Counsel of the Company, unless
otherwise specified by the Agents), and, only when
required pursuant to an applicable Terms Agreement
pursuant to clause (3) above, the written opinion of
counsel for the Agents, in each case dated the date of
filing with the Commission of such supplement or document,
the date of effectiveness of such amendment or the
applicable Settlement Date, as the case may be, in form
and substance satisfactory to the Agents, of the same
tenor as the opinions referred to in Section 6(c) hereof,
but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinions or, in lieu of
such opinions, counsel last furnishing such opinions to
<PAGE>
-29-
the Agents shall each furnish the Agents with a letter to
the effect that the Agents may rely on such last opinion
to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in
such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter
authorizing reliance). If one or more of the Agents
reasonably determine that the information included in a
filing by the Company in a Quarterly Report filed on
Form 10-Q or a Current Report filed on Form 8-K is of such
importance that legal opinion should be delivered to the
Agents in conjunction therewith, such Agent or Agents
shall notify the Company promptly upon such determination
(and in any event not later than 30 days after such
filing) and the Company will thereupon furnish or cause to
be furnished the opinions described above.
(d) Subsequent Delivery of Comfort Letters. Subject
--------------------------------------
to the provisions of Section 3(k) hereof, each time that
the Registration Statement or the Prospectus shall be
amended or supplemented (other than by incorporation by
reference) to include additional financial information or
there is filed with the Commission any document
incorporated by reference into the Prospectus which
contains additional financial information or (if required
pursuant to the terms of a Terms Agreement) the Company
sells Notes to an Agent pursuant to a Terms Agreement, the
Company shall cause KPMG Peat Marwick LLP or their
successors forthwith to furnish the Agents a letter, dated
the date of filing with the Commission of such supplement
or document, the date of effectiveness of such amendment,
or the applicable Settlement Date, as the case may be, in
form and substance satisfactory to the Agents, of the same
tenor as the the letter referred to in Section 6(d) hereof
but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of
such letter; provided, however, that if the Registration
-------- -------
Statement or the Prospectus is amended or supplemented
solely to include financial information as of and for a
fiscal quarter, KPMG Peat Marwick LLP or their successors
may limit the scope of such letter to the unaudited
financial statements included in such amendment or
supplement unless any other information included therein
of an accounting, financial or statistical nature is of
such a nature that, in the reasonable judgment of the
Agents, such letter should cover such other information.
<PAGE>
-30-
10. Survival of Certain Representations and
---------------------------------------
Obligations. The respective indemnities, agreements,
- -----------
representations, warranties and other statements of the Company
or its officers and of the several Agents set forth in or made
pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the
result thereof, made by or on behalf of any Agent, the Company
or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery
of and payment for any of the Notes.
11. Termination. (a) Termination of this
----------- -------------------
Agreement. This Agreement (excluding any Terms Agreement) may
- ---------
be terminated for any reason, at any time by either the Company
with respect to one or more Agents or an Agent, as to itself,
upon the giving of 30 days' written notice of such termination
to the other parties hereto.
(b) General. In the event of any such termination,
-------
neither party will have any liability to the other party
hereto, except that (i) each Agent shall be entitled to any
commission with respect to Notes sold by the Company as a
result of a solicitation made by such Agent and earned in
accordance with the third paragraph of Section 2(b) hereof,
(ii) if at the time of termination (a) an Agent shall own any
Notes purchased pursuant to a Terms Agreement with the
intention of reselling them or (b) an offer to purchase any of
the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes
relating thereto has not occurred, the covenants set forth in
Sections 3 and 9 hereof shall remain in effect until such Notes
are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 3(g) hereof, the provisions of
Section 6 hereof, the indemnity and contribution agreements set
forth in Section 5 hereof, and the provisions of Section 10 and
13 hereof shall remain in effect.
12. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Company shall be directed to
Varity Corporation, 672 Delaware Avenue, Buffalo, New York
14209, Attention: Corporate Secretary; notices to the Agents
shall be directed to: [ ].
13. Parties. This Agreement shall inure to the
-------
benefit of and be binding upon each Agent, the Company and
<PAGE>
-31-
their respective successors, heirs and legal representatives.
Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation,
other than the Agents, the Company and their respective
successors, heirs and legal representatives and the controlling
persons and officers and directors referred to in Section 5 and
their heirs and legal representatives, any legal or equitable
right, remedy or claim under, by virtue of or in respect of
this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the
Agents, the Company and their respective successors, heirs and
legal representatives, and said controlling persons and
officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Notes shall be deemed to be a
successor or assign by reason merely of such purchase.
14. Applicable Law; Counterparts. This Agreement
----------------------------
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed entirely within the State of New York. This
Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to us
the enclosed duplicate hereof.
Very truly yours,
VARITY CORPORATION
By:__________________________
Name:
Title:
<PAGE>
-32-
The foregoing Agreement is
hereby confirmed as of the
date first above written
[NAME OF AGENT]
By______________________________
Name:
Title:
<PAGE>
Exhibit A
to Agency Agreement
[Agent's Commission Schedule]
<PAGE>
Exhibit B
to Agency Agreement
Terms to be agreed to by the Company and the Agents
in a Terms Agreement.
<PAGE>
Exhibit C
to Agency Agreement
Exhibit C to the Agency Agreement will be added at
the time the Agency Agreement is signed and will consist of
Administrative Procedures agreed on by the Company and the
Agents.
<PAGE>
EXHIBIT 4.1
_______________________________________________________________
_______________________________________________________________
____________________
KELSEY-HAYES COMPANY, as Issuer,
and
VARITY CORPORATION, as Guarantor,
and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
____________________
INDENTURE
Dated as of , 1995
____________________
Senior Debt Securities
_______________________________________________________________
_______________________________________________________________
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of , 1995
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S) 310(a)(1) ........................................ 7.11
(a)(2) ........................................ 7.11
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(a)(5) ........................................ 7.11
(b) ........................................ 7.11; 11.2
(c) ........................................ N.A.
(S) 311(a) ........................................ 7.12
(b) ........................................ 7.12
(c) ........................................ N.A.
(S) 312(a) ........................................ 2.6
(b) ........................................ 11.3
(c) ........................................ 11.3
(S) 313(a) ........................................ 7.7
(b) ........................................ 7.7
(c) ........................................ 7.7; 11.2
(d) ........................................ 7.7
(S) 314(a) ........................................ 4.4; 4.5; 11.2
(b) ........................................ N.A.
(c)(1) ........................................ 11.4
(c)(2) ........................................ 11.4
(c)(3) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ 11.5
(f) ........................................ N.A.
(S) 315(a) ........................................ 7.1(b)
(b) ........................................ 7.5; 11.2
(c) ........................................ 7.1(a)
(d) ........................................ 7.1(c)
(e) ........................................ 6.11
(S) 316(a) (last
sentence) ........................................ 2.9
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................ N.A.
(b) ........................................ 6.7
(c) ........................................ N.A.
(S) 317(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.9
(b) ........................................ 2.5
(S) 318(a) ........................................ 11.1
(b) ........................................ N.A.
(c) ........................................ 11.1
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions..................................... 1
Section 1.2. Incorporation by Reference of Trust
Indenture Act................................. 9
Section 1.3. Rules of Construction........................... 10
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally................................. 10
Section 2.2. Title, Terms and Denominations.................. 11
Section 2.3. Execution, Authentication, Delivery
and Dating.................................... 15
Section 2.4. Registrar and Paying Agent...................... 17
Section 2.5. Paying Agent To Hold Money in Trust............. 17
Section 2.6. Securityholder Lists............................ 18
Section 2.7. Transfer and Exchange........................... 18
Section 2.8. Replacement Securities.......................... 19
Section 2.9. Outstanding Securities;
Determination of Holders' Action.............. 20
Section 2.10. Temporary Securities............................ 20
Section 2.11. Cancellation.................................... 21
Section 2.12. Payment of Interest; Defaulted
Interest...................................... 21
Section 2.13. CUSIP Number.................................... 22
Section 2.14. Deposit of Moneys............................... 22
Section 2.15. Persons Deemed Owners........................... 22
Section 2.16. Computation of Interest......................... 23
Section 2.17. Global Securities............................... 23
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.......................... 24
Section 3.2. Selection of Securities To Be
Redeemed...................................... 24
Section 3.3. Notice of Redemption............................ 25
Section 3.4. Effect of Notice of Redemption.................. 26
Section 3.5. Deposit of Redemption Price..................... 26
Section 3.6. Securities Redeemed or Purchased in
Part.......................................... 27
-ii-
<PAGE>
Page
----
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities........................... 27
Section 4.2. Maintenance of Office or Agency................. 28
Section 4.3. Corporate Existence............................. 28
Section 4.4. Compliance Certificate.......................... 29
Section 4.5. SEC Reports..................................... 30
Section 4.6. Waiver of Stay, Extension or Usury
Laws.......................................... 31
Section 4.7. Limitation on Liens............................. 31
Section 4.8. Limitation on Sale and Lease-Back
Transactions.................................. 32
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company and Guarantor May
Merge, etc.................................... 33
Section 5.2. Successor Substituted........................... 34
ARTICLE 6
REMEDIES
Section 6.1. Events of Default............................... 35
Section 6.2. Acceleration.................................... 37
Section 6.3. Other Remedies.................................. 39
Section 6.4. Waiver of Past Defaults......................... 39
Section 6.5. Control by Majority............................. 39
Section 6.6. Limitation on Suits............................. 40
Section 6.7. Right of Holders To Receive Payment............. 41
Section 6.8. Collection Suit by Trustee...................... 41
Section 6.9. Trustee May File Proofs of Claim................ 41
Section 6.10. Priorities...................................... 42
Section 6.11. Undertaking for Costs........................... 42
Section 6.12. Restoration of Rights and Remedies.............. 43
ARTICLE 7
TRUSTEE
Section 7.1. Duties.......................................... 43
Section 7.2. Rights of Trustee............................... 44
Section 7.3. Individual Rights of Trustee.................... 46
Section 7.4. Trustee's Disclaimer............................ 46
-iii-
<PAGE>
Page
----
Section 7.5. Notice of Default............................... 46
Section 7.6. Money Held in Trust............................. 46
Section 7.7. Reports by Trustee to Holders................... 47
Section 7.8. Compensation and Indemnity...................... 47
Section 7.9. Replacement of Trustee.......................... 48
Section 7.10. Successor Trustee by Merger, etc................ 50
Section 7.11. Eligibility; Disqualification................... 51
Section 7.12. Preferential Collection of Claims
Against Company............................... 51
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's and the
Guarantor's Obligations....................... 51
Section 8.2. Legal Defeasance and Covenant
Defeasance.................................... 53
Section 8.3 Application of Trust Money...................... 57
Section 8.4. Repayment to Company............................ 57
Section 8.5. Reinstatement................................... 58
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders...................... 58
Section 9.2. With Consent of Holders......................... 59
Section 9.3. Compliance with Trust Indenture Act............. 61
Section 9.4. Revocation and Effect of Consents............... 61
Section 9.5. Notation on or Exchange of
Securities.................................... 62
Section 9.6. Trustee May Sign Amendments, etc................ 63
ARTICLE 10
GUARANTEE
Section 10.1. Unconditional Guarantee ........................ 63
Section 10.2. Execution of Guarantee ......................... 64
-iv-
<PAGE>
Page
----
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act of 1939..................... 65
Section 11.2. Notices......................................... 65
Section 11.3. Communication by Holders with Other
Holders....................................... 67
Section 11.4. Certificate and Opinion as to
Conditions Precedent.......................... 67
Section 11.5. Statements Required in Certificate
or Opinion.................................... 67
Section 11.6. Rules by Trustee, Paying Agent,
Registrar..................................... 68
Section 11.7. Governing Law................................... 68
Section 11.8. No Interpretation of Other
Agreements.................................... 68
Section 11.9. No Recourse Against Others...................... 68
Section 11.10. Successors...................................... 68
Section 11.11. Duplicate Originals............................. 69
Section 11.12. Separability.................................... 69
Section 11.13. Table of Contents, Headings, etc................ 69
Section 11.14. Benefits of Indenture........................... 69
SIGNATURES......................................................... 70
-v-
<PAGE>
INDENTURE, dated as of , 1995, among
KELSEY-HAYES COMPANY, a Delaware corporation (the "Company"),
VARITY CORPORATION, a Delaware corporation (the "Guarantor"),
and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee").
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 ratable
benefit of the Holders of the Securities or of any series
thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
-----------
"Affiliate" means, with respect to any specified
Person, any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Attributable Debt" when used in connection with a
Sale and Lease-Back Transaction involving a Principal Property
shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by
the Board of Directors of the Company); or (b) the present
value of the total net amount of rent required to be paid under
such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the
terms of such lease or, if not practicable to determine such
rate, the weighted average interest rate per annum borne by the
Securities of each series outstanding pursuant to this
Indenture compounded semi-annually. For purposes of the fore-
going definition, rent shall not include amounts required to be
paid by the lessee, whether or not designated as rent or
additional rent, on account of or contingent upon maintenance
and repairs, insurance, taxes, assessments, water rates and
similar charges. In the case of any lease which is terminable
by the lessee upon the payment of a penalty, such net amount
shall be the lesser of the net amount determined assuming
termination upon the first date such lease may be terminated
(in which case the net amount shall also include the amount of
the penalty, but no
<PAGE>
-2-
rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated)
or the net amount determined assuming no such termination.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the
relief of debtors.
"Board of Directors" means the board of directors of
the Company or the Guarantor, as the case may be, or any duly
authorized committee of either such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors of
the Company or the Guarantor as the context requires and to be
in full force and effect on the date of such certification, and
delivered to the Trustee.
"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, State of New York, or the
city in which the Trustee has its Corporate Trust Office, are
authorized or obligated by law, regulation or executive order
to close.
"Capital Stock" means, with respect to any Person,
any and all shares, interests, participations, rights in or
other equivalents (however designated) of such Person's capital
stock, and any rights (other than debt securities convertible
into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture,
the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in
accordance with GAAP.
"Company" means the party named as such in this
Indenture until a successor replaces it (or any previous
successor) pursuant to this Indenture, and thereafter means
such successor.
<PAGE>
-3-
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one
of its Chairman of the Board, its Vice-Chairman, its President
or a Vice President, and by any one of its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is One M & T Plaza, Buffalo, New York
14240, Attention: Corporate Trust Department.
"Covenant Defeasance" shall have the meaning set
forth in Section 8.2.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Discount Security" means any Security which provides
for an amount less than the principal thereof to be due and
payable upon a declaration of acceleration of the Stated
Maturities thereof pursuant to Section 6.2.
"Event of Default" has the meaning set forth in
Section 6.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States of America, as in
effect on the date hereof.
"Guarantee" means the guarantee of the Guarantor set
forth in Article Ten hereof.
<PAGE>
-4-
"Guarantor" means Varity Corporation, a Delaware
corporation, and, subject to Article Ten, its successors and
assigns.
"Holder" or "Securityholder" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all obligations for borrowed money,
(ii) all obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued
expenses arising in the ordinary course of business), (v) all
fixed unconditional obligations issued or contracted for as
payment in consideration of the purchase by such Person of the
stock or substantially all the assets of another Person or a
merger or consolidation, (vi) all obligations for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction which secure
Indebtedness of a Person other than the issuer of the letter of
credit or the accepting bank, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons
guaranteed by such Person to the extent of the guarantee; and
(viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons which are secured by any Lien on
any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the value of such
property or asset at the time the Lien is created or the amount
of the obligation so secured.
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time, in accordance
herewith, and includes, with respect to a particular series of
Securities, the terms of such series of Securities established
or contemplated by Section 2.2(a).
"Interest Payment Date", for any series of
Securities, has the meaning provided in the form of such
Securities set forth in the supplemental indenture, Board
Resolution, or Officers' Certificate under which such
Securities are issued.
"Issue Date" means, with respect to any particular
series of Securities, the original date of issuance of such
series; provided that, in the case of a series subject to a
--------
Periodic Offering, the Issue Date shall be the original issue
<PAGE>
-5-
date or dates established pursuant to the proviso of the third
paragraph of Section 2.3.
"Legal Defeasance" shall have the meaning set forth
in Section 8.2.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any
property which such Person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Material Subsidiary" means, at any particular time,
any Subsidiary of any Person that (a) accounted for more than
10% of the consolidated revenues of such Person and its
Subsidiaries on a consolidated basis for the most recently
completed fiscal year of such Person or (b) was the owner of
more than 10% of the consolidated assets of such Person and its
Subsidiaries on a consolidated basis as at the end of such
fiscal year, all as shown on the consolidated financial
statements of such Person and its Subsidiaries for such fiscal
year.
"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due
and payable as therein or herein provided, whether at the
Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or
otherwise.
"Nonrecourse Obligation" means Indebtedness or other
obligations substantially related to (i) the acquisition of
assets not previously owned by the Company or any Restricted
Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to
such Indebtedness or obligation has no recourse to the Company
or any Restricted Subsidiary or any assets of the Company or
any Restricted Subsidiary other than the assets which were
acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the
proceeds thereof).
"Officer" means the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the
<PAGE>
-6-
Chief Operating Officer, the Treasurer, the Secretary or the
Controller of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
Subject to any express provision hereof, the counsel may be an
employee of or counsel to the Company or the Guarantor.
"Paying Agent" has the meaning set forth in
Section 2.4, except that, for the purposes of Articles Three
and Eight, the Paying Agent shall not be: (i) the Company or
the Guarantor, (ii) a Subsidiary of the Company or the
Guarantor or (iii) any of the Company's or Guarantor's
respective Affiliates.
"Periodic Offering" means an offering of Securities
of a series from time to time the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the Stated Maturity or Stated
Maturities thereof, the original Issue Date or Dates thereof,
the redemption provisions, if any, and any other terms
specified as contemplated by Section 2.2(a) with respect
thereto, are to be determined by the Company, or one or more of
the Company's agents or employees designated in an Officers'
Certificate, upon the issuance of such Securities.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the
Securities only, the premium, if any, on the Security.
"Principal Property" shall mean the land, land
improvements, buildings and fixtures (to the extent they
constitute real property interests) (including any leasehold
interest therein) constituting the principal corporate office,
any manufacturing plant or any manufacturing facility (whether
now owned or hereafter acquired) which: (a) is owned by the
Company or any of its Subsidiaries; (b) is located within any
<PAGE>
-7-
of the present 50 States of the United States of America (or
the District of Columbia); (c) has not been determined in good
faith by the Board of Directors of the Company not to be
materially important to the total business conducted by the
Company and its Subsidiaries taken as a whole; and (d) has a
book value on the date as of which the determination is being
made in excess of 1% of consolidated total assets of the
Company as most recently determined on or prior to such date.
"Redemption Date" means, with respect to any Security
to be redeemed, the date fixed by the Company or the Guarantor,
as the case may be, for such redemption pursuant to this
Indenture and the Securities.
"Redemption Price" means, with respect to any
Security to be redeemed, the price fixed for such redemption
pursuant to the terms of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in
Section 2.4.
"Regular Record Date", for any series of Securities,
has the meaning provided in the form of such Securities set
forth in the supplemental indenture, Board Resolution or
Officers' Certificate under which such Securities are issued.
"Restricted Subsidiary" shall mean any Subsidiary of
the Company which owns any Principal Property.
"Sale and Lease-Back Transaction" shall mean any sale
or transfer by the Company or one of its Restricted
Subsidiaries of any Principal Property that is being sold or
transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or
commencement of operation thereof, if such sale or transfer is
made with the intent of leasing, or as part of an arrangement
involving the lease of, such Principal Property to the Company
or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission,
as from time to time constituted or, if at any time after the
execution of this Indenture such Commission is not existing and
performing the applicable duties now assigned to it, then the
body or bodies performing such duties at such time.
<PAGE>
-8-
"Securities" means the securities that are issued
under this Indenture, as amended or supplemented from time to
time pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Stated Maturity" means, when used with respect to
any Security of a particular series or any installment of
principal thereon, the date specified in such Security of such
series as the fixed date on which any principal of such
Security of such series is due and payable, and when used with
respect to any other Indebtedness, means any date specified in
the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness is due and payable.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture,
in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
a majority ownership interest entitled to vote in the election
of directors, managers or trustees thereof (or other Person
performing similar functions).
"Surviving Entity" shall have the meaning set forth
in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any
previous successor) in accordance with the provisions of this
Indenture, and thereafter means such successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer of the Trustee assigned by the
Trustee to administer its corporate trust matters 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>
-9-
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.2.
"Vice President" shall include Senior Vice President
or a Vice President with any other prefix.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
Section 1.2. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company, the Guarantor or any other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
Section 1.3. Rules of Construction.
---------------------
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
<PAGE>
-10-
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(f) 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; and
(g) all references to $ or dollars refer to the
lawful currency of the United States of America.
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally.
---------------
The Securities of each series shall be substantially
in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as
set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an
Officers' Certificate of the Company detailing such
establishment) 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
any applicable law or with the rules of any securities exchange
or as may, consistently herewith, be determined by the Officers
executing such Securities, as evidenced by their execution
thereof. The Securities shall be issuable only in registered
form without coupons. The indenture supplemental hereto or the
Board Resolution or Officers' Certificate establishing the form
of security of any series shall be delivered to the Trustee
concurrently with or
<PAGE>
-11-
prior to the delivery of the Company Order contemplated by
Section 2.3 for the authentication and delivery of such
Securities.
The definitive Securities and Guarantees endorsed
thereon shall be printed, typewritten, lithographed or engraved
or produced by any combination of these methods 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 and
Guarantees, as evidenced by their execution of such Securities
and Guarantees. Each Security and Guarantee shall be dated the
date of its authentication.
The Guarantees to be endorsed on the Securities of
each series shall be in substantially the form set forth in
Section 10.1 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
any law or with any rules made pursuant thereto or with any
rules of any securities exchange or to conform to general usage
or as may, consistently herewith, be determined by the Officers
executing such Guarantees, as evidenced by their execution of
such Guarantees.
Section 2.2. Title, Terms and Denominations.
------------------------------
(a) The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture
shall be unlimited. The Securities may be issued in one or
more series. There shall be established and, subject to
Section 2.3, set forth, or determined in the manner provided,
in one or more indentures supplemental hereto or in or pursuant
to a Board Resolution (as set forth in such Board Resolution
or, to the extent established pursuant to rather then set forth
in such Board Resolution, an Officers' Certificate detailing
such establishment):
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all
other Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated
and delivered under this Indenture (except for Securities
<PAGE>
-12-
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Sections 2.7, 2.8, 2.10, 3.6 or 9.5
and except for any Securities which, pursuant to
Section 2.3, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on any Security
of the series shall be payable, if other than the Person
in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable or the method of
determination thereof;
(5) the rate or rates at which the Securities of the
series shall bear interest (which in no event shall be
greater than the then applicable legal rate therefor), 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 Securities on any Interest
Payment Date and/or the method by which such rate or rates
or Regular Record Date or Dates shall be determined;
(6) the place or places where, subject to the
provisions of Section 4.2, the principal of and any
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for regis-
tration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or
upon the Company in respect of the Securities of the
series and this Indenture may be served;
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof, the conditions, if any, giving rise to
such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions
<PAGE>
-13-
upon which Securities of the series shall be redeemed or
purchased, in whole or in part, and any provisions for the
remarketing of such Securities;
(9) the denominations in which any Securities of the
series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof;
(10) if the amount of payments of principal of and
any interest on the Securities of the series is to be
determined with reference to an index, formula or other
method, the manner in which such amounts shall be
determined and the calculation agent, if any, with respect
thereto;
(11) if other than the principal amount thereof, the
portion of the principal amount of any Securities of the
series which shall be payable upon declaration of
acceleration of the Stated Maturity thereof pursuant to
Section 6.2;
(12) if other than as defined in Section 1.1, the
meaning of "Business Day" when used with respect to any
Securities of the series;
(13) if the Securities of the series may be issued
or delivered (whether upon original issuance or upon
exchange of a temporary Security of such series or
otherwise), or any installment of principal of or any
interest is payable, only upon receipt of certain
certificates or other documents or satisfaction of other
conditions in addition to those specified in this
Indenture, the form and terms of such certificates,
documents or conditions;
(14) the forms of the Securities;
(15) whether the Securities of the series shall be
issued in whole or in part in the form of a global
Security or Securities and, in such case, the depositary
for such global Security or Securities;
(16) any provision for defeasance or discharge of
the Securities of the series, if different from those set
forth herein;
(17) any listing of the Securities of a series on a
securities exchange;
<PAGE>
-14-
(18) the price or prices at which the Securities of
a series will be issued; and
(19) any other terms of the series not inconsistent
with the provisions hereof, but which may include
covenants, Events of Default, definitions and other
provisions in lieu of or in addition to those set forth in
this Indenture as of the date hereof and amendments to or
other changes in any of the covenants, Events of Default,
definitions and other provisions set forth in this
Indenture as of the date hereof.
All Securities of any one series shall be substan-
tially identical except as to denomination, the rate or rates
of interest, if any, the Stated Maturities, the date from which
interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to the Board Resolutions or Officers'
Certificates referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of
additional Securities of such series or for the establishment
of additional terms with respect to the Securities of such
series, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolutions, such
Officers' Certificates or in any such indenture supplemental
hereto.
(b) Unless otherwise provided as contemplated by
Section 2.2(a) which respect to any series of Securities, any
Securities of a series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
(c) The Securities of any one series shall rank pari
----
passu in right of payment with the Securities of any other
- -----
series.
Section 2.3. Execution, Authentication,
Delivery and Dating.
-------------------------
Two Officers shall sign, or one Officer shall sign
and one Officer shall attest to (provided that in either case,
one such Officer must be the Chairman of the Board, President,
a Vice President, Treasurer or Secretary) the Securities for
the Company by manual or facsimile signatures.
Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
<PAGE>
-15-
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.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the
validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Securities of any series, executed by the Company and having
endorsed thereon the Guarantees executed by the Guarantor, to
the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall
authenticate and deliver such Securities; provided, however,
-------- -------
that, with respect to Securities of a series subject to a
Periodic Offering, (a) such Company Order may be delivered by
the Company to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such
series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to a Company Order or
pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by a Company Order, (c) the rate or
rates of interest, if any, the Stated Maturity or Maturities,
the original Issue Date or Dates, the redemption provisions, if
any, and any other terms of Securities of such series shall be
determined by Company Order or pursuant to such procedures and
(d) if provided for in such procedures, such Company Order may
authorize authentication and delivery pursuant to oral or
electronic instructions from the Company, or the Company's duly
authorized agent or agents designated in an Officers'
Certificate, which oral instructions shall be confirmed
promptly in writing. The Trustee shall be entitled to rely on
such oral instructions, whether or not confirmed in writing.
Each Security shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. Unless
otherwise provided in the appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the
<PAGE>
-16-
Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal
with the Company, the Guarantor or an Affiliate.
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 duly executed by
the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. The Trustee's
Certificate of Authentication shall be in substantially the
following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
_____________________________,
as Trustee
By: _______________________
Authorized Officer
Notwithstanding the foregoing, if any Security of any series
shall have been duly authenticated and delivered hereunder but
never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as
provided in Section 2.11 together with a written statement
(which need not comply with Section 11.4 or 11.5 and need not
be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 2.4. Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each
series of Securities, an office or agency in the Borough of
Manhattan, The City of New York, State of New York where such
Securities may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where such
Securities may be presented for payment (the "Paying Agent")
and an office or agency where notices and demands to or upon
the Company in respect of such Securities and this Indenture
<PAGE>
-17-
may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying
agent. Except as otherwise expressly provided in this
Indenture, the Company, the Guarantor or any Affiliate of the
Company or the Guarantor may act as Paying Agent.
The Company and the Guarantor shall enter into an
appropriate agency agreement, with respect to each series of
Securities, with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement
shall implement the provisions of this Indenture that relate to
such Agent. The Company shall notify the Trustee of the name
and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent or agent for service of
notices and demands, or fails to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.8.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
Section 2.5. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit
of Securityholders of a particular series or the Trustee all
money held by the Paying Agent for the payment of principal of,
or interest on, the Securities of such series (whether such
money has been distributed to it by the Company, the Guarantor
or any other obligor on such Securities), and the Company and
the Paying Agent shall notify the Trustee of any default by the
Company (or any other obligor on such Securities) in making any
such payment. If the Company or the Guarantor or a Subsidiary
of the Company or Guarantor acts as Paying Agent, the money
shall be segregated and held as a separate trust fund. The
Company at any time may require a Paying Agent to distribute
all money held by it to the Trustee and account for any funds
disbursed and the Trustee may at any time during the
continuance of any payment Default with respect to such
Securities, upon written request to a Paying Agent, require
such Paying Agent to pay all money held by it to the Trustee
and to account for any funds distributed. Upon doing so, the
Paying Agent (other than an obligor under the Securities) shall
have no further liability for the money so paid over to the
Trustee. Upon
<PAGE>
-18-
any bankruptcy or reorganization proceeding involving the Company
or the Guarantor, the Trustee shall act as Paying Agent for the
Securities.
Section 2.6. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders of each series of
Securities and shall otherwise comply with TIA (S) 312(a). If
the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten Business Days before each Interest
Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of
Securityholders of such series of Securities, which list may be
conclusively relied upon by the Trustee.
Section 2.7. Transfer and Exchange.
---------------------
When Securities of any series are presented to the
Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such
transaction are met; provided, however, that such Securities
-------- -------
surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney-in-fact duly authorized in
writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request and the Guarantor shall
endorse the Guarantee thereon. No service charge shall be made
for any registration of transfer or exchange, but the Company
or the Guarantor may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.3, 2.8, 2.11, 3.6 or 8.5).
At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series of any
authorized denomination or denominations, of a like aggregate
principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency.
<PAGE>
-19-
Whenever any Securities are so surrendered for
exchange, the Company shall execute, the Guarantor shall
endorse the Guarantee on, and the Trustee or a duly appointed
authenticating agent shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
The Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of Securities and ending at the close
of business on the day of such mailing or (ii) selected for
redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in
part.
Section 2.8. Replacement Securities.
----------------------
If a mutilated Security of any series is surrendered
to the Trustee or if the Holder of a Security of any series
claims that such Security has been lost, destroyed or
wrongfully taken, the Company shall issue, the Guarantor shall
endorse the Guarantee on, and the Trustee shall authenticate, a
replacement Security if the Trustee's requirements are met. If
required by the Trustee, the Guarantor or the Company, such
Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of the Trustee, the Company and the
Guarantor, to protect the Company, the Trustee, the Guarantor
or any Agent from any loss which any of them may suffer if a
Security is replaced. The Company may charge such Holder for
its reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the Company
and the Guarantor.
Section 2.9. Outstanding Securities;
Determination of Holders' Action.
--------------------------------
Securities of any series outstanding at any time are
all Securities of such series that have been authenticated by
the Trustee, except those cancelled by it, those delivered to
<PAGE>
-20-
it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding
because the Company or any of its Affiliates holds the
Security; provided, however, that in determining whether the
-------- -------
Holders of the required principal amount of Securities of any
series have concurred in any direction, waiver or consent,
Securities of such series owned by the Company or other obligor
on the Securities of such series or an Affiliate of the Company
or such other obligor shall be disregarded, except that for the
sole purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be
disregarded.
If a Security is replaced pursuant to Section 2.8
(other than a mutilated Security surrendered for replacement),
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
----
fide purchaser. A mutilated Security ceases to be outstanding
- ----
upon surrender of such Security and replacement thereof
pursuant to Section 2.8.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Securities payable on
that date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Securities
pursuant to the terms of this Indenture, then on and after that
date such Securities cease to be outstanding and interest on
them shall cease to accrue.
Section 2.10. Temporary Securities.
--------------------
Until definitive Securities of any series are
prepared and ready for delivery, the Company may prepare, the
Guarantor may endorse its Guarantee on and the Trustee shall
authenticate temporary Securities. Temporary Securities shall
be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company
shall prepare, the Guarantor shall endorse its Guarantee on,
and the Trustee shall authenticate, definitive Securities in
exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
<PAGE>
-21-
Section 2.11. Cancellation.
------------
The Company or the Guarantor at any time may deliver
Securities to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The
Trustee or, at the direction of the Trustee, the Registrar or
the Paying Agent (other than the Company, the Guarantor or an
Affiliate of the Company or the Guarantor), and no one else,
shall cancel and, at the written direction of the Company,
shall dispose of all Securities surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.8, the
Company may not issue new Securities to replace Securities that
it has paid or delivered to the Trustee for cancellation. If
the Company or the Guarantor shall acquire any of the
Securities, such acquisition shall not operate as a payment,
redemption or satisfaction of the Indebtedness represented by
such Securities unless and until the same are surrendered to
the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Payment of Interest;
Defaulted Interest.
--------------------
Unless otherwise provided as contemplated by Section
2.2(a) with respect to any series of Securities, interest on
any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest.
If the Company defaults on a payment of interest on
any series of Securities, it shall pay the defaulted interest,
plus (to the extent permitted by law) any interest payable on
the defaulted interest, in accordance with the terms hereof, to
the Persons who are Securityholders of such series on a
subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Company
shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each
Securityholder of such series a notice that states the special
record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if
any, to be paid.
Section 2.13. CUSIP Number.
------------
<PAGE>
-22-
The Company in issuing any series of Securities may
use a "CUSIP" number (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that
-------- -------
any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the
notice or on such Securities, and that reliance may be placed
only on the other identification numbers printed on such
Securities. The Company will promptly notify the Trustee of
any change in the CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
On or before each Interest Payment Date and Maturity
Date, the Company shall deposit with the Trustee or Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders of the
applicable series of Securities on such Interest Payment Date
or Maturity Date, as the case may be.
Section 2.15. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for
registration of transfer, the Company, the Guarantor, the
Trustee and any agent of the Company, the Guarantor or the
Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of and (except as otherwise
specified as contemplated by Section 2.2(a) and Section 2.12)
interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and
neither the Company, the Guarantor, the Trustee nor any agent
of the Company, the Guarantor or the Trustee shall be affected
by notice to the contrary.
Section 2.16. Computation of Interest.
-----------------------
Except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series,
(i) interest, if any, on any Securities which bear interest at
a fixed rate shall be computed on the basis of a 360-day year
of twelve 30 day months and (ii) interest on any Securities
which bear interest at a variable or floating rate shall be
computed on the basis of the actual number of days in an
interest period
<PAGE>
-23-
divided by the number of days in the year for which such interest
is calculated.
Section 2.17. Global Securities.
-----------------
The Company may issue, if a Board Resolution or
Officers' Certificate so provides, some or all of the
Securities of a series in temporary or permanent global form.
A global Security may be in registered form or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the
Company's request, the Registrar shall endorse a global
Security to reflect the amount of any increase or decrease in
the Securities represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may
transfer a global Security only as a whole to its nominee or to
a successor depository.
The Company may establish, among other things, the
manner of paying principal and interest on a global Security
and whether and upon what terms a beneficial owner of an
interest in a global Security may exchange such interest for
definitive Securities.
The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a
depository, for any depository records of beneficial ownership
interests or for any transactions between the depository and
beneficial owners.
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.
----------------------
Securities of any series which are redeemable before
their maturity shall be redeemable in accordance with their
terms and (except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series) in
accordance with this Article.
<PAGE>
-24-
If the Company elects to redeem Securities of a
series which are redeemable, it shall notify the Trustee in an
Officers' Certificate of the Redemption Date and principal
amount of Securities of such series to be redeemed.
If the Company wishes to reduce the principal amount
of a series of Securities to be redeemed, it shall so notify
the Trustee of the amount of the reduction and the basis for
it. If the Company wishes to credit, and is entitled to
credit, against any such redemption Securities of such series
it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such
notice.
The Company shall give each notice provided for in
this Section 3.1 at least 45 days, but not more than 60 days
before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
Section 3.2. Selection of Securities To Be
Redeemed.
-----------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, if less than all the Securities of any series are
to be redeemed, the particular Securities of such series or
portions thereof to be redeemed shall be selected from the
outstanding Securities not previously called for redemption
either (x) pro rata, by lot or by such other method as the
Trustee considers to be fair and appropriate or (y) in such
manner as complies with the requirements of the principal
national securities exchange, if any, on which the Securities
of such series being redeemed are listed. The amounts to be
redeemed shall be equal to $1,000 or any integral multiple
thereof, except that if all of the Securities of a series of a
Holder are to be redeemed, the entire amount of Securities of
such series held by such Holder, even if not a multiple of
$1,000, shall be redeemed or purchased.
The Trustee shall select Securities to be redeemed
from the Securities of the applicable series outstanding and
not previously called for redemption and shall promptly notify
the Company and the Registrar in writing of the Securities of
any series selected for redemption and, in the case of any
Securities of any series selected for partial redemption, the
principal amount thereof to be redeemed.
<PAGE>
-25-
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Securities of any series 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 3.3. Notice of Redemption.
--------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, notice of redemption shall be given by first-class
or certified mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder
of Securities to be redeemed, at the address of such Holder
appearing in the security register maintained by the Registrar.
All notices of redemption shall identify the
Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities
redeemed;
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Security to be redeemed
and that on or after the Redemption Date, upon surrender
for cancellation of such Security to the Paying Agent, a
new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be
issued without charge to the Securityholder;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and the name and address of the Paying Agent;
<PAGE>
-26-
(f) the CUSIP number, if any, relating to such
Securities; and
(g) whether Securities are being redeemed pursuant
to the mandatory redemption or the optional redemption
provisions of the Securities.
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 written request, by the Trustee in the name
and at the expense of the Company.
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Paying
Agent, such Securities called for redemption shall be paid at
the Redemption Price plus accrued interest to the Redemption
Date, but interest installments whose maturity is on or prior
to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the
Securities.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in immediately
available funds sufficient to pay the Redemption Price of, and
accrued and unpaid interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that
date which have been delivered by the Company to the Trustee
for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed
will cease to accrue on and after the applicable Redemption
Date, whether or not such Securities are presented for payment.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and, to the
extent lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate provided in the
Securities, unless otherwise specified as contemplated by
<PAGE>
-27-
Section 2.2(a) with respect to the Securities of such series or
in such Securities.
Section 3.6. Securities Redeemed or Purchased in
Part.
-----------------------------------
Upon surrender to the Paying Agent of a Security
which is to be redeemed in part, the Company shall execute, the
Guarantor shall endorse the Guarantee on and the Trustee shall
authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the unredeemed portion of
the principal of the Security so surrendered that is not
redeemed.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest
on each series of Securities on the dates and in the manner
provided in such Securities or pursuant to this Indenture. An
installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the
Company, the Guarantor, a Subsidiary of the Company or the
Guarantor or any Affiliate of any thereof) holds for the
benefit of the Holders on that date money deposited and
designated for and sufficient to pay the installment and is not
prohibited from paying such money to the Holders of the
Securities pursuant to the terms of this Indenture.
Unless otherwise specified as contemplated by
Section 2.2(a) with respect to any series of Securities, the
Company will pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue
principal at the rate and in the manner provided in the
Securities; it shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law)
on overdue installments of interest (without regard to any
applicable grace period) at the same rate and in the same
manner, to the extent lawful.
<PAGE>
-28-
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company and the Guarantor will maintain in the
Borough of Manhattan, The City of New York, State of New York,
an office or agency where Securities may be surrendered for
registration of transfer or exchange, an office or agency where
the Securities may be presented for payment and an office or
agency where notices and demands to or upon the Company and the
Guarantor in respect of the Securities and this Indenture may
be served. The Company and the Guarantor will give prompt
written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the
Company or the Guarantor shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the
Trustee as set forth in Section 11.2.
The Company and the Guarantor may also from time to
time designate one or more other offices or agencies where
Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the
Company or the Guarantor of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New
York, State of New York, for such purposes. The Company and
the Guarantor will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the
location of any such other office or agency. The Company and
the Guarantor hereby initially designate the Corporate Trust
Office of the Trustee as such office of the Company and the
Guarantor.
Section 4.3. Corporate Existence.
-------------------
Subject to Article Five, the Company and the
Guarantor will each do or cause to be done all things necessary
to, and will cause each of its Material Subsidiaries to,
preserve and keep in full force and effect its respective
corporate existence, rights (charter and statutory), licenses
and/or franchises; provided, however, that the Company or the
-------- -------
Guarantor or any of their respective Subsidiaries shall not be
required to preserve any such existence, rights, licenses or
franchises if (x) the Company or the Guarantor, as the case may
be, shall reasonably determine that the preservation thereof is
no longer desirable in the conduct of the business of it and
its Subsidiaries taken as a whole or (y) the loss thereof is
<PAGE>
-29-
not materially adverse to either the Company or the Guarantor,
as the case may be, and its respective Subsidiaries taken as a
whole or to the ability of the Company or the Guarantor to
otherwise satisfy its obligations hereunder.
Section 4.4. Compliance Certificate.
----------------------
(a) The Company and the Guarantor shall deliver to
the Trustee, within 120 days after the end of each of their
respective fiscal years, an Officers' Certificate stating that
a review of the activities of the Company or the Guarantor, as
the case may be, and their respective Subsidiaries during the
preceding fiscal year has been made under the supervision of
the signing officers with a view to determining whether the
Company or the Guarantor, as the case may be, has kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his knowledge the Company
or the Guarantor, as the case may be, has kept, observed,
performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions
hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of
which he may have knowledge and what action the Company or the
Guarantor, as the case may be, is taking or proposes to take
with respect thereto) and that to the best of his knowledge no
event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the
Securities of any series are prohibited or, if such event has
occurred, a description of the event and what action the
Company or the Guarantor, as the case may be, is taking or
proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered
pursuant to Section 4.5 below shall be accompanied by a written
statement of the Guarantor's independent public accountants
(who shall be a firm of established national reputation) that
in making the examination necessary for certification of such
financial statements nothing has come to their attention that
would lead them to believe that the Guarantor or the Company
has violated any provisions of Articles 4 or 5 of this
Indenture or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood
that such accountants shall not be liable directly or
<PAGE>
-30-
indirectly to any Person for any failure to obtain knowledge of
any such violation.
(c) The Company and the Guarantor will deliver to
the Trustee as soon as possible, and in any event within 10
days after they become aware or should reasonably have become
aware of the occurrence of any Default or Event of Default in
respect of any series of Securities, an Officers' Certificate
specifying such Default or Event of Default and what action the
Company or the Guarantor is taking or proposes to take with
respect thereto.
Section 4.5. SEC Reports.
-----------
The Guarantor and the Company shall file with the
Trustee, within 15 days after it files them with the SEC,
copies of the quarterly and annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Guarantor or the Company, as
the case may be, is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Guarantor also
shall comply with the other provisions of TIA (S) 314(a). If the
Guarantor is not subject to the requirements of such Section 13
or 15(d), the Guarantor shall file with the Trustee, within 15
days after it would have been required to file the same with
the SEC, financial statements, including any notes thereto (and
with respect to annual reports, an auditors' report by a firm
of established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Guarantor would
have been required to include in such annual reports,
information, documents or other reports if the Guarantor had
been subject to the requirements of such Section 13 or 15(d).
In addition, the Guarantor shall cause its annual report to
stockholders and any quarterly or other financial reports
furnished by it to stockholders generally to be filed with the
Trustee and mailed, no later than the date such materials are
mailed or made available to the Guarantor's stockholders, to
the Holders at their addresses as set forth in the register of
Securities maintained by the Registrar.
Section 4.6. Waiver of Stay, Extension
or Usury Laws.
-------------------------
Each of the Company and the Guarantor covenants (to
the extent that it may lawfully do so) that it will not at any
<PAGE>
-31-
time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive
the Company or the Guarantor from paying all or any portion of
the principal of or interest on Securities of any series as
contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Guarantor 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.
Section 4.7. Limitations on Liens.
--------------------
The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, incur, create, assume or guarantee, any
Indebtedness secured by a Lien upon any Principal Property of
the Company or such Restricted Subsidiary or upon any shares of
stock or Indebtedness of any Restricted Subsidiary held by the
Company (whether such Principal Property, shares or
Indebtedness are now existing or owed or hereafter created or
acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation,
assumption or guaranty of any such secured Indebtedness, or the
grant of a Lien with respect to any such Indebtedness of any
Restricted Subsidiary, that the Securities (together with, if
the Company shall so determine, any other Indebtedness of or
guarantee by the Company or such Restricted Subsidiary) shall
be secured by a mortgage ranking equally and ratably with (or,
at the option of the Company, prior to), and for so long as
such other Indebtedness is so secured, such secured debt. The
foregoing restriction, however, will not apply to: (a) Liens
on property, shares of stock or Indebtedness or other assets of
any corporation existing at the time such corporation becomes a
Restricted Subsidiary; provided that such Liens are not
--------
incurred in anticipation of such corporation becoming a
Restricted Subsidiary; (b) Liens on property, shares of stock
or Indebtedness existing at the time of acquisition thereof by
the Company or a Restricted Subsidiary or Liens on property,
shares of stock or Indebtedness to secure any Indebtedness for
borrowed money incurred prior to, at the time of, or within 270
days after, the latest of the acquisition thereof, or, in the
case of property, the completion of construction, the
completion of improvements or the
<PAGE>
-32-
commencement of substantial commercial operation of such property,
for the purpose of financing all or any part of the purchase price
thereof, such construction or the making of such improvements; (c)
Liens to secure Indebtedness owing to the Company or the Guarantor
or to a Restricted Subsidiary; (d) Liens existing at the date of
the initial issuance of the Securities of such series; (e) 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 sale, lease or other disposition of
the properties of a corporation as an entirety or substantially as
an entirety to the Company or a Restricted Subsidiary; provided
--------
that such Lien was not incurred in anticipation of such merger or
consolidation or sale, lease or other disposition; (f) Liens
created in connection with a project financed with, and created to
secure, a Nonrecourse Obligation; or (g) extensions, renewals or
replacements of any Liens permitted by any of the foregoing
clauses (a) through (f); provided, however, that any Liens
-------- -------
permitted by any of the foregoing clauses (a) through (f) shall
not extend to or cover any property of the Company or such
Restricted Subsidiary, as the case may be, other than the property
specified in such clauses and improvements thereto.
Section 4.8. Limitations on Sale and Lease-Back
Transactions.
----------------------------------
The Company covenants that it will not, nor will it
permit any Restricted Subsidiary to, enter into any Sale and
Lease-Back Transaction with respect to any Principal Property,
other than any such transaction involving a lease for a term of
not more than three years or any such transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries, unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur Indebtedness secured by a
mortgage on the Principal Property involved in such transaction
at least equal in amount to the Attributable Debt with respect
to such Sale and Lease-Back Transaction, without equally and
ratably securing the Securities, pursuant to Section 4.7; or
(b) the Company shall apply an amount equal to the greater of
the net proceeds of such sale or the Attributable Debt with
respect to such Sale and Lease-Back Transaction within 180 days
of such sale to either (or a combination of) the retirement
(other than any mandatory retirement, mandatory prepayment or
sinking fund payment or by payment at maturity) of Indebtedness
of the Company or a Restricted Subsidiary that matures more
than twelve months after the creation of such Indebtedness or
the purchase, construction or development of other comparable
property.
<PAGE>
-33-
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company and Guarantor May Merge,
etc.
-------------------------------------
(a) Neither the Company nor the Guarantor will, in a
single transaction or a series of transactions, consolidate
with or merge with or into, or sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety to, any other Person or
Persons, or permit any of their respective Subsidiaries to
enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease
or other disposition of all or substantially all of the
properties and assets of the Company or the Guarantor and their
respective Subsidiaries, taken as a whole, to any other Person
or Persons, unless:
(1) either (A) if the transaction or series of
transactions is a merger or consolidation, the Company or
the Guarantor, as the case may be, shall be the Person
surviving such merger or consolidation or (B) the Person
formed by such consolidation or into which the Company,
the Guarantor or such Subsidiary, as the case may be, is
merged or to which the properties and assets of the
Company, the Guarantor or such Subsidiary, substantially
as an entirety, are transferred (any such surviving Person
or transferee Person being the "Surviving Entity") shall
be a corporation organized and existing under the laws of
the United States of America, any State thereof or the
District of Columbia and (x) in the case of the Company,
such corporation shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the
Company's obligation for the due and punctual payment of
the principal of and interest, if any, on all the
Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or
observed and (y) in the case of the Guarantor, such
corporation shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the
Guarantor's obligation for the due and punctual payment of
the Guarantee and the performance of every covenant of
this Indenture on the part of the Guarantor to
<PAGE>
-34-
be performed or observed; provided, however, that this
-------- -------
subsection (1) need not be complied with in the case of
the Guarantor's consolidation with or merger into the
Company;
(2) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
--- -----
(including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be
continuing with respect to Securities of any series; and
(3) the Company or the Guarantor, as the case may
be, shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and
substance reasonably satisfactory to the Trustee, each
stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition and, if a
supplemental indenture is required in connection with such
transaction or series of transactions, such supplemental
indenture comply with this Indenture and that all
conditions precedent herein provided for relating to such
transaction or series of transactions have been complied
with.
Section 5.2. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all of the properties and assets of the
Company or the Guarantor, as the case may be, in accordance
with Section 5.1(a) hereof, the successor Person or Persons
formed by such consolidation or into which the Company or the
Guarantor, as the case may be, is merged or the successor
Person to which such sale, assignment, conveyance, transfer,
lease or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company or the Guarantor, as the case may be, under this
Indenture and the Securities with the same effect as if such
successor had been named as the Company or the Guarantor, as
the case may be, herein; and thereafter the Company or the
Guarantor, as the case may be, shall be discharged from all
obligations and covenants under this Indenture and the
Securities.
<PAGE>
-35-
ARTICLE 6
REMEDIES
Section 6.1. Events of Default.
-----------------
An "Event of Default" means with respect to each
series of Securities, individually, any of the following
events:
(a) default by the Company or the Guarantor in the
payment of the principal of any Security of such series
when the same becomes due and payable upon Stated
Maturity, acceleration or otherwise; or
(b) default by the Company or the Guarantor in the
payment of an installment of interest on any Security of
such series when the same becomes due and payable, and any
such Default continues for a period of 30 days; or
(c) default by the Company or the Guarantor in the
performance or observance of any term, covenant or
agreement contained in this Indenture or the Securities
(other than Defaults specified in clause (a) or (b)
above), and such Default continues for a period of 60 days
after written notice of such Default (which notice shall
specify the Default, demand that it be remedied and state
that it is a "Notice of Default") requiring the Company or
the Guarantor, as the case may be, to remedy the same
shall have been given (i) to the Company or the Guarantor
by the Trustee or (ii) to the Company or the Guarantor and
the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
outstanding; or
(d) default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or
other evidences of Indebtedness, whether now existing or
hereinafter created, under which the Company, the
Guarantor or any Material Subsidiary of the Company or the
Guarantor then has outstanding Indebtedness in excess of
$10 million or more individually or $20 million or more in
the aggregate (or, in each case, the equivalent thereof in
any other currency), and either (i) such Indebtedness is
already due and payable in full or (ii) such default or
defaults have resulted in the acceleration of the maturity
of such Indebtedness unless such acceleration is cured,
<PAGE>
-36-
waived, rescinded or annulled within 30 days after written
notice thereof shall been given to the Company by the
Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the
Securities of such series then outstanding; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $10
million or more individually or $20 million or more in the
aggregate (or, in each case, the equivalent thereof in any
other currency), shall be entered against the Company, the
Guarantor or any Material Subsidiary of the Company or the
Guarantor, as the case may be, and shall not be discharged
or fully bonded and there shall have been a period of 60
days after the date on which any period for appeal has
expired and during which a stay of enforcement of such
judgment, order or decree shall not be in effect; or
(f) the Company, the Guarantor or any Material
Subsidiary of the Company or the Guarantor pursuant to or
under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for
relief against it in an involuntary case or
proceeding;
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its
property; or
(iv) makes a general assignment for the benefit
of its creditors; or
(g) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, the
Guarantor or any Material Subsidiary of the Company
or the Guarantor in an involuntary case or
proceeding,
(ii) appoints a Custodian of the Company, the
Guarantor or any Material Subsidiary of the Company
<PAGE>
-37-
or the Guarantor or for all or substantially all of
its properties, or
(iii) orders the liquidation of the Company, the
Guarantor or any Material Subsidiary of the Company
or the Guarantor,
and in each case the order or decree remains unstayed and
in effect for 60 days.
The Trustee shall not be charged with knowledge of
any Default or Event of Default (other than, if the Trustee is
acting as Paying Agent, those set forth in Section 6.1(a), (b)
or, to the extent relating to Section 4.1, (c)) unless written
notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the
Paying Agent, any Holder, any holder of Senior Indebtedness or
any of their respective agents.
Section 6.2. Acceleration.
------------
If an Event of Default with respect to any series of
Securities (other than an Event of Default specified in Section
6.1(f) or (g) with respect to the Company or the Guarantor)
occurs and is continuing, the Trustee by written notice to the
Company, or the Holders of at least 25% in aggregate principal
amount of the Securities of such series then outstanding, by
written notice to the Company and the Trustee, may declare the
unpaid principal of (or, if any of the Securities of that
series are Discount Securities, such portion of the principal
amount of such Securities as may be specified in the terms
thereof) and accrued interest on all the Securities of such
series to be due and payable immediately. If an Event of
Default specified in Section 6.1(f) or (g) with respect to the
Company or the Guarantor occurs and is continuing, then the
principal of and accrued interest on all the Securities shall
ipso facto become and be immediately due and payable without
- ---- -----
any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration in
respect of a series of Securities has been made and before a
judgment or decree for payment of the money due has been
obtained by the Trustee, Holders of a majority in aggregate
principal amount of such series of Securities outstanding, by
written notice to the Company and the Trustee, may, on behalf
<PAGE>
-38-
of all Holders of such series of Securities, rescind and annul
such declaration and its consequences if:
(a) the Company or the Guarantor has paid or
deposited with the Trustee a sum sufficient to pay
(i) all amounts due the Trustee under Section
7.8 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel,
(ii) all overdue interest on all Securities of
such series,
(iii) the principal of such series of Securities
which has become due otherwise than by such
declaration of acceleration and interest thereon at
the rate borne by such series of Securities, and
(iv) interest upon overdue principal and, to the
extent that payment of such interest is lawful,
overdue interest at the rate borne by such series of
Securities which has become due otherwise than by
such declaration of acceleration;
(b) such rescission or annulment would not conflict
with any judgment or decree of a court of competent
jurisdiction; and
(c) all Events of Default with respect to such
series of Securities, other than the non-payment of
principal of and interest on such series of Securities
which has become due solely by such declaration of
acceleration, have been cured or waived as provided in
Section 6.4.
No such rescission shall affect any subsequent
Default or Event of Default with respect to such series of
Securities or impair any right consequent thereon.
Section 6.3. Other Remedies.
--------------
If an Event of Default with respect to a series of
Securities occurs and is continuing, the Trustee may in its
discretion pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
such Securities or to enforce the performance of any provision
of such Securities or this Indenture.
<PAGE>
-39-
All rights of action and claims under this Indenture
or the Securities of any series may be enforced by the Trustee
even if it does not possess any of the Securities of such
series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of
Default with respect to a series of Securities shall not impair
the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.4. Waiver of Past Defaults.
-----------------------
Subject to the provisions of Sections 6.2, 6.7 and
9.2, the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities of any series by
notice to the Trustee may, on behalf of the Holders of all the
Securities of such series, waive any existing Default or Event
of Default, with respect to such series, and its consequences.
When a Default or Event of Default with respect to a series of
Securities is so waived, it shall be deemed cured and shall
cease to exist, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any
right consequent thereon.
Section 6.5. Control by Majority.
-------------------
The Holders of at least a majority in aggregate
principal amount of the then 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, provided, however, that the Trustee may refuse to
-------- -------
follow any direction (a) that conflicts with any rule of law or
this Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder of such
series, or (c) that may expose the Trustee to Personal
liability unless the Trustee has indemnification satisfactory
to it in its sole discretion against any loss or expense caused
by its following such direction; and provided, further, that
-------- -------
the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
<PAGE>
-40-
Section 6.6. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have
any right to pursue any remedy with respect to this Indenture
or such Securities unless:
(a) the Holder gives written notice to the Trustee
of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of at least 25% in principal amount
of the then outstanding Securities of that series make a
written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
and, if requested, provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in aggregate principal amount of the then
outstanding Securities of that series do not give the
Trustee a direction which is inconsistent with the
request.
The foregoing limitations shall not apply to a suit
instituted by a Holder of Securities of a series for the
enforcement of the payment of principal of or accrued interest
on such Securities held by such Holder on or after the
respective due dates set forth in such Securities.
A Securityholder of a series may not use this
Indenture to prejudice the rights of any other Securityholder
of such series or to obtain priority or preference over such
other Securityholder.
Section 6.7. Right of Holders To Receive Payment.
-----------------------------------
Notwithstanding any other provision in this
Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on such Security, on
or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or
after the Stated Maturity or Interest Payment Date, as the case
may
<PAGE>
-41-
be, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in clause (a) or (b)
of Section 6.1 with respect to Securities of any series occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust in favor of the Holders
against the Company, the Guarantor or any other obligor on the
Securities of such series for the whole amount of principal of
and accrued interest remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the
Securities of such series and 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.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company or the
Guarantor (or any other obligor upon the Securities), their
creditors or their property and shall be entitled and empowered
to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and
any Custodian in any such judicial proceedings 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 for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section
7.8. 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.
<PAGE>
-42-
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following
order:
First: to the Trustee for amounts due under Section
7.8;
Second: to Holders for interest accrued, if any, on
the Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities for interest;
Third: to Holders for principal owing under the
Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities of the
applicable series for principal; and
Fourth: the balance, if any, to whomsoever may be
lawfully entitled thereto.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may
in its discretion require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.7, or a suit by
Holders of more than 10% in aggregate principal amount of the
outstanding Securities of any series.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
or
<PAGE>
-43-
any Security 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.
ARTICLE 7
TRUSTEE
Section 7.1. Duties.
------
(a) In case an Event of Default has occurred and is
continuing, with respect to Securities of any series, the
Trustee shall exercise, with respect to Securities of such
series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default, with respect to the Securities of any series:
(1) the Trustee need perform, with respect to
Securities of such series, 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, with respect to Securities of such series,
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
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform
to the requirements of this Indenture.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own
<PAGE>
-44-
negligent action, its own negligent failure to act, or its own
willful misconduct, except that
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(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
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b),
(c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on,
or be required to invest, any assets received by it except as
the Trustee may agree with the Company. Assets held in trust
by the Trustee need not be segregated from other assets except
to the extent required by law.
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof and the provisions of
TIA (S) 315:
(a) The Trustee may rely, and shall be protected
from acting or refraining from acting, on any document
believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers'
<PAGE>
-45-
Certificate or an Opinion of Counsel, which shall conform
to Sections 11.4 and 11.5. The Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any
liabilities arising out of its own negligence.
(e) The Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization
and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 7.11 and 7.12 and TIA (S)(S) 310 and 311, may otherwise
deal with the Company and its Subsidiaries with the same rights
it would have if it were not the Trustee, Paying Agent,
Registrar or such other agent.
<PAGE>
-46-
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities,
it shall not be accountable for the Company's use or
application of the proceeds from the Securities, it shall not
be responsible for the use or application of any money received
by any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the
Trustee's certificate of authentication.
Section 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder of the affected series notice of
the Default or Event of Default within 30 days thereafter;
provided, however, that, except in the case of a Default in the
- -------- -------
payment of the principal of or interest on any Security or in
the payment of any sinking fund installment, the Trustee shall
be protected in withholding such notice if and so long as the
board of directors, the executive committee of the board of
directors or a committee of the directors of the Trustee and/or
Trust Officers in good faith determines that the withholding of
such notice is in the interest of the Holders.
Section 7.6. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be
segregated from other funds except to the extent required
herein or by law. The Trustee shall not be under any liability
for interest on any moneys received by it hereunder.
Section 7.7. Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 of each year beginning
with the May 15 following the date of this Indenture, the
Trustee shall, to the extent that any of the events described
in TIA (S) 313(a) has occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as
of such May 15 that complies with TIA (S) 313(a). The Trustee
also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC
<PAGE>
-47-
and each securities exchange, if any, on which the Securities
are listed.
The Company shall notify the Trustee in writing if
the Securities become listed on any securities exchange or
automatic quotation system.
Section 7.8. Compensation and Indemnity.
--------------------------
The Company covenants and agrees to pay the Trustee
from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it
arising out of or in connection with the administration of this
trust and its rights or duties hereunder, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its written consent.
The Company need not reimburse any expense or indemnify against
any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this
Section 7.8, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section
6.1(f) or (g) with respect to the Company or the Guarantor, the
expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
<PAGE>
-48-
The Company's obligations under this Section 7.8 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.9. Replacement of Trustee.
----------------------
The Trustee may resign with respect to any series of
Securities issued hereunder by so notifying the Company. The
Holders of a majority in principal amount of the outstanding
Securities of any series may remove the Trustee by so notifying
the Company and the Trustee and may appoint a successor Trustee
with the Company's consent. The Company may remove the Trustee
with respect to any series of Securities if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason with respect to
the Securities of one or more series, the Company shall notify
each Holder of such event and shall promptly appoint a
successor Trustee, with respect to the Securities of such
series. The Trustee shall be entitled to payment of its fees
and reimbursement of its expenses while acting as Trustee, and
to the extent such amounts remain unpaid, the Trustee that has
resigned or has been removed shall retain the Lien afforded by
Section 7.8. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the
outstanding Securities of any series may appoint a successor
Trustee to replace the successor Trustee appointed by the
Company with respect to the Securities of that series.
In the case of the appointment hereunder of a
successor Trustee with respect to all Securities, a successor
Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by
it as
<PAGE>
-49-
Trustee to the successor Trustee, subject to the Lien
provided in Section 7.8, the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
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 to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental
indenture shall constitute such Trustees as co-Trustees of the
same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture,
the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to
the Securities of that or those series to which the appointment
of such successor Trustee relates, subject, nevertheless, to
its Lien, if any, provided for in Section 7.8.
<PAGE>
-50-
If a successor Trustee with respect to the Securities
of one or more series does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities of such series
may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any provisions
of this Section 7.9 shall become effective upon acceptance of
appointment by the successor trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.9, the Company's obligations under Section
7.8 shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation
or national banking association without any further act shall,
if such resulting, surviving or transferee corporation or
national banking association is otherwise eligible hereunder,
be the successor Trustee.
Section 7.11. Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA (S)(S) 310(a)(1) and
310(a)(5) and which shall have a combined capital and surplus
of at least $100,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes 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. If at any time the Trustee shall cease to be
<PAGE>
-51-
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect hereinabove specified in this Article. The Trustee
shall comply with TIA (S) 310(b).
Section 7.12. Preferential Collection of Claims
Against Company.
---------------------------------
The Trustee shall comply with TIA (S) 311(a) excluding
any creditor relationship listed in TIA (S) 311(b). If the
present or any future Trustee shall resign or be removed, it
shall be subject to TIA (S) 311(a) to the extent provided
therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's
and the Guarantor's Obligations.
-------------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may terminate its obligations and the
obligations of the Guarantor under this Indenture with respect
to any series of Securities, except those obligations referred
to in the penultimate paragraph of this Section 8.1, if all
Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities
which have been replaced or paid or Securities for whose
payment money has theretofore been deposited with the Trustee
or the Paying Agent in trust or segregated and held in trust by
the Company and thereafter repaid to the Company, as provided
in Section 8.4) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it
hereunder, or if:
(a) either (i) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed
a notice to each Securityholder of such series of the
redemption of all of the Securities of such series under
arrangements satisfactory to the Trustee for the giving of
such notice or (ii) all Securities of such series have
otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee
satisfactory to the Trustee, under the terms of an
<PAGE>
-52-
irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Securityholders of such
series for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such
interest, to pay principal of and interest on the
outstanding Securities of such series to maturity or
redemption; provided that the Trustee shall have been
--------
irrevocably instructed to apply such money to the payment
of said principal and interest with respect to such
Securities;
(c) no Default or Event of Default with respect to
this Indenture applicable to such series or the Securities
of such series shall have occurred and be continuing on
the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other
instrument to which the Company or the Guarantor is a
party or by which it is bound;
(d) the Company and the Guarantor shall have paid
all other sums payable by it hereunder; and
(e) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent providing for the
termination of the Company's obligations under such
Securities and this Indenture applicable to such
Securities have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and
discharge does not result in a default under any agreement
or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the
Company's and, to the extent applicable, the Guarantor's
obligations in Sections 2.6, 2.7, 2.8, 2.9, 4.1, 4.2, 7.8, 8.4,
8.5, 10.1 and 10.2 shall survive until the Securities of such
series are no longer outstanding pursuant to the last paragraph
of Section 2.9. After the Securities are no longer
outstanding, the Company's and, to the extent applicable, the
Guarantor's obligations in Sections 7.8, 8.4 and 8.5 shall
survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the discharge
of the Company's and the Guarantor's obligations under the
Securities of such series and this Indenture applicable to such
Securities except for those surviving obligations specified
above.
<PAGE>
-53-
Section 8.2. Legal Defeasance and
Covenant Defeasance.
--------------------
(a) Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may, at its option by Board Resolution
or by an Officers' Certificate, at any time, with respect to
the Securities of any series, elect to have either paragraph
(b) or paragraph (c) below be applied to the outstanding
Securities of such series upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), each of the
Company and the Guarantor shall be deemed to have been released
and discharged from its obligations with respect to the
outstanding Securities of such series on the date the
conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding
Securities of such series, which shall thereafter be deemed to
be "outstanding" only for the purposes of paragraph (e) below
and the other Sections of and matters under this Indenture
applicable to such Securities referred to in (i) and (ii)
below, and to have satisfied all its other obligations under
such Securities and this Indenture applicable to such
Securities insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities
of such series to receive solely from the trust fund described
in paragraph (d) below and as more fully set forth in such
paragraph payments in respect of the principal of and interest
on such Securities when such payments are due, (ii) the
Company's and, to the extent applicable, the Guarantor's
obligations with respect to such Securities under Sections 2.7,
2.8 and 4.2 and, with respect to the Trustee, under Section
7.8, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and (iv) this Section 8.2 and Section
8.5. Subject to compliance with this Section 8.2, the Company
may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under
paragraph (c) below with respect to Securities of any series.
<PAGE>
-54-
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
and, to the extent applicable, the Guarantor shall be released
and discharged from its obligations under any covenant
contained in Article 5 and in Section 4.3, except as to the
corporate existence of the Company and the Guarantor and in
Sections 4.4 through 4.8 and in certain other sections with
respect to the outstanding Securities of such series identified
in any supplemental indenture pursuant to Section 2.2(a) on and
after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and such Securities shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to such outstanding
Securities, the Company and, to the extent applicable, the
Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of
any reference elsewhere herein to any such covenant or by
reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default
under Section 6.1(c) with respect to such series of Securities,
but, except as specified above, the remainder of this Indenture
applicable to such Securities and such Securities shall be
unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Securities of such series:
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this Section
8.2 applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, (x)
money in an amount or (y) direct non-callable obligations
of, or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or
obligation the full faith and credit of the United States
is pledged ("U.S. Government Obligations") maturing as to
<PAGE>
-55-
principal and interest in such amounts of money and at
such times as are sufficient without consideration of any
reinvestment of such interest, to pay principal of and
interest on the outstanding Securities of such series not
later than one day before the due date of any payment, or
(z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge principal of and interest on
the outstanding Securities of such series on the Maturity
Date or otherwise in accordance with the terms of this
Indenture and of the Securities of such series; provided,
--------
however, that the Trustee (or other qualifying trustee)
-------
shall have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to
the Securities of such series;
(ii) no Default or Event of Default with respect to
such series of Securities shall have occurred and be
continuing on the date of such deposit;
(iii) such deposit will not result in a breach or
violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(iv) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities of such series will
not recognize income, gain or loss for Federal income tax
purposes 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;
(v) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
<PAGE>
-56-
Opinion of Counsel to the effect that the Holders of the
outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes 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;
(vi) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to either the Legal Defeasance under paragraph
(b) above or the Covenant Defeasance under paragraph (c)
above, as the case may be, have been complied with; and
(vii) the Company shall have delivered to the Trustee
an amount sufficient to cover its fees and expenses as
Trustee under this Indenture through the term of the
Securities to be defeased, or made adequate provision
therefor to the satisfaction of the Trustee.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee; collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above
in respect of the outstanding Securities of such series shall
be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture applicable
to such Securities, to the payment, either directly or through
any Paying Agent (other than the Company or any Affiliate of
the Company) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
paragraph (d) above or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the
outstanding Securities of such series.
Anything in this Section 8.2 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, of the
Company any
<PAGE>
-57-
money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.3. Application of Trust Money.
--------------------------
The Trustee or a trustee satisfactory to the Trustee,
the Company and the Guarantor shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to
Sections 8.1 and 8.2, and shall apply the deposited money and
the money from U.S. Government Obligations in accordance with
this Indenture to the payment of principal of and interest on
the Securities of such series.
Section 8.4. Repayment to Company.
--------------------
Subject to Sections 7.8, 8.1 and 8.2, the Trustee
shall promptly pay to the Company, upon receipt by the Trustee
of an Officers' Certificate, any excess money, determined in
accordance with Section 8.2, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be,
of an Officers' Certificate, any money held by it for the
payment or principal or interest that remains unclaimed for two
years after payment to the Securityholders of such series is
required; provided, however, that the Trustee and the Paying
-------- -------
Agent before being required to make any payment may, but need
not, at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York
or mail to each Securityholder of such series entitled to such
money notice that such money remains unclaimed and that after a
date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance
of such money then remaining will be repaid to the Company.
After payment to the Company, Securityholders entitled to money
must look solely to the Company for payment as general
creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
<PAGE>
-58-
Section 8.5. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations to any payment in respect
of Securities of any series in accordance with this Indenture
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, then and
only then, the Company's and the Guarantor's obligations under
this Indenture and the Securities of such series shall be
revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is
permitted to apply all such money or U.S. Government
Obligations in accordance with this Indenture; provided,
--------
however, that if the Company or the Guarantor has made any
- -------
payment of principal of or interest on any Securities of such
series because of the reinstatement of its obligations, the
Company or the Guarantor, as the case may be, shall be
subrogated to the rights of the Holders of Securities of such
series to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
--------------------------
The Company, the Guarantor and the Trustee may amend,
waive or supplement this Indenture or the Securities of any
series without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to evidence the succession of another Person to
the Company or the Guarantor, and the assumption by any
such successor of the obligations of the Company or the
Guarantor herein and in the Securities of any series in
accordance with Article Five;
(c) to provide for uncertificated Securities in
addition to certificated Securities;
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
<PAGE>
-59-
(e) to make any change that would provide any
additional benefit or rights to the Holders or that does
not adversely affect the rights of any Holder; or
(f) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.2(a),
respectively.
Upon the request of the Company accompanied by a
resolution of its Board of Directors, and in the case of an
amendment to Article 10 hereof adversely affecting the Guarantor,
the Guarantor's Board of Directors, authorizing the execution of
any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company and, as the case may be,
the Guarantor, in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations which
may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which
affects its own rights, duties, protections or immunities under
this Indenture or otherwise.
Section 9.2. With Consent of Holders.
-----------------------
Subject to Section 6.4, the Company, the Guarantor
and the Trustee may amend or supplement this Indenture or the
Securities of any series or any supplemental indenture relating
to any series of Securities with the written consent of the
Holders of not less than a majority in aggregate principal
amount of the Securities of each series affected then
outstanding, and the Holders of not less than a majority in
aggregate principal amount of the Securities of each series
affected then outstanding by written notice to the Trustee may
waive future compliance by the Company and the Guarantor with
any provision of this Indenture, such Securities or any
supplemental indenture relating to such Securities.
Upon the request of the Company, accompanied by a
resolution of its Board of Directors, and in the case of an
amendment to Article 10 hereof adversely affecting the Guarantor,
the Guarantor's Board of Directors, authorizing the execution of
any supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Securityholders as
aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with
the Company,
<PAGE>
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and, as the case may be, the Guarantor in the execution of such
supplemental indenture unless such supplemental indenture affects
the Trustee's own rights, duties, protections or immunities under
this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
Notwithstanding the provisions of this Section 9.2,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 6.4, may not:
(a) reduce the percentage in aggregate outstanding
principal amount of Securities of any series the Holders
of which must consent to an amendment, supplement or
waiver of any provision of this Indenture, the Securities
of such series or any supplemental indenture;
(b) reduce the rate or change the time for payment
of interest on any Security of any series or change the
method or formula for calculating interest;
(c) reduce the principal amount outstanding of or
extend the fixed maturity of any Security of any series or
alter the redemption provisions with respect thereto or
reduce the amount of the principal of any outstanding
Discount Securities that would be due and payable upon
declaration of acceleration of maturity thereof;
(d) waive a default in the payment of the principal
of or interest on, or redemption or an offer to purchase
required hereunder with respect to, any Security of any
series;
(e) make the principal of or interest on any
Security of any series payable in money or in a manner
other than that stated in the Security;
(f) modify this Section 9.2 or Section 6.4 or
Section 6.7;
(g) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Securities of any series;
(h) make such other changes as may require the
consent of each Holder so affected pursuant to any
supplemental indenture; or
<PAGE>
-61-
(i) release the Guarantor from its obligations under
the Guarantee or this Indenture or make any other change
to Article 10 that adversely affects the legal rights of
Holders of the Securities.
It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form
of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the
Holders of each Security affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement
or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or
affect the validity of any supplemental indenture.
Section 9.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment of or supplement to this Indenture or
the Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes
effective with respect to a series of Securities, a consent to
it by a Holder of a Security of such series is a continuing
consent by such Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security prior to such amendment,
supplement or waiver becoming effective as to the Securities of
such series. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under (S) 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated
<PAGE>
-62-
proxies), and only those Persons, shall be entitled to consent
to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue
to be Holders after such record date. Such consent shall be
effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder of such series
unless it makes a change described in any of clauses (a)
through (i) of Section 9.2; if it makes such a change, the
amendment, supplement or waiver shall bind every subsequent
Holder of a Security of such series or portion of a Security
that evidences the same debt as the consenting Holder's
Security.
Section 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the
terms of a Security of any series, the Trustee shall (in
accordance with the specific direction of the Company) request
the Holder of such Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the
Company) place an appropriate notation on such Security about
the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in
exchange for such Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.6. Trustee May Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the
amendment, supplement or waiver does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it
will be valid and binding upon the Company in accordance with
its terms.
<PAGE>
-63-
ARTICLE 10
GUARANTEE
Section 10.1. Unconditional Guarantee.
-----------------------
The Guarantor hereby unconditionally and irrevocably
guarantees to each Holder of a Security of each series
authenticated and delivered by the Trustee the due and punctual
payment of the principal of (including any amount in respect of
original issue discount), and interest, if any (together with
any additional amounts payable pursuant to the terms of such
Security), on such Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations,
if any, provided for pursuant to the terms of such Security,
when and as the same shall become due and payable, whether at
maturity or upon redemption or upon declaration of acceleration
or otherwise according to the terms of such Security and of
this Indenture. In case of default by the Company in the
payment of any such principal (including any amount in respect
of original issue discount), interest (together with any
additional amounts payable pursuant to the terms of such
Security), sinking fund payment, or analogous obligation, the
Guarantor agrees duly and punctually to pay the same. The
Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional irrespective of any extension of the
time for payment of any such Security, any modification of any
such Security, any invalidity, irregularity or unenforceability
of any such Security or this Indenture, any failure to enforce
the same or any waiver, modification or indulgence granted to
the Company with respect thereto by the Holder of such Security
or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event
of merger or bankruptcy of the Company, any right to require a
demand or proceeding first against the Company, protest or
notice with respect to any such Security or the Indebtedness
evidenced thereby and all demands whatsoever, and covenants
that this guarantee will not be discharged as to any such
Security except by payment in full of the principal of
(including any amount payable in respect of original issue
discount) and interest, if any (together with any additional
amounts payable pursuant to the terms of such Security),
thereon.
Until the principal of and interest on the Securities
and all other amounts payable by the Company or the Guarantor
<PAGE>
-64-
under this Indenture shall have been paid in full, the
Guarantor irrevocably waives any and all rights to which it may
be entitled, by operation of law or otherwise, upon making any
payment hereunder to exercise its rights to be subrogated to
the rights of the payee against the Company with respect to
such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof; at any time
thereafter, the Guarantor shall be free to exercise any of such
rights.
The guarantee set forth in this Section shall not be
valid or become obligatory for any purpose with respect to a
Security of any series until the certificate of authentication
on such Security shall have been signed by the Trustee.
Section 10.2. Execution of Guarantee.
----------------------
To evidence its guarantee specified in Section 10.1
to the Holders of Securities of any series, the Guarantor
hereby agrees to execute the Guarantee in substantially the
form above recited to be endorsed on each Security of such
series authenticated and delivered by the Trustee. Such
Guarantee shall be executed on behalf of the Guarantor by both
(a) its Chairman or its Vice Chairman or its President or any
Vice President and (b) its Treasurer or any Assistant Treasurer
or its Secretary or any Assistant Secretary, prior to the
authentication of the Security on which it is endorsed, and the
delivery of such Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of such Guarantee on behalf of the Guarantor. The seal of the
Guarantor may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the
Guarantees. Typographical and other minor errors or defects in
any such reproduction of any such signature shall not affect
the validity or enforceability of any Guarantee that has been
duly authenticated and delivered by the Trustee.
Such signatures may be the manual or facsimile
signatures of such officers and may be imprinted or otherwise
reproduced on the Guarantees. In case any officer of the
Guarantor who shall have signed any of the Guarantees shall
cease to be an officer before the Securities on which such
Guarantees are endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such
Securities nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Guarantees had
not ceased to be such officer, and any Guarantees may be signed
on behalf of
<PAGE>
-65-
the Guarantor by such Persons as, at the actual date of the
execution of such Guarantees, shall be the proper officers of the
Guarantor, although at the date of such Securities or of the
execution of this Indenture any such Person was not such an
officer.
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act of 1939.
---------------------------
This Indenture is subject to the provisions of the
TIA that are required to be a part of this Indenture, and
shall, to the extent applicable, be governed by such
provisions.
If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
Section 11.2. Notices.
-------
Any notice or communication shall be sufficiently
given if in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows:
If to the Company, to:
KELSEY-HAYES COMPANY
11878 Hubbard Road
Livonia, Michigan 48150
Attention: Treasurer
If to the Guarantor, to:
VARITY CORPORATION
672 Delaware Avenue
Buffalo, New York 14209
Attention: Treasurer
<PAGE>
-66-
If to the Trustee, to:
MANUFACTURERS AND TRADERS TRUST COMPANY
One M&T Plaza
Buffalo, New York 14240
Attention: Corporate Trust Department
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed, postage prepaid,
to a Holder, including any notice delivered in connection with
TIA (S) 310(b), TIA (S) 313(c), TIA (S) 314(a) and TIA (S) 315(b),
shall be mailed by first class mail to such Holder at the
address of such Holder as it appears on the Securities register
maintained by the Registrar and shall be sufficiently given to
such Holder if so mailed within the time prescribed. Copies of
any such communication or notice to a Holder shall also be
mailed to the Trustee.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Holders. Except for a notice
to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 11.3. Communication by Holders with
Other Holders.
-----------------------------
Holders may communicate pursuant to TIA (S) 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The Company, the Guarantor, the Trustee,
the Registrar and any other Person shall have the protection of
TIA (S) 312(c).
Section 11.4. Certificate and Opinion as to
Conditions Precedent.
-----------------------------
Upon any request or application by the Company or the
Guarantor to the Trustee to take any action under this
Indenture, the Company or the Guarantor shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
<PAGE>
-67-
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
Section 11.5. Statements Required in Certificate
or Opinion.
----------------------------------
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the Person making such
certificate or rendering such opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is
necessary to enable him to express an opinion as to
whether or not such covenant or condition has been
compiled with; and
(4) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
compiled with; provided, however, that with respect to
-------- -------
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 11.6. Rules by Trustee, Paying Agent,
Registrar.
------------------------------
The Trustee may make reasonable rules for action by
or at a meeting of Securityholders. The Paying Agent or
Registrar may make reasonable rules for its functions.
Section 11.7. Governing Law.
-------------
This Indenture, the Securities and the Guarantee
shall be governed by and construed in accordance with the laws
of the State of New York, without regard to principles of
conflicts of law.
<PAGE>
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Section 11.8. No Interpretation of
Other Agreements.
--------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
Subsidiaries. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
Section 11.9. No Recourse Against Others.
--------------------------
A director, officer, employee, shareholder or
Affiliate, as such, of the Company or the Guarantor shall not
have any liability for any obligations of the Company or the
Guarantor under the Securities, the Guarantee or this Indenture
or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability.
Section 11.10. Successors.
----------
All agreements of the Company and the Guarantor in
this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its
successors.
Section 11.11. Duplicate Originals.
-------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 11.12. Separability.
------------
In case any provision in this Indenture or 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, and a Holder shall have no claim therefor against any
party hereto.
Section 11.13. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
<PAGE>
-69-
Section 11.14. Benefits of Indenture.
---------------------
Nothing in this Indenture, in the Securities or in
the Guarantee, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder,
and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first
above written.
KELSEY-HAYES COMPANY, as Issuer
By:_________________________________
Name:
Title:
VARITY CORPORATION, as Guarantor
By:_________________________________
Name:
Title:
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By:_________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.2
_______________________________________________________________
_______________________________________________________________
____________________
KELSEY-HAYES COMPANY, as Issuer,
and
VARITY CORPORATION, as Guarantor,
and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
____________________
INDENTURE
Dated as of , 1995
____________________
Subordinated Debt Securities
_______________________________________________________________
_______________________________________________________________
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of , 1995
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S) 310(a)(1) ........................................ 7.11
(a)(2) ........................................ 7.11
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(a)(5) ........................................ 7.11
(b) ........................................ 7.11; 12.2
(c) ........................................ N.A.
(S) 311(a) ........................................ 7.12
(b) ........................................ 7.12
(c) ........................................ N.A.
(S) 312(a) ........................................ 2.6
(b) ........................................ 12.3
(c) ........................................ 12.3
(S) 313(a) ........................................ 7.7
(b) ........................................ 7.7
(c) ........................................ 7.7; 12.2
(d) ........................................ 7.7
(S) 314(a) ........................................ 4.4; 4.5; 12.2
(b) ........................................ N.A.
(c)(1) ........................................ 12.4
(c)(2) ........................................ 12.4
(c)(3) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ 12.5
(f) ........................................ N.A.
(S) 315(a) ........................................ 7.1(b)
(b) ........................................ 7.5; 12.2
(c) ........................................ 7.1(a)
(d) ........................................ 7.1(c)
(e) ........................................ 6.11
(S) 316(a) (last
sentence) ........................................ 2.9
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................ N.A.
(b) ........................................ 6.7
(c) ........................................ N.A.
(S) 317(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.9
(b) ........................................ 2.5
(S) 318(a) ........................................ 12.1
(b) ........................................ N.A.
(c) ........................................ 12.1
__________
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions..................................... 1
Section 1.2. Incorporation by Reference of Trust
Indenture Act................................. 9
Section 1.3. Rules of Construction........................... 10
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally................................. 11
Section 2.2. Title, Terms and Denominations.................. 12
Section 2.3. Execution, Authentication, Delivery
and Dating.................................... 15
Section 2.4. Registrar and Paying Agent...................... 17
Section 2.5. Paying Agent To Hold Money in Trust............. 18
Section 2.6. Securityholder Lists............................ 18
Section 2.7. Transfer and Exchange........................... 19
Section 2.8. Replacement Securities.......................... 20
Section 2.9. Outstanding Securities;
Determination of Holders' Action.............. 20
Section 2.10. Temporary Securities............................ 21
Section 2.11. Cancellation.................................... 21
Section 2.12. Payment of Interest; Defaulted
Interest...................................... 22
Section 2.13. CUSIP Number.................................... 22
Section 2.14. Deposit of Moneys............................... 22
Section 2.15. Persons Deemed Owners........................... 23
Section 2.16. Computation of Interest......................... 23
Section 2.17. Global Securities............................... 23
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.......................... 24
Section 3.2. Selection of Securities To Be
Redeemed...................................... 25
Section 3.3. Notice of Redemption............................ 25
Section 3.4. Effect of Notice of Redemption.................. 27
Section 3.5. Deposit of Redemption Price..................... 27
Section 3.6. Securities Redeemed or Purchased in
Part.......................................... 27
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<PAGE>
Page
----
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities........................... 28
Section 4.2. Maintenance of Office or Agency................. 28
Section 4.3. Corporate Existence............................. 29
Section 4.4. Compliance Certificate.......................... 29
Section 4.5. SEC Reports..................................... 31
Section 4.6. Waiver of Stay, Extension or Usury
Laws.......................................... 31
Section 4.7. Limitation on Liens............................. 32
Section 4.8. Limitations on Sale and Lease-Back
Transactions.................................. 33
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company and Guarantor May
Merge, etc.................................... 33
Section 5.2. Successor Substituted........................... 35
ARTICLE 6
REMEDIES
Section 6.1. Events of Default............................... 35
Section 6.2. Acceleration.................................... 38
Section 6.3. Other Remedies.................................. 39
Section 6.4. Waiver of Past Defaults......................... 40
Section 6.5. Control by Majority............................. 40
Section 6.6. Limitation on Suits............................. 40
Section 6.7. Right of Holders To Receive Payment............. 41
Section 6.8. Collection Suit by Trustee...................... 41
Section 6.9. Trustee May File Proofs of Claim................ 42
Section 6.10. Priorities...................................... 42
Section 6.11. Undertaking for Costs........................... 43
Section 6.12. Restoration of Rights and Remedies.............. 43
ARTICLE 7
TRUSTEE
Section 7.1. Duties.......................................... 44
Section 7.2. Rights of Trustee............................... 45
Section 7.3. Individual Rights of Trustee.................... 46
Section 7.4. Trustee's Disclaimer............................ 46
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<PAGE>
Page
----
Section 7.5. Notice of Default............................... 47
Section 7.6. Money Held in Trust............................. 47
Section 7.7. Reports by Trustee to Holders................... 47
Section 7.8. Compensation and Indemnity...................... 47
Section 7.9. Replacement of Trustee.......................... 48
Section 7.10. Successor Trustee by Merger, etc................ 51
Section 7.11. Eligibility; Disqualification................... 51
Section 7.12. Preferential Collection of Claims
Against Company............................... 52
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's and the
Guarantor's Obligations....................... 52
Section 8.2. Legal Defeasance and Covenant
Defeasance.................................... 54
Section 8.3 Application of Trust Money...................... 58
Section 8.4. Repayment to Company............................ 58
Section 8.5. Reinstatement................................... 59
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders...................... 59
Section 9.2. With Consent of Holders......................... 60
Section 9.3. Compliance with Trust Indenture Act............. 62
Section 9.4. Revocation and Effect of Consents............... 62
Section 9.5. Notation on or Exchange of
Securities.................................... 63
Section 9.6. Trustee May Sign Amendments, etc................ 63
ARTICLE 10
GUARANTEE
Section 10.1. Unconditional Guarantee ........................ 64
Section 10.2. Execution of Guarantee ......................... 65
ARTICLE 11
SUBORDINATION
Section 11.1. Agreement to Subordinate........................ 66
Section 11.2. Liquidation; Dissolution; Bankruptcy............ 66
Section 11.3. Default on Senior Debt.......................... 67
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<PAGE>
Page
----
Section 11.4. Acceleration of Securities...................... 68
Section 11.5. When Distribution Must Be Paid Over............. 68
Section 11.6. Notice by Company............................... 69
Section 11.7. Subrogation..................................... 69
Section 11.8. Relative Rights................................. 69
Section 11.9. Subordination May Not Be Impaired by
Company....................................... 70
Section 11.10. Distribution or Notice to
Representative................................ 70
Section 11.11. Rights of Trustee and Paying Agent.............. 70
Section 11.12. Authorization to Effect
Subordination................................. 71
ARTICLE 12
MISCELLANEOUS
Section 12.1. Trust Indenture Act of 1939..................... 71
Section 12.2. Notices......................................... 72
Section 12.3. Communication by Holders with Other
Holders....................................... 73
Section 12.4. Certificate and Opinion as to
Conditions Precedent.......................... 73
Section 12.5. Statements Required in Certificate
or Opinion.................................... 73
Section 12.6. Rules by Trustee, Paying Agent,
Registrar..................................... 74
Section 12.7. Governing Law................................... 74
Section 12.8. No Interpretation of Other
Agreements.................................... 74
Section 12.9. No Recourse Against Others...................... 74
Section 12.10. Successors...................................... 74
Section 12.11. Duplicate Originals............................. 75
Section 12.12. Separability.................................... 75
Section 12.13. Table of Contents, Headings, etc................ 75
Section 12.14. Benefits of Indenture........................... 75
SIGNATURES......................................................... 76
-v-
<PAGE>
INDENTURE, dated as of , 1995, among
KELSEY-HAYES COMPANY, a Delaware corporation (the "Company"),
VARITY CORPORATION, a Delaware corporation (the "Guarantor"),
and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee").
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 ratable
benefit of the Holders of the Securities or of any series
thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
-----------
"Affiliate" means, with respect to any specified
Person, any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Attributable Debt" when used in connection with a
Sale and Lease-Back Transaction involving a Principal Property
shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by
the Board of Directors of the Company); or (b) the present
value of the total net amount of rent required to be paid under
such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the
terms of such lease or, if not practicable to determine such
rate, the weighted average interest rate per annum borne by the
Securities of each series outstanding pursuant to this
Indenture compounded semi-annually. For purposes of the fore-
going definition, rent shall not include amounts required to be
paid by the lessee, whether or not designated as rent or
additional rent, on account of or contingent upon maintenance
and repairs, insurance, taxes, assessments, water rates and
similar charges. In the case of any lease which is terminable
by the lessee upon the payment of a penalty, such net amount
shall be the lesser of the net amount determined assuming
termination upon the first date such lease may be terminated
(in which case the net amount shall also include the amount of
the penalty, but no
<PAGE>
-2-
rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated)
or the net amount determined assuming no such termination.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the
relief of debtors.
"Board of Directors" means the board of directors of
the Company or the Guarantor, as the case may be, or any duly
authorized committee of either such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors of
the Company or the Guarantor as the context requires and to be
in full force and effect on the date of such certification, and
delivered to the Trustee.
"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, State of New York, or the
city in which the Trustee has its Corporate Trust Office, are
authorized or obligated by law, regulation or executive order
to close.
"Capital Stock" means, with respect to any Person,
any and all shares, interests, participations, rights in or
other equivalents (however designated) of such Person's capital
stock, and any rights (other than debt securities convertible
into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture,
the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in
accordance with GAAP.
"Company" means the party named as such in this
Indenture until a successor replaces it (or any previous
successor) pursuant to this Indenture, and thereafter means
such successor.
<PAGE>
-3-
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one
of its Chairman of the Board, its Vice-Chairman, its President
or a Vice President, and by any one of its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is One M & T Plaza, Buffalo, New York
14240, Attention: Corporate Trust Department.
"Covenant Defeasance" shall have the meaning set
forth in Section 8.2.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Discount Security" means any Security which provides
for an amount less than the principal thereof to be due and
payable upon a declaration of acceleration of the Stated
Maturities thereof pursuant to Section 6.2.
"Event of Default" has the meaning set forth in
Section 6.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States of America, as in
effect on the date hereof.
"Guarantee" means the guarantee of the Guarantor set
forth in Article Ten hereof.
<PAGE>
-4-
"Guarantor" means Varity Corporation, a Delaware
corporation, and, subject to Article Ten, its successors and
assigns.
"Holder" or "Securityholder" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all obligations for borrowed money,
(ii) all obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued
expenses arising in the ordinary course of business), (v) all
fixed unconditional obligations issued or contracted for as
payment in consideration of the purchase by such Person of the
stock or substantially all the assets of another Person or a
merger or consolidation, (vi) all obligations for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction which secure
Indebtedness of a Person other than the issuer of the letter of
credit or the accepting bank, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons
guaranteed by such Person to the extent of the guarantee; and
(viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons which are secured by any Lien on
any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the value of such
property or asset at the time the Lien is created or the amount
of the obligation so secured.
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time, in accordance
herewith, and includes, with respect to a particular series of
Securities, the terms of such series of Securities established
or contemplated by Section 2.2(a).
"Interest Payment Date", for any series of
Securities, has the meaning provided in the form of such
Securities set forth in the supplemental indenture, Board
Resolution, or Officers' Certificate under which such
Securities are issued.
"Issue Date" means, with respect to any particular
series of Securities, the original date of issuance of such
series; provided that, in the case of a series subject to a
--------
Periodic Offering, the Issue Date shall be the original issue
<PAGE>
-5-
date or dates established pursuant to the proviso of the third
paragraph of Section 2.3.
"Legal Defeasance" shall have the meaning set forth
in Section 8.2.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any
property which such Person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Material Subsidiary" means, at any particular time,
any Subsidiary of any Person that (a) accounted for more than
10% of the consolidated revenues of such Person and its
Subsidiaries on a consolidated basis for the most recently
completed fiscal year of such Person or (b) was the owner of
more than 10% of the consolidated assets of such Person and its
Subsidiaries on a consolidated basis as at the end of such
fiscal year, all as shown on the consolidated financial
statements of such Person and its Subsidiaries for such fiscal
year.
"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due
and payable as therein or herein provided, whether at the
Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or
otherwise.
"Nonrecourse Obligation" means Indebtedness or other
obligations substantially related to (i) the acquisition of
assets not previously owned by the Company or any Restricted
Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to
such Indebtedness or obligation has no recourse to the Company
or any Restricted Subsidiary or any assets of the Company or
any Restricted Subsidiary other than the assets which were
acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the
proceeds thereof).
"Officer" means the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the
<PAGE>
-6-
Chief Operating Officer, the Treasurer, the Secretary or the
Controller of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
Subject to any express provision hereof, the counsel may be an
employee of or counsel to the Company or the Guarantor.
"Paying Agent" has the meaning set forth in
Section 2.4, except that, for the purposes of Articles Three
and Eight, the Paying Agent shall not be: (i) the Company or
the Guarantor, (ii) a Subsidiary of the Company or the
Guarantor or (iii) any of the Company's or Guarantor's
respective Affiliates.
"Periodic Offering" means an offering of Securities
of a series from time to time the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the Stated Maturity or Stated
Maturities thereof, the original Issue Date or Dates thereof,
the redemption provisions, if any, and any other terms
specified as contemplated by Section 2.2(a) with respect
thereto, are to be determined by the Company, or one or more of
the Company's agents or employees designated in an Officers'
Certificate, upon the issuance of such Securities.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the
Securities only, the premium, if any, on the Security.
"Principal Property" shall mean the land, land
improvements, buildings and fixtures (to the extent they
constitute real property interests) (including any leasehold
interest therein) constituting the principal corporate office,
any manufacturing plant or any manufacturing facility (whether
now owned or hereafter acquired) which: (a) is owned by the
Company or any of its Subsidiaries; (b) is located within any
<PAGE>
-7-
of the present 50 States of the United States of America (or
the District of Columbia); (c) has not been determined in good
faith by the Board of Directors of the Company not to be
materially important to the total business conducted by the
Company and its Subsidiaries taken as a whole; and (d) has a
book value on the date as of which the determination is being
made in excess of 1% of consolidated total assets of the
Company as most recently determined on or prior to such date.
"Redemption Date" means, with respect to any Security
to be redeemed, the date fixed by the Company or the Guarantor,
as the case may be, for such redemption pursuant to this
Indenture and the Securities.
"Redemption Price" means, with respect to any
Security to be redeemed, the price fixed for such redemption
pursuant to the terms of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in
Section 2.4.
"Regular Record Date", for any series of Securities,
has the meaning provided in the form of such Securities set
forth in the supplemental indenture, Board Resolution or
Officers' Certificate under which such Securities are issued.
"Representative" means the trustee or other agent or
representative for any Senior Indebtedness.
"Restricted Subsidiary" shall mean any Subsidiary of
the Company which owns any Principal Property.
"Sale and Lease-Back Transaction" shall mean any sale
or transfer by the Company or one of its Restricted
Subsidiaries of any Principal Property that is being sold or
transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or
commencement of operation thereof, if such sale or transfer is
made with the intent of leasing, or as part of an arrangement
involving the lease of, such Principal Property to the Company
or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission,
as from time to time constituted or, if at any time after the
execution of this Indenture such Commission is not existing and
performing the applicable duties now assigned to it, then the
body or bodies performing such duties at such time.
<PAGE>
-8-
"Securities" means the securities that are issued
under this Indenture, as amended or supplemented from time to
time pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Senior Indebtedness" means all Indebtedness of the
Company and all renewals, extensions or refundings thereof.
Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (i) any Indebtedness of
the Company to any of its Subsidiaries, or (ii) any
Indebtedness created or evidenced pursuant to an instrument
that expressly provides that such Indebtedness is not superior
in right of payment to the Securities.
"Stated Maturity" means, when used with respect to
any Security of a particular series or any installment of
principal thereon, the date specified in such Security of such
series as the fixed date on which any principal of such
Security of such series is due and payable, and when used with
respect to any other Indebtedness, means any date specified in
the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness is due and payable.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture,
in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
a majority ownership interest entitled to vote in the election
of directors, managers or trustees thereof (or other Person
performing similar functions).
"Surviving Entity" shall have the meaning set forth
in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any
<PAGE>
-9-
previous successor) in accordance with the provisions of this
Indenture, and thereafter means such successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer of the Trustee assigned by the
Trustee to administer its corporate trust matters 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.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.2.
"Vice President" shall include Senior Vice President
or a Vice President with any other prefix.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
Section 1.2. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company, the Guarantor or any other obligor on the Securities.
<PAGE>
-10-
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
Section 1.3. Rules of Construction.
---------------------
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(f) 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; and
(g) all references to $ or dollars refer to the
lawful currency of the United States of America.
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally.
---------------
The Securities of each series shall be substantially
in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as
set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an
Officers' Certificate of the Company detailing such
establishment) or in one or more indentures supplemental
hereto, in each case with such appropriate insertions,
omissions, substitutions
<PAGE>
-11-
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 any applicable law or with the
rules of any securities exchange or as may, consistently
herewith, be determined by the Officers executing such
Securities, as evidenced by their execution thereof. The
Securities shall be issuable only in registered form without
coupons. The indenture supplemental hereto or the Board
Resolution or Officers' Certificate establishing the form of
security of any series shall be delivered to the Trustee
concurrently with or prior to the delivery of the Company Order
contemplated by Section 2.3 for the authentication and delivery
of such Securities.
The definitive Securities and Guarantees endorsed
thereon shall be printed, typewritten, lithographed or engraved
or produced by any combination of these methods 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 and
Guarantees, as evidenced by their execution of such Securities
and Guarantees. Each Security and Guarantee shall be dated the
date of its authentication.
The Guarantees to be endorsed on the Securities of
each series shall be in substantially the form set forth in
Section 10.1 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
any law or with any rules made pursuant thereto or with any
rules of any securities exchange or to conform to general usage
or as may, consistently herewith, be determined by the Officers
executing such Guarantees, as evidenced by their execution of
such Guarantees.
Section 2.2. Title, Terms and Denominations.
------------------------------
(a) The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture
shall be unlimited. The Securities may be issued in one or
more series. There shall be established and, subject to
Section 2.3, set forth, or determined in the manner provided,
in one or more indentures supplemental hereto or in or pursuant
to a Board Resolution (as set forth in such Board Resolution
<PAGE>
-12-
or, to the extent established pursuant to rather then set forth
in such Board Resolution, an Officers' Certificate detailing
such establishment):
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all
other Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated
and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Sections 2.7, 2.8, 2.10, 3.6 or 9.5
and except for any Securities which, pursuant to
Section 2.3, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on any Security
of the series shall be payable, if other than the Person
in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable or the method of
determination thereof;
(5) the rate or rates at which the Securities of the
series shall bear interest (which in no event shall be
greater than the then applicable legal rate therefor), 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 Securities on any Interest
Payment Date and/or the method by which such rate or rates
or Regular Record Date or Dates shall be determined;
(6) the place or places where, subject to the
provisions of Section 4.2, the principal of and any
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for regis-
tration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or
upon the Company in respect of the Securities of the
series and this Indenture may be served;
<PAGE>
-13-
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof, the conditions, if any, giving rise to
such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or
purchased, in whole or in part, and any provisions for the
remarketing of such Securities;
(9) the denominations in which any Securities of the
series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof;
(10) if the amount of payments of principal of and
any interest on the Securities of the series is to be
determined with reference to an index, formula or other
method, the manner in which such amounts shall be
determined and the calculation agent, if any, with respect
thereto;
(11) if other than the principal amount thereof, the
portion of the principal amount of any Securities of the
series which shall be payable upon declaration of
acceleration of the Stated Maturity thereof pursuant to
Section 6.2;
(12) if other than as defined in Section 1.1, the
meaning of "Business Day" when used with respect to any
Securities of the series;
(13) if the Securities of the series may be issued
or delivered (whether upon original issuance or upon
exchange of a temporary Security of such series or
otherwise), or any installment of principal of or any
interest is payable, only upon receipt of certain
certificates or other documents or satisfaction of other
conditions in addition to those specified in this
Indenture, the form and terms of such certificates,
documents or conditions;
(14) the forms of the Securities;
<PAGE>
-14-
(15) whether the Securities of the series shall be
issued in whole or in part in the form of a global
Security or Securities and, in such case, the depositary
for such global Security or Securities;
(16) any provision for defeasance or discharge of
the Securities of the series, if different from those set
forth herein;
(17) any listing of the Securities of a series on a
securities exchange;
(18) the price or prices at which the Securities of
a series will be issued; and
(19) any other terms of the series not inconsistent
with the provisions hereof, but which may include
covenants, Events of Default, definitions and other
provisions in lieu of or in addition to those set forth in
this Indenture as of the date hereof and amendments to or
other changes in any of the covenants, Events of Default,
definitions and other provisions set forth in this
Indenture as of the date hereof.
All Securities of any one series shall be substan-
tially identical except as to denomination, the rate or rates
of interest, if any, the Stated Maturities, the date from which
interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to the Board Resolutions or Officers'
Certificates referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of
additional Securities of such series or for the establishment
of additional terms with respect to the Securities of such
series, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolutions, such
Officers' Certificates or in any such indenture supplemental
hereto.
(b) Unless otherwise provided as contemplated by
Section 2.2(a) with respect to any series of Securities, any
Securities of a series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
(c) The Securities of any one series shall rank pari
----
passu in right of payment with the Securities of any other
- -----
series.
<PAGE>
-15-
Section 2.3. Execution, Authentication,
Delivery and Dating.
-------------------------
Two Officers shall sign, or one Officer shall sign
and one Officer shall attest to (provided that in either case,
one such Officer must be the Chairman of the Board, President,
a Vice President, Treasurer or Secretary) the Securities for
the Company by manual or facsimile signatures.
Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the
validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Securities of any series, executed by the Company and having
endorsed thereon the Guarantees executed by the Guarantor, to
the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall
authenticate and deliver such Securities; provided, however,
-------- -------
that, with respect to Securities of a series subject to a
Periodic Offering, (a) such Company Order may be delivered by
the Company to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such
series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to a Company Order or
pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by a Company Order, (c) the rate or
rates of interest, if any, the Stated Maturity or Maturities,
the original Issue Date or Dates, the redemption provisions, if
any, and any other terms of Securities of such series shall be
determined by Company Order or pursuant to such procedures and
(d) if provided for in such procedures, such Company Order may
authorize authentication and delivery pursuant to oral or
electronic instructions from the Company, or the Company's duly
authorized agent or agents designated in an Officers'
Certificate, which oral instructions shall be confirmed
promptly in writing. The
<PAGE>
-16-
Trustee shall be entitled to rely on such oral instructions, whether
or not confirmed in writing.
Each Security shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. Unless
otherwise provided in the appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal
with the Company, the Guarantor or an Affiliate.
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 duly executed by
the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. The Trustee's
Certificate of Authentication shall be in substantially the
following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
_____________________________,
as Trustee
By: _______________________
Authorized Officer
Notwithstanding the foregoing, if any Security of any series
shall have been duly authenticated and delivered hereunder but
never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as
provided in Section 2.11 together with a written statement
(which need not comply with Section 12.4 or 12.5 and need not
be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
<PAGE>
-17-
Section 2.4. Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each
series of Securities, an office or agency in the Borough of
Manhattan, The City of New York, State of New York where such
Securities may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where such
Securities may be presented for payment (the "Paying Agent")
and an office or agency where notices and demands to or upon
the Company in respect of such Securities and this Indenture
may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying
agent. Except as otherwise expressly provided in this
Indenture, the Company, the Guarantor or any Affiliate of the
Company or the Guarantor may act as Paying Agent.
The Company and the Guarantor shall enter into an
appropriate agency agreement, with respect to each series of
Securities, with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement
shall implement the provisions of this Indenture that relate to
such Agent. The Company shall notify the Trustee of the name
and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent or agent for service of
notices and demands, or fails to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.8.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
Section 2.5. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit
of Securityholders of a particular series or the Trustee all
money held by the Paying Agent for the payment of principal of,
or interest on, the Securities of such series (whether such
money has been distributed to it by the Company, the Guarantor
or any other obligor on such Securities), and the Company and
the Paying Agent shall notify the Trustee of any default by the
Company (or any other obligor on such Securities) in making any
such payment. If the Company or the Guarantor or a Subsidiary
of the Company or Guarantor acts as Paying Agent, the money
<PAGE>
-18-
shall be segregated and held as a separate trust fund. The
Company at any time may require a Paying Agent to distribute
all money held by it to the Trustee and account for any funds
disbursed and the Trustee may at any time during the
continuance of any payment Default with respect to such
Securities, upon written request to a Paying Agent, require
such Paying Agent to pay all money held by it to the Trustee
and to account for any funds distributed. Upon doing so, the
Paying Agent (other than an obligor under the Securities) shall
have no further liability for the money so paid over to the
Trustee. Upon any bankruptcy or reorganization proceeding
involving the Company or the Guarantor, the Trustee shall act
as Paying Agent for the Securities.
Section 2.6. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders of each series of
Securities and shall otherwise comply with TIA (S) 312(a). If
the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten Business Days before each Interest
Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of
Securityholders of such series of Securities, which list may be
conclusively relied upon by the Trustee.
Section 2.7. Transfer and Exchange.
---------------------
When Securities of any series are presented to the
Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such
transaction are met; provided, however, that such Securities
-------- -------
surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney-in-fact duly authorized in
writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request and the Guarantor shall
endorse the Guarantee thereon. No service charge shall be made
for any registration of transfer or exchange, but the Company
or the Guarantor may require payment of a sum sufficient to
cover any transfer
<PAGE>
-19-
tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant
to Section 2.3, 2.8, 2.11, 3.6 or 8.5).
At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series of any
authorized denomination or denominations, of a like aggregate
principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency.
Whenever any Securities are so surrendered for
exchange, the Company shall execute, the Guarantor shall
endorse the Guarantee on, and the Trustee or a duly appointed
authenticating agent shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
The Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of Securities and ending at the close
of business on the day of such mailing or (ii) selected for
redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in
part.
Section 2.8. Replacement Securities.
----------------------
If a mutilated Security of any series is surrendered
to the Trustee or if the Holder of a Security of any series
claims that such Security has been lost, destroyed or
wrongfully taken, the Company shall issue, the Guarantor shall
endorse the Guarantee on, and the Trustee shall authenticate, a
replacement Security if the Trustee's requirements are met. If
required by the Trustee, the Guarantor or the Company, such
Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of the Trustee, the Company and the
Guarantor, to protect the Company, the Trustee, the Guarantor
or any Agent from any loss which any of them may suffer if a
Security is replaced. The Company may charge such Holder for
<PAGE>
-20-
its reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the Company
and the Guarantor.
Section 2.9. Outstanding Securities;
Determination of Holders' Action.
--------------------------------
Securities of any series outstanding at any time are
all Securities of such series that have been authenticated by
the Trustee, except those cancelled by it, those delivered to
it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding
because the Company or any of its Affiliates holds the
Security; provided, however, that in determining whether the
-------- -------
Holders of the required principal amount of Securities of any
series have concurred in any direction, waiver or consent,
Securities of such series owned by the Company or other obligor
on the Securities of such series or an Affiliate of the Company
or such other obligor shall be disregarded, except that for the
sole purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be
disregarded.
If a Security is replaced pursuant to Section 2.8
(other than a mutilated Security surrendered for replacement),
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
----
fide purchaser. A mutilated Security ceases to be outstanding
- ----
upon surrender of such Security and replacement thereof
pursuant to Section 2.8.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Securities payable on
that date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Securities
pursuant to the terms of this Indenture, then on and after that
date such Securities cease to be outstanding and interest on
them shall cease to accrue.
Section 2.10. Temporary Securities.
--------------------
Until definitive Securities of any series are
prepared and ready for delivery, the Company may prepare, the
<PAGE>
-21-
Guarantor may endorse its Guarantee on and the Trustee shall
authenticate temporary Securities. Temporary Securities shall
be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company
shall prepare, the Guarantor shall endorse its Guarantee on,
and the Trustee shall authenticate, definitive Securities in
exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
Section 2.11. Cancellation.
------------
The Company or the Guarantor at any time may deliver
Securities to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The
Trustee or, at the direction of the Trustee, the Registrar or
the Paying Agent (other than the Company, the Guarantor or an
Affiliate of the Company or the Guarantor), and no one else,
shall cancel and, at the written direction of the Company,
shall dispose of all Securities surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.8, the
Company may not issue new Securities to replace Securities that
it has paid or delivered to the Trustee for cancellation. If
the Company or the Guarantor shall acquire any of the
Securities, such acquisition shall not operate as a payment,
redemption or satisfaction of the Indebtedness represented by
such Securities unless and until the same are surrendered to
the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Payment of Interest;
Defaulted Interest.
--------------------
Unless otherwise provided as contemplated by Section
2.2(a) with respect to any series of Securities, interest on
any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest.
If the Company defaults on a payment of interest on
any series of Securities, it shall pay the defaulted interest,
plus (to the extent permitted by law) any interest payable on
the defaulted interest, in accordance with the terms hereof, to
the Persons who are Securityholders of such series on a
<PAGE>
-22-
subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Company
shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each
Securityholder of such series a notice that states the special
record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if
any, to be paid.
Section 2.13. CUSIP Number.
------------
The Company in issuing any series of Securities may
use a "CUSIP" number (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that
-------- -------
any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the
notice or on such Securities, and that reliance may be placed
only on the other identification numbers printed on such
Securities. The Company will promptly notify the Trustee of
any change in the CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
On or before each Interest Payment Date and Maturity
Date, the Company shall deposit with the Trustee or Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders of the
applicable series of Securities on such Interest Payment Date
or Maturity Date, as the case may be.
Section 2.15. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for
registration of transfer, the Company, the Guarantor, the
Trustee and any agent of the Company, the Guarantor or the
Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of and (except as otherwise
specified as contemplated by Section 2.2(a) and Section 2.12)
interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and
neither the Company, the Guarantor, the Trustee nor any agent
of the Company, the
<PAGE>
-23-
Guarantor or the Trustee shall be affected by notice to
the contrary.
Section 2.16. Computation of Interest.
-----------------------
Except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series,
(i) interest, if any, on any Securities which bear interest at
a fixed rate shall be computed on the basis of a 360-day year
of twelve 30 day months and (ii) interest on any Securities
which bear interest at a variable or floating rate shall be
computed on the basis of the actual number of days in an
interest period divided by the number of days in the year for
which such interest is calculated.
Section 2.17. Global Securities.
-----------------
The Company may issue, if a Board Resolution or
Officers' Certificate so provides, some or all of the
Securities of a series in temporary or permanent global form.
A global Security may be in registered form or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the
Company's request, the Registrar shall endorse a global
Security to reflect the amount of any increase or decrease in
the Securities represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may
transfer a global Security only as a whole to its nominee or to
a successor depository.
The Company may establish, among other things, the
manner of paying principal and interest on a global Security
and whether and upon what terms a beneficial owner of an
interest in a global Security may exchange such interest for
definitive Securities.
The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a
depository, for any depository records of beneficial ownership
interests or for any transactions between the depository and
beneficial owners.
<PAGE>
-24-
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.
----------------------
Securities of any series which are redeemable before
their maturity shall be redeemable in accordance with their
terms and (except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series) in
accordance with this Article.
If the Company elects to redeem Securities of a
series which are redeemable, it shall notify the Trustee in an
Officers' Certificate of the Redemption Date and principal
amount of Securities of such series to be redeemed.
If the Company wishes to reduce the principal amount
of a series of Securities to be redeemed, it shall so notify
the Trustee of the amount of the reduction and the basis for
it. If the Company wishes to credit, and is entitled to
credit, against any such redemption Securities of such series
it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such
notice.
The Company shall give each notice provided for in
this Section 3.1 at least 45 days, but not more than 60 days
before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
Section 3.2. Selection of Securities To Be
Redeemed.
-----------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, if less than all the Securities of any series are
to be redeemed, the particular Securities of such series or
portions thereof to be redeemed shall be selected from the
outstanding Securities not previously called for redemption
either (x) pro rata, by lot or by such other method as the
Trustee considers to be fair and appropriate or (y) in such
manner as complies with the requirements of the principal
national securities exchange, if any, on which the Securities
of such series being redeemed are listed. The amounts to be
redeemed shall be equal to $1,000 or any integral multiple
thereof, except that if all of the
<PAGE>
-25-
Securities of a series of a Holder are to be redeemed, the entire
amount of Securities of such series held by such Holder, even if
not a multiple of $1,000, shall be redeemed or purchased.
The Trustee shall select Securities to be redeemed
from the Securities of the applicable series outstanding and
not previously called for redemption and shall promptly notify
the Company and the Registrar in writing of the Securities of
any series selected for redemption and, in the case of any
Securities of any series selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Securities of any series 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 3.3. Notice of Redemption.
--------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, notice of redemption shall be given by first-class
or certified mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder
of Securities to be redeemed, at the address of such Holder
appearing in the security register maintained by the Registrar.
All notices of redemption shall identify the
Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities
redeemed;
<PAGE>
-26-
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Security to be redeemed
and that on or after the Redemption Date, upon surrender
for cancellation of such Security to the Paying Agent, a
new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be
issued without charge to the Securityholder;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such
Securities; and
(g) whether Securities are being redeemed pursuant
to the mandatory redemption or the optional redemption
provisions of the Securities.
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 written request, by the Trustee in the name
and at the expense of the Company.
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Paying
Agent, such Securities called for redemption shall be paid at
the Redemption Price plus accrued interest to the Redemption
Date, but interest installments whose maturity is on or prior
to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the
Securities.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in immediately
available funds sufficient to pay the Redemption Price of, and
accrued and unpaid interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that
date
<PAGE>
-27-
which have been delivered by the Company to the Trustee
for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed
will cease to accrue on and after the applicable Redemption
Date, whether or not such Securities are presented for payment.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and, to the
extent lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate provided in the
Securities, unless otherwise specified as contemplated by
Section 2.2(a) with respect to the Securities of such series or
in such Securities.
Section 3.6. Securities Redeemed or Purchased in
Part.
-----------------------------------
Upon surrender to the Paying Agent of a Security
which is to be redeemed in part, the Company shall execute, the
Guarantor shall endorse the Guarantee on and the Trustee shall
authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the unredeemed portion of
the principal of the Security so surrendered that is not
redeemed.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest
on each series of Securities on the dates and in the manner
provided in such Securities or pursuant to this Indenture. An
installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the
Company, the Guarantor, a Subsidiary of the Company or the
Guarantor or any Affiliate of any thereof) holds for the
benefit of the Holders on that date money deposited and
designated for and sufficient to pay the installment and is not
prohibited from paying such money to the Holders of the
Securities pursuant to the terms of this Indenture.
<PAGE>
-28-
Unless otherwise specified as contemplated by
Section 2.2(a) with respect to any series of Securities, the
Company will pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue
principal at the rate and in the manner provided in the
Securities; it shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law)
on overdue installments of interest (without regard to any
applicable grace period) at the same rate and in the same
manner, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company and the Guarantor will maintain in the
Borough of Manhattan, The City of New York, State of New York,
an office or agency where Securities may be surrendered for
registration of transfer or exchange, an office or agency where
the Securities may be presented for payment and an office or
agency where notices and demands to or upon the Company and the
Guarantor in respect of the Securities and this Indenture may
be served. The Company and the Guarantor will give prompt
written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the
Company or the Guarantor shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the
Trustee as set forth in Section 12.2.
The Company and the Guarantor may also from time to
time designate one or more other offices or agencies where
Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the
Company or the Guarantor of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New
York, State of New York, for such purposes. The Company and
the Guarantor will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the
location of any such other office or agency. The Company and
the Guarantor hereby initially designate the Corporate Trust
Office of the Trustee as such office of the Company and the
Guarantor.
<PAGE>
-29-
Section 4.3. Corporate Existence.
-------------------
Subject to Article Five, the Company and the
Guarantor will each do or cause to be done all things necessary
to, and will cause each of its Material Subsidiaries to,
preserve and keep in full force and effect its respective
corporate existence, rights (charter and statutory), licenses
and/or franchises; provided, however, that the Company or the
-------- -------
Guarantor or any of their respective Subsidiaries shall not be
required to preserve any such existence, rights, licenses or
franchises if (x) the Company or the Guarantor, as the case may
be, shall reasonably determine that the preservation thereof is
no longer desirable in the conduct of the business of it and
its Subsidiaries taken as a whole or (y) the loss thereof is
not materially adverse to either the Company or the Guarantor,
as the case may be, and its respective Subsidiaries taken as a
whole or to the ability of the Company or the Guarantor to
otherwise satisfy its obligations hereunder.
Section 4.4. Compliance Certificate.
----------------------
(a) The Company and the Guarantor shall deliver to
the Trustee, within 120 days after the end of each of their
respective fiscal years, an Officers' Certificate stating that
a review of the activities of the Company or the Guarantor, as
the case may be, and their respective Subsidiaries during the
preceding fiscal year has been made under the supervision of
the signing officers with a view to determining whether the
Company or the Guarantor, as the case may be, has kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his knowledge the Company
or the Guarantor, as the case may be, has kept, observed,
performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions
hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of
which he may have knowledge and what action the Company or the
Guarantor, as the case may be, is taking or proposes to take
with respect thereto) and that to the best of his knowledge no
event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the
Securities of any series are prohibited or, if such event has
occurred, a description of the event and what action the
Company or the Guarantor, as the case may be, is taking or
proposes to take with respect thereto.
<PAGE>
-30-
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered
pursuant to Section 4.5 below shall be accompanied by a written
statement of the Guarantor's independent public accountants
(who shall be a firm of established national reputation) that
in making the examination necessary for certification of such
financial statements nothing has come to their attention that
would lead them to believe that the Guarantor or the Company
has violated any provisions of Articles 4 or 5 of this
Indenture or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood
that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of
any such violation.
(c) The Company and the Guarantor will deliver to
the Trustee as soon as possible, and in any event within 10
days after they become aware or should reasonably have become
aware of the occurrence of any Default or Event of Default in
respect of any series of Securities, an Officers' Certificate
specifying such Default or Event of Default and what action the
Company or the Guarantor is taking or proposes to take with
respect thereto.
Section 4.5. SEC Reports.
-----------
The Guarantor and the Company shall file with the
Trustee, within 15 days after it files them with the SEC,
copies of the quarterly and annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Guarantor or the Company, as
the case may be, is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Guarantor also
shall comply with the other provisions of TIA (S) 314(a). If the
Guarantor is not subject to the requirements of such Section 13
or 15(d), the Guarantor shall file with the Trustee, within 15
days after it would have been required to file the same with
the SEC, financial statements, including any notes thereto (and
with respect to annual reports, an auditors' report by a firm
of established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Guarantor would
have been required to include in such annual reports,
information, documents or other reports if the Guarantor had
been subject to the requirements of such Section 13 or 15(d).
In addition, the
<PAGE>
-31-
Guarantor shall cause its annual report to stockholders and any
quarterly or other financial reports furnished by it to
stockholders generally to be filed with the Trustee and mailed,
no later than the date such materials are mailed or made
available to the Guarantor's stockholders, to the Holders at
their addresses as set forth in the register of Securities
maintained by the Registrar.
Section 4.6. Waiver of Stay, Extension
or Usury Laws.
-------------------------
Each of the Company and the Guarantor 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
or any usury law or other law which would prohibit or forgive
the Company or the Guarantor from paying all or any portion of
the principal of or interest on Securities of any series as
contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Guarantor 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.
Section 4.7. Limitations on Liens.
--------------------
The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, incur, create, assume or guarantee, any
Indebtedness secured by a Lien upon any Principal Property of
the Company or such Restricted Subsidiary or upon any shares of
stock or Indebtedness of any Restricted Subsidiary held by the
Company (whether such Principal Property, shares or
Indebtedness are now existing or owed or hereafter created or
acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation,
assumption or guaranty of any such secured Indebtedness, or the
grant of a Lien with respect to any such Indebtedness of any
Restricted Subsidiary, that the Securities (together with, if
the Company shall so determine, any other Indebtedness of or
guarantee by the Company or such Restricted Subsidiary) shall
be secured by a mortgage ranking equally and ratably with (or,
at the option of the Company, prior to), and for so long as
such other Indebtedness
<PAGE>
-32-
is so secured, such secured debt. The foregoing restriction,
however, will not apply to: (a) Liens on property, shares of
stock or Indebtedness or other assets of any corporation existing
at the time such corporation becomes a Restricted Subsidiary;
provided that such Liens are not incurred in anticipation of such
- --------
corporation becoming a Restricted Subsidiary; (b) Liens on
property, shares of stock or Indebtedness existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary or
Liens on property, shares of stock or Indebtedness to secure any
Indebtedness for borrowed money incurred prior to, at the time
of, or within 270 days after, the latest of the acquisition
thereof, or, in the case of property, the completion of
construction, the completion of improvements or the commencement
of substantial commercial operation of such property, for the
purpose of financing all or any part of the purchase price
thereof, such construction or the making of such improvements;
(c) Liens to secure Indebtedness owing to the Company or the
Guarantor or to a Restricted Subsidiary; (d) Liens existing at
the date of the initial issuance of the Securities of such
series; (e) 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 sale,
lease or other disposition of the properties of a corporation as
an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary; provided that such Lien was not incurred
--------
in anticipation of such merger or consolidation or sale, lease or
other disposition; (f) Liens created in connection with a project
financed with, and created to secure, a Nonrecourse Obligation;
or (g) extensions, renewals or replacements of any Liens
permitted by any of the foregoing clauses (a) through (f);
provided, however, that any Liens permitted by any of the
- -------- -------
foregoing clauses (a) through (f) shall not extend to or cover
any property of the Company or such Restricted Subsidiary, as
the case may be, other than the property specified in such
clauses and improvements thereto.
Section 4.8. Limitations on Sale and Lease-Back
Transactions.
----------------------------------
The Company covenants that it will not, nor will it
permit any Restricted Subsidiary to, enter into any Sale and
Lease-Back Transaction with respect to any Principal Property,
other than any such transaction involving a lease for a term of
not more than three years or any such transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries, unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur Indebtedness secured by a
<PAGE>
-33-
mortgage on the Principal Property involved in such transaction
at least equal in amount to the Attributable Debt with respect
to such Sale and Lease-Back Transaction, without equally and
ratably securing the Securities, pursuant to Section 4.7; or
(b) the Company shall apply an amount equal to the greater of
the net proceeds of such sale or the Attributable Debt with
respect to such Sale and Lease-Back Transaction within 180 days
of such sale to either (or a combination of) the retirement
(other than any mandatory retirement, mandatory prepayment or
sinking fund payment or by payment at maturity) of Indebtedness
of the Company or a Restricted Subsidiary that matures more
than twelve months after the creation of such Indebtedness or
the purchase, construction or development of other comparable
property.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company and Guarantor May Merge,
etc.
------------------------------------
(a) Neither the Company nor the Guarantor will, in a
single transaction or a series of transactions, consolidate
with or merge with or into, or sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety to, any other Person or
Persons, or permit any of their respective Subsidiaries to
enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease
or other disposition of all or substantially all of the
properties and assets of the Company or the Guarantor and their
respective Subsidiaries, taken as a whole, to any other Person
or Persons, unless:
(1) either (A) if the transaction or series of
transactions is a merger or consolidation, the Company or
the Guarantor, as the case may be, shall be the Person
surviving such merger or consolidation or (B) the Person
formed by such consolidation or into which the Company,
the Guarantor or such Subsidiary, as the case may be, is
merged or to which the properties and assets of the
Company, the Guarantor or such Subsidiary, substantially
as an entirety, are transferred (any such surviving Person
or transferee Person being the "Surviving Entity") shall
be a
<PAGE>
-34-
corporation organized and existing under the laws of the
United States of America, any State thereof or the District
of Columbia and (x) in the case of the Company, such
corporation shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the Company's
obligation for the due and punctual payment of the
principal of and interest, if any, on all the Securities
and the performance of every covenant of this Indenture on
the part of the Company to be performed or observed and (y)
in the case of the Guarantor, such corporation shall
expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory
to the Trustee, the Guarantor's obligation for the due and
punctual payment of the Guarantee and the performance of
every covenant of this Indenture on the part of the
Guarantor to be performed or observed; provided, however,
-------- -------
that this subsection (1) need not be complied with in the
case of the Guarantor's consolidation with or merger into
the Company;
(2) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
--- -----
(including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be
continuing with respect to Securities of any series; and
(3) the Company or the Guarantor, as the case may
be, shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and
substance reasonably satisfactory to the Trustee, each
stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition and, if a
supplemental indenture is required in connection with such
transaction or series of transactions, such supplemental
indenture comply with this Indenture and that all
conditions precedent herein provided for relating to such
transaction or series of transactions have been complied
with.
Section 5.2. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all of the properties and assets of the
<PAGE>
-35-
Company or the Guarantor, as the case may be, in accordance
with Section 5.1(a) hereof, the successor Person or Persons
formed by such consolidation or into which the Company or the
Guarantor, as the case may be, is merged or the successor
Person to which such sale, assignment, conveyance, transfer,
lease or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company or the Guarantor, as the case may be, under this
Indenture and the Securities with the same effect as if such
successor had been named as the Company or the Guarantor, as
the case may be, herein; and thereafter the Company or the
Guarantor, as the case may be, shall be discharged from all
obligations and covenants under this Indenture and the
Securities.
ARTICLE 6
REMEDIES
Section 6.1. Events of Default.
-----------------
An "Event of Default" means with respect to each
series of Securities, individually, any of the following
events:
(a) default by the Company or the Guarantor in the
payment of the principal of any Security of such series
when the same becomes due and payable upon Stated
Maturity, acceleration or otherwise, whether or not such
payment is prohibited by Article 11; or
(b) default by the Company or the Guarantor in the
payment of an installment of interest on any Security of
such series when the same becomes due and payable, and any
such Default continues for a period of 30 days, whether or
not such payment is prohibited by Article 11; or
(c) default by the Company or the Guarantor in the
performance or observance of any term, covenant or
agreement contained in this Indenture or the Securities
(other than Defaults specified in clause (a) or (b)
above), and such Default continues for a period of 60 days
after written notice of such Default (which notice shall
specify the Default, demand that it be remedied and state
that it is a "Notice of Default") requiring the Company or
the Guarantor, as the case may be, to remedy the same
shall have been given (i) to the Company or the Guarantor
by the Trustee or (ii) to the Company or the Guarantor and
the
<PAGE>
-36-
Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
outstanding; or
(d) default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or
other evidences of Indebtedness, whether now existing or
hereinafter created, under which the Company, the
Guarantor or any Material Subsidiary of the Company or the
Guarantor then has outstanding Indebtedness in excess of
$10 million or more individually or $20 million or more in
the aggregate (or, in each case, the equivalent thereof in
any other currency), and either (i) such Indebtedness is
already due and payable in full or (ii) such default or
defaults have resulted in the acceleration of the maturity
of such Indebtedness unless such acceleration is cured,
waived, rescinded or annulled within 30 days after written
notice thereof shall been given to the Company by the
Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the
Securities of such series then outstanding; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $10
million or more individually or $20 million or more in the
aggregate (or, in each case, the equivalent thereof in any
other currency), shall be entered against the Company, the
Guarantor or any Material Subsidiary of the Company or the
Guarantor, as the case may be, and shall not be discharged
or fully bonded and there shall have been a period of 60
days after the date on which any period for appeal has
expired and during which a stay of enforcement of such
judgment, order or decree shall not be in effect; or
(f) the Company, the Guarantor or any Material
Subsidiary of the Company or the Guarantor pursuant to or
under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for
relief against it in an involuntary case or
proceeding;
<PAGE>
-37-
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its
property; or
(iv) makes a general assignment for the benefit
of its creditors; or
(g) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, the
Guarantor or any Material Subsidiary of the Company
or the Guarantor in an involuntary case or
proceeding,
(ii) appoints a Custodian of the Company, the
Guarantor or any Material Subsidiary of the Company
or the Guarantor or for all or substantially all of
its properties, or
(iii) orders the liquidation of the Company, the
Guarantor or any Material Subsidiary of the Company
or the Guarantor,
and in each case the order or decree remains unstayed and
in effect for 60 days.
The Trustee shall not be charged with knowledge of
any Default or Event of Default (other than, if the Trustee is
acting as Paying Agent, those set forth in Section 6.1(a), (b)
or, to the extent relating to Section 4.1, (c)) unless written
notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the
Paying Agent, any Holder, any holder of Senior Indebtedness or
any of their respective agents.
Section 6.2. Acceleration.
------------
If an Event of Default with respect to any series of
Securities (other than an Event of Default specified in Section
6.1(f) or (g) with respect to the Company or the Guarantor)
occurs and is continuing, the Trustee by written notice to the
Company, or the Holders of at least 25% in aggregate principal
amount of the Securities of such series then outstanding, by
written notice to the Company and the Trustee, may declare the
unpaid principal of (or, if any of the Securities of that
series are Discount Securities, such portion of the principal
<PAGE>
-38-
amount of such Securities as may be specified in the terms
thereof) and accrued interest on all the Securities of such
series to be due and payable immediately. If an Event of
Default specified in Section 6.1(f) or (g) with respect to the
Company or the Guarantor occurs and is continuing, then the
principal of and accrued interest on all the Securities shall
ipso facto become and be immediately due and payable without
- ---- -----
any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration in
respect of a series of Securities has been made and before a
judgment or decree for payment of the money due has been
obtained by the Trustee, Holders of a majority in aggregate
principal amount of such series of Securities outstanding, by
written notice to the Company and the Trustee, may, on behalf
of all Holders of such series of Securities, rescind and annul
such declaration and its consequences if:
(a) the Company or the Guarantor has paid or
deposited with the Trustee a sum sufficient to pay
(i) all amounts due the Trustee under Section
7.8 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel,
(ii) all overdue interest on all Securities of
such series,
(iii) the principal of such series of Securities
which has become due otherwise than by such
declaration of acceleration and interest thereon at
the rate borne by such series of Securities, and
(iv) interest upon overdue principal and, to the
extent that payment of such interest is lawful,
overdue interest at the rate borne by such series of
Securities which has become due otherwise than by
such declaration of acceleration;
(b) such rescission or annulment would not conflict
with any judgment or decree of a court of competent
jurisdiction; and
(c) all Events of Default with respect to such
series of Securities, other than the non-payment of
<PAGE>
-39-
principal of and interest on such series of Securities
which has become due solely by such declaration of
acceleration, have been cured or waived as provided in
Section 6.4.
No such rescission shall affect any subsequent
Default or Event of Default with respect to such series of
Securities or impair any right consequent thereon.
Section 6.3. Other Remedies.
--------------
If an Event of Default with respect to a series of
Securities occurs and is continuing, the Trustee may in its
discretion pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
such Securities or to enforce the performance of any provision
of such Securities or this Indenture.
All rights of action and claims under this Indenture
or the Securities of any series may be enforced by the Trustee
even if it does not possess any of the Securities of such
series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of
Default with respect to a series of Securities shall not impair
the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.4. Waiver of Past Defaults.
-----------------------
Subject to the provisions of Sections 6.2, 6.7 and
9.2, the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities of any series by
notice to the Trustee may, on behalf of the Holders of all the
Securities of such series, waive any existing Default or Event
of Default, with respect to such series, and its consequences.
When a Default or Event of Default with respect to a series of
Securities is so waived, it shall be deemed cured and shall
cease to exist, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any
right consequent thereon.
<PAGE>
-40-
Section 6.5. Control by Majority.
-------------------
The Holders of at least a majority in aggregate
principal amount of the then 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, provided, however, that the Trustee may refuse to
-------- -------
follow any direction (a) that conflicts with any rule of law or
this Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder of such
series, or (c) that may expose the Trustee to Personal
liability unless the Trustee has indemnification satisfactory
to it in its sole discretion against any loss or expense caused
by its following such direction; and provided, further, that
-------- -------
the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
Section 6.6. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have
any right to pursue any remedy with respect to this Indenture
or such Securities unless:
(a) the Holder gives written notice to the Trustee
of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of at least 25% in principal amount
of the then outstanding Securities of that series make a
written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
and, if requested, provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in aggregate principal amount of the then
outstanding Securities of that series do not give the
Trustee a direction which is inconsistent with the
request.
The foregoing limitations shall not apply to a suit
instituted by a Holder of Securities of a series for the
<PAGE>
-41-
enforcement of the payment of principal of or accrued interest
on such Securities held by such Holder on or after the
respective due dates set forth in such Securities.
A Securityholder of a series may not use this
Indenture to prejudice the rights of any other Securityholder
of such series or to obtain priority or preference over such
other Securityholder.
Section 6.7. Right of Holders To Receive Payment.
-----------------------------------
Notwithstanding any other provision in this
Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on such Security, on
or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or
after the Stated Maturity or Interest Payment Date, as the case
may be, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in clause (a) or (b)
of Section 6.1 with respect to Securities of any series occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust in favor of the Holders
against the Company, the Guarantor or any other obligor on the
Securities of such series for the whole amount of principal of
and accrued interest remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the
Securities of such series and 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.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company or the
Guarantor (or any other obligor upon the Securities), their
creditors or their property and shall be entitled and empowered
<PAGE>
-42-
to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and
any Custodian in any such judicial proceedings 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 for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section
7.8. 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 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following
order:
First: to the Trustee for amounts due under Section
7.8;
Second: to Holders for interest accrued, if any, on
the Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities for interest;
Third: to Holders for principal owing under the
Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities of the
applicable series for principal; and
Fourth: the balance, if any, to whomsoever may be
lawfully entitled thereto.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee
for
<PAGE>
-43-
any action taken or omitted by it as Trustee, a court may in its
discretion require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to
any suit by the Trustee, any suit by a Holder pursuant to Section
6.7, or a suit by Holders of more than 10% in aggregate principal
amount of the outstanding Securities of any series.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
or any Security 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.
ARTICLE 7
TRUSTEE
Section 7.1. Duties.
------
(a) In case an Event of Default has occurred and is
continuing, with respect to Securities of any series, the
Trustee shall exercise, with respect to Securities of such
series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default, with respect to the Securities of any series:
(1) the Trustee need perform, with respect to
Securities of such series, 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
<PAGE>
-44-
(2) in the absence of bad faith on its part, the
Trustee may, with respect to Securities of such series,
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
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform
to the requirements of this Indenture.
(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 paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(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
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b),
(c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on,
or be required to invest, any assets received by it except as
the Trustee may agree with the Company. Assets held in trust
by the Trustee need not be segregated from other assets except
to the extent required by law.
<PAGE>
-45-
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof and the provisions of
TIA (S) 315:
(a) The Trustee may rely, and shall be protected
from acting or refraining from acting, on any document
believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers'
Certificate or an Opinion of Counsel, which shall conform
to Sections 12.4 and 12.5. The Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any
liabilities arising out of its own negligence.
(e) The Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization
and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
<PAGE>
-46-
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 7.11 and 7.12 and TIA (S)(S) 310 and 311, may otherwise
deal with the Company and its Subsidiaries with the same rights
it would have if it were not the Trustee, Paying Agent,
Registrar or such other agent.
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities,
it shall not be accountable for the Company's use or
application of the proceeds from the Securities, it shall not
be responsible for the use or application of any money received
by any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the
Trustee's certificate of authentication.
Section 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder of the affected series notice of
the Default or Event of Default within 30 days thereafter;
provided, however, that, except in the case of a Default in the
- -------- -------
payment of the principal of or interest on any Security or in
the payment of any sinking fund installment, the Trustee shall
be protected in withholding such notice if and so long as the
board of directors, the executive committee of the board of
directors or a committee of the directors of the Trustee and/or
Trust Officers in good faith determines that the withholding of
such notice is in the interest of the Holders.
Section 7.6. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be
segregated from other funds except to the extent required
herein or by
<PAGE>
-47-
law. The Trustee shall not be under any liability for interest
on any moneys received by it hereunder.
Section 7.7. Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 of each year beginning
with the May 15 following the date of this Indenture, the
Trustee shall, to the extent that any of the events described
in TIA (S) 313(a) has occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as
of such May 15 that complies with TIA (S) 313(a). The Trustee
also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC
and each securities exchange, if any, on which the Securities
are listed.
The Company shall notify the Trustee in writing if
the Securities become listed on any securities exchange or
automatic quotation system.
Section 7.8. Compensation and Indemnity.
--------------------------
The Company covenants and agrees to pay the Trustee
from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it
arising out of or in connection with the administration of this
trust and its rights or duties hereunder, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its written consent.
The Company need not reimburse any expense or indemnify against
<PAGE>
-48-
any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this
Section 7.8, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section
6.1(f) or (g) with respect to the Company or the Guarantor, the
expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
The Company's obligations under this Section 7.8 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.9. Replacement of Trustee.
----------------------
The Trustee may resign with respect to any series of
Securities issued hereunder by so notifying the Company. The
Holders of a majority in principal amount of the outstanding
Securities of any series may remove the Trustee by so notifying
the Company and the Trustee and may appoint a successor Trustee
with the Company's consent. The Company may remove the Trustee
with respect to any series of Securities if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason with respect to
the Securities of one or more series, the Company shall notify
each Holder of such event and shall promptly appoint a
successor Trustee, with respect to the Securities of such
series.
<PAGE>
-49-
The Trustee shall be entitled to payment of its fees
and reimbursement of its expenses while acting as Trustee, and
to the extent such amounts remain unpaid, the Trustee that has
resigned or has been removed shall retain the Lien afforded by
Section 7.8. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the
outstanding Securities of any series may appoint a successor
Trustee to replace the successor Trustee appointed by the
Company with respect to the Securities of that series.
In the case of the appointment hereunder of a
successor Trustee with respect to all Securities, a successor
Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by
it as Trustee to the successor Trustee, subject to the Lien
provided in Section 7.8, the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
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 to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-Trustees of the same trust and
that each such Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder
<PAGE>
-50-
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates,
subject, nevertheless, to its Lien, if any, provided for in
Section 7.8.
If a successor Trustee with respect to the Securities
of one or more series does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities of such series
may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any provisions
of this Section 7.9 shall become effective upon acceptance of
appointment by the successor trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.9, the Company's obligations under Section
7.8 shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or
national banking association without any further act shall,
if such resulting, surviving or transferee corporation or
<PAGE>
-51-
national banking association is otherwise eligible hereunder,
be the successor Trustee.
Section 7.11. Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA (S)(S) 310(a)(1) and
310(a)(5) and which shall have a combined capital and surplus
of at least $100,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes 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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect hereinabove specified in this Article. The Trustee
shall comply with TIA (S) 310(b).
Section 7.12. Preferential Collection of Claims
Against Company.
---------------------------------
The Trustee shall comply with TIA (S) 311(a) excluding
any creditor relationship listed in TIA (S) 311(b). If the
present or any future Trustee shall resign or be removed, it
shall be subject to TIA (S) 311(a) to the extent provided
therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's
and the Guarantor's Obligations.
-------------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may terminate its obligations and the
obligations of the Guarantor under this Indenture with respect
to any series of Securities, except those obligations referred
to in the penultimate paragraph of this Section 8.1, if all
Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities
which have been replaced or paid or Securities for whose
payment money has theretofore been deposited with the Trustee
or the Paying Agent in trust or
<PAGE>
-52-
segregated and held in trust by the Company and thereafter repaid
to the Company, as provided in Section 8.4) have been delivered
to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed
a notice to each Securityholder of such series of the
redemption of all of the Securities of such series under
arrangements satisfactory to the Trustee for the giving of
such notice or (ii) all Securities of such series have
otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee
satisfactory to the Trustee, under the terms of an
irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Securityholders of such
series for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such
interest, to pay principal of and interest on the
outstanding Securities of such series to maturity or
redemption; provided that the Trustee shall have been
--------
irrevocably instructed to apply such money to the payment
of said principal and interest with respect to such
Securities and; provided, further, that the provisions of
-------- -------
Article 11 permit payments with respect to the securities
at the time of deposit;
(c) no Default or Event of Default with respect to
this Indenture applicable to such series or the Securities
of such series shall have occurred and be continuing on
the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other
instrument to which the Company or the Guarantor is a
party or by which it is bound;
(d) the Company and the Guarantor shall have paid
all other sums payable by it hereunder; and
(e) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent providing for the
termination of the Company's obligations under such
Securities and this Indenture applicable to such
Securities have been complied with. Such Opinion of
Counsel shall
<PAGE>
-53-
also state that such satisfaction and discharge does not
result in a default under any agreement or instrument then
known to such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the
Company's and, to the extent applicable, the Guarantor's
obligations in Sections 2.6, 2.7, 2.8, 2.9, 4.1, 4.2, 7.8, 8.4,
8.5, 10.1 and 10.2 shall survive until the Securities of such
series are no longer outstanding pursuant to the last paragraph
of Section 2.9. After the Securities are no longer
outstanding, the Company's and, to the extent applicable, the
Guarantor's obligations in Sections 7.8, 8.4 and 8.5 shall
survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the discharge
of the Company's and the Guarantor's obligations under the
Securities of such series and this Indenture applicable to such
Securities except for those surviving obligations specified
above.
Section 8.2. Legal Defeasance and
Covenant Defeasance.
--------------------
(a) Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may, at its option by Board Resolution
or by an Officers' Certificate, at any time, with respect to
the Securities of any series, elect to have either paragraph
(b) or paragraph (c) below be applied to the outstanding
Securities of such series upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), each of the
Company and the Guarantor shall be deemed to have been released
and discharged from its obligations with respect to the
outstanding Securities of such series on the date the
conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding
Securities of such series, which shall thereafter be deemed to
be "outstanding" only for the purposes of paragraph (e) below
and the other Sections of and matters under this Indenture
applicable to such Securities referred to in (i) and (ii)
below, and to have satisfied all its other obligations under
such Securities and this Indenture applicable to such
Securities insofar as
<PAGE>
-54-
such Securities are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the
same), and Holders of such Securities and any amounts deposited
under paragraph (d) below shall cease to be subject to any
obligations to, or the rights of, any holder of Senior
Indebtedness under Article 11 or otherwise, except for the
following which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding
Securities of such series to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in
such paragraph payments in respect of the principal of and
interest on such Securities when such payments are due, (ii) the
Company's and, to the extent applicable, the Guarantor's
obligations with respect to such Securities under Sections 2.7,
2.8 and 4.2 and, with respect to the Trustee, under Section 7.8,
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Section 8.2 and Section 8.5.
Subject to compliance with this Section 8.2, the Company may
exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with
respect to Securities of any series.
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
and, to the extent applicable, the Guarantor shall be released
and discharged from its obligations under any covenant
contained in Article 5 and in Section 4.3, except as to the
corporate existence of the Company and the Guarantor and in
Sections 4.4 through 4.8 and in certain other sections with
respect to the outstanding Securities of such series identified
in any supplemental indenture pursuant to Section 2.2(a) on and
after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and such Securities shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to such outstanding
Securities, the Company and, to the extent applicable, the
Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of
any reference elsewhere herein to any such covenant or by
reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default
under
<PAGE>
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Section 6.1(c) with respect to such series of Securities,
but, except as specified above, the remainder of this Indenture
applicable to such Securities and such Securities shall be
unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Securities of such series:
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this Section
8.2 applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, (x)
money in an amount or (y) direct non-callable obligations
of, or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or
obligation the full faith and credit of the United States
is pledged ("U.S. Government Obligations") maturing as to
principal and interest in such amounts of money and at
such times as are sufficient without consideration of any
reinvestment of such interest, to pay principal of and
interest on the outstanding Securities of such series not
later than one day before the due date of any payment, or
(z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge principal of and interest on
the outstanding Securities of such series on the Maturity
Date or otherwise in accordance with the terms of this
Indenture and of the Securities of such series; provided,
--------
however, that the Trustee (or other qualifying trustee)
-------
shall have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to
the Securities of such series and; provided further, that
-------- -------
the provisions of Article 11 permit payments with respect
to the Securities at the time of deposit;
<PAGE>
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(ii) no Default or Event of Default with respect to
such series of Securities shall have occurred and be
continuing on the date of such deposit;
(iii) such deposit will not result in a breach or
violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(iv) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities of such series will
not recognize income, gain or loss for Federal income tax
purposes 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;
(v) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes 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;
(vi) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to either the Legal Defeasance under paragraph
(b) above or the Covenant Defeasance under paragraph (c)
above, as the case may be, have been complied with; and
(vii) the Company shall have delivered to the Trustee
an amount sufficient to cover its fees and expenses as
Trustee under this Indenture through the term of the
Securities to be defeased, or made adequate provision
therefor to the satisfaction of the Trustee.
<PAGE>
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(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee; collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above
in respect of the outstanding Securities of such series shall
be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture applicable
to such Securities, to the payment, either directly or through
any Paying Agent (other than the Company or any Affiliate of
the Company) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
paragraph (d) above or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the
outstanding Securities of such series.
Anything in this Section 8.2 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, of the
Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.3. Application of Trust Money.
--------------------------
The Trustee or a trustee satisfactory to the Trustee,
the Company and the Guarantor shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to
Sections 8.1 and 8.2, and shall apply the deposited money and
the money from U.S. Government Obligations in accordance with
this Indenture to the payment of principal of and interest on
the Securities of such series.
<PAGE>
-58-
Section 8.4. Repayment to Company.
--------------------
Subject to Sections 7.8, 8.1 and 8.2, the Trustee
shall promptly pay to the Company, upon receipt by the Trustee
of an Officers' Certificate, any excess money, determined in
accordance with Section 8.2, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be,
of an Officers' Certificate, any money held by it for the
payment or principal or interest that remains unclaimed for two
years after payment to the Securityholders of such series is
required; provided, however, that the Trustee and the Paying
-------- -------
Agent before being required to make any payment may, but need
not, at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York
or mail to each Securityholder of such series entitled to such
money notice that such money remains unclaimed and that after a
date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance
of such money then remaining will be repaid to the Company.
After payment to the Company, Securityholders entitled to money
must look solely to the Company for payment as general
creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
Section 8.5. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations to any payment in respect
of Securities of any series in accordance with this Indenture
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, then and
only then, the Company's and the Guarantor's obligations under
this Indenture and the Securities of such series shall be
revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is
permitted to apply all such money or U.S. Government
Obligations in accordance with this Indenture; provided,
--------
however, that if the Company or the Guarantor has made any
- -------
payment of principal of or interest on any Securities of such
series because of the reinstatement of its obligations, the
Company or the Guarantor, as the case may be, shall be
subrogated to the rights of the Holders of Securities of such
series to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
<PAGE>
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ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
--------------------------
The Company, the Guarantor and the Trustee may amend,
waive or supplement this Indenture or the Securities of any
series without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to evidence the succession of another Person to
the Company or the Guarantor, and the assumption by any
such successor of the obligations of the Company or the
Guarantor herein and in the Securities of any series in
accordance with Article Five;
(c) to provide for uncertificated Securities in
addition to certificated Securities;
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to make any change that would provide any
additional benefit or rights to the Holders or that does
not adversely affect the rights of any Holder; or
(f) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.2(a),
respectively.
Upon the request of the Company accompanied by a
resolution of its Board of Directors, and in the case of an
amendment to Article 10 hereof adversely affecting the Guarantor,
the Guarantor's Board of Directors, authorizing the execution of
any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company and, as the case may be,
the Guarantor, in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations which
may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which
affects its
<PAGE>
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own rights, duties, protections or immunities under this Indenture
or otherwise.
Section 9.2. With Consent of Holders.
-----------------------
Subject to Section 6.4, the Company, the Guarantor
and the Trustee may amend or supplement this Indenture or the
Securities of any series or any supplemental indenture relating
to any series of Securities with the written consent of the
Holders of not less than a majority in aggregate principal
amount of the Securities of each series affected then
outstanding, and the Holders of not less than a majority in
aggregate principal amount of the Securities of each series
affected then outstanding by written notice to the Trustee may
waive future compliance by the Company and the Guarantor with
any provision of this Indenture, such Securities or any
supplemental indenture relating to such Securities.
Upon the request of the Company, accompanied by a
resolution of its Board of Directors, and in the case of an
amendment to Article 10 hereof adversely affecting the Guarantor,
the Guarantor's Board of Directors, authorizing the execution of
any supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Securityholders as
aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with
the Company, and, as the case may be, the Guarantor in the
execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights,
duties, protections or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental
indenture.
Notwithstanding the provisions of this Section 9.2,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 6.4, may not:
(a) reduce the percentage in aggregate outstanding
principal amount of Securities of any series the Holders
of which must consent to an amendment, supplement or
waiver of any provision of this Indenture, the Securities
of such series or any supplemental indenture;
(b) reduce the rate or change the time for payment
of interest on any Security of any series or change the
method or formula for calculating interest;
<PAGE>
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(c) reduce the principal amount outstanding of or
extend the fixed maturity of any Security of any series or
alter the redemption provisions with respect thereto or
reduce the amount of the principal of any outstanding
Discount Securities that would be due and payable upon
declaration of acceleration of maturity thereof;
(d) waive a default in the payment of the principal
of or interest on, or redemption or an offer to purchase
required hereunder with respect to, any Security of any
series;
(e) make the principal of or interest on any
Security of any series payable in money or in a manner
other than that stated in the Security;
(f) modify this Section 9.2 or Section 6.4 or
Section 6.7;
(g) modify or change any provision of this Indenture
affecting the subordination of the Securities of any
series in a manner adverse to such Holders;
(h) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Securities of any series;
(i) make such other changes as may require the
consent of each Holder so affected pursuant to any
supplemental indenture; or
(j) release the Guarantor from its obligations under
the Guarantee or this Indenture or make any other change
to Article 10 that adversely affects the legal rights of
Holders of the Securities.
It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form
of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the
Holders of each Security affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement
or waiver. Any failure of the Company to mail such notice, or
<PAGE>
-62-
any defect therein, shall not, however, in any way impair or
affect the validity of any supplemental indenture.
Section 9.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment of or supplement to this Indenture or
the Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes
effective with respect to a series of Securities, a consent to
it by a Holder of a Security of such series is a continuing
consent by such Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security prior to such amendment,
supplement or waiver becoming effective as to the Securities of
such series. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under (S) 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent
to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue
to be Holders after such record date. Such consent shall be
effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder of such series
unless it makes a change described in any of clauses (a)
through (j) of Section 9.2; if it makes such a change, the
amendment, supplement or waiver shall bind every subsequent
Holder of a Security of such series or portion of a Security
that evidences the same debt as the consenting Holder's
Security.
<PAGE>
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Section 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the
terms of a Security of any series, the Trustee shall (in
accordance with the specific direction of the Company) request
the Holder of such Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the
Company) place an appropriate notation on such Security about
the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in
exchange for such Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.6. Trustee May Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the
amendment, supplement or waiver does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it
will be valid and binding upon the Company in accordance with
its terms.
ARTICLE 10
GUARANTEE
Section 10.1. Unconditional Guarantee.
-----------------------
The Guarantor hereby unconditionally and irrevocably
guarantees to each Holder of a Security of each series
authenticated and delivered by the Trustee the due and punctual
payment of the principal of (including any amount in respect of
original issue discount), and interest, if any (together with
any additional amounts payable pursuant to the terms of such
Security), on such Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations,
if any, provided for pursuant to the terms of such Security,
when and as the same shall become due and payable, whether at
<PAGE>
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maturity or upon redemption or upon declaration of acceleration
or otherwise according to the terms of such Security and of
this Indenture. In case of default by the Company in the
payment of any such principal (including any amount in respect
of original issue discount), interest (together with any
additional amounts payable pursuant to the terms of such
Security), sinking fund payment, or analogous obligation, the
Guarantor agrees duly and punctually to pay the same. The
Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional irrespective of any extension of the
time for payment of any such Security, any modification of any
such Security, any invalidity, irregularity or unenforceability
of any such Security or this Indenture, any failure to enforce
the same or any waiver, modification or indulgence granted to
the Company with respect thereto by the Holder of such Security
or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event
of merger or bankruptcy of the Company, any right to require a
demand or proceeding first against the Company, protest or
notice with respect to any such Security or the Indebtedness
evidenced thereby and all demands whatsoever, and covenants
that this guarantee will not be discharged as to any such
Security except by payment in full of the principal of
(including any amount payable in respect of original issue
discount) and interest, if any (together with any additional
amounts payable pursuant to the terms of such Security),
thereon.
Until the principal of and interest on the Securities
and all other amounts payable by the Company or the Guarantor
under this Indenture shall have been paid in full, the
Guarantor irrevocably waives any and all rights to which it may
be entitled, by operation of law or otherwise, upon making any
payment hereunder to exercise its rights to be subrogated to
the rights of the payee against the Company with respect to
such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof; at any time
thereafter, the Guarantor shall be free to exercise any of such
rights.
The guarantee set forth in this Section shall not be
valid or become obligatory for any purpose with respect to a
Security of any series until the certificate of authentication
on such Security shall have been signed by the Trustee.
<PAGE>
-65-
Section 10.2. Execution of Guarantee.
----------------------
To evidence its guarantee specified in Section 10.1
to the Holders of Securities of any series, the Guarantor
hereby agrees to execute the Guarantee in substantially the
form above recited to be endorsed on each Security of such
series authenticated and delivered by the Trustee. Such
Guarantee shall be executed on behalf of the Guarantor by both
(a) its Chairman or its Vice Chairman or its President or any
Vice President and (b) its Treasurer or any Assistant Treasurer
or its Secretary or any Assistant Secretary, prior to the
authentication of the Security on which it is endorsed, and the
delivery of such Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of such Guarantee on behalf of the Guarantor. The seal of the
Guarantor may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the
Guarantees. Typographical and other minor errors or defects in
any such reproduction of any such signature shall not affect
the validity or enforceability of any Guarantee that has been
duly authenticated and delivered by the Trustee.
Such signatures may be the manual or facsimile
signatures of such officers and may be imprinted or otherwise
reproduced on the Guarantees. In case any officer of the
Guarantor who shall have signed any of the Guarantees shall
cease to be an officer before the Securities on which such
Guarantees are endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such
Securities nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Guarantees had
not ceased to be such officer, and any Guarantees may be signed
on behalf of the Guarantor by such Persons as, at the actual
date of the execution of such Guarantees, shall be the proper
officers of the Guarantor, although at the date of such
Securities or of the execution of this Indenture any such
Person was not such an officer.
ARTICLE 11
SUBORDINATION
Section 11.1. Agreement to Subordinate.
------------------------
The Company, for itself and its successors, agrees,
and each Securityholder by accepting a Security agrees, that
the Indebtedness evidenced by the Security is subordinated in
<PAGE>
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right of payment, to the extent and in the manner provided in
this Article 11, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of
the holders of Senior Indebtedness.
This Article 11 shall constitute a continuing offer
to all Persons who become holders of, or continue to hold
Senior Indebtedness, and such provisions are made for the
benefit of the holders of the Senior Indebtedness, and such
holders are made obligees hereunder and any one or more of them
may enforce such provisions.
Section 11.2. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any distribution to creditors of the Company in
a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property or in an assignment for
the benefit of creditors or any marshalling of the assets and
liabilities of the Company:
(1) holders of Senior Indebtedness shall be entitled
to receive payment in full of all obligations with respect
to the Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified
in the applicable Senior Indebtedness, whether or not such
interest is an allowable claim in any such proceeding)
before Securityholders shall be entitled to receive any
payment of any obligations with respect to the Securities;
and
(2) until all obligations with respect to Senior
Indebtedness (as provided in subsection (1) above) are
paid in full, any distribution to which Securityholders
would be entitled but for this Article shall be made to
holders of Senior Indebtedness, as their interests may
appear, except that Securityholders may receive securities
that are subordinated to at least the same extent as the
Securities to Senior Indebtedness.
Section 11.3. Default on Senior Debt.
----------------------
The Company may not make any payment or distribution
to the Trustee or any Securityholder in respect of obligations
with respect to the Securities and may not acquire from the
Trustee or any Securityholders any Securities for cash or
property (other than Indebtedness which is subordinated to at
least
<PAGE>
-67-
the same extent as the Securities to Senior Indebtedness), until
all obligations with respect to the Senior Indebtedness have been
paid in full if:
(i) there occurs and is continuing a default in the
payment of any obligations with respect to the Senior
Indebtedness at the final scheduled maturity thereof or
that permits holders of such Senior Indebtedness to
accelerate its maturity or the maturity of which has been
accelerated; or
(ii) there occurs and is continuing an event of
default, other than a payment default, on any Senior
Indebtedness that permits holders of Senior Indebtedness
to accelerate its maturity, and such event of default is
the subject of judicial proceedings or the Company
receives a notice of the default from a Person who may
give it pursuant to Section 11.11 hereof. If the Company
receives any such notice, a subsequent notice received
within 360 days thereafter relating to Senior Indebtedness
shall not be effective for purposes of this Section.
The Company may resume payments on and distributions
in respect of the Securities and may acquire them when
(1) the default is cured or waived or has ceased to
exist or such notice has been rescinded or annulled, or
(2) in the case of an event of default referred to
in Section 11.3(ii) hereof, 179 days pass after the
Trustee receives written notice of such default and the
holders of Senior Indebtedness as to which such default
relates have not declared such Senior Indebtedness to be
immediately due and payable,
if this Article otherwise permits the payment or acquisition at
the time of such payment or acquisition.
Section 11.4. Acceleration of Securities.
--------------------------
If payment of the Securities is accelerated because
of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
<PAGE>
-68-
Section 11.5. When Distribution Must
Be Paid Over.
----------------------
In the event that a distribution is made to the
Trustee or any Securityholder at a time when such distribution
is prohibited by Section 11.2 or 11.3 hereof, the Trustee or
such Securityholder who receives the distribution shall hold it
in trust for the benefit of, and, upon written request, pay it
over to, the holders of Senior Indebtedness as their interests
may appear, for application to the payment of all obligations
with respect to Senior Indebtedness remaining unpaid to the
extent necessary to pay such obligations in full in accordance
with their terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform only such obligations on the
part of the Trustee as are specifically set forth in this
Article 11, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness, and shall not be liable to any such holders if
the Trustee shall pay over or distribute to or on behalf of
Securityholders or the Company or any other Person money or
assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article 11, except if such payment
is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 11.6. Notice by Company.
-----------------
The Company shall promptly notify the Trustee and any
Paying Agent of any facts known to the Company that would cause
a payment of any obligations with respect to the Securities to
violate this Article 11, but failure to give such notice shall
not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article 11.
Section 11.7. Subrogation.
-----------
After all Senior Indebtedness is paid in full and
until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior
<PAGE>
-69-
Indebtedness. A distribution made under this Article 11 to
holders of Senior Indebtedness which otherwise would have been
made to Securityholders shall not, as between the Company and
Securityholders, be deemed a payment by the Company to or on
account of the Senior Indebtedness.
Section 11.8. Relative Rights.
---------------
This Article 11 defines the relative rights of
Securityholders and holders of Senior Indebtedness. Nothing in
this Indenture shall:
(1) impair, as between the Company and
Securityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of Securityholders
and creditors of the Company other than their rights in
relation to holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event
of Default, subject to the rights of holders and owners of
Senior Indebtedness to receive distributions and payments
otherwise payable to Securityholders.
If the Company fails because of this Article to pay
principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default.
Section 11.9. Subordination May Not Be
Impaired by Company.
------------------------
No right of any holder of Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by the
Securities shall be impaired by any act or failure to act by
the Company or by its failure to comply with this Indenture.
Section 11.10. Distribution or Notice
to Representative.
----------------------
Whenever a distribution is to be made or a notice
given to holders of Senior Indebtedness, the distribution may
be made and the notice given to their Representative.
<PAGE>
-70-
Upon any payment or distribution of assets of the
Company referred to in this Article 11, the Trustee and the
Securityholders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating
trustee or agent or other Person making any distribution to the
Trustee or to the Securityholders for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 11.
Section 11.11. Rights of Trustee and
Paying Agent.
---------------------
Notwithstanding the provisions of this Article 11 or
any other provision of this Indenture, neither the Trustee nor
any Paying Agent shall be charged with knowledge of the
existence of any facts which would prohibit the making of any
payment or distribution by the Trustee or such Paying Agent,
and the Trustee or such Paying Agent may continue to make
payments on the Securities unless, in the case of the Trustee,
and in the case of such Paying Agent as long as the Trustee is
such Paying Agent, a Trust Officer shall have received at the
Corporate Trust Office of the Trustee, and in the case of a
Paying Agent other than the Trustee, it shall have received, in
each case at least two Business Days prior to the date of such
payment, written notice of facts that would cause the payment
of any obligations with respect to the Securities to violate
this Article. The Trustee or any Paying Agent, as applicable,
shall promptly provide a copy of such notice to the
Securityholders. Only the Company, a Representative or a
holder of an issue of Senior Indebtedness that has no
Representative may give notice. Nothing in this Article 11
shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.8 hereof.
The Trustee in its individual or any other capacity
may hold Senior Indebtedness with the same rights it would have
if it were not the Trustee subject to TIA (S) 310(b) and 311.
Any Agent may do the same with like rights.
Section 11.12. Authorization to Effect
Subordination.
-----------------------
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
<PAGE>
-71-
action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 11, and appoints the
Trustee his attorney-in-fact for any and all such purposes.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Trust Indenture Act of 1939.
---------------------------
This Indenture is subject to the provisions of the
TIA that are required to be a part of this Indenture, and
shall, to the extent applicable, be governed by such
provisions.
If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
Section 12.2. Notices.
-------
Any notice or communication shall be sufficiently
given if in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows:
If to the Company, to:
KELSEY-HAYES COMPANY
11878 Hubbard Road
Livonia, Michigan 48150
Attention: Treasurer
If to the Guarantor, to:
VARITY CORPORATION
672 Delaware Avenue
Buffalo, New York 14209
Attention: Treasurer
If to the Trustee, to:
MANUFACTURERS AND TRADERS TRUST COMPANY
One M&T Plaza
Buffalo, New York 14240
Attention: Corporate Trust Department
<PAGE>
-72-
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed, postage prepaid,
to a Holder, including any notice delivered in connection with
TIA (S) 310(b), TIA (S) 313(c), TIA (S) 314(a) and TIA (S) 315(b),
shall be mailed by first class mail to such Holder at the
address of such Holder as it appears on the Securities register
maintained by the Registrar and shall be sufficiently given to
such Holder if so mailed within the time prescribed. Copies of
any such communication or notice to a Holder shall also be
mailed to the Trustee.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Holders. Except for a notice
to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 12.3. Communication by Holders with
Other Holders.
-----------------------------
Holders may communicate pursuant to TIA (S) 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The Company, the Guarantor, the Trustee,
the Registrar and any other Person shall have the protection of
TIA (S) 312(c).
Section 12.4. Certificate and Opinion as to
Conditions Precedent.
-----------------------------
Upon any request or application by the Company or the
Guarantor to the Trustee to take any action under this
Indenture, the Company or the Guarantor shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
<PAGE>
-73-
Section 12.5. Statements Required in Certificate
or Opinion.
----------------------------------
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the Person making such
certificate or rendering such opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is
necessary to enable him to express an opinion as to
whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
complied with; provided, however, that with respect to
-------- -------
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 12.6. Rules by Trustee, Paying Agent,
Registrar.
-------------------------------
The Trustee may make reasonable rules for action by
or at a meeting of Securityholders. The Paying Agent or
Registrar may make reasonable rules for its functions.
Section 12.7. Governing Law.
-------------
This Indenture, the Securities and the Guarantee
shall be governed by and construed in accordance with the laws
of the State of New York, without regard to principles of
conflicts of law.
Section 12.8. No Interpretation of
Other Agreements.
--------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
<PAGE>
-74-
Subsidiaries. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
Section 12.9. No Recourse Against Others.
--------------------------
A director, officer, employee, shareholder or
Affiliate, as such, of the Company or the Guarantor shall not
have any liability for any obligations of the Company or the
Guarantor under the Securities, the Guarantee or this Indenture
or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability.
Section 12.10. Successors.
----------
All agreements of the Company and the Guarantor in
this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its
successors.
Section 12.11. Duplicate Originals.
-------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 12.12. Separability.
------------
In case any provision in this Indenture or 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, and a Holder shall have no claim therefor against any
party hereto.
Section 12.13. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 12.14. Benefits of Indenture.
---------------------
Nothing in this Indenture, in the Securities or in
the Guarantee, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder,
<PAGE>
-75-
and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
<PAGE>
-76-
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first
above written.
KELSEY-HAYES COMPANY, as Issuer
By:________________________________
Name:
Title:
VARITY CORPORATION, as Guarantor
By:________________________________
Name:
Title:
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.3
_______________________________________________________________
_______________________________________________________________
____________________
VARITY CORPORATION, as Issuer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
____________________
INDENTURE
Dated as of , 1995
____________________
Senior Debt Securities
_______________________________________________________________
_______________________________________________________________
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of , 1995
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S) 310(a)(1) ........................................ 7.11
(a)(2) ........................................ 7.11
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(a)(5) ........................................ 7.11
(b) ........................................ 7.11; 10.2
(c) ........................................ N.A.
(S) 311(a) ........................................ 7.12
(b) ........................................ 7.12
(c) ........................................ N.A.
(S) 312(a) ........................................ 2.6
(b) ........................................ 10.3
(c) ........................................ 10.3
(S) 313(a) ........................................ 7.7
(b) ........................................ 7.7
(c) ........................................ 7.7; 10.2
(d) ........................................ 7.7
(S) 314(a) ........................................ 4.4; 4.5; 10.2
(b) ........................................ N.A.
(c)(1) ........................................ 10.4
(c)(2) ........................................ 10.4
(c)(3) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ 10.5
(f) ........................................ N.A.
(S) 315(a) ........................................ 7.1(b)
(b) ........................................ 7.5; 10.2
(c) ........................................ 7.1(a)
(d) ........................................ 7.1(c)
(e) ........................................ 6.11
(S) 316(a) (last
sentence) ........................................ 2.9
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................ N.A.
(b) ........................................ 6.7
(c) ........................................ N.A.
(S) 317(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.9
(b) ........................................ 2.5
(S) 318(a) ........................................ 10.1
(b) ........................................ N.A.
(c) ........................................ 10.1
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions..................................... 1
Section 1.2. Incorporation by Reference of Trust
Indenture Act................................. 9
Section 1.3. Rules of Construction........................... 9
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally................................. 10
Section 2.2. Title, Terms and Denominations.................. 11
Section 2.3. Execution, Authentication, Delivery
and Dating.................................... 14
Section 2.4. Registrar and Paying Agent...................... 16
Section 2.5. Paying Agent To Hold Money in Trust............. 17
Section 2.6. Securityholder Lists............................ 17
Section 2.7. Transfer and Exchange........................... 18
Section 2.8. Replacement Securities.......................... 19
Section 2.9. Outstanding Securities;
Determination of Holders' Action.............. 19
Section 2.10. Temporary Securities............................ 20
Section 2.11. Cancellation.................................... 20
Section 2.12. Payment of Interest; Defaulted
Interest...................................... 21
Section 2.13. CUSIP Number.................................... 21
Section 2.14. Deposit of Moneys............................... 21
Section 2.15. Persons Deemed Owners........................... 22
Section 2.16. Computation of Interest......................... 22
Section 2.17. Global Securities............................... 22
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.......................... 23
Section 3.2. Selection of Securities To Be
Redeemed...................................... 24
Section 3.3. Notice of Redemption............................ 24
Section 3.4. Effect of Notice of Redemption.................. 25
Section 3.5. Deposit of Redemption Price..................... 26
Section 3.6. Securities Redeemed or Purchased in
Part.......................................... 26
-ii-
<PAGE>
Page
----
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities........................... 27
Section 4.2. Maintenance of Office or Agency................. 27
Section 4.3. Corporate Existence............................. 28
Section 4.4. Compliance Certificate.......................... 28
Section 4.5. SEC Reports..................................... 29
Section 4.6. Waiver of Stay, Extension or Usury
Laws.......................................... 30
Section 4.7. Limitation on Liens............................. 30
Section 4.8. Limitation on Sale and Lease-Back
Transactions.................................. 31
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, etc..................... 32
Section 5.2. Successor Substituted........................... 33
ARTICLE 6
REMEDIES
Section 6.1. Events of Default............................... 34
Section 6.2. Acceleration.................................... 36
Section 6.3. Other Remedies.................................. 37
Section 6.4. Waiver of Past Defaults......................... 38
Section 6.5. Control by Majority............................. 38
Section 6.6. Limitation on Suits............................. 38
Section 6.7. Right of Holders To Receive Payment............. 39
Section 6.8. Collection Suit by Trustee...................... 39
Section 6.9. Trustee May File Proofs of Claim................ 40
Section 6.10. Priorities...................................... 40
Section 6.11. Undertaking for Costs........................... 41
Section 6.12. Restoration of Rights and Remedies.............. 41
ARTICLE 7
TRUSTEE
Section 7.1. Duties.......................................... 42
Section 7.2. Rights of Trustee............................... 43
Section 7.3. Individual Rights of Trustee.................... 44
Section 7.4. Trustee's Disclaimer............................ 44
Section 7.5. Notice of Default............................... 45
-iii-
<PAGE>
Page
----
Section 7.6. Money Held in Trust............................. 45
Section 7.7. Reports by Trustee to Holders................... 45
Section 7.8. Compensation and Indemnity...................... 45
Section 7.9. Replacement of Trustee.......................... 46
Section 7.10. Successor Trustee by Merger, etc................ 49
Section 7.11. Eligibility; Disqualification................... 49
Section 7.12. Preferential Collection of Claims
Against Company............................... 50
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's
Obligations................................... 50
Section 8.2. Legal Defeasance and Covenant
Defeasance.................................... 52
Section 8.3 Application of Trust Money...................... 56
Section 8.4. Repayment to Company............................ 56
Section 8.5. Reinstatement................................... 56
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders...................... 57
Section 9.2. With Consent of Holders......................... 58
Section 9.3. Compliance with Trust Indenture Act............. 60
Section 9.4. Revocation and Effect of Consents............... 60
Section 9.5. Notation on or Exchange of
Securities.................................... 61
Section 9.6. Trustee May Sign Amendments, etc................ 61
ARTICLE 10
MISCELLANEOUS
Section 10.1. Trust Indenture Act of 1939..................... 61
Section 10.2. Notices......................................... 62
Section 10.3. Communication by Holders with Other
Holders....................................... 62
Section 10.4. Certificate and Opinion as to
Conditions Precedent.......................... 63
Section 10.5. Statements Required in Certificate
or Opinion.................................... 63
Section 10.6. Rules by Trustee, Paying Agent,
Registrar..................................... 64
Section 10.7. Governing Law................................... 64
-iv-
<PAGE>
Page
----
Section 10.8. No Interpretation of Other
Agreements.................................... 64
Section 10.9. No Recourse Against Others...................... 64
Section 10.10. Successors...................................... 64
Section 10.11. Duplicate Originals............................. 64
Section 10.12. Separability.................................... 64
Section 10.13. Table of Contents, Headings, etc................ 65
Section 10.14. Benefits of Indenture........................... 65
SIGNATURES......................................................... 66
-v-
<PAGE>
INDENTURE, dated as of , 1995, between
VARITY CORPORATION, a Delaware corporation (the "Company"), and
MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee").
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 ratable
benefit of the Holders of the Securities or of any series
thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
-----------
"Affiliate" means, with respect to any specified
Person, any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Attributable Debt" when used in connection with a
Sale and Lease-Back Transaction involving a Principal Property
shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by
the Board of Directors of the Company); or (b) the present
value of the total net amount of rent required to be paid under
such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the
terms of such lease or, if not practicable to determine such
rate, the weighted average interest rate per annum borne by the
Securities of each series outstanding pursuant to this
Indenture compounded semi-annually. For purposes of the fore-
going definition, rent shall not include amounts required to be
paid by the lessee, whether or not designated as rent or
additional rent, on account of or contingent upon maintenance
and repairs, insurance, taxes, assessments, water rates and
similar charges. In the case of any lease which is terminable
by the lessee upon the payment of a penalty, such net amount
shall be the lesser of the net amount determined assuming
termination upon the first date such lease may be terminated
(in which case the net amount shall also include the amount of
the penalty, but no rent shall be considered as required to be
paid under such
<PAGE>
-2-
lease subsequent to the first date upon which it may be so
terminated) or the net amount determined assuming no such
termination.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the
relief of debtors.
"Board of Directors" means the board of directors of
the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"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, State of New York, or the
city in which the Trustee has its Corporate Trust Office, are
authorized or obligated by law, regulation or executive order
to close.
"Capital Stock" means, with respect to any Person,
any and all shares, interests, participations, rights in or
other equivalents (however designated) of such Person's capital
stock, and any rights (other than debt securities convertible
into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture,
the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in
accordance with GAAP.
"Company" means the party named as such in this
Indenture until a successor replaces it (or any previous
successor) pursuant to this Indenture, and thereafter means
such successor.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one
<PAGE>
-3-
of its Chairman of the Board, its Vice-Chairman, its President
or a Vice President, and by any one of its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is One M & T Plaza, Buffalo, N.Y.
14240, Attention: Corporate Trust Department.
"Covenant Defeasance" shall have the meaning set
forth in Section 8.2.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Discount Security" means any Security which provides
for an amount less than the principal thereof to be due and
payable upon a declaration of acceleration of the Stated
Maturities thereof pursuant to Section 6.2.
"Event of Default" has the meaning set forth in
Section 6.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States of America, as in
effect on the date hereof.
"Holder" or "Securityholder" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all obligations for borrowed money,
(ii) all obligations evidenced by bonds, debentures, notes or
<PAGE>
-4-
other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued
expenses arising in the ordinary course of business), (v) all
fixed unconditional obligations issued or contracted for as
payment in consideration of the purchase by such Person of the
stock or substantially all the assets of another Person or a
merger or consolidation, (vi) all obligations for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction which secure
Indebtedness of a Person other than the issuer of the letter of
credit or the accepting bank, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons
guaranteed by such Person to the extent of the guarantee; and
(viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons which are secured by any Lien on
any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the value of such
property or asset at the time the Lien is created or the amount
of the obligation so secured.
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time, in accordance
herewith, and includes, with respect to a particular series of
Securities, the terms of such series of Securities established
or contemplated by Section 2.2(a).
"Interest Payment Date", for any series of
Securities, has the meaning provided in the form of such
Securities set forth in the supplemental indenture, Board
Resolution, or Officers' Certificate under which such
Securities are issued.
"Issue Date" means, with respect to any particular
series of Securities, the original date of issuance of such
series; provided that, in the case of a series subject to a
--------
Periodic Offering, the Issue Date shall be the original issue
date or dates established pursuant to the proviso of the third
paragraph of Section 2.3.
"Legal Defeasance" shall have the meaning set forth
in Section 8.2.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind.
<PAGE>
-5-
A Person shall be deemed to own subject to a Lien any property
which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement.
"Material Subsidiary" means, at any particular time,
any Subsidiary of any Person that (a) accounted for more than
10% of the consolidated revenues of such Person and its
Subsidiaries on a consolidated basis for the most recently
completed fiscal year of such Person or (b) was the owner of
more than 10% of the consolidated assets of such Person and its
Subsidiaries on a consolidated basis as at the end of such
fiscal year, all as shown on the consolidated financial
statements of such Person and its Subsidiaries for such fiscal
year.
"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due
and payable as therein or herein provided, whether at the
Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or
otherwise.
"Nonrecourse Obligation" means Indebtedness or other
obligations substantially related to (i) the acquisition of
assets not previously owned by the Company or any Restricted
Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to
such Indebtedness or obligation has no recourse to the Company
or any Restricted Subsidiary or any assets of the Company or
any Restricted Subsidiary other than the assets which were
acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the
proceeds thereof).
"Officer" means the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the
Chief Operating Officer, the Treasurer, the Secretary or the
Controller of the Company.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
<PAGE>
-6-
Subject to any express provision hereof, the counsel may be an
employee of or counsel to the Company.
"Paying Agent" has the meaning set forth in
Section 2.4, except that, for the purposes of Articles Three
and Eight, the Paying Agent shall not be: (i) the Company,
(ii) a Subsidiary of the Company or (iii) any of the Company's
respective Affiliates.
"Periodic Offering" means an offering of Securities
of a series from time to time the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the Stated Maturity or Stated
Maturities thereof, the original Issue Date or Dates thereof,
the redemption provisions, if any, and any other terms
specified as contemplated by Section 2.2(a) with respect
thereto, are to be determined by the Company, or one or more of
the Company's agents or employees designated in an Officers'
Certificate, upon the issuance of such Securities.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the
Securities only, the premium, if any, on the Security.
"Principal Property" shall mean the land, land
improvements, buildings and fixtures (to the extent they
constitute real property interests) (including any leasehold
interest therein) constituting the principal corporate office,
any manufacturing plant or any manufacturing facility (whether
now owned or hereafter acquired) which: (a) is owned by the
Company or any of its Subsidiaries; (b) is located within any
of the present 50 States of the United States of America (or
the District of Columbia); (c) has not been determined in good
faith by the Board of Directors of the Company not to be
materially important to the total business conducted by the
Company and its Subsidiaries taken as a whole; and (d) has a
book value on the date as of which the determination is being
made in excess of .5% of consolidated total assets of the
Company as most recently determined on or prior to such date.
<PAGE>
-7-
"Redemption Date" means, with respect to any Security
to be redeemed, the date fixed by the Company for such
redemption pursuant to this Indenture and the Securities.
"Redemption Price" means, with respect to any
Security to be redeemed, the price fixed for such redemption
pursuant to the terms of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in
Section 2.4.
"Regular Record Date", for any series of Securities,
has the meaning provided in the form of such Securities set
forth in the supplemental indenture, Board Resolution or
Officers' Certificate under which such Securities are issued.
"Restricted Subsidiary" shall mean any Subsidiary of
the Company which owns any Principal Property.
"Sale and Lease-Back Transaction" shall mean any sale
or transfer by the Company or one of its Restricted
Subsidiaries of any Principal Property that is being sold or
transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or
commencement of operation thereof, if such sale or transfer is
made with the intent of leasing, or as part of an arrangement
involving the lease of, such Principal Property to the Company
or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission,
as from time to time constituted or, if at any time after the
execution of this Indenture such Commission is not existing and
performing the applicable duties now assigned to it, then the
body or bodies performing such duties at such time.
"Securities" means the securities that are issued
under this Indenture, as amended or supplemented from time to
time pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Stated Maturity" means, when used with respect to
any Security of a particular series or any installment of
principal thereon, the date specified in such Security of such
series as the fixed date on which any principal of such
Security of such series is due and payable, and when used with
<PAGE>
-8-
respect to any other Indebtedness, means any date specified in
the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness is due and payable.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture,
in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
a majority ownership interest entitled to vote in the election
of directors, managers or trustees thereof (or other Person
performing similar functions).
"Surviving Entity" shall have the meaning set forth
in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any
previous successor) in accordance with the provisions of this
Indenture, and thereafter means such successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer of the Trustee assigned by the
Trustee to administer its corporate trust matters 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.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.2.
"Vice President" shall include Senior Vice President
or a Vice President with any other prefix.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
Person (irrespective of whether or not, at the time, stock of
<PAGE>
-9-
any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
Section 1.2. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company or any other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
Section 1.3. Rules of Construction.
---------------------
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
<PAGE>
-10-
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(f) 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; and
(g) all references to $ or dollars refer to the
lawful currency of the United States of America.
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally.
---------------
The Securities of each series shall be substantially
in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as
set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an
Officers' Certificate of the Company detailing such
establishment) 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
any applicable law or with the rules of any securities exchange
or as may, consistently herewith, be determined by the Officers
executing such Securities, as evidenced by their execution
thereof. The Securities shall be issuable only in registered
form without coupons. The indenture supplemental hereto or the
Board Resolution or Officers' Certificate establishing the form
of security of any series shall be delivered to the Trustee
concurrently with or prior to the delivery of the Company Order
contemplated by Section 2.3 for the authentication and delivery
of such Securities.
The definitive Securities shall be printed,
typewritten, lithographed or engraved or produced by any
combination of these methods 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
<PAGE>
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Securities, as evidenced by their execution of such Securities.
Each Security shall be dated the date of its authentication.
Section 2.2. Title, Terms and Denominations.
------------------------------
(a) The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture
shall be unlimited. The Securities may be issued in one or
more series. There shall be established and, subject to
Section 2.3, set forth, or determined in the manner provided,
in one or more indentures supplemental hereto or in or pursuant
to a Board Resolution (as set forth in such Board Resolution
or, to the extent established pursuant to rather then set forth
in such Board Resolution, an Officers' Certificate detailing
such establishment):
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all
other Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated
and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Sections 2.7, 2.8, 2.10, 3.6 or 9.5
and except for any Securities which, pursuant to
Section 2.3, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on any Security
of the series shall be payable, if other than the Person
in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable or the method of
determination thereof;
(5) the rate or rates at which the Securities of the
series shall bear interest (which in no event shall be
greater than the then applicable legal rate therefor), 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 Securities on any Interest
<PAGE>
-12-
Payment Date and/or the method by which such rate or rates
or Regular Record Date or Dates shall be determined;
(6) the place or places where, subject to the
provisions of Section 4.2, the principal of and any
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for regis-
tration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or
upon the Company in respect of the Securities of the
series and this Indenture may be served;
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof, the conditions, if any, giving rise to
such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or
purchased, in whole or in part, and any provisions for the
remarketing of such Securities;
(9) the denominations in which any Securities of the
series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof;
(10) if the amount of payments of principal of and
any interest on the Securities of the series is to be
determined with reference to an index, formula or other
method, the manner in which such amounts shall be
determined and the calculation agent, if any, with respect
thereto;
(11) if other than the principal amount thereof, the
portion of the principal amount of any Securities of the
series which shall be payable upon declaration of
acceleration of the Stated Maturity thereof pursuant to
Section 6.2;
(12) if other than as defined in Section 1.1, the
meaning of "Business Day" when used with respect to any
Securities of the series;
<PAGE>
-13-
(13) if the Securities of the series may be issued
or delivered (whether upon original issuance or upon
exchange of a temporary Security of such series or
otherwise), or any installment of principal of or any
interest is payable, only upon receipt of certain
certificates or other documents or satisfaction of other
conditions in addition to those specified in this
Indenture, the form and terms of such certificates,
documents or conditions;
(14) the forms of the Securities;
(15) whether the Securities of the series shall be
issued in whole or in part in the form of a global
Security or Securities and, in such case, the depositary
for such global Security or Securities;
(16) any provision for defeasance or discharge of
the Securities of the series, if different from those set
forth herein;
(17) any listing of the Securities of a series on a
securities exchange;
(18) the price or prices at which the Securities of
a series will be issued; and
(19) any other terms of the series not inconsistent
with the provisions hereof, but which may include
covenants, Events of Default, definitions and other
provisions in lieu of or in addition to those set forth in
this Indenture as of the date hereof and amendments to or
other changes in any of the covenants, Events of Default,
definitions and other provisions set forth in this
Indenture as of the date hereof.
All Securities of any one series shall be substan-
tially identical except as to denomination, the rate or rates
of interest, if any, the Stated Maturities, the date from which
interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to the Board Resolutions or Officers'
Certificates referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of
additional Securities of such series or for the establishment
of additional terms with respect to the Securities of such
series, consistent with the terms of this Indenture, if so
provided by
<PAGE>
-14-
or pursuant to such Board Resolutions, such Officers' Certificates
or in any such indenture supplemental hereto.
(b) Unless otherwise provided as contemplated by
Section 2.2(a) with respect to any series of Securities, any
Securities of a series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
(c) The Securities of any one series shall rank pari
----
passu in right of payment with the Securities of any other
- -----
series.
Section 2.3. Execution, Authentication,
Delivery and Dating.
-------------------------
Two Officers shall sign, or one Officer shall sign
and one Officer shall attest to (provided that in either case,
one such Officer must be the Chairman of the Board, President,
a Vice President, Treasurer or Secretary) the Securities for
the Company by manual or facsimile signatures.
Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the
validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Securities of any series, executed by the Company, to the
Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall
authenticate and deliver such Securities; provided, however,
-------- -------
that, with respect to Securities of a series subject to a
Periodic Offering, (a) such Company Order may be delivered by
the Company to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such
series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to a Company Order or
pursuant to such procedures
<PAGE>
-15-
acceptable to the Trustee as may be specified from time to time by
a Company Order, (c) the rate or rates of interest, if any, the
Stated Maturity or Maturities, the original Issue Date or Dates,
the redemption provisions, if any, and any other terms of
Securities of such series shall be determined by Company Order or
pursuant to such procedures and (d) if provided for in such
procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the
Company, or the Company's duly authorized agent or agents
designated in an Officers' Certificate, which oral instructions
shall be confirmed promptly in writing. The Trustee shall be
entitled to rely on such oral instructions, whether or not
confirmed in writing.
Each Security shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. Unless
otherwise provided in the appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal
with the Company or an Affiliate.
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 duly executed by
the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. The Trustee's
Certificate of Authentication shall be in substantially the
following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
_____________________________,
as Trustee
By: _______________________
Authorized Officer
<PAGE>
-16-
Notwithstanding the foregoing, if any Security of any series
shall have been duly authenticated and delivered hereunder but
never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as
provided in Section 2.11 together with a written statement
(which need not comply with Section 10.4 or 10.5 and need not
be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 2.4. Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each
series of Securities, an office or agency in the Borough of
Manhattan, The City of New York, State of New York where such
Securities may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where such
Securities may be presented for payment (the "Paying Agent")
and an office or agency where notices and demands to or upon
the Company in respect of such Securities and this Indenture
may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying
agent. Except as otherwise expressly provided in this
Indenture, the Company or any Affiliate of the Company may act
as Paying Agent.
The Company shall enter into an appropriate agency
agreement, with respect to each series of Securities, with any
Agent not a party to this Indenture, which shall incorporate
the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any
such Agent. If the Company fails to maintain a Registrar,
Paying Agent or agent for service of notices and demands, or
fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in
accordance with Section 7.8.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
<PAGE>
-17-
Section 2.5. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit
of Securityholders of a particular series or the Trustee all
money held by the Paying Agent for the payment of principal of,
or interest on, the Securities of such series (whether such
money has been distributed to it by the Company or any other
obligor on such Securities), and the Company and the Paying
Agent shall notify the Trustee of any default by the Company
(or any other obligor on such Securities) in making any such
payment. If the Company or a Subsidiary of the Company acts as
Paying Agent, the money shall be segregated and held as a
separate trust fund. The Company at any time may require a
Paying Agent to distribute all money held by it to the Trustee
and account for any funds disbursed and the Trustee may at any
time during the continuance of any payment Default with respect
to such Securities, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds distributed. Upon doing
so, the Paying Agent (other than an obligor under the
Securities) shall have no further liability for the money so
paid over to the Trustee. Upon any bankruptcy or
reorganization proceeding involving the Company, the Trustee
shall act as Paying Agent for the Securities.
Section 2.6. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders of each series of
Securities and shall otherwise comply with TIA (S) 312(a). If
the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten Business Days before each Interest
Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of
Securityholders of such series of Securities, which list may be
conclusively relied upon by the Trustee.
Section 2.7. Transfer and Exchange.
---------------------
When Securities of any series are presented to the
Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such
transaction are met;
<PAGE>
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provided, however, that such Securities surrendered for transfer
- -------- -------
or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Registrar, duly executed by the Holder thereof or his
attorney-in-fact duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable
upon exchanges or transfers pursuant to Section 2.3, 2.8, 2.11,
3.6 or 8.5).
At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series of any
authorized denomination or denominations, of a like aggregate
principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency.
Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee or a duly
appointed authenticating agent shall authenticate and deliver,
the Securities which the Holder making the exchange is entitled
to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
The Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of Securities and ending at the close
of business on the day of such mailing or (ii) selected for
redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in
part.
Section 2.8. Replacement Securities.
----------------------
If a mutilated Security of any series is surrendered
to the Trustee or if the Holder of a Security of any series
claims that such Security has been lost, destroyed or
<PAGE>
-19-
wrongfully taken, the Company shall issue, and the Trustee
shall authenticate, a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of the Trustee and the
Company, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is
replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the
Company.
Section 2.9. Outstanding Securities;
Determination of Holders' Action.
--------------------------------
Securities of any series outstanding at any time are
all Securities of such series that have been authenticated by
the Trustee, except those cancelled by it, those delivered to
it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding
because the Company or any of its Affiliates holds the
Security; provided, however, that in determining whether the
-------- -------
Holders of the required principal amount of Securities of any
series have concurred in any direction, waiver or consent,
Securities of such series owned by the Company or other obligor
on the Securities of such series or an Affiliate of the Company
or such other obligor shall be disregarded, except that for the
sole purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be
disregarded.
If a Security is replaced pursuant to Section 2.8
(other than a mutilated Security surrendered for replacement),
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
----
fide purchaser. A mutilated Security ceases to be outstanding
- ----
upon surrender of such Security and replacement thereof
pursuant to Section 2.8.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Securities payable on
that date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Securities
pursuant to the terms of this Indenture, then on and after that
date
<PAGE>
-20-
such Securities cease to be outstanding and interest on them
shall cease to accrue.
Section 2.10. Temporary Securities.
--------------------
Until definitive Securities of any series are
prepared and ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall
authenticate, definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as
definitive Securities.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for transfer, exchange or payment. The Trustee or, at the
direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the
Company, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to
Section 2.8, the Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee
for cancellation. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a payment,
redemption or satisfaction of the Indebtedness represented by
such Securities unless and until the same are surrendered to
the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Payment of Interest;
Defaulted Interest.
--------------------
Unless otherwise provided as contemplated by Section
2.2(a) with respect to any series of Securities, interest on
any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest.
<PAGE>
-21-
If the Company defaults on a payment of interest on
any series of Securities, it shall pay the defaulted interest,
plus (to the extent permitted by law) any interest payable on
the defaulted interest, in accordance with the terms hereof, to
the Persons who are Securityholders of such series on a
subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Company
shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each
Securityholder of such series a notice that states the special
record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if
any, to be paid.
Section 2.13. CUSIP Number.
------------
The Company in issuing any series of Securities may
use a "CUSIP" number (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that
-------- -------
any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the
notice or on such Securities, and that reliance may be placed
only on the other identification numbers printed on such
Securities. The Company will promptly notify the Trustee of
any change in the CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
On or before each Interest Payment Date and Maturity
Date, the Company shall deposit with the Trustee or Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders of the
applicable series of Securities on such Interest Payment Date
or Maturity Date, as the case may be.
Section 2.15. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of
and (except as otherwise specified as contemplated by Section
2.2(a) and Section 2.12) interest, if any, on such Security and
for all other
<PAGE>
-22-
purposes whatsoever, whether or not such Security is 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 2.16. Computation of Interest.
-----------------------
Except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series,
(i) interest, if any, on any Securities which bear interest at
a fixed rate shall be computed on the basis of a 360-day year
of twelve 30 day months and (ii) interest on any Securities
which bear interest at a variable or floating rate shall be
computed on the basis of the actual number of days in an
interest period divided by the number of days in the year for
which such interest is calculated.
Section 2.17. Global Securities.
-----------------
The Company may issue, if a Board Resolution or
Officers' Certificate so provides, some or all of the
Securities of a series in temporary or permanent global form.
A global Security may be in registered form or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the
Company's request, the Registrar shall endorse a global
Security to reflect the amount of any increase or decrease in
the Securities represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may
transfer a global Security only as a whole to its nominee or to
a successor depository.
The Company may establish, among other things, the
manner of paying principal and interest on a global Security
and whether and upon what terms a beneficial owner of an
interest in a global Security may exchange such interest for
definitive Securities.
The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a
depository, for any depository records of beneficial ownership
interests or for any transactions between the depository and
beneficial owners.
<PAGE>
-23-
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.
----------------------
Securities of any series which are redeemable before
their maturity shall be redeemable in accordance with their
terms and (except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series) in
accordance with this Article.
If the Company elects to redeem Securities of a
series which are redeemable, it shall notify the Trustee in an
Officers' Certificate of the Redemption Date and principal
amount of Securities of such series to be redeemed.
If the Company wishes to reduce the principal amount
of a series of Securities to be redeemed, it shall so notify
the Trustee of the amount of the reduction and the basis for
it. If the Company wishes to credit, and is entitled to
credit, against any such redemption Securities of such series
it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such
notice.
The Company shall give each notice provided for in
this Section 3.1 at least 45 days, but not more than 60 days
before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
Section 3.2. Selection of Securities To Be
Redeemed.
-----------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, if less than all the Securities of any series are
to be redeemed, the particular Securities of such series or
portions thereof to be redeemed shall be selected from the
outstanding Securities not previously called for redemption
either (x) pro rata, by lot or by such other method as the
Trustee considers to be fair and appropriate or (y) in such
manner as complies with the requirements of the principal
national securities exchange, if any, on which the Securities
of such series being redeemed are listed. The amounts to be
redeemed shall be equal to $1,000 or any integral multiple
thereof, except that if all of the
<PAGE>
-24-
Securities of a series of a Holder are to be redeemed, the entire
amount of Securities of such series held by such Holder, even if
not a multiple of $1,000, shall be redeemed or purchased.
The Trustee shall select Securities to be redeemed
from the Securities of the applicable series outstanding and
not previously called for redemption and shall promptly notify
the Company and the Registrar in writing of the Securities of
any series selected for redemption and, in the case of any
Securities of any series selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Securities of any series 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 3.3. Notice of Redemption.
--------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, notice of redemption shall be given by first-class
or certified mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder
of Securities to be redeemed, at the address of such Holder
appearing in the security register maintained by the Registrar.
All notices of redemption shall identify the
Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities
redeemed;
<PAGE>
-25-
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Security to be redeemed
and that on or after the Redemption Date, upon surrender
for cancellation of such Security to the Paying Agent, a
new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be
issued without charge to the Securityholder;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such
Securities; and
(g) whether Securities are being redeemed pursuant
to the mandatory redemption or the optional redemption
provisions of the Securities.
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 written request, by the Trustee in the name
and at the expense of the Company.
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Paying
Agent, such Securities called for redemption shall be paid at
the Redemption Price plus accrued interest to the Redemption
Date, but interest installments whose maturity is on or prior
to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the
Securities.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in immediately
available funds sufficient to pay the Redemption Price of, and
accrued and unpaid interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that
date
<PAGE>
-26-
which have been delivered by the Company to the Trustee for
cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed
will cease to accrue on and after the applicable Redemption
Date, whether or not such Securities are presented for payment.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and, to the
extent lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate provided in the
Securities, unless otherwise specified as contemplated by
Section 2.2(a) with respect to the Securities of such series or
in such Securities.
Section 3.6. Securities Redeemed or Purchased in
Part.
-----------------------------------
Upon surrender to the Paying Agent of a Security
which is to be redeemed in part, the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of
such Security without service charge a new Security or
Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest
on each series of Securities on the dates and in the manner
provided in such Securities or pursuant to this Indenture. An
installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company or any Affiliate of any
thereof) holds for the benefit of the Holders on that date
money deposited and designated for and sufficient to pay the
installment and is not prohibited from paying such money to the
Holders of the Securities pursuant to the terms of this
Indenture.
<PAGE>
-27-
Unless otherwise specified as contemplated by
Section 2.2(a) with respect to any series of Securities, the
Company will pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue
principal at the rate and in the manner provided in the
Securities; it shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law)
on overdue installments of interest (without regard to any
applicable grace period) at the same rate and in the same
manner, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of
Manhattan, The City of New York, State of New York, an office
or agency where Securities may be surrendered for registration
of transfer or exchange, an office or agency where the
Securities may be presented for payment and an office or agency
where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If
at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the
Trustee as set forth in Section 10.2.
The Company may also from time to time designate one
or more other offices or agencies where Securities of one or
more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall
- -------- -------
in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of
New York, State of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of
any such other office or agency. The Company hereby initially
designate the Corporate Trust Office of the Trustee as such
office of the Company.
Section 4.3. Corporate Existence.
-------------------
Subject to Article Five, the Company will do or cause
to be done all things necessary to, and will cause each of its
Material Subsidiaries to, preserve and keep in full force and
<PAGE>
-28-
effect its respective corporate existence, rights (charter and
statutory), licenses and/or franchises; provided, however, that
-------- -------
the Company or any of its Subsidiaries shall not be required to
preserve any such existence, rights, licenses or franchises if
(x) the Company shall reasonably determine that the
preservation thereof is no longer desirable in the conduct of
the business of it and its Subsidiaries taken as a whole or
(y) the loss thereof is not materially adverse to the Company
and its Subsidiaries taken as a whole or to the ability of the
Company to otherwise satisfy its obligations hereunder.
Section 4.4. Compliance Certificate.
----------------------
(a) The Company shall deliver to the Trustee, within
120 days after the end of each of its fiscal year, an Officers'
Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing officers
with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his knowledge the Company
has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and
that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of
the principal of or interest on the Securities of any series
are prohibited or, if such event has occurred, a description of
the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered
pursuant to Section 4.5 below shall be accompanied by a written
statement of the Company's independent public accountants (who
shall be a firm of established national reputation) that in
making the examination necessary for certification of such
financial statements nothing has come to their attention that
would lead them to believe that the Company has violated any
provisions of Articles 4 or 5 of this Indenture or, if any such
violation has occurred, specifying the nature and period of
<PAGE>
-29-
existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) The Company will deliver to the Trustee as soon
as possible, and in any event within 10 days after it becomes
aware or should reasonably have become aware of the occurrence
of any Default or Event of Default in respect of any series of
Securities, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or
proposes to take with respect thereto.
Section 4.5. SEC Reports.
-----------
The Company shall file with the Trustee, within 15
days after it files them with the SEC, copies of the quarterly
and annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act. The Company also shall comply
with the other provisions of TIA (S) 314(a). If the Company is
not subject to the requirements of such Section 13 or 15(d),
the Company shall file with the Trustee, within 15 days after
it would have been required to file the same with the SEC,
financial statements, including any notes thereto (and with
respect to annual reports, an auditors' report by a firm of
established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Company would
have been required to include in such annual reports,
information, documents or other reports if the Company had been
subject to the requirements of such Section 13 or 15(d). In
addition, the Company shall cause its annual report to
stockholders and any quarterly or other financial reports
furnished by it to stockholders generally to be filed with the
Trustee and mailed, no later than the date such materials are
mailed or made available to the Company's stockholders, to the
Holders at their addresses as set forth in the register of
Securities maintained by the Registrar.
Section 4.6. Waiver of Stay, Extension
or Usury 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
<PAGE>
-30-
advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on
Securities of any series as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) the Company 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.
Section 4.7. Limitations on Liens.
--------------------
The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, incur, create, assume or guarantee, any
Indebtedness secured by a Lien upon any Principal Property of
the Company or such Restricted Subsidiary or upon any shares of
stock or Indebtedness of any Restricted Subsidiary held by the
Company (whether such Principal Property, shares or
Indebtedness are now existing or owed or hereafter created or
acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation,
assumption or guaranty of any such secured Indebtedness, or the
grant of a Lien with respect to any such Indebtedness of any
Restricted Subsidiary, that the Securities (together with, if
the Company shall so determine, any other Indebtedness of or
guarantee by the Company or such Restricted Subsidiary) shall
be secured by a mortgage ranking equally and ratably with (or,
at the option of the Company, prior to), and for so long as
such other Indebtedness is so secured, such secured debt. The
foregoing restriction, however, will not apply to: (a) Liens
on property, shares of stock or Indebtedness or other assets of
any corporation existing at the time such corporation becomes a
Restricted Subsidiary; provided that such Liens are not
incurred in anticipation of such corporation becoming a
Restricted Subsidiary; (b) Liens on property, shares of stock
or Indebtedness existing at the time of acquisition thereof by
the Company or a Restricted Subsidiary or Liens on property,
shares of stock or Indebtedness to secure any Indebtedness for
borrowed money incurred prior to, at the time of, or within 270
days after, the latest of the acquisition thereof, or, in the
case of property, the completion of construction, the
completion of improvements or the commencement of substantial
commercial operation of such property, for the purpose of
financing all or any part of the
<PAGE>
-31-
purchase price thereof, such construction or the making of such
improvements; (c) Liens to secure Indebtedness owing to the
Company or to a Restricted Subsidiary; (d) Liens existing at the
date of the initial issuance of the Securities of such series;
(e) 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 sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted
Subsidiary; provided that such Lien was not incurred in
--------
anticipation of such merger or consolidation or sale, lease or
other disposition; (f) Liens created in connection with a project
financed with, and created to secure, a Nonrecourse Obligation;
or (g) extensions, renewals or replacements of any Liens
permitted by any of the foregoing clauses (a) through (f);
provided, however, that any Liens permitted by any of the
- -------- -------
foregoing clauses (a) through (f) shall not extend to or cover
any property of the Company or such Restricted Subsidiary, as the
case may be, other than the property specified in such clauses
and improvements thereto.
Section 4.8. Limitations on Sale and Lease-Back
Transactions.
----------------------------------
The Company covenants that it will not, nor will it
permit any Restricted Subsidiary to, enter into any Sale and
Lease-Back Transaction with respect to any Principal Property,
other than any such transaction involving a lease for a term of
not more than three years or any such transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries, unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur Indebtedness secured by a
mortgage on the Principal Property involved in such transaction
at least equal in amount to the Attributable Debt with respect
to such Sale and Lease-Back Transaction, without equally and
ratably securing the Securities, pursuant to Section 4.7; or
(b) the Company shall apply an amount equal to the greater of
the net proceeds of such sale or the Attributable Debt with
respect to such Sale and Lease-Back Transaction within 180 days
of such sale to either (or a combination of) the retirement
(other than any mandatory retirement, mandatory prepayment or
sinking fund payment or by payment at maturity) of Indebtedness
of the Company or a Restricted Subsidiary that matures more
than twelve months after the creation of such Indebtedness or
the purchase, construction or development of other comparable
property.
<PAGE>
-32-
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, etc.
---------------------------
(a) The Company will not, in a single transaction or
a series of transactions, consolidate with or merge with or
into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and
assets as an entirety to, any other Person or Persons, or
permit any of its Subsidiaries to enter into any such
transaction or series of transactions if such transaction or
series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and
assets of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons, unless:
(1) either (A) if the transaction or series of
transactions is a merger or consolidation, the Company
shall be the Person surviving such merger or consolidation
or (B) the Person formed by such consolidation or into
which the Company or such Subsidiary, as the case may be,
is merged or to which the properties and assets of the
Company or such Subsidiary, substantially as an entirety,
are transferred (any such surviving Person or transferee
Person being the "Surviving Entity") shall be a
corporation organized and existing under the laws of the
United States of America, any State thereof or the
District of Columbia and such corporation shall expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the
Trustee, the Company's obligation for the due and punctual
payment of the principal of and interest, if any, 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 or series of transactions on a pro forma basis
--- -----
(including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be
continuing with respect to Securities of any series; and
<PAGE>
-33-
(3) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
in form and substance reasonably satisfactory to the
Trustee, each stating that such consolidation, merger,
sale, assignment, conveyance, transfer, lease or other
disposition and, if a supplemental indenture is required
in connection with such transaction or series of
transactions, such supplemental indenture comply with this
Indenture and that all conditions precedent herein
provided for relating to such transaction or series of
transactions have been complied with.
Section 5.2. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all of the properties and assets of the
Company in accordance with Section 5.1(a) hereof, the successor
Person or Persons formed by such consolidation or into which
the Company is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or other
disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if
such successor had been named as the Company herein; and
thereafter the Company shall be discharged from all obligations
and covenants under this Indenture and the Securities.
ARTICLE 6
REMEDIES
Section 6.1. Events of Default.
-----------------
An "Event of Default" means with respect to each
series of Securities, individually, any of the following
events:
(a) default by the Company in the payment of the
principal of any Security of such series when the same
becomes due and payable upon Stated Maturity, acceleration
or otherwise; or
(b) default by the Company in the payment of an
installment of interest on any Security of such series
when the same becomes due and payable, and any such
Default continues for a period of 30 days; or
<PAGE>
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(c) default by the Company in the performance or
observance of any term, covenant or agreement contained in
this Indenture or the Securities (other than Defaults
specified in clause (a) or (b) above), and such Default
continues for a period of 60 days after written notice of
such Default (which notice shall specify the Default,
demand that it be remedied and state that it is a "Notice
of Default") requiring the Company to remedy the same
shall have been given (i) to the Company by the Trustee or
(ii) to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities
of such series then outstanding; or
(d) default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or
other evidences of Indebtedness, whether now existing or
hereinafter created, under which the Company or any
Material Subsidiary of the Company then has outstanding
Indebtedness in excess of $10 million or more individually
or $20 million or more in the aggregate (or, in each case,
the equivalent thereof in any other currency), and either
(i) such Indebtedness is already due and payable in full
or (ii) such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness unless
such acceleration is cured, waived, rescinded or annulled
within 30 days after written notice thereof shall been
given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
outstanding; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $10
million or more individually or $20 million or more in the
aggregate (or, in each case, the equivalent thereof in any
other currency), shall be entered against the Company or
any Material Subsidiary of the Company and shall not be
discharged or fully bonded and there shall have been a
period of 60 days after the date on which any period for
appeal has expired and during which a stay of enforcement
of such judgment, order or decree shall not be in effect;
or
(f) the Company or any Material Subsidiary of the
Company pursuant to or under or within the meaning of any
Bankruptcy Law:
<PAGE>
-35-
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for
relief against it in an involuntary case or
proceeding;
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its
property; or
(iv) makes a general assignment for the benefit
of its creditors; or
(g) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
Material Subsidiary of the Company in an involuntary
case or proceeding,
(ii) appoints a Custodian of the Company or any
Material Subsidiary of the Company or for all or
substantially all of its properties, or
(iii) orders the liquidation of the Company or
any Material Subsidiary of the Company,
and in each case the order or decree remains unstayed and
in effect for 60 days.
The Trustee shall not be charged with knowledge of
any Default or Event of Default (other than, if the Trustee is
acting as Paying Agent, those set forth in Section 6.1(a), (b)
or, to the extent relating to Section 4.1, (c)) unless written
notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the
Paying Agent, any Holder, any holder of Senior Indebtedness or
any of their respective agents.
Section 6.2. Acceleration.
------------
If an Event of Default with respect to any series of
Securities (other than an Event of Default specified in Section
6.1(f) or (g) with respect to the Company) occurs and is
continuing, the Trustee by written notice to the Company, or
the Holders of at least 25% in aggregate principal amount of
the Securities of such series then outstanding, by written
notice
<PAGE>
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to the Company and the Trustee, may declare the unpaid
principal of (or, if any of the Securities of that series are
Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof) and
accrued interest on all the Securities of such series to be due
and payable immediately. If an Event of Default specified in
Section 6.1(f) or (g) with respect to the Company occurs and is
continuing, then the principal of and accrued interest on all
the Securities shall ipso facto become and be immediately due
---- -----
and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration in
respect of a series of Securities has been made and before a
judgment or decree for payment of the money due has been
obtained by the Trustee, Holders of a majority in aggregate
principal amount of such series of Securities outstanding, by
written notice to the Company and the Trustee, may, on behalf
of all Holders of such series of Securities, rescind and annul
such declaration and its consequences if:
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all amounts due the Trustee under Section
7.8 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel,
(ii) all overdue interest on all Securities of
such series,
(iii) the principal of such series of Securities
which has become due otherwise than by such
declaration of acceleration and interest thereon at
the rate borne by such series of Securities, and
(iv) interest upon overdue principal and, to the
extent that payment of such interest is lawful,
overdue interest at the rate borne by such series of
Securities which has become due otherwise than by
such declaration of acceleration;
(b) such rescission or annulment would not conflict
with any judgment or decree of a court of competent
jurisdiction; and
<PAGE>
-37-
(c) all Events of Default with respect to such
series of Securities, other than the non-payment of
principal of and interest on such series of Securities
which has become due solely by such declaration of
acceleration, have been cured or waived as provided in
Section 6.4.
No such rescission shall affect any subsequent
Default or Event of Default with respect to such series of
Securities or impair any right consequent thereon.
Section 6.3. Other Remedies.
--------------
If an Event of Default with respect to a series of
Securities occurs and is continuing, the Trustee may in its
discretion pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
such Securities or to enforce the performance of any provision
of such Securities or this Indenture.
All rights of action and claims under this Indenture
or the Securities of any series may be enforced by the Trustee
even if it does not possess any of the Securities of such
series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of
Default with respect to a series of Securities shall not impair
the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.4. Waiver of Past Defaults.
-----------------------
Subject to the provisions of Sections 6.2, 6.7 and
9.2, the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities of any series by
notice to the Trustee may, on behalf of the Holders of all the
Securities of such series, waive any existing Default or Event
of Default, with respect to such series, and its consequences.
When a Default or Event of Default with respect to a series of
Securities is so waived, it shall be deemed cured and shall
cease to exist, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any
right consequent thereon.
<PAGE>
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Section 6.5. Control by Majority.
-------------------
The Holders of at least a majority in aggregate
principal amount of the then 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, provided, however, that the Trustee may refuse to
-------- -------
follow any direction (a) that conflicts with any rule of law or
this Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder of such
series, or (c) that may expose the Trustee to Personal
liability unless the Trustee has indemnification satisfactory
to it in its sole discretion against any loss or expense caused
by its following such direction; and provided, further, that
-------- -------
the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
Section 6.6. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have
any right to pursue any remedy with respect to this Indenture
or such Securities unless:
(a) the Holder gives written notice to the Trustee
of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of at least 25% in principal amount
of the then outstanding Securities of that series make a
written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
and, if requested, provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in aggregate principal amount of the then
outstanding Securities of that series do not give the
Trustee a direction which is inconsistent with the
request.
The foregoing limitations shall not apply to a suit
instituted by a Holder of Securities of a series for the
<PAGE>
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enforcement of the payment of principal of or accrued interest
on such Securities held by such Holder on or after the
respective due dates set forth in such Securities.
A Securityholder of a series may not use this
Indenture to prejudice the rights of any other Securityholder
of such series or to obtain priority or preference over such
other Securityholder.
Section 6.7. Right of Holders To Receive Payment.
-----------------------------------
Notwithstanding any other provision in this
Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on such Security, on
or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or
after the Stated Maturity or Interest Payment Date, as the case
may be, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in clause (a) or (b)
of Section 6.1 with respect to Securities of any series occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust in favor of the Holders
against the Company or any other obligor on the Securities of
such series for the whole amount of principal of and accrued
interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each
case at the rate per annum borne by the Securities of such
series and 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.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and
receive
<PAGE>
-40-
any monies or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such
judicial proceedings 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 for the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.8. 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 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following
order:
First: to the Trustee for amounts due under Section
7.8;
Second: to Holders for interest accrued, if any, on
the Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities for interest;
Third: to Holders for principal owing under the
Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities of the
applicable series for principal; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may
in
<PAGE>
-41-
its discretion require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.7, or a suit by
Holders of more than 10% in aggregate principal amount of the
outstanding Securities of any series.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
or any Security 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.
ARTICLE 7
TRUSTEE
Section 7.1. Duties.
------
(a) In case an Event of Default has occurred and is
continuing, with respect to Securities of any series, the
Trustee shall exercise, with respect to Securities of such
series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default, with respect to the Securities of any series:
(1) the Trustee need perform, with respect to
Securities of such series, 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
<PAGE>
-42-
(2) in the absence of bad faith on its part, the
Trustee may, with respect to Securities of such series,
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
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform
to the requirements of this Indenture.
(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 paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(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
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b),
(c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on,
or be required to invest, any assets received by it except as
the Trustee may agree with the Company. Assets held in trust
by the Trustee need not be segregated from other assets except
to the extent required by law.
<PAGE>
-43-
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof and the provisions of
TIA (S) 315:
(a) The Trustee may rely, and shall be protected
from acting or refraining from acting, on any document
believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers'
Certificate or an Opinion of Counsel, which shall conform
to Sections 10.4 and 10.5. The Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any
liabilities arising out of its own negligence.
(e) The Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization
and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
<PAGE>
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unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 7.11 and 7.12 and TIA (S)(S) 310 and 311, may otherwise
deal with the Company and its Subsidiaries with the same rights
it would have if it were not the Trustee, Paying Agent,
Registrar or such other agent.
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities,
it shall not be accountable for the Company's use or
application of the proceeds from the Securities, it shall not
be responsible for the use or application of any money received
by any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the
Trustee's certificate of authentication.
Section 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder of the affected series notice of
the Default or Event of Default within 30 days thereafter;
provided, however, that, except in the case of a Default in the
- -------- -------
payment of the principal of or interest on any Security or in
the payment of any sinking fund installment, the Trustee shall
be protected in withholding such notice if and so long as the
board of directors, the executive committee of the board of
directors or a committee of the directors of the Trustee and/or
Trust Officers in good faith determines that the withholding of
such notice is in the interest of the Holders.
Section 7.6. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be
segregated from other funds except to the extent required
herein or by
<PAGE>
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law. The Trustee shall not be under any liability for interest on
any moneys received by it hereunder.
Section 7.7. Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 of each year beginning
with the May 15 following the date of this Indenture, the
Trustee shall, to the extent that any of the events described
in TIA (S) 313(a) has occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as
of such May 15 that complies with TIA (S) 313(a). The Trustee
also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC
and each securities exchange, if any, on which the Securities
are listed.
The Company shall notify the Trustee in writing if
the Securities become listed on any securities exchange or
automatic quotation system.
Section 7.8. Compensation and Indemnity.
--------------------------
The Company covenants and agrees to pay the Trustee
from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it
arising out of or in connection with the administration of this
trust and its rights or duties hereunder, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its written consent.
The Company need not reimburse any expense or indemnify against
<PAGE>
-46-
any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this
Section 7.8, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section
6.1(f) or (g) with respect to the Company, the expenses and the
compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's obligations under this Section 7.8 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.9. Replacement of Trustee.
----------------------
The Trustee may resign with respect to any series of
Securities issued hereunder by so notifying the Company. The
Holders of a majority in principal amount of the outstanding
Securities of any series may remove the Trustee by so notifying
the Company and the Trustee and may appoint a successor Trustee
with the Company's consent. The Company may remove the Trustee
with respect to any series of Securities if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason with respect to
the Securities of one or more series, the Company shall notify
each Holder of such event and shall promptly appoint a
successor Trustee, with respect to the Securities of such
series.
<PAGE>
-47-
The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee, and to the
extent such amounts remain unpaid, the Trustee that has resigned
or has been removed shall retain the Lien afforded by Section
7.8. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the outstanding
Securities of any series may appoint a successor Trustee to
replace the successor Trustee appointed by the Company with
respect to the Securities of that series.
In the case of the appointment hereunder of a
successor Trustee with respect to all Securities, a successor
Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by
it as Trustee to the successor Trustee, subject to the Lien
provided in Section 7.8, the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
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 to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental
indenture shall constitute such Trustees as co-Trustees of the
same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or
trusts hereunder
<PAGE>
-48-
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates,
subject, nevertheless, to its Lien, if any, provided for in
Section 7.8.
If a successor Trustee with respect to the Securities
of one or more series does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities of such series
may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any provisions
of this Section 7.9 shall become effective upon acceptance of
appointment by the successor trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.9, the Company's obligations under Section
7.8 shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation
or national banking association without any further act shall,
if such resulting, surviving or transferee corporation or
<PAGE>
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national banking association is otherwise eligible hereunder,
be the successor Trustee.
Section 7.11. Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA (S)(S) 310(a)(1) and
310(a)(5) and which shall have a combined capital and surplus
of at least $100,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes 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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect hereinabove specified in this Article. The Trustee
shall comply with TIA (S) 310(b).
Section 7.12. Preferential Collection of Claims
Against Company.
---------------------------------
The Trustee shall comply with TIA (S) 311(a) excluding
any creditor relationship listed in TIA (S) 311(b). If the
present or any future Trustee shall resign or be removed, it
shall be subject to TIA (S) 311(a) to the extent provided
therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's
Obligations.
----------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may terminate its obligations under
this Indenture with respect to any series of Securities, except
those obligations referred to in the penultimate paragraph of
this Section 8.1, if all Securities of such series previously
authenticated and delivered (other than destroyed, lost or
stolen Securities which have been replaced or paid or
Securities for whose payment money has theretofore been
deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by
<PAGE>
-50-
the Company and thereafter repaid to the Company, as provided in
Section 8.4) have been delivered to the Trustee for cancellation
and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed
a notice to each Securityholder of such series of the
redemption of all of the Securities of such series under
arrangements satisfactory to the Trustee for the giving of
such notice or (ii) all Securities of such series have
otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee
satisfactory to the Trustee, under the terms of an
irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Securityholders of such
series for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such
interest, to pay principal of and interest on the
outstanding Securities of such series to maturity or
redemption; provided that the Trustee shall have been
--------
irrevocably instructed to apply such money to the payment
of said principal and interest with respect to such
Securities;
(c) no Default or Event of Default with respect to
this Indenture applicable to such series or the Securities
of such series shall have occurred and be continuing on
the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(d) the Company shall have paid all other sums
payable by it hereunder; and
(e) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent providing for the
termination of the Company's obligations under such
Securities and this Indenture applicable to such
Securities have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and
discharge does not
<PAGE>
-51-
result in a default under any agreement or instrument
then known to such counsel that binds or affects the
Company.
Notwithstanding the foregoing paragraph, the
Company's obligations in Sections 2.6, 2.7, 2.8, 2.9, 4.1, 4.2,
7.8, 8.4 and 8.5 shall survive until the Securities of such
series are no longer outstanding pursuant to the last paragraph
of Section 2.9. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.8, 8.4 and
8.5 shall survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the discharge
of the Company's obligations under the Securities of such
series and this Indenture applicable to such Securities except
for those surviving obligations specified above.
Section 8.2. Legal Defeasance and
Covenant Defeasance.
--------------------
(a) Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may, at its option by Board Resolution
or by an Officers' Certificate, at any time, with respect to
the Securities of any series, elect to have either paragraph
(b) or paragraph (c) below be applied to the outstanding
Securities of such series upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), the Company
shall be deemed to have been released and discharged from its
obligations with respect to the outstanding Securities of such
series on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such
Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by the
outstanding Securities of such series, which shall thereafter
be deemed to be "outstanding" only for the purposes of
paragraph (e) below and the other Sections of and matters under
this Indenture applicable to such Securities referred to in (i)
and (ii) below, and to have satisfied all its other obligations
under such Securities and this Indenture applicable to such
Securities insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following
<PAGE>
-52-
which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities
of such series to receive solely from the trust fund described
in paragraph (d) below and as more fully set forth in such
paragraph payments in respect of the principal of and interest
on such Securities when such payments are due, (ii) the
Company's obligations with respect to such Securities under
Sections 2.7, 2.8 and 4.2 and, with respect to the Trustee,
under Section 7.8, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Section 8.2
and Section 8.5. Subject to compliance with this Section 8.2,
the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under
paragraph (c) below with respect to Securities of any series.
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
shall be released and discharged from its obligations under any
covenant contained in Article 5 and in Section 4.3, except as
to the corporate existence of the Company and in Sections 4.4
through 4.8 and in certain other sections with respect to the
outstanding Securities of such series identified in any
supplemental indenture pursuant to Section 2.2(a) on and after
the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and such Securities shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to such outstanding
Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly,
by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to
any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event
of Default under Section 6.1(c) with respect to such series of
Securities, but, except as specified above, the remainder of
this Indenture applicable to such Securities and such
Securities shall be unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Securities of such series:
<PAGE>
-53-
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this Section
8.2 applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, (x)
money in an amount or (y) direct non-callable obligations
of, or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or
obligation the full faith and credit of the United States
is pledged ("U.S. Government Obligations") maturing as to
principal and interest in such amounts of money and at
such times as are sufficient without consideration of any
reinvestment of such interest, to pay principal of and
interest on the outstanding Securities of such series not
later than one day before the due date of any payment, or
(z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge principal of and interest on
the outstanding Securities of such series on the Maturity
Date or otherwise in accordance with the terms of this
Indenture and of the Securities of such series; provided,
--------
however, that the Trustee (or other qualifying trustee)
-------
shall have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to
the Securities of such series;
(ii) no Default or Event of Default with respect to
such series of Securities shall have occurred and be
continuing on the date of such deposit;
(iii) such deposit will not result in a breach or
violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(iv) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the
<PAGE>
-54-
Internal Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities of such series will
not recognize income, gain or loss for Federal income tax
purposes 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;
(v) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes 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;
(vi) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to either the Legal Defeasance under paragraph
(b) above or the Covenant Defeasance under paragraph (c)
above, as the case may be, have been complied with; and
(vii) the Company shall have delivered to the Trustee
an amount sufficient to cover its fees and expenses as
Trustee under this Indenture through the term of the
Securities to be defeased, or made adequate provision
therefor to the satisfaction of the Trustee.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee; collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above
in respect of the outstanding Securities of such series shall
be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture applicable
to such Securities, to the payment, either directly or through
any Paying Agent (other than the Company or any Affiliate of
the Company) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be
<PAGE>
-55-
segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
paragraph (d) above or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the
outstanding Securities of such series.
Anything in this Section 8.2 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, of the
Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.3. Application of Trust Money.
--------------------------
The Trustee or a trustee satisfactory to the Trustee
and the Company shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.1 and 8.2,
and shall apply the deposited money and the money from
U.S. Government Obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities
of such series.
Section 8.4. Repayment to Company.
--------------------
Subject to Sections 7.8, 8.1 and 8.2, the Trustee
shall promptly pay to the Company, upon receipt by the Trustee
of an Officers' Certificate, any excess money, determined in
accordance with Section 8.2, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be,
of an Officers' Certificate, any money held by it for the
payment or principal or interest that remains unclaimed for two
years after payment to the Securityholders of such series is
required; provided, however, that the Trustee and the Paying
-------- -------
Agent before being required to make any payment may, but need
not, at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York
<PAGE>
-56-
or mail to each Securityholder of such series entitled to such
money notice that such money remains unclaimed and that after a
date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance
of such money then remaining will be repaid to the Company.
After payment to the Company, Securityholders entitled to money
must look solely to the Company for payment as general
creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
Section 8.5. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations to any payment in respect
of Securities of any series in accordance with this Indenture
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, then and
only then, the Company's obligations under this Indenture and
the Securities of such series shall be revived and reinstated
as though no deposit had been made pursuant to this Indenture
until such time as the Trustee is permitted to apply all such
money or U.S. Government Obligations in accordance with this
Indenture; provided, however, that if the Company has made any
-------- -------
payment of principal of or interest on any Securities of such
series because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of
Securities of such series to receive such payment from the
money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
--------------------------
The Company and the Trustee may amend, waive or
supplement this Indenture or the Securities of any series
without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to evidence the succession of another Person to
the Company and the assumption by any such successor of
<PAGE>
-57-
the obligations of the Company herein and in the
Securities of any series in accordance with Article Five;
(c) to provide for uncertificated Securities in
addition to certificated Securities;
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to make any change that would provide any
additional benefit or rights to the Holders or that does
not adversely affect the rights of any Holder; or
(f) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.2(a),
respectively.
Upon the request of the Company accompanied by a
resolution of its Board of Directors, authorizing the execution
of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements
and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such
supplemental indenture which affects its own rights, duties,
protections or immunities under this Indenture or otherwise.
Section 9.2. With Consent of Holders.
-----------------------
Subject to Section 6.4, the Company and the Trustee
may amend or supplement this Indenture or the Securities of any
series or any supplemental indenture relating to any series of
Securities with the written consent of the Holders of not less
than a majority in aggregate principal amount of the Securities
of each series affected then outstanding, and the Holders of
not less than a majority in aggregate principal amount of the
Securities of each series affected then outstanding by written
notice to the Trustee may waive future compliance by the
Company with any provision of this Indenture, such Securities
or any supplemental indenture relating to such Securities.
Upon the request of the Company, accompanied by a
resolution of its Board of Directors authorizing the execution
<PAGE>
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of any supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Securityholders as
aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with
the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own
rights, duties, protections or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental
indenture.
Notwithstanding the provisions of this Section 9.2,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 6.4, may not:
(a) reduce the percentage in aggregate outstanding
principal amount of Securities of any series the Holders
of which must consent to an amendment, supplement or
waiver of any provision of this Indenture, the Securities
of such series or any supplemental indenture;
(b) reduce the rate or change the time for payment
of interest on any Security of any series or change the
method or formula for calculating interest;
(c) reduce the principal amount outstanding of or
extend the fixed maturity of any Security of any series or
alter the redemption provisions with respect thereto or
reduce the amount of the principal of any outstanding
Discount Securities that would be due and payable upon
declaration of acceleration of maturity thereof;
(d) waive a default in the payment of the principal
of or interest on, or redemption or an offer to purchase
required hereunder with respect to, any Security of any
series;
(e) make the principal of or interest on any
Security of any series payable in money or in a manner
other than that stated in the Security;
(f) modify this Section 9.2 or Section 6.4 or
Section 6.7;
(g) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Securities of any series; or
<PAGE>
-59-
(h) make such other changes as may require the
consent of each Holder so affected pursuant to any
supplemental indenture.
It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form
of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the
Holders of each Security affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement
or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or
affect the validity of any supplemental indenture.
Section 9.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment of or supplement to this Indenture or
the Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes
effective with respect to a series of Securities, a consent to
it by a Holder of a Security of such series is a continuing
consent by such Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security prior to such amendment,
supplement or waiver becoming effective as to the Securities of
such series. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under (S) 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent
<PAGE>
-60-
to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue
to be Holders after such record date. Such consent shall be
effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder of such series
unless it makes a change described in any of clauses (a)
through (h) of Section 9.2; if it makes such a change, the
amendment, supplement or waiver shall bind every subsequent
Holder of a Security of such series or portion of a Security
that evidences the same debt as the consenting Holder's
Security.
Section 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the
terms of a Security of any series, the Trustee shall (in
accordance with the specific direction of the Company) request
the Holder of such Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the
Company) place an appropriate notation on such Security about
the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in
exchange for such Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.6. Trustee May Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the
amendment, supplement or waiver does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it
will be valid and binding upon the Company in accordance with
its terms.
<PAGE>
-61-
ARTICLE 10
MISCELLANEOUS
Section 10.1. Trust Indenture Act of 1939.
---------------------------
This Indenture is subject to the provisions of the
TIA that are required to be a part of this Indenture, and
shall, to the extent applicable, be governed by such
provisions.
If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
Section 10.2. Notices.
-------
Any notice or communication shall be sufficiently
given if in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows:
If to the Company, to:
VARITY CORPORATION
672 Delaware Avenue
Buffalo, New York 14209
Attention: Treasurer
If to the Trustee, to:
MANUFACTURERS AND TRADERS TRUST COMPANY
One M&T Plaza
Buffalo, New York 14240
Attention: Corporate Trust Department
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed, postage prepaid,
to a Holder, including any notice delivered in connection with
TIA (S) 310(b), TIA (S) 313(c), TIA (S) 314(a) and TIA (S) 315(b),
shall be mailed by first class mail to such Holder at the
address of such Holder as it appears on the Securities register
maintained by the Registrar and shall be sufficiently given to
such Holder if so mailed within the time prescribed. Copies of
<PAGE>
-62-
any such communication or notice to a Holder shall also be
mailed to the Trustee.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Holders. Except for a notice
to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 10.3. Communication by Holders with
Other Holders.
-----------------------------
Holders may communicate pursuant to TIA (S) 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The Company, the Trustee, the Registrar and
any other Person shall have the protection of TIA (S) 312(c).
Section 10.4. Certificate and Opinion as to
Conditions Precedent.
-----------------------------
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
Section 10.5. Statements Required in Certificate
or Opinion.
----------------------------------
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the Person making such
certificate or rendering such opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
<PAGE>
-63-
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is
necessary to enable him to express an opinion as to
whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
complied with; provided, however, that with respect to
-------- -------
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 10.6. Rules by Trustee, Paying Agent,
Registrar.
-------------------------------
The Trustee may make reasonable rules for action by
or at a meeting of Securityholders. The Paying Agent or
Registrar may make reasonable rules for its functions.
Section 10.7. Governing Law.
-------------
This Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York, without regard to principles of conflicts of law.
Section 10.8. No Interpretation of
Other Agreements.
--------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
Subsidiaries. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
Section 10.9. No Recourse Against Others.
--------------------------
A director, officer, employee, shareholder or
Affiliate, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability.
<PAGE>
-64-
Section 10.10. Successors.
----------
All agreements of the Company in this Indenture and
the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
Section 10.11. Duplicate Originals.
-------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 10.12. Separability.
------------
In case any provision in this Indenture or 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, and a Holder shall have no claim therefor against any
party hereto.
Section 10.13. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 10.14. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Holders,
any benefit or any legal or equitable right, remedy or claim
under this Indenture.
<PAGE>
-65-
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first
above written.
VARITY CORPORATION, as Issuer
By:__________________________________
Name:
Title:
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By:__________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.4
_______________________________________________________________
_______________________________________________________________
____________________
VARITY CORPORATION, as Issuer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
____________________
INDENTURE
Dated as of , 1995
____________________
Subordinated Debt Securities
_______________________________________________________________
_______________________________________________________________
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of , 1995
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S) 310(a)(1) ........................................ 7.11
(a)(2) ........................................ 7.11
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(a)(5) ........................................ 7.11
(b) ........................................ 7.11; 11.2
(c) ........................................ N.A.
(S) 311(a) ........................................ 7.12
(b) ........................................ 7.12
(c) ........................................ N.A.
(S) 312(a) ........................................ 2.6
(b) ........................................ 11.3
(c) ........................................ 11.3
(S) 313(a) ........................................ 7.7
(b) ........................................ 7.7
(c) ........................................ 7.7; 11.2
(d) ........................................ 7.7
(S) 314(a) ........................................ 4.4; 4.5; 11.2
(b) ........................................ N.A.
(c)(1) ........................................ 11.4
(c)(2) ........................................ 11.4
(c)(3) ........................................ N.A.
(d) ........................................ N.A.
(e) ........................................ 11.5
(f) ........................................ N.A.
(S) 315(a) ........................................ 7.1(b)
(b) ........................................ 7.5; 11.2
(c) ........................................ 7.1(a)
(d) ........................................ 7.1(c)
(e) ........................................ 6.11
(S) 316(a) (last
sentence) ........................................ 2.9
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................ N.A.
(b) ........................................ 6.7
(c) ........................................ N.A.
(S) 317(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.9
(b) ........................................ 2.5
(S) 318(a) ........................................ 11.1
(b) ........................................ N.A.
(c) ........................................ 11.1
_______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions..................................... 1
Section 1.2. Incorporation by Reference of Trust
Indenture Act................................. 9
Section 1.3. Rules of Construction........................... 10
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally................................. 10
Section 2.2. Title, Terms and Denominations.................. 11
Section 2.3. Execution, Authentication, Delivery
and Dating.................................... 14
Section 2.4. Registrar and Paying Agent...................... 16
Section 2.5. Paying Agent To Hold Money in Trust............. 17
Section 2.6. Securityholder Lists............................ 18
Section 2.7. Transfer and Exchange........................... 18
Section 2.8. Replacement Securities.......................... 19
Section 2.9. Outstanding Securities;
Determination of Holders' Action.............. 19
Section 2.10. Temporary Securities............................ 20
Section 2.11. Cancellation.................................... 20
Section 2.12. Payment of Interest; Defaulted
Interest...................................... 21
Section 2.13. CUSIP Number.................................... 21
Section 2.14. Deposit of Moneys............................... 22
Section 2.15. Persons Deemed Owners........................... 22
Section 2.16. Computation of Interest......................... 22
Section 2.17. Global Securities............................... 22
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.......................... 23
Section 3.2. Selection of Securities To Be
Redeemed...................................... 24
Section 3.3. Notice of Redemption............................ 25
Section 3.4. Effect of Notice of Redemption.................. 26
Section 3.5. Deposit of Redemption Price..................... 26
Section 3.6. Securities Redeemed or Purchased in
Part.......................................... 26
-ii-
<PAGE>
Page
----
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities........................... 27
Section 4.2. Maintenance of Office or Agency................. 27
Section 4.3. Corporate Existence............................. 28
Section 4.4. Compliance Certificate.......................... 28
Section 4.5. SEC Reports..................................... 29
Section 4.6. Waiver of Stay, Extension or Usury
Laws.......................................... 30
Section 4.7. Limitation on Liens............................. 30
Section 4.8. Limitation on Sale and Lease-Back
Transactions.................................. 32
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, etc..................... 32
Section 5.2. Successor Substituted........................... 33
ARTICLE 6
REMEDIES
Section 6.1. Events of Default............................... 34
Section 6.2. Acceleration.................................... 36
Section 6.3. Other Remedies.................................. 38
Section 6.4. Waiver of Past Defaults......................... 38
Section 6.5. Control by Majority............................. 38
Section 6.6. Limitation on Suits............................. 39
Section 6.7. Right of Holders To Receive Payment............. 40
Section 6.8. Collection Suit by Trustee...................... 40
Section 6.9. Trustee May File Proofs of Claim................ 40
Section 6.10. Priorities...................................... 41
Section 6.11. Undertaking for Costs........................... 41
Section 6.12. Restoration of Rights and Remedies.............. 42
ARTICLE 7
TRUSTEE
Section 7.1. Duties.......................................... 42
Section 7.2. Rights of Trustee............................... 43
Section 7.3. Individual Rights of Trustee.................... 45
Section 7.4. Trustee's Disclaimer............................ 45
Section 7.5. Notice of Default............................... 45
-iii-
<PAGE>
Page
----
Section 7.6. Money Held in Trust............................. 45
Section 7.7. Reports by Trustee to Holders................... 46
Section 7.8. Compensation and Indemnity...................... 46
Section 7.9. Replacement of Trustee.......................... 47
Section 7.10. Successor Trustee by Merger, etc................ 49
Section 7.11. Eligibility; Disqualification................... 50
Section 7.12. Preferential Collection of Claims
Against Company............................... 50
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the Company's
Obligations................................... 50
Section 8.2. Legal Defeasance and Covenant
Defeasance.................................... 52
Section 8.3 Application of Trust Money...................... 56
Section 8.4. Repayment to Company............................ 56
Section 8.5. Reinstatement................................... 57
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders...................... 58
Section 9.2. With Consent of Holders......................... 59
Section 9.3. Compliance with Trust Indenture Act............. 60
Section 9.4. Revocation and Effect of Consents............... 60
Section 9.5. Notation on or Exchange of
Securities.................................... 61
Section 9.6. Trustee May Sign Amendments, etc................ 62
ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate........................ 62
Section 10.2. Liquidation; Dissolution; Bankruptcy............ 62
Section 10.3. Default on Senior Debt.......................... 63
Section 10.4. Acceleration of Securities...................... 64
Section 10.5. When Distribution Must be Paid Over............. 64
Section 10.6. Notice by Company............................... 65
Section 10.7. Subrogation..................................... 65
Section 10.8. Relative Rights................................. 65
Section 10.9. Subordination May Not Be Impaired by
Company....................................... 66
-iv-
<PAGE>
Page
----
Section 10.10. Distribution or Notice to
Representative................................ 66
Section 10.11. Rights of Trustee and Paying Agent.............. 66
Section 10.12. Authorization to Effect
Subordination................................. 67
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act of 1939..................... 67
Section 11.2. Notices......................................... 68
Section 11.3. Communication by Holders with Other
Holders....................................... 68
Section 11.4. Certificate and Opinion as to
Conditions Precedent.......................... 69
Section 11.5. Statements Required in Certificate
or Opinion.................................... 69
Section 11.6. Rules by Trustee, Paying Agent,
Registrar..................................... 70
Section 11.7. Governing Law................................... 70
Section 11.8. No Interpretation of Other
Agreements.................................... 70
Section 11.9. No Recourse Against Others...................... 70
Section 11.10. Successors...................................... 70
Section 11.11. Duplicate Originals............................. 70
Section 11.12. Separability.................................... 70
Section 11.13. Table of Contents, Headings, etc................ 71
Section 11.14. Benefits of Indenture........................... 71
SIGNATURES......................................................... 72
-v-
<PAGE>
INDENTURE, dated as of , 1995, between
VARITY CORPORATION, a Delaware corporation (the "Company"), and
MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee").
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 ratable
benefit of the Holders of the Securities or of any series
thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
-----------
"Affiliate" means, with respect to any specified
Person, any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Attributable Debt" when used in connection with a
Sale and Lease-Back Transaction involving a Principal Property
shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by
the Board of Directors of the Company); or (b) the present
value of the total net amount of rent required to be paid under
such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the
terms of such lease or, if not practicable to determine such
rate, the weighted average interest rate per annum borne by the
Securities of each series outstanding pursuant to this
Indenture compounded semi-annually. For purposes of the fore-
going definition, rent shall not include amounts required to be
paid by the lessee, whether or not designated as rent or
additional rent, on account of or contingent upon maintenance
and repairs, insurance, taxes, assessments, water rates and
similar charges. In the case of any lease which is terminable
by the lessee upon the payment of a penalty, such net amount
shall be the lesser of the net amount determined assuming
termination upon the first date such lease may be terminated
(in which case the net amount shall also include the amount of
the penalty, but no rent shall be considered as required to be
paid under such
<PAGE>
-2-
lease subsequent to the first date upon which it may be so
terminated) or the net amount determined assuming no such
termination.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the
relief of debtors.
"Board of Directors" means the board of directors of
the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"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, State of New York, or the
city in which the Trustee has its Corporate Trust Office, are
authorized or obligated by law, regulation or executive order
to close.
"Capital Stock" means, with respect to any Person,
any and all shares, interests, participations, rights in or
other equivalents (however designated) of such Person's capital
stock, and any rights (other than debt securities convertible
into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture,
the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in
accordance with GAAP.
"Company" means the party named as such in this
Indenture until a successor replaces it (or any previous
successor) pursuant to this Indenture, and thereafter means
such successor.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one
<PAGE>
-3-
of its Chairman of the Board, its Vice-Chairman, its President
or a Vice President, and by any one of its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is One M&T Plaza, Buffalo, New York
14240, Attention: Corporate Trust Department.
"Covenant Defeasance" shall have the meaning set
forth in Section 8.2.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Discount Security" means any Security which provides
for an amount less than the principal thereof to be due and
payable upon a declaration of acceleration of the Stated
Maturities thereof pursuant to Section 6.2.
"Event of Default" has the meaning set forth in
Section 6.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States of America, as in
effect on the date hereof.
"Holder" or "Securityholder" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all obligations for borrowed money,
(ii) all obligations evidenced by bonds, debentures, notes or
<PAGE>
-4-
other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued
expenses arising in the ordinary course of business), (v) all
fixed unconditional obligations issued or contracted for as
payment in consideration of the purchase by such Person of the
stock or substantially all the assets of another Person or a
merger or consolidation, (vi) all obligations for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction which secure
Indebtedness of a Person other than the issuer of the letter of
credit or the accepting bank, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons
guaranteed by such Person to the extent of the guarantee; and
(viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons which are secured by any Lien on
any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the value of such
property or asset at the time the Lien is created or the amount
of the obligation so secured.
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time, in accordance
herewith, and includes, with respect to a particular series of
Securities, the terms of such series of Securities established
or contemplated by Section 2.2(a).
"Interest Payment Date", for any series of
Securities, has the meaning provided in the form of such
Securities set forth in the supplemental indenture, Board
Resolution, or Officers' Certificate under which such
Securities are issued.
"Issue Date" means, with respect to any particular
series of Securities, the original date of issuance of such
series; provided that, in the case of a series subject to a
--------
Periodic Offering, the Issue Date shall be the original issue
date or dates established pursuant to the proviso of the third
paragraph of Section 2.3.
"Legal Defeasance" shall have the meaning set forth
in Section 8.2.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind.
<PAGE>
-5-
A Person shall be deemed to own subject to a Lien any property
which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement.
"Material Subsidiary" means, at any particular time,
any Subsidiary of any Person that (a) accounted for more than
10% of the consolidated revenues of such Person and its
Subsidiaries on a consolidated basis for the most recently
completed fiscal year of such Person or (b) was the owner of
more than 10% of the consolidated assets of such Person and its
Subsidiaries on a consolidated basis as at the end of such
fiscal year, all as shown on the consolidated financial
statements of such Person and its Subsidiaries for such fiscal
year.
"Maturity Date" means, with respect to any Security,
the date on which any principal of such Security becomes due
and payable as therein or herein provided, whether at the
Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or
otherwise.
"Nonrecourse Obligation" means Indebtedness or other
obligations substantially related to (i) the acquisition of
assets not previously owned by the Company or any Restricted
Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to
such Indebtedness or obligation has no recourse to the Company
or any Restricted Subsidiary or any assets of the Company or
any Restricted Subsidiary other than the assets which were
acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the
proceeds thereof).
"Officer" means the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the
Chief Operating Officer, the Treasurer, the Secretary or the
Controller of the Company.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
<PAGE>
-6-
Subject to any express provision hereof, the counsel may be an
employee of or counsel to the Company.
"Paying Agent" has the meaning set forth in
Section 2.4, except that, for the purposes of Articles Three
and Eight, the Paying Agent shall not be: (i) the Company,
(ii) a Subsidiary of the Company or (iii) any of the Company's
Affiliates.
"Periodic Offering" means an offering of Securities
of a series from time to time the specific terms of which
Securities, including, without limitation, the rate or rates of
interest, if any, thereon, the Stated Maturity or Stated
Maturities thereof, the original Issue Date or Dates thereof,
the redemption provisions, if any, and any other terms
specified as contemplated by Section 2.2(a) with respect
thereto, are to be determined by the Company, or one or more of
the Company's agents or employees designated in an Officers'
Certificate, upon the issuance of such Securities.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the
Securities only, the premium, if any, on the security.
"Principal Property" shall mean the land, land
improvements, buildings and fixtures (to the extent they
constitute real property interests) (including any leasehold
interest therein) constituting the principal corporate office,
any manufacturing plant or any manufacturing facility (whether
now owned or hereafter acquired) which: (a) is owned by the
Company or any of its Subsidiaries; (b) is located within any
of the present 50 States of the United States of America (or
the District of Columbia); (c) has not been determined in good
faith by the Board of Directors of the Company not to be
materially important to the total business conducted by the
Company and its Subsidiaries taken as a whole; and (d) has a
book value on the date as of which the determination is being
made in excess of .5% of consolidated total assets of the
Company as most recently determined on or prior to such date.
<PAGE>
-7-
"Redemption Date" means, with respect to any Security
to be redeemed, the date fixed by the Company for such
redemption pursuant to this Indenture and the Securities.
"Redemption Price" means, with respect to any
Security to be redeemed, the price fixed for such redemption
pursuant to the terms of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in
Section 2.4.
"Regular Record Date", for any series of Securities,
has the meaning provided in the form of such Securities set
forth in the supplemental indenture, Board Resolution or
Officers' Certificate under which such Securities are issued.
"Representative" means the trustee or other agent or
representative for any Senior Indebtedness.
"Restricted Subsidiary" shall mean any Subsidiary of
the Company which owns any Principal Property.
"Sale and Lease-Back Transaction" shall mean any sale
or transfer by the Company or one of its Restricted
Subsidiaries of any Principal Property that is being sold or
transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or
commencement of operation thereof, if such sale or transfer is
made with the intent of leasing, or as part of an arrangement
involving the lease of, such Principal Property to the Company
or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission,
as from time to time constituted or, if at any time after the
execution of this Indenture such Commission is not existing and
performing the applicable duties now assigned to it, then the
body or bodies performing such duties at such time.
"Securities" means the securities that are issued
under this Indenture, as amended or supplemented from time to
time pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Senior Indebtedness" means all Indebtedness of the
Company and all renewals, extensions or refundings thereof.
<PAGE>
-8-
Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (i) any Indebtedness of
the Company to any of its Subsidiaries, or (ii) any
Indebtedness created or evidenced pursuant to an instrument
that expressly provides that such Indebtedness is not superior
in right of payment to the Securities.
"Stated Maturity" means, when used with respect to
any Security of a particular series or any installment of
principal thereon, the date specified in such Security of such
series as the fixed date on which any principal of such
Security of such series is due and payable, and when used with
respect to any other Indebtedness, means any date specified in
the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness is due and payable.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture,
in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, has at least
a majority ownership interest entitled to vote in the election
of directors, managers or trustees thereof (or other Person
performing similar functions).
"Surviving Entity" shall have the meaning set forth
in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any
previous successor) in accordance with the provisions of this
Indenture, and thereafter means such successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer of the Trustee assigned by the
Trustee to administer its corporate trust matters 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>
-9-
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.2.
"Vice President" shall include Senior Vice President
or a Vice President with any other prefix.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
Section 1.2. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company or any other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
Section 1.3. Rules of Construction.
---------------------
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
<PAGE>
-10-
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(f) 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; and
(g) all references to $ or dollars refer to the
lawful currency of the United States of America.
ARTICLE 2
THE SECURITIES
Section 2.1. Forms Generally.
---------------
The Securities of each series shall be substantially
in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as
set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an
Officers' Certificate of the Company detailing such
establishment) 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
any applicable law or with the rules of any securities exchange
or as may, consistently herewith, be determined by the Officers
executing such Securities, as evidenced by their execution
thereof. The Securities shall be issuable only in registered
form without coupons. The indenture supplemental hereto or the
Board Resolution or Officers' Certificate establishing the form
of security of any series shall be delivered to the Trustee
concurrently with or
<PAGE>
-11-
prior to the delivery of the Company Order contemplated by Section
2.3 for the authentication and delivery of such Securities.
The definitive Securities shall be printed,
typewritten, lithographed or engraved or produced by any
combination of these methods 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. Each Security shall be dated the
date of its authentication.
Section 2.2. Title, Terms and Denominations.
------------------------------
(a) The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture
shall be unlimited. The Securities may be issued in one or
more series. There shall be established and, subject to
Section 2.3, set forth, or determined in the manner provided,
in one or more indentures supplemental hereto or in or pursuant
to a Board Resolution (as set forth in such Board Resolution
or, to the extent established pursuant to rather then set forth
in such Board Resolution, an Officers' Certificate detailing
such establishment):
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all
other Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated
and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Sections 2.7, 2.8, 2.10, 3.6 or 9.5
and except for any Securities which, pursuant to
Section 2.3, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on any Security
of the series shall be payable, if other than the Person
in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest;
<PAGE>
-12-
(4) the date or dates on which the principal of the
Securities of the series is payable or the method of
determination thereof;
(5) the rate or rates at which the Securities of the
series shall bear interest (which in no event shall be
greater than the then applicable legal rate therefor), 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 Securities on any Interest
Payment Date and/or the method by which such rate or rates
or Regular Record Date or Dates shall be determined;
(6) the place or places where, subject to the
provisions of Section 4.2, the principal of and any
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for regis-
tration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or
upon the Company in respect of the Securities of the
series and this Indenture may be served;
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof, the conditions, if any, giving rise to
such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or
purchased, in whole or in part, and any provisions for the
remarketing of such Securities;
(9) the denominations in which any Securities of the
series shall be issuable, if other than denominations of
$1,000 and any integral multiple thereof;
(10) if the amount of payments of principal of and
any interest on the Securities of the series is to be
determined with reference to an index, formula or other
method, the manner in which such amounts shall be
<PAGE>
-13-
determined and the calculation agent, if any, with respect
thereto;
(11) if other than the principal amount thereof, the
portion of the principal amount of any Securities of the
series which shall be payable upon declaration of
acceleration of the Stated Maturity thereof pursuant to
Section 6.2;
(12) if other than as defined in Section 1.1, the
meaning of "Business Day" when used with respect to any
Securities of the series;
(13) if the Securities of the series may be issued
or delivered (whether upon original issuance or upon
exchange of a temporary Security of such series or
otherwise), or any installment of principal of or any
interest is payable, only upon receipt of certain
certificates or other documents or satisfaction of other
conditions in addition to those specified in this
Indenture, the form and terms of such certificates,
documents or conditions;
(14) the forms of the Securities;
(15) whether the Securities of the series shall be
issued in whole or in part in the form of a global
Security or Securities and, in such case, the depositary
for such global Security or Securities;
(16) any provision for defeasance or discharge of
the Securities of the series, if different from those set
forth herein;
(17) any listing of the Securities of a series on a
securities exchange;
(18) the price or prices at which the Securities of
a series will be issued; and
(19) any other terms of the series not inconsistent
with the provisions hereof, but which may include
covenants, Events of Default, definitions and other
provisions in lieu of or in addition to those set forth in
this Indenture as of the date hereof and amendments to or
other changes in any of the covenants, Events of Default,
definitions and other provisions set forth in this
Indenture as of the date hereof.
<PAGE>
-14-
All Securities of any one series shall be substan-
tially identical except as to denomination, the rate or rates
of interest, if any, the Stated Maturities, the date from which
interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to the Board Resolutions or Officers'
Certificates referred to above or as set forth in any such
indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of
additional Securities of such series or for the establishment
of additional terms with respect to the Securities of such
series, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolutions, such
Officers' Certificates or in any such indenture supplemental
hereto.
(b) Unless otherwise provided as contemplated by
Section 2.2(a) with respect to any series of Securities, any
Securities of a series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
(c) The Securities of any one series shall rank pari
passu in right of payment with the Securities of any other
series.
Section 2.3. Execution, Authentication,
Delivery and Dating.
-------------------------
Two Officers shall sign, or one Officer shall sign
and one Officer shall attest to (provided that in either case,
one such Officer must be the Chairman of the Board, President,
a Vice President, Treasurer or Secretary) the Securities for
the Company by manual or facsimile signatures.
Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the
validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Securities
of any series, executed by the Company, to the Trustee for
<PAGE>
-15-
authentication, together with a Company Order for
the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall
authenticate and deliver such Securities; provided, however,
-------- -------
that, with respect to Securities of a series subject to a
Periodic Offering, (a) such Company Order may be delivered by
the Company to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such
series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to a Company Order or
pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by a Company Order, (c) the rate or
rates of interest, if any, the Stated Maturity or Maturities,
the original Issue Date or Dates, the redemption provisions, if
any, and any other terms of Securities of such series shall be
determined by Company Order or pursuant to such procedures and
(d) if provided for in such procedures, such Company Order may
authorize authentication and delivery pursuant to oral or
electronic instructions from the Company, or the Company's duly
authorized agent or agents designated in an Officers'
Certificate, which oral instructions shall be confirmed
promptly in writing. The Trustee shall be entitled to rely on
such oral instructions, whether or not confirmed in writing.
Each Security shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Securities. Unless
otherwise provided in the appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal
with the Company or an Affiliate.
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 duly executed by
the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. The Trustee's
<PAGE>
-16-
Certificate of Authentication shall be in substantially the
following form:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
________________________________,
as Trustee
By: _______________________
Authorized Officer
Notwithstanding the foregoing, if any Security of any series
shall have been duly authenticated and delivered hereunder but
never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as
provided in Section 2.11 together with a written statement
(which need not comply with Section 11.4 or 11.5 and need not
be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 2.4. Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each
series of Securities, an office or agency in the Borough of
Manhattan, The City of New York, State of New York where such
Securities may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where such
Securities may be presented for payment (the "Paying Agent")
and an office or agency where notices and demands to or upon
the Company in respect of such Securities and this Indenture
may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying
agent. Except as otherwise expressly provided in this
Indenture, the Company or any Affiliate of the Company may act
as Paying Agent.
<PAGE>
-17-
The Company shall enter into an appropriate agency
agreement, with respect to each series of Securities, with any
Agent not a party to this Indenture, which shall incorporate
the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any
such Agent. If the Company fails to maintain a Registrar,
Paying Agent or agent for service of notices and demands, or
fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in
accordance with Section 7.8.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
Section 2.5. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit
of Securityholders of a particular series or the Trustee all
money held by the Paying Agent for the payment of principal of,
or interest on, the Securities of such series (whether such
money has been distributed to it by the Company or any other
obligor on such Securities), and the Company and the Paying
Agent shall notify the Trustee of any default by the Company
(or any other obligor on such Securities) in making any such
payment. If the Company or a Subsidiary of the Company acts as
Paying Agent, the money shall be segregated and held as a
separate trust fund. The Company at any time may require a
Paying Agent to distribute all money held by it to the Trustee
and account for any funds disbursed and the Trustee may at any
time during the continuance of any payment Default with respect
to such Securities, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds distributed. Upon doing
so, the Paying Agent (other than an obligor under the
Securities) shall have no further liability for the money so
paid over to the Trustee. Upon any bankruptcy or
reorganization proceeding involving the Company, the Trustee
shall act as Paying Agent for the Securities.
Section 2.6. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders of each series of
Securities and shall otherwise comply with TIA (S) 312(a). If
<PAGE>
-18-
the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten Business Days before each Interest
Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of
Securityholders of such series of Securities, which list may be
conclusively relied upon by the Trustee.
Section 2.7. Transfer and Exchange.
---------------------
When Securities of any series are presented to the
Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such
transaction are met; provided, however, that such Securities
-------- -------
surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney-in-fact duly authorized in
writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.3, 2.8, 2.11, 3.6 or 8.5).
At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series of any
authorized denomination or denominations, of a like aggregate
principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency.
Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee or a duly
appointed authenticating agent shall authenticate and deliver,
the Securities which the Holder making the exchange is entitled
to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same
<PAGE>
-19-
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
The Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of Securities and ending at the close
of business on the day of such mailing or (ii) selected for
redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in
part.
Section 2.8. Replacement Securities.
----------------------
If a mutilated Security of any series is surrendered
to the Trustee or if the Holder of a Security of any series
claims that such Security has been lost, destroyed or
wrongfully taken, the Company shall issue, and the Trustee
shall authenticate, a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of the Trustee and the
Company, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is
replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the
Company.
Section 2.9. Outstanding Securities;
Determination of Holders' Action.
--------------------------------
Securities of any series outstanding at any time are
all Securities of such series that have been authenticated by
the Trustee, except those cancelled by it, those delivered to
it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding
because the Company or any of its Affiliates holds the
Security; provided, however, that in determining whether the
-------- -------
Holders of the required principal amount of Securities of any
series have concurred in any direction, waiver or consent,
Securities of such series owned by the Company or other obligor
on the Securities of such series or an Affiliate of the Company
or such other obligor shall be disregarded, except that for the
sole purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
<PAGE>
-20-
only Securities which the Trustee knows are so owned shall be
disregarded.
If a Security is replaced pursuant to Section 2.8
(other than a mutilated Security surrendered for replacement),
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
----
fide purchaser. A mutilated Security ceases to be outstanding
- ----
upon surrender of such Security and replacement thereof
pursuant to Section 2.8.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Securities payable on
that date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Securities
pursuant to the terms of this Indenture, then on and after that
date such Securities cease to be outstanding and interest on
them shall cease to accrue.
Section 2.10. Temporary Securities.
--------------------
Until definitive Securities of any series are
prepared and ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare, and the Trustee shall
authenticate, definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as
definitive Securities.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for transfer, exchange or payment. The Trustee or, at the
direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the
Company, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to
Section 2.8, the Company may not issue new Securities to replace
<PAGE>
-21-
Securities that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a payment, redemption or
satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
Section 2.12. Payment of Interest;
Defaulted Interest.
--------------------
Unless otherwise provided as contemplated by Section
2.2(a) with respect to any series of Securities, interest on
any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest.
If the Company defaults on a payment of interest on
any series of Securities, it shall pay the defaulted interest,
plus (to the extent permitted by law) any interest payable on
the defaulted interest, in accordance with the terms hereof, to
the Persons who are Securityholders of such series on a
subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Company
shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each
Securityholder of such series a notice that states the special
record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if
any, to be paid.
Section 2.13. CUSIP Number.
------------
The Company in issuing any series of Securities may
use a "CUSIP" number (if then generally in use), and if so, the
Trustee may use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that
-------- -------
any such notice may state that no representation is made as to
the correctness or accuracy of the CUSIP number printed in the
notice or on such Securities, and that reliance may be placed
only on the other identification numbers printed on such
Securities. The Company will promptly notify the Trustee of
any change in the CUSIP number.
<PAGE>
-22-
Section 2.14. Deposit of Moneys.
-----------------
On or before each Interest Payment Date and Maturity
Date, the Company shall deposit with the Trustee or Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders of the
applicable series of Securities on such Interest Payment Date
or Maturity Date, as the case may be.
Section 2.15. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of
and (except as otherwise specified as contemplated by Section
2.2(a) and Section 2.12) interest, if any, on such Security and
for all other purposes whatsoever, whether or not such Security
is 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 2.16. Computation of Interest.
-----------------------
Except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series,
(i) interest, if any, on any Securities which bear interest at
a fixed rate shall be computed on the basis of a 360-day year
of twelve 30 day months and (ii) interest on any Securities
which bear interest at a variable or floating rate shall be
computed on the basis of the actual number of days in an
interest period divided by the number of days in the year for
which such interest is calculated.
Section 2.17. Global Securities.
-----------------
The Company may issue, if a Board Resolution or
Officers' Certificate so provides, some or all of the
Securities of a series in temporary or permanent global form.
A global Security may be in registered form or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the
Company's request,
<PAGE>
-23-
the Registrar shall endorse a global Security to reflect the
amount of any increase or decrease in the Securities
represented thereby.
The Company may issue a global Security only to a
depository designated by the Company. A depository may
transfer a global Security only as a whole to its nominee or to
a successor depository.
The Company may establish, among other things, the
manner of paying principal and interest on a global Security
and whether and upon what terms a beneficial owner of an
interest in a global Security may exchange such interest for
definitive Securities.
The Company, an Affiliate, the Trustee and any Agent
shall not be responsible for any acts or omissions of a
depository, for any depository records of beneficial ownership
interests or for any transactions between the depository and
beneficial owners.
ARTICLE 3
REDEMPTION OF SECURITIES
Section 3.1. Notices to the Trustee.
----------------------
Securities of any series which are redeemable before
their maturity shall be redeemable in accordance with their
terms and (except as otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) for Securities of any series) in
accordance with this Article.
If the Company elects to redeem Securities of a
series which are redeemable, it shall notify the Trustee in an
Officers' Certificate of the Redemption Date and principal
amount of Securities of such series to be redeemed.
If the Company wishes to reduce the principal amount
of a series of Securities to be redeemed, it shall so notify
the Trustee of the amount of the reduction and the basis for
it. If the Company wishes to credit, and is entitled to
credit, against any such redemption Securities of such series
it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such notice.
<PAGE>
-24-
The Company shall give each notice provided for in
this Section 3.1 at least 45 days, but not more than 60 days
before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
Section 3.2. Selection of Securities To Be
Redeemed.
-----------------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, if less than all the Securities of any series are
to be redeemed, the particular Securities of such series or
portions thereof to be redeemed shall be selected from the
outstanding Securities not previously called for redemption
either (x) pro rata, by lot or by such other method as the
Trustee considers to be fair and appropriate or (y) in such
manner as complies with the requirements of the principal
national securities exchange, if any, on which the Securities
of such series being redeemed are listed. The amounts to be
redeemed shall be equal to $1,000 or any integral multiple
thereof, except that if all of the Securities of a series of a
Holder are to be redeemed, the entire amount of Securities of
such series held by such Holder, even if not a multiple of
$1,000, shall be redeemed or purchased.
The Trustee shall select Securities to be redeemed
from the Securities of the applicable series outstanding and
not previously called for redemption and shall promptly notify
the Company and the Registrar in writing of the Securities of
any series selected for redemption and, in the case of any
Securities of any series selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Securities of any series 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 3.3. Notice of Redemption.
--------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, notice of redemption shall be given by first-class
or certified mail, postage prepaid, mailed not less than 30 nor
more than 60
<PAGE>
-25-
days prior to the Redemption Date, to each Holder
of Securities to be redeemed, at the address of such Holder
appearing in the security register maintained by the Registrar.
All notices of redemption shall identify the
Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities
redeemed;
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Security to be redeemed
and that on or after the Redemption Date, upon surrender
for cancellation of such Security to the Paying Agent, a
new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be
issued without charge to the Securityholder;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such
Securities; and
(g) whether Securities are being redeemed pursuant
to the mandatory redemption or the optional redemption
provisions of the Securities.
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 written request, by the Trustee in the name
and at the expense of the Company.
<PAGE>
-26-
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Paying
Agent, such Securities called for redemption shall be paid at
the Redemption Price plus accrued interest to the Redemption
Date, but interest installments whose maturity is on or prior
to such Redemption Date will be payable on the relevant
Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the
Securities.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in immediately
available funds sufficient to pay the Redemption Price of, and
accrued and unpaid interest on, all the Securities or portions
thereof which are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that
date which have been delivered by the Company to the Trustee
for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed
will cease to accrue on and after the applicable Redemption
Date, whether or not such Securities are presented for payment.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and, to the
extent lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate provided in the
Securities, unless otherwise specified as contemplated by
Section 2.2(a) with respect to the Securities of such series or
in such Securities.
Section 3.6. Securities Redeemed or Purchased in
Part.
-----------------------------------
Upon surrender to the Paying Agent of a Security
which is to be redeemed in part, the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of
such Security without service charge a new Security or
Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange
<PAGE>
-27-
for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest
on each series of Securities on the dates and in the manner
provided in such Securities or pursuant to this Indenture. An
installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company or any Affiliate of any
thereof) holds for the benefit of the Holders on that date
money deposited and designated for and sufficient to pay the
installment and is not prohibited from paying such money to the
Holders of the Securities pursuant to the terms of this
Indenture.
Unless otherwise specified as contemplated by
Section 2.2(a) with respect to any series of Securities, the
Company will pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue
principal at the rate and in the manner provided in the
Securities; it shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law)
on overdue installments of interest (without regard to any
applicable grace period) at the same rate and in the same
manner, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of
Manhattan, The City of New York, State of New York, an office
or agency where Securities may be surrendered for registration
of transfer or exchange, an office or agency where Securities
may be presented for payment and an office or agency where
notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and
demands
<PAGE>
-28-
may be made or served at the address of the Trustee as set
forth in Section 11.2.
The Company may also from time to time designate one
or more other offices or agencies where Securities of one or
more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall
- -------- -------
in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of
New York, State of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of
any such other office or agency. The Company hereby initially
designates the Corporate Trust Office of the Trustee as such
office of the Company.
Section 4.3. Corporate Existence.
-------------------
Subject to Article Five, the Company will do or cause
to be done all things necessary to, and will cause each of its
Material Subsidiaries to, preserve and keep in full force and
effect its respective corporate existence, rights (charter and
statutory), licenses and/or franchises; provided, however, that
-------- -------
the Company or any of its Subsidiaries shall not be required to
preserve any such existence, rights, licenses or franchises if
(x) the Company shall reasonably determine that the
preservation thereof is no longer desirable in the conduct of
the business of it and its Subsidiaries taken as a whole or
(y) the loss thereof is not materially adverse to the Company
and its Subsidiaries taken as a whole or to the ability of the
Company to otherwise satisfy its obligations hereunder.
Section 4.4. Compliance Certificate.
----------------------
(a) The Company shall deliver to the Trustee, within
120 days after the end of its fiscal year, an Officers'
Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing officers
with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his knowledge the Company
has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and
<PAGE>
-29-
conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and
that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of
the principal of or interest on the Securities of any series
are prohibited or, if such event has occurred, a description of
the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered
pursuant to Section 4.5 below shall be accompanied by a written
statement of the Company's independent public accountants (who
shall be a firm of established national reputation) that in
making the examination necessary for certification of such
financial statements nothing has come to their attention that
would lead them to believe that the Company has violated any
provisions of Articles 4 or 5 of this Indenture or, if any such
violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) The Company will deliver to the Trustee as soon
as possible, and in any event within 10 days after it becomes
aware or should reasonably have become aware of the occurrence
of any Default or Event of Default in respect of any series of
Securities, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or
proposes to take with respect thereto.
Section 4.5. SEC Reports.
-----------
The Company shall file with the Trustee, within 15
days after it files them with the SEC, copies of the quarterly
and annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act. The Company also shall comply
with the other provisions of TIA (S) 314(a). If the Company is
not subject to the requirements of such Section 13 or 15(d),
the Company shall file with the Trustee, within 15 days after
it would have been required to file the same with the SEC,
<PAGE>
-30-
financial statements, including any notes thereto (and with
respect to annual reports, an auditors' report by a firm of
established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Company would
have been required to include in such annual reports,
information, documents or other reports if the Company had been
subject to the requirements of such Section 13 or 15(d). In
addition, the Company shall cause its annual report to
stockholders and any quarterly or other financial reports
furnished by it to stockholders generally to be filed with the
Trustee and mailed, no later than the date such materials are
mailed or made available to the Company's stockholders, to the
Holders at their addresses as set forth in the register of
Securities maintained by the Registrar.
Section 4.6. Waiver of Stay, Extension
or Usury 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 or any usury law or
other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on
Securities of any series as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) the Company 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.
Section 4.7. Limitations on Liens.
--------------------
The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, incur, create, assume or guarantee, any
Indebtedness secured by a Lien upon any Principal Property of
the Company or such Restricted Subsidiary or upon any shares of
stock or Indebtedness of any Restricted Subsidiary held by the
Company (whether such Principal Property, shares or
Indebtedness are now existing or owed or hereafter created or
acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation, assumption
or guaranty
<PAGE>
-31-
of any such secured Indebtedness, or the grant of a Lien with
respect to any such Indebtedness of any Restricted Subsidiary,
that the Securities (together with, if the Company shall so
determine, any other Indebtedness of or guarantee by the Company
or such Restricted Subsidiary) shall be secured by a mortgage
ranking equally and ratably with (or, at the option of the
Company, prior to), and for so long as such other Indebtedness is
so secured, such secured debt. The foregoing restriction, however,
will not apply to: (a) Liens on property, shares of stock or
Indebtedness or other assets of any corporation existing at the
time such corporation becomes a Restricted Subsidiary; provided
--------
that such Liens are not incurred in anticipation of such
corporation becoming a Restricted Subsidiary; (b) Liens on
property, shares of stock or Indebtedness existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary or
Liens on property, shares of stock or Indebtedness to secure any
Indebtedness for borrowed money incurred prior to, at the time of,
or within 270 days after, the latest of the acquisition thereof,
or, in the case of property, the completion of construction, the
completion of improvements or the commencement of substantial
commercial operation of such property, for the purpose of
financing all or any part of the purchase price thereof, such
construction or the making of such improvements; (c) Liens to
secure Indebtedness owing to the Company or to a Restricted
Subsidiary; (d) Liens existing at the date of the initial issuance
of the Securities of such series; (e) 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 sale, lease or other disposition of the properties
of a corporation as an entirety or substantially as an entirety to
the Company or a Restricted Subsidiary; provided that such Lien
--------
was not incurred in anticipation of such merger or consolidation
or sale, lease or other disposition; (f) Liens created in
connection with a project financed with, and created to secure, a
Nonrecourse Obligation; or (g) extensions, renewals or
replacements of any Liens permitted by any of the foregoing
clauses (a) through (f); provided, however, that any Liens
-------- -------
permitted by any of the foregoing clauses (a) through (f) shall
not extend to or cover any property of the Company or such
Restricted Subsidiary, as the case may be, other than the property
specified in such clauses and improvements thereto.
<PAGE>
-32-
Section 4.8. Limitations on Sale and Lease-Back
Transactions.
----------------------------------
The Company covenants that it will not, nor will it
permit any Restricted Subsidiary to, enter into any Sale and
Lease-Back Transaction with respect to any Principal Property,
other than any such transaction involving a lease for a term of
not more than three years or any such transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries, unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur Indebtedness secured by a
mortgage on the Principal Property involved in such transaction
at least equal in amount to the Attributable Debt with respect
to such Sale and Lease-Back Transaction, without equally and
ratably securing the Securities, pursuant to Section 4.7; or
(b) the Company shall apply an amount equal to the greater of
the net proceeds of such sale or the Attributable Debt with
respect to such Sale and Lease-Back Transaction within 180 days
of such sale to either (or a combination of) the retirement
(other than any mandatory retirement, mandatory prepayment or
sinking fund payment or by payment at maturity) of Indebtedness
of the Company or a Restricted Subsidiary that matures more
than twelve months after the creation of such Indebtedness or
the purchase, construction or development of other comparable
property.
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge, etc.
---------------------------
(a) The Company will not, in a single transaction or
a series of transactions, consolidate with or merge with or
into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and
assets as an entirety to, any other Person or Persons, or
permit any of its Subsidiaries to enter into any such
transaction or series of transactions if such transaction or
series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and
assets of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons, unless:
(1) either (A) if the transaction or series of
transactions is a merger or consolidation, the Company
<PAGE>
-33-
shall be the Person surviving such merger or consolidation
or (B) the Person formed by such consolidation or into
which the Company or such Subsidiary, as the case may be,
is merged or to which the properties and assets of the
Company or such Subsidiary, substantially as an entirety,
are transferred (any such surviving Person or transferee
Person being the "Surviving Entity") shall be a
corporation organized and existing under the laws of the
United States of America, any State thereof or the
District of Columbia and such corporation shall expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the
Trustee, the Company's obligation for the due and punctual
payment of the principal of and interest, if any, 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 or series of transactions on a pro forma basis
--- -----
(including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be
continuing with respect to Securities of any series; and
(3) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
in form and substance reasonably satisfactory to the
Trustee, each stating that such consolidation, merger,
sale, assignment, conveyance, transfer, lease or other
disposition and, if a supplemental indenture is required
in connection with such transaction or series of
transactions, such supplemental indenture comply with this
Indenture and that all conditions precedent herein
provided for relating to such transaction or series of
transactions have been complied with.
Section 5.2. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all of the properties and assets of the
Company in accordance with Section 5.1(a) hereof, the successor
Person or Persons formed by such consolidation or into which
the Company is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or other
<PAGE>
-34-
disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if
such successor had been named as the Company herein; and
thereafter the Company shall be discharged from all obligations
and covenants under this Indenture and the Securities.
ARTICLE 6
REMEDIES
Section 6.1. Events of Default.
-----------------
An "Event of Default" means with respect to each
series of Securities, individually, any of the following
events:
(a) default by the Company in the payment of the
principal of any Security of such series when the same
becomes due and payable upon Stated Maturity, acceleration
or otherwise, whether or not such payment is prohibited by
Article 10; or
(b) default by the Company in the payment of an
installment of interest on any Security of such series
when the same becomes due and payable, and any such
Default continues for a period of 30 days, whether or not
such payment is prohibited by Article 10; or
(c) default by the Company in the performance or
observance of any term, covenant or agreement contained in
this Indenture or the Securities (other than Defaults
specified in clause (a) or (b) above), and such Default
continues for a period of 60 days after written notice of
such Default (which notice shall specify the Default,
demand that it be remedied and state that it is a "Notice
of Default") requiring the Company to remedy the same
shall have been given (i) to the Company by the Trustee or
(ii) to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities
of such series then outstanding; or
(d) default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or
other evidences of Indebtedness, whether now existing or
hereinafter created, under which the Company or any
Material Subsidiary of the Company then has outstanding
<PAGE>
-35-
Indebtedness in excess of $10 million or more individually
or $20 million or more in the aggregate (or, in each case,
the equivalent thereof in any other currency), and either
(i) such Indebtedness is already due and payable in full
or (ii) such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness unless
such acceleration is cured, waived, rescinded or annulled
within 30 days after written notice thereof shall been
given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities of such series then
outstanding; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $10
million or more individually or $20 million or more in the
aggregate (or, in each case, the equivalent thereof in any
other currency), shall be entered against the Company or
any Material Subsidiary of the Company and shall not be
discharged or fully bonded and there shall have been a
period of 60 days after the date on which any period for
appeal has expired and during which a stay of enforcement
of such judgment, order or decree shall not be in effect;
or
(f) the Company or any Material Subsidiary of the
Company pursuant to or under or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for
relief against it in an involuntary case or
proceeding;
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its
property; or
(iv) makes a general assignment for the benefit
of its creditors; or
(g) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
<PAGE>
-36-
(i) is for relief against the Company or any
Material Subsidiary of the Company in an involuntary
case or proceeding,
(ii) appoints a Custodian of the Company or any
Material Subsidiary of the Company or for all or
substantially all of its properties, or
(iii) orders the liquidation of the Company or
any Material Subsidiary of the Company,
and in each case the order or decree remains unstayed and
in effect for 60 days.
The Trustee shall not be charged with knowledge of
any Default or Event of Default (other than, if the Trustee is
acting as Paying Agent, those set forth in Section 6.1(a), (b)
or, to the extent relating to Section 4.1, (c)) unless written
notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the
Paying Agent, any Holder, any holder of Senior Indebtedness or
any of their respective agents.
Section 6.2. Acceleration.
------------
If an Event of Default with respect to any series of
Securities (other than an Event of Default specified in Section
6.1(f) or (g) with respect to the Company) occurs and is
continuing, the Trustee by written notice to the Company, or
the Holders of at least 25% in aggregate principal amount of
the Securities of such series then outstanding, by written
notice to the Company and the Trustee, may declare the unpaid
principal of (or, if any of the Securities of that series are
Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof) and
accrued interest on all the Securities of such series to be due
and payable immediately. If an Event of Default specified in
Section 6.1(f) or (g) with respect to the Company occurs and is
continuing, then the principal of and accrued interest on all
the Securities shall ipso facto become and be immediately due
---- -----
and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration in
respect of a series of Securities has been made and before a
judgment or decree for payment of the money due has been
obtained by the Trustee, Holders of a majority in aggregate
<PAGE>
-37-
principal amount of such series of Securities outstanding, by
written notice to the Company and the Trustee, may, on behalf
of all Holders of such series of Securities, rescind and annul
such declaration and its consequences if:
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all amounts due the Trustee under Section
7.8 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel,
(ii) all overdue interest on all Securities of
such series,
(iii) the principal of such series of Securities
which has become due otherwise than by such
declaration of acceleration and interest thereon at
the rate borne by such series of Securities, and
(iv) interest upon overdue principal and, to the
extent that payment of such interest is lawful,
overdue interest at the rate borne by such series of
Securities which has become due otherwise than by
such declaration of acceleration;
(b) such rescission or annulment would not conflict
with any judgment or decree of a court of competent
jurisdiction; and
(c) all Events of Default with respect to such
series of Securities, other than the non-payment of
principal of and interest on such series of Securities
which has become due solely by such declaration of
acceleration, have been cured or waived as provided in
Section 6.4.
No such rescission shall affect any subsequent
Default or Event of Default with respect to such series of
Securities or impair any right consequent thereon.
Section 6.3. Other Remedies.
--------------
If an Event of Default with respect to a series of
Securities occurs and is continuing, the Trustee may in its
discretion pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
<PAGE>
-38-
such Securities or to enforce the performance of any provision
of such Securities or this Indenture.
All rights of action and claims under this Indenture
or the Securities of any series may be enforced by the Trustee
even if it does not possess any of the Securities of such
series or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of
Default with respect to a series of Securities shall not impair
the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.4. Waiver of Past Defaults.
-----------------------
Subject to the provisions of Sections 6.2, 6.7 and
9.2, the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities of any series by
notice to the Trustee may, on behalf of the Holders of all the
Securities of such series, waive any existing Default or Event
of Default, with respect to such series, and its consequences.
When a Default or Event of Default with respect to a series of
Securities is so waived, it shall be deemed cured and shall
cease to exist, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any
right consequent thereon.
Section 6.5. Control by Majority.
-------------------
The Holders of at least a majority in aggregate
principal amount of the then 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, provided, however, that the Trustee may refuse to
-------- -------
follow any direction (a) that conflicts with any rule of law or
this Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder of such
series, or (c) that may expose the Trustee to Personal
liability unless the Trustee has indemnification satisfactory
to it in its sole discretion against any loss or expense caused
by its following such direction; and provided, further, that
-------- -------
the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
<PAGE>
-39-
Section 6.6. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have
any right to pursue any remedy with respect to this Indenture
or such Securities unless:
(a) the Holder gives written notice to the Trustee
of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of at least 25% in principal amount
of the then outstanding Securities of that series make a
written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
and, if requested, provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in aggregate principal amount of the then
outstanding Securities of that series do not give the
Trustee a direction which is inconsistent with the
request.
The foregoing limitations shall not apply to a suit
instituted by a Holder of Securities of a series for the
enforcement of the payment of principal of or accrued interest
on such Securities held by such Holder on or after the
respective due dates set forth in such Securities.
A Securityholder of a series may not use this
Indenture to prejudice the rights of any other Securityholder
of such series or to obtain priority or preference over such
other Securityholder.
Section 6.7. Right of Holders To Receive Payment.
-----------------------------------
Notwithstanding any other provision in this
Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on such Security, on
or after the respective due dates expressed in such Security,
or to bring suit for the enforcement of any such payment on or
after the Stated Maturity or Interest Payment Date, as the case
may
<PAGE>
-40-
be, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in clause (a) or (b)
of Section 6.1 with respect to Securities of any series occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust in favor of the Holders
against the Company or any other obligor on the Securities of
such series for the whole amount of principal of and accrued
interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each
case at the rate per annum borne by the Securities of such
series and 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.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian
in any such judicial proceedings 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 for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agent and counsel, and any
other amounts due the Trustee under Section 7.8. 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.
<PAGE>
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Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following
order:
First: to the Trustee for amounts due under Section
7.8;
Second: to Holders for interest accrued, if any, on
the Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities for interest;
Third: to Holders for principal owing under the
Securities of the applicable series, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities of the
applicable series for principal; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may
in its discretion require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.7, or a suit by
Holders of more than 10% in aggregate principal amount of the
outstanding Securities of any series.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
or any Security and such proceeding has been discontinued or
<PAGE>
-42-
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.
ARTICLE 7
TRUSTEE
Section 7.1. Duties.
------
(a) In case an Event of Default has occurred and is
continuing, with respect to Securities of any series, the
Trustee shall exercise, with respect to Securities of such
series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default, with respect to the Securities of any series:
(1) the Trustee need perform, with respect to
Securities of such series, 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, with respect to Securities of such series,
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
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform
to the requirements of this Indenture.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own
<PAGE>
-43-
negligent action, its own negligent failure to act, or its own
willful misconduct, except that
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(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
it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b),
(c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on,
or be required to invest, any assets received by it except as
the Trustee may agree with the Company. Assets held in trust
by the Trustee need not be segregated from other assets except
to the extent required by law.
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof and the provisions of
TIA (S) 315:
(a) The Trustee may rely, and shall be protected
from acting or refraining from acting, on any document
believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers'
<PAGE>
-44-
Certificate or an Opinion of Counsel, which shall conform
to Sections 11.4 and 11.5. The Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture other than any
liabilities arising out of its own negligence.
(e) The Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization
and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 7.11 and 7.12 and TIA (S)(S) 310 and 311, may otherwise
deal with the Company and its Subsidiaries with the same rights
it would have if it were not the Trustee, Paying Agent,
Registrar or such other agent.
<PAGE>
-45-
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities,
it shall not be accountable for the Company's use or
application of the proceeds from the Securities, it shall not
be responsible for the use or application of any money received
by any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the
Trustee's certificate of authentication.
Section 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Securityholder of the affected series notice of
the Default or Event of Default within 30 days thereafter;
provided, however, that, except in the case of a Default in the
- -------- -------
payment of the principal of or interest on any Security or in
the payment of any sinking fund installment, the Trustee shall
be protected in withholding such notice if and so long as the
board of directors, the executive committee of the board of
directors or a committee of the directors of the Trustee and/or
Trust Officers in good faith determines that the withholding of
such notice is in the interest of the Holders.
Section 7.6. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used
or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be
segregated from other funds except to the extent required
herein or by law. The Trustee shall not be under any liability
for interest on any moneys received by it hereunder.
Section 7.7. Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 of each year beginning
with the May 15 following the date of this Indenture, the
Trustee shall, to the extent that any of the events described
in TIA (S) 313(a) has occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as
of such May 15 that complies with TIA (S) 313(a). The Trustee
also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC
<PAGE>
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and each securities exchange, if any, on which the Securities
are listed.
The Company shall notify the Trustee in writing if
the Securities become listed on any securities exchange or
automatic quotation system.
Section 7.8. Compensation and Indemnity.
--------------------------
The Company covenants and agrees to pay the Trustee
from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it
arising out of or in connection with the administration of this
trust and its rights or duties hereunder, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its written consent.
The Company need not reimburse any expense or indemnify against
any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this
Section 7.8, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section
6.1(f) or (g) with respect to the Company, the expenses and the
compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
<PAGE>
-47-
The Company's obligations under this Section 7.8 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.9. Replacement of Trustee.
----------------------
The Trustee may resign with respect to any series of
Securities issued hereunder by so notifying the Company. The
Holders of a majority in principal amount of the outstanding
Securities of any series may remove the Trustee by so notifying
the Company and the Trustee and may appoint a successor Trustee
with the Company's consent. The Company may remove the Trustee
with respect to any series of Securities if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason with respect to
the Securities of one or more series, the Company shall notify
each Holder of such event and shall promptly appoint a
successor Trustee, with respect to the Securities of such
series. The Trustee shall be entitled to payment of its fees
and reimbursement of its expenses while acting as Trustee, and
to the extent such amounts remain unpaid, the Trustee that has
resigned or has been removed shall retain the Lien afforded by
Section 7.8. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the
outstanding Securities of any series may appoint a successor
Trustee to replace the successor Trustee appointed by the
Company with respect to the Securities of that series.
In the case of the appointment hereunder of a
successor Trustee with respect to all Securities, a successor
Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by
it as
<PAGE>
-48-
Trustee to the successor Trustee, subject to the Lien
provided in Section 7.8, the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
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 to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental
indenture shall constitute such Trustees as co-Trustees of the
same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture,
the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to
the Securities of that or those series to which the appointment
of such successor Trustee relates, subject, nevertheless, to
its Lien, if any, provided for in Section 7.8.
<PAGE>
-49-
If a successor Trustee with respect to the Securities
of one or more series does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities of such series
may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any provisions
of this Section 7.9 shall become effective upon acceptance of
appointment by the successor trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.9, the Company's obligations under Section
7.8 shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation
or national banking association without any further act shall,
if such resulting, surviving or transferee corporation or
national banking association is otherwise eligible hereunder,
be the successor Trustee.
Section 7.11. Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA (S)(S) 310(a)(1) and
310(a)(5) and which shall have a combined capital and surplus
of at least $100,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes 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. If at any time the Trustee shall cease to be
<PAGE>
-50-
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect hereinabove specified in this Article. The Trustee
shall comply with TIA (S) 310(b).
Section 7.12. Preferential Collection of Claims
Against Company.
---------------------------------
The Trustee shall comply with TIA (S) 311(a) excluding
any creditor relationship listed in TIA (S) 311(b). If the
present or any future Trustee shall resign or be removed, it
shall be subject to TIA (S) 311(a) to the extent provided
therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1. Termination of the
Company's Obligations.
---------------------
Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may terminate its obligations under
this Indenture with respect to any series of Securities, except
those obligations referred to in the penultimate paragraph of
this Section 8.1, if all Securities of such series previously
authenticated and delivered (other than destroyed, lost or
stolen Securities which have been replaced or paid or
Securities for whose payment money has theretofore been
deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company, as provided in Section 8.4) have been
delivered to the Trustee for cancellation and the Company has
paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed
a notice to each Securityholder of such series of the
redemption of all of the Securities of such series under
arrangements satisfactory to the Trustee for the giving of
such notice or (ii) all Securities of such series have
otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee
satisfactory to the Trustee, under the terms of an
<PAGE>
-51-
irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Securityholders of such
series for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such
interest, to pay principal of and interest on the
outstanding Securities of such series to maturity or
redemption; provided that the Trustee shall have been
--------
irrevocably instructed to apply such money to the payment
of said principal and interest with respect to such
Securities and; provided, further, that the provisions of
-------- -------
Article 10 permit payments with respect to the securities
at the time of deposit;
(c) no Default or Event of Default with respect to
this Indenture applicable to such series or the Securities
of such series shall have occurred and be continuing on
the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(d) the Company shall have paid all other sums
payable by it hereunder; and
(e) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent providing for the
termination of the Company's obligations under such
Securities and this Indenture applicable to such
Securities have been complied with. Such Opinion of
Counsel shall also state that such satisfaction and
discharge does not result in a default under any agreement
or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the
Company's obligations in Sections 2.6, 2.7, 2.8, 2.9, 4.1, 4.2,
7.8, 8.4 and 8.5 shall survive until the Securities of such
series are no longer outstanding pursuant to the last paragraph
of Section 2.9. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.8, 8.4 and
8.5 shall survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the discharge
of the Company's obligations under the Securities of such series
<PAGE>
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and this Indenture applicable to such Securities except
for those surviving obligations specified above.
Section 8.2. Legal Defeasance and
Covenant Defeasance.
--------------------
(a) Unless otherwise specified in a supplemental
indenture, Board Resolution or Officers' Certificate as
contemplated by Section 2.2(a) with respect to any series of
Securities, the Company may, at its option by Board Resolution
or by an Officers' Certificate, at any time, with respect to
the Securities of any series, elect to have either paragraph
(b) or paragraph (c) below be applied to the outstanding
Securities of such series upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), the Company
shall be deemed to have been released and discharged from its
obligations with respect to the outstanding Securities of such
series on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such
Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by the
outstanding Securities of such series, which shall thereafter
be deemed to be "outstanding" only for the purposes of
paragraph (e) below and the other Sections of and matters under
this Indenture applicable to such Securities referred to in (i)
and (ii) below, and to have satisfied all its other obligations
under such Securities and this Indenture applicable to such
Securities insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), and Holders of such
Securities and any amounts deposited under paragraph (d) below
shall cease to be subject to any obligations to, or the rights
of, any holder of Senior Indebtedness under Article 10 or
otherwise, except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights
of Holders of outstanding Securities of such series to receive
solely from the trust fund described in paragraph (d) below and
as more fully set forth in such paragraph payments in respect
of the principal of and interest on such Securities when such
payments are due, (ii) the Company's obligations with respect
to such Securities under Sections 2.7, 2.8 and 4.2 and, with
respect to the Trustee, under Section 7.8, (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder
and (iv) this Section 8.2 and Section 8.5. Subject to
<PAGE>
-53-
compliance with this Section 8.2, the Company may exercise its
option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) below with respect
to Securities of any series.
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
shall be released and discharged from its obligations under any
covenant contained in Article 5 and in Section 4.3, except as
to the corporate existence of the Company and in Sections 4.4
through 4.8 and in certain other sections with respect to the
outstanding Securities of such series identified in any
supplemental indenture pursuant to Section 2.2(a) on and after
the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and such Securities shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for
all other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to such outstanding
Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly,
by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to
any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event
of Default under Section 6.1(c) with respect to such series of
Securities, but, except as specified above, the remainder of
this Indenture applicable to such Securities and such
Securities shall be unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Securities of such series:
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this Section
8.2 applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, (x)
money in an amount or (y) direct non-callable obligations
of, or non-callable obligations guaranteed by, the
United States
<PAGE>
-54-
of America for the payment of which guarantee or
obligation the full faith and credit of the United States
is pledged ("U.S. Government Obligations") maturing as to
principal and interest in such amounts of money and at
such times as are sufficient without consideration of any
reinvestment of such interest, to pay principal of and
interest on the outstanding Securities of such series not
later than one day before the due date of any payment, or
(z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge principal of and interest on
the outstanding Securities of such series on the Maturity
Date or otherwise in accordance with the terms of this
Indenture and of the Securities of such series; provided,
--------
however, that the Trustee (or other qualifying trustee)
-------
shall have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to
the Securities of such series and; provided further, that
-------- -------
the provisions of Article 10 permit payments with respect
to the Securities at the time of deposit;
(ii) no Default or Event of Default with respect to
such series of Securities shall have occurred and be
continuing on the date of such deposit;
(iii) such deposit will not result in a breach or
violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it
is bound;
(iv) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities of such series will
not recognize income, gain or loss for Federal income tax
purposes as a result of such Legal Defeasance and will be
subject to Federal income tax on the same amounts, in the
<PAGE>
-55-
same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(v) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes 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;
(vi) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to either the Legal Defeasance under paragraph
(b) above or the Covenant Defeasance under paragraph (c)
above, as the case may be, have been complied with; and
(vii) the Company shall have delivered to the Trustee
an amount sufficient to cover its fees and expenses as
Trustee under this Indenture through the term of the
Securities to be defeased, or made adequate provision
therefor to the satisfaction of the Trustee.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee; collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above
in respect of the outstanding Securities of such series shall
be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture applicable
to such Securities, to the payment, either directly or through
any Paying Agent (other than the Company or any Affiliate of
the Company) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
paragraph (d) above or the principal and interest received in
respect thereof other than any such tax, fee or other charge
<PAGE>
-56-
which by law is for the account of the Holders of the
outstanding Securities of such series.
Anything in this Section 8.2 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, of the
Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.3. Application of Trust Money.
--------------------------
The Trustee or a trustee satisfactory to the Trustee
and the Company shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.1 and 8.2,
and shall apply the deposited money and the money from
U.S. Government Obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities
of such series.
Section 8.4. Repayment to Company.
--------------------
Subject to Sections 7.8, 8.1 and 8.2, the Trustee
shall promptly pay to the Company, upon receipt by the Trustee
of an Officers' Certificate, any excess money, determined in
accordance with Section 8.2, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company, upon
receipt by the Trustee or the Paying Agent, as the case may be,
of an Officers' Certificate, any money held by it for the
payment or principal or interest that remains unclaimed for two
years after payment to the Securityholders of such series is
required; provided, however, that the Trustee and the Paying
-------- -------
Agent before being required to make any payment may, but need
not, at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York
or mail to each Securityholder of such series entitled to such
money notice that such money remains unclaimed and that after a
date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance
of such money then remaining will be repaid to the Company.
After payment to the Company, Securityholders entitled to money
must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates
<PAGE>
-57-
another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
Section 8.5. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations to any payment in respect
of Securities of any series in accordance with this Indenture
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, then and
only then, the Company's obligations under this Indenture and
the Securities of such series shall be revived and reinstated
as though no deposit had been made pursuant to this Indenture
until such time as the Trustee is permitted to apply all such
money or U.S. Government Obligations in accordance with this
Indenture; provided, however, that if the Company has made any
-------- -------
payment of principal of or interest on any Securities of such
series because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of
Securities of such series to receive such payment from the
money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
--------------------------
The Company and the Trustee may amend, waive or
supplement this Indenture or the Securities of any series
without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to evidence the succession of another Person to
the Company and the assumption by any such successor of
the obligations of the Company herein and in the
Securities of any series in accordance with Article Five;
(c) to provide for uncertificated Securities in
addition to certificated Securities;
<PAGE>
-58-
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to make any change that would provide any
additional benefit or rights to the Holders or that does
not adversely affect the rights of any Holder; or
(f) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.2(a),
respectively.
Upon the request of the Company accompanied by a
resolution of its Board of Directors, authorizing the execution
of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements
and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such
supplemental indenture which affects its own rights, duties,
protections or immunities under this Indenture or otherwise.
Section 9.2. With Consent of Holders.
-----------------------
Subject to Section 6.4, the Company and the Trustee
may amend or supplement this Indenture or the Securities of any
series or any supplemental indenture relating to any series of
Securities with the written consent of the Holders of not less
than a majority in aggregate principal amount of the Securities
of each series affected then outstanding, and the Holders of
not less than a majority in aggregate principal amount of the
Securities of each series affected then outstanding by written
notice to the Trustee may waive future compliance by the
Company with any provision of this Indenture, such Securities
or any supplemental indenture relating to such Securities.
Upon the request of the Company, accompanied by a
resolution of its Board of Directors authorizing the execution
of any supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Securityholders as
aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with
the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own
<PAGE>
-59-
rights, duties, protections or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental
indenture.
Notwithstanding the provisions of this Section 9.2,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 6.4, may not:
(a) reduce the percentage in aggregate outstanding
principal amount of Securities of any series the Holders
of which must consent to an amendment, supplement or
waiver of any provision of this Indenture, the Securities
of such series or any supplemental indenture;
(b) reduce the rate or change the time for payment
of interest on any Security of any series or change the
method or formula for calculating interest;
(c) reduce the principal amount outstanding of or
extend the fixed maturity of any Security of any series or
alter the redemption provisions with respect thereto or
reduce the amount of the principal of any outstanding
Discount Securities that would be due and payable upon
declaration of acceleration of maturity thereof;
(d) waive a default in the payment of the principal
of or interest on, or redemption or an offer to purchase
required hereunder with respect to, any Security of any
series;
(e) make the principal of or interest on any
Security of any series payable in money or in a manner
other than that stated in the Security;
(f) modify this Section 9.2 or Section 6.4 or
Section 6.7;
(g) modify or change any provision of this Indenture
affecting the subordination of the Securities of any
series in a manner adverse to such Holders;
(h) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Securities of any series; or
<PAGE>
-60-
(i) make such other changes as may require the
consent of each Holder so affected pursuant to any
supplemental indenture.
It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form
of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the
Holders of each Security affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement
or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or
affect the validity of any supplemental indenture.
Section 9.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment of or supplement to this Indenture or
the Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes
effective with respect to a series of Securities, a consent to
it by a Holder of a Security of such series is a continuing
consent by such Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security prior to such amendment,
supplement or waiver becoming effective as to the Securities of
such series. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under (S) 316(b) of the TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent
<PAGE>
-61-
to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue
to be Holders after such record date. Such consent shall be
effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder of such series
unless it makes a change described in any of clauses (a)
through (i) of Section 9.2; if it makes such a change, the
amendment, supplement or waiver shall bind every subsequent
Holder of a Security of such series or portion of a Security
that evidences the same debt as the consenting Holder's
Security.
Section 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the
terms of a Security of any series, the Trustee shall (in
accordance with the specific direction of the Company) request
the Holder of such Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the
Company) place an appropriate notation on such Security about
the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in
exchange for such Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.6. Trustee May Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the
amendment, supplement or waiver does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it
will be valid and binding upon the Company in accordance with
its terms.
<PAGE>
-62-
ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate.
------------------------
The Company, for itself and its successors, agrees,
and each Securityholder by accepting a Security agrees, that
the Indebtedness evidenced by the Security is subordinated in
right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of
the holders of Senior Indebtedness.
This Article 10 shall constitute a continuing offer
to all Persons who become holders of, or continue to hold
Senior Indebtedness, and such provisions are made for the
benefit of the holders of the Senior Indebtedness, and such
holders are made obligees hereunder and any one or more of them
may enforce such provisions.
Section 10.2. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any distribution to creditors of the Company in
a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property or in an assignment for
the benefit of creditors or any marshalling of the assets and
liabilities of the Company:
(1) holders of Senior Indebtedness shall be entitled
to receive payment in full of all obligations with respect
to the Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified
in the applicable Senior Indebtedness, whether or not such
interest is an allowable claim in any such proceeding)
before Securityholders shall be entitled to receive any
payment of any obligations with respect to the Securities;
and
(2) until all obligations with respect to Senior
Indebtedness (as provided in subsection (1) above) are
paid in full, any distribution to which Securityholders
would be entitled but for this Article shall be made to
holders of Senior Indebtedness, as their interests may
appear, except that Securityholders may receive securities
<PAGE>
-63-
that are subordinated to at least the same extent as the
Securities to Senior Indebtedness.
Section 10.3. Default on Senior Debt.
----------------------
The Company may not make any payment or distribution
to the Trustee or any Securityholder in respect of obligations
with respect to the Securities and may not acquire from the
Trustee or any Securityholders any Securities for cash or
property (other than Indebtedness which is subordinated to at
least the same extent as the Securities to Senior
Indebtedness), until all obligations with respect to the Senior
Indebtedness have been paid in full if:
(i) there occurs and is continuing a default in the
payment of any obligations with respect to the Senior
Indebtedness at the final scheduled maturity thereof or
that permits holders of such Senior Indebtedness to
accelerate its maturity or the maturity of which has been
accelerated; or
(ii) there occurs and is continuing an event of
default, other than a payment default, on any Senior
Indebtedness that permits holders of Senior Indebtedness
to accelerate its maturity, and such event of default is
the subject of judicial proceedings or the Company
receives a notice of the default from a Person who may
give it pursuant to Section 10.11 hereof. If the Company
receives any such notice, a subsequent notice received
within 360 days thereafter relating to Senior Indebtedness
shall not be effective for purposes of this Section.
The Company may resume payments on and distributions
in respect of the Securities and may acquire them when
(1) the default is cured or waived or has ceased to
exist or such notice has been rescinded or annulled, or
(2) in the case of an event of default referred to
in Section 10.3(ii) hereof, 179 days pass after the
Trustee receives written notice of such default and the
holders of Senior Indebtedness as to which such default
relates have not declared such Senior Indebtedness to be
immediately due and payable,
if this Article otherwise permits the payment or acquisition at
the time of such payment or acquisition.
<PAGE>
-64-
Section 10.4. Acceleration of Securities.
--------------------------
If payment of the Securities is accelerated because
of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
Section 10.5. When Distribution Must
Be Paid Over.
----------------------
In the event that a distribution is made to the
Trustee or any Securityholder at a time when such distribution
is prohibited by Section 10.2 or 10.3 hereof, the Trustee or
such Securityholder who receives the distribution shall hold it
in trust for the benefit of, and, upon written request, pay it
over to, the holders of Senior Indebtedness as their interests
may appear, for application to the payment of all obligations
with respect to Senior Indebtedness remaining unpaid to the
extent necessary to pay such obligations in full in accordance
with their terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform only such obligations on the
part of the Trustee as are specifically set forth in this
Article 10, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness, and shall not be liable to any such holders if
the Trustee shall pay over or distribute to or on behalf of
Securityholders or the Company or any other Person money or
assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article 10, except if such payment
is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 10.6. Notice by Company.
-----------------
The Company shall promptly notify the Trustee and any
Paying Agent of any facts known to the Company that would cause
a payment of any obligations with respect to the Securities to
violate this Article 10, but failure to give such notice shall
not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article 10.
<PAGE>
-65-
Section 10.7. Subrogation.
-----------
After all Senior Indebtedness is paid in full and
until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article 10 to
holders of Senior Indebtedness which otherwise would have been
made to Securityholders shall not, as between the Company and
Securityholders, be deemed a payment by the Company to or on
account of the Senior Indebtedness.
Section 10.8. Relative Rights.
---------------
This Article 10 defines the relative rights of
Securityholders and holders of Senior Indebtedness. Nothing in
this Indenture shall:
(1) impair, as between the Company and
Securityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of Securityholders
and creditors of the Company other than their rights in
relation to holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event
of Default, subject to the rights of holders and owners of
Senior Indebtedness to receive distributions and payments
otherwise payable to Securityholders.
If the Company fails because of this Article to pay
principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default.
Section 10.9. Subordination May Not Be
Impaired by Company.
------------------------
No right of any holder of Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by the
Securities shall be impaired by any act or failure to act by
the Company or by its failure to comply with this Indenture.
<PAGE>
-66-
Section 10.10. Distribution or Notice
to Representative.
----------------------
Whenever a distribution is to be made or a notice
given to holders of Senior Indebtedness, the distribution may
be made and the notice given to their Representative.
Upon any payment or distribution of assets of the
Company referred to in this Article 10, the Trustee and the
Securityholders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating
trustee or agent or other Person making any distribution to the
Trustee or to the Securityholders for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 10.
Section 10.11. Rights of Trustee and
Paying Agent.
---------------------
Notwithstanding the provisions of this Article 10 or
any other provision of this Indenture, neither the Trustee nor
any Paying Agent shall be charged with knowledge of the
existence of any facts which would prohibit the making of any
payment or distribution by the Trustee or such Paying Agent,
and the Trustee or such Paying Agent may continue to make
payments on the Securities unless, in the case of the Trustee,
and in the case of such Paying Agent as long as the Trustee is
such Paying Agent, a Trust Officer shall have received at the
Corporate Trust Office of the Trustee, and in the case of a
Paying Agent other than the Trustee, it shall have received, in
each case at least two Business Days prior to the date of such
payment, written notice of facts that would cause the payment
of any obligations with respect to the Securities to violate
this Article. The Trustee or any Paying Agent, as applicable,
shall promptly provide a copy of such notice to the
Securityholders. Only the Company, a Representative or a
holder of an issue of Senior Indebtedness that has no
Representative may give notice. Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.8 hereof.
The Trustee in its individual or any other capacity
may hold Senior Indebtedness with the same rights it would have
<PAGE>
-67-
if it were not the Trustee subject to TIA (S) 310(b) and 311.
Any Agent may do the same with like rights.
Section 10.12. Authorization to Effect
Subordination.
-----------------------
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the
Trustee his attorney-in-fact for any and all such purposes.
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act of 1939.
---------------------------
This Indenture is subject to the provisions of the
TIA that are required to be a part of this Indenture, and
shall, to the extent applicable, be governed by such
provisions.
If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
Section 11.2. Notices.
-------
Any notice or communication shall be sufficiently
given if in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows:
If to the Company, to:
VARITY CORPORATION
672 Delaware Avenue
Buffalo, New York 14209
Attention: Treasurer
If to the Trustee, to:
MANUFACTURERS AND TRADERS TRUST COMPANY
One M&T Plaza
Buffalo, New York 14240
Attention: Corporate Trust Department
<PAGE>
-68-
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed, postage prepaid,
to a Holder, including any notice delivered in connection with
TIA (S) 310(b), TIA (S) 313(c), TIA (S) 314(a) and TIA (S) 315(b),
shall be mailed by first class mail to such Holder at the
address of such Holder as it appears on the Securities register
maintained by the Registrar and shall be sufficiently given to
such Holder if so mailed within the time prescribed. Copies of
any such communication or notice to a Holder shall also be
mailed to the Trustee.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Holders. Except for a notice
to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
Section 11.3. Communication by Holders with
Other Holders.
-----------------------------
Holders may communicate pursuant to TIA (S) 312(b) with
other Holders with respect to their rights under this Indenture
or the Securities. The Company, the Trustee, the Registrar and
any other Person shall have the protection of TIA (S) 312(c).
Section 11.4. Certificate and Opinion as to
Conditions Precedent.
-----------------------------
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
<PAGE>
-69-
Section 11.5. Statements Required in Certificate
or Opinion.
----------------------------------
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the Person making such
certificate or rendering such opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is
necessary to enable him to express an opinion as to
whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
complied with; provided, however, that with respect to
-------- -------
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 11.6. Rules by Trustee, Paying Agent,
Registrar.
-------------------------------
The Trustee may make reasonable rules for action by
or at a meeting of Securityholders. The Paying Agent or
Registrar may make reasonable rules for its functions.
Section 11.7. Governing Law.
-------------
This Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York, without regard to principles of conflicts of law.
Section 11.8. No Interpretation of
Other Agreements.
--------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
Subsidiaries. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
<PAGE>
-70-
Section 11.9. No Recourse Against Others.
--------------------------
A director, officer, employee, shareholder or
Affiliate, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability.
Section 11.10. Successors.
----------
All agreements of the Company in this Indenture and
the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
Section 11.11. Duplicate Originals.
-------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 11.12. Separability.
------------
In case any provision in this Indenture or 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, and a Holder shall have no claim therefor against any
party hereto.
Section 11.13. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 11.14. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Holders,
any benefit or any legal or equitable right, remedy or claim
under this Indenture.
<PAGE>
-71-
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first
above written.
VARITY CORPORATION, as Issuer
By:________________________________
Name:
Title:
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT 5.1
January 23, 1995
(212) 701-3000
Kelsey-Hayes Company
11878 Hubbard Road
Livonia, Michigan 48150
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Re: Kelsey-Hayes Company Debt Securities
Guaranteed by Varity Corporation
------------------------------------
Dear Sirs:
We have acted as special counsel to Kelsey-Hayes Com-
pany, a Delaware corporation (the "Company"), and Varity Corpora-
tion, a Delaware corporation (the "Guarantor"), in connection with
the filing of a Joint Registration Statement on Form S-3 (the "Reg-
istration Statement") under the Securities Act of 1933, as amended
(the "Act"), providing for the issuance of up to $100 million
aggregate principal amount of the Company's Debt Securities (the
"Debt Securities") and the Guarantor's guarantees thereon (the
<PAGE>
-2-
"Guarantees") to be issued under an indenture (the "Indenture") to
be substantially in the form filed as an Exhibit to the Registra-
tion Statement.
We advise you that, in our opinion, when the Registra-
tion Statement has become effective under the Act and the terms of
the Debt Securities and of their issue and sale have been duly
established and upon the execution and delivery of the Indenture
and execution and authentication of the Debt Securities and Guar-
antees in accordance with the Indenture and delivery of the Debt
Securities and the Guarantees to the purchasers thereof against
payment therefor, the Debt Securities and the Guarantees will be
legal, valid and binding obligations of the Company and the Guar-
antor, respectively, enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganiza-
tion and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
We hereby consent to the filing of this opinion as an
Exhibit to the Registration Statement and to the reference to our
firm under the caption "Legal Matters" in the Registration State-
ment and related Prospectus. Our consent to such reference does
not constitute a consent under Section 7 of the Act, as in con-
senting to such reference we have not certified any part of the
Registration Statement and do not otherwise come within the cate-
gories of persons whose consent is required under Section 7 or
under the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel
<PAGE>
EXHIBIT 5.2
January 23, 1995
(212) 701-3000
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209
Re: Varity Corporation
Debt Securities
------------------
Dear Sirs:
We have acted as special counsel to Varity Corporation,
a Delaware corporation (the "Company"), in connection with the
filing of a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the
"Act"), providing for the issuance of up to $100 million aggregate
principal amount of the Company's Debt Securities (the "Debt
Securities") to be issued under an indenture (the "Indenture") to
be substantially in the form filed as an Exhibit to the
Registration Statement.
We advise you that, in our opinion, when the
Registration Statement has become effective under the Act and the
terms of the Debt Securities and of their issue and sale have been
duly
<PAGE>
-2-
established and the Debt Securities have been duly authorized and
upon the execution and delivery of the Indenture and execution and
authentication of the Debt Securities in accordance with the
Indenture and delivery to the purchasers thereof against payment
therefor, the Debt Securities will be legal, valid and binding
obligations of the Company enforceable in accordance with their
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.
We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Registration Statement and related Prospectus. Our
consent to such reference does not constitute a consent under Section 7 of the
Act, as in consenting to such reference we have not certified any part of the
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 or under the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel
<PAGE>
EXHIBIT 12
VARITY CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended January 31,
-----------------------
1990 1991 1992 1993 1994
------ ------ ------ ------ ------
(dollar amounts in millions)
<S> <C> <C> <C> <C> <C>
Earnings (loss) from continuing
operations before income
taxes 42.2 59.7 (85.0) 58.8 69.2
------ ------ ------ ------ ------
Interest expense:
Operating activities 51.1 119.7 111.4 106.0 38.3
Rental 3.5 4.4 5.7 5.6 4.9
------ ------ ------ ------ ------
Total Interest expense 54.6 124.1 117.1 111.6 43.2
------ ------ ------ ------ ------
Earnings before interest expense
and income taxes 96.8 183.8 32.1 170.4 112.4
====== ====== ====== ====== ======
Fixed charges:
Total interest expense 54.6 124.1 117.1 111.6 43.2
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 1.77 1.48 - 1.53 2.60
Coverage deficiency on fixed
charges - - (85.0) - -
</TABLE>
<PAGE>
VARITY CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended October 31,
-----------------------------
1993 1994
------ ------
(dollar amounts in millions)
<S> <C> <C>
Earnings from continuing operations
before income taxes 47.4 85.6
------ ------
Interest expense:
Operating activities 29.5 20.7
Rental 3.7 3.6
------ ------
Total Interest expense 33.2 24.3
------ ------
Earnings before interest expense
and Income taxes 80.6 109.9
====== ======
Fixed charges:
Total Interest expense 33.2 24.3
====== ======
Ratio of earnings to fixed charges 2.43 4.52
</TABLE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
-------------------------------
The Board of Directors
Varity Corporation:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Buffalo, New York
January 23, 1995
<PAGE>
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b) (2) ___________________
-----------------------
MANUFACTURERS AND TRADERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 16-0538020
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a national bank) identification No.)
One M&T Plaza
Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
-----------------------
KELSEY-HAYES COMPANY
(Exact name of obligor as specified in its charter)
DELAWARE 38-3084488
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
11878 Hubbard Road
Livonia, Michigan 48150
(Address of principal executive offices) (Zip Code)
----------------------
VARITY CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 22-3091314
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
672 Delaware Avenue
Buffalo, New York 14209
(Address of principal executive offices) (Zip Code)
SENIOR DEBT SECURITIES
(Title of indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Bank of the State of New York, 2 World Trade Center,
New York, NY 10047 and Albany, NY 12203.
Federal Reserve Bank of New York, 33 Liberty Street, New York, NY
10045.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 1 -
<PAGE>
ITEM 16 LIST OF EXHIBITS
Exhibit 1. Organization Certificate of the Trustee as Now in Effect.
Incorporated by reference herein to Exhibit 1, Form T-1,
Registration Statement No. 33-7309.
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business. Incorporated by reference herein to Exhibit 2,
Form T-1, Registration Statement No. 33-7309.
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust
Powers. Incorporated by reference herein to Exhibit 3, Form
T-1, Registration Statement No. 33-7309.
Exhibit 4. Existing By-Laws of the Trustee. Incorporated by reference
herein to Exhibit 4, Form T-1, Registration Statement No.
33-7309.
Exhibit 5. Not Applicable.
Exhibit 6. Consent of the Trustee. Incorporated by reference herein to
Exhibit 6, Form T-1, Registration Statement No. 33-7309.
Exhibit 7. Report of Condition of the Trustee.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
Manufacturers and Traders Trust Company, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Buffalo, and State of New York, on
the 17th day of January 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Russell T. Whitley
-----------------------------------
Russell T. Whitley
Assistant Vice President
- 2 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
MANUFACTURERS & TRADERS TRUST COMPANY
ONE M&T PLAZA, BUFFALO, NY 14203-0223,
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1994,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE
FEDERAL RESERVE BANK OF THIS DISTRICT PURSUANT
TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
Dollar Amounts
in Thousands
- --------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin(1)....... $ 329,227
b. Interest-bearing balances(2)................................ 70,043
2. Securities:
a. Held-to-maturity securities................................. 224,213
b. Available-for-sale securities............................... 1,382,841
3. Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold.......................................... 227,750
b. Securities purchased under agreements to resell............. 331,066
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income $6,169,053
b. LESS: Allowance for loan and lease losses 199,642
c. LESS: Allocated transfer risk reserve 0
----------
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)......... 5,969,411
5. Assets held in trading accounts................................ 6,790
6. Premises and fixed assets (including capitalized leases)....... 120,117
7. Other real estate owned........................................ 8,382
8. Investments in unconsolidated subsidiaries and associated
companies...................................................... 0
9. Customers' liability to this bank on acceptances outstanding... 1,068
10. Intangible assets............................................. 8,282
11. Other assets.................................................. 140,991
---------
12. Total assets (sum of items 1 through 11)...................... $8,820,181
=========
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
LIABILITIES
13. Deposits:
a. In domestic offices....................................... $5,843,745
(1) Noninterest-bearing(1).................. $1,047,220
(2) Interest-bearing........................ 4,796,525
----------
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................... 310,222
(1) Noninterest-bearing..................... $ 0
(2) Interest-bearing........................ 310,222
----------
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................... 1,722,160
b. Securities sold under agreements to repurchase............ 101,514
15. a. Demand notes issued to the U.S. Treasury.................. 102,294
b. Trading liabilities....................................... 2,874
16. Other borrowed money:
a. With original maturity of one year or less................ 0
b. With original maturity of more than one year.............. 0
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... 513
18 Bank's liability on acceptances executed and outstanding.. 1,068
19. Subordinated notes and debentures......................... 75,000
20. Other liabilities......................................... 91,092
21. Total liabilities (sum of items 13 through 20)............ 8,250,482
---------
22. Limited-life preferred stock and related surplus.......... 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. 0
24. Common stock.............................................. 120,635
25. Surplus (exclude all surplus related to preferred stock).. 87,524
26. a. Undivided profits and capital reserves................ 391,161
b. Net unrealized holding gains (losses) on available-
for-sale securities................................... (29,621)
27. Cumulative foreign currency translation adjustments....... 0
28. Total equity capital (sum of items 23 through 27)......... 569,699
---------
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).............. $8,820,181
==========
- -------------
(1) Includes total demand deposits and noninterest-bearing
time and savings deposits.
<PAGE>
I, Randall A. Krolewicz, A.V.P. of the named bank do hereby declare
that this Report of Condition and Income has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and belief.
/S/ RANDALL A. KROLEWICZ
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/21/94
- ----------------------------------------------
Date of Signature
We, the undersigned directors (trustees), attest to the correctness
of this Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true and correct.
/S/ ROBERT G. WILMERS
- ----------------------------------------------
Director (Trustee)
/S/ BRENT D. BAIRD
- ----------------------------------------------
Director (Trustee)
/S/ RAYMOND D. STEVENS, JR.
- ----------------------------------------------
Director (Trustee)
<PAGE>
EXHIBIT 25.2
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b) (2) ___________________
-----------------------
MANUFACTURERS AND TRADERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 16-0538020
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a national bank) identification No.)
One M&T Plaza
Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
-----------------------
KELSEY-HAYES COMPANY
(Exact name of obligor as specified in its charter)
DELAWARE 38-3084488
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
11878 Hubbard Road
Livonia, Michigan 48150
(Address of principal executive offices) (Zip Code)
----------------------
VARITY CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 22-3091314
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
672 Delaware Avenue
Buffalo, New York 14209
(Address of principal executive offices) (Zip Code)
SUBORDINATED DEBT SECURITIES
(Title of indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Bank of the State of New York, 2 World Trade Center,
New York, NY 10047 and Albany, NY 12203.
Federal Reserve Bank of New York, 33 Liberty Street, New York, NY
10045.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 1 -
<PAGE>
ITEM 16 LIST OF EXHIBITS
Exhibit 1. Organization Certificate of the Trustee as Now in Effect.
Incorporated by reference herein to Exhibit 1, Form T-1,
Registration Statement No. 33-7309.
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business. Incorporated by reference herein to Exhibit 2,
Form T-1, Registration Statement No. 33-7309.
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust
Powers. Incorporated by reference herein to Exhibit 3, Form
T-1, Registration Statement No. 33-7309.
Exhibit 4. Existing By-Laws of the Trustee. Incorporated by reference
herein to Exhibit 4, Form T-1, Registration Statement No.
33-7309.
Exhibit 5. Not Applicable.
Exhibit 6. Consent of the Trustee. Incorporated by reference herein to
Exhibit 6, Form T-1, Registration Statement No. 33-7309.
Exhibit 7. Report of Condition of the Trustee.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
Manufacturers and Traders Trust Company, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Buffalo, and State of New York, on
the 17th day of January 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Russell T. Whitley
-----------------------------------
Russell T. Whitley
Assistant Vice President
- 2 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
MANUFACTURERS & TRADERS TRUST COMPANY
ONE M&T PLAZA, BUFFALO, NY 14203-0223,
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1994,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE
FEDERAL RESERVE BANK OF THIS DISTRICT PURSUANT
TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
Dollar Amounts
in Thousands
- --------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin(1)....... $ 329,227
b. Interest-bearing balances(2)................................ 70,043
2. Securities:
a. Held-to-maturity securities................................. 224,213
b. Available-for-sale securities............................... 1,382,841
3. Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold.......................................... 227,750
b. Securities purchased under agreements to resell............. 331,066
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income $ 6,169,053
b. LESS: Allowance for loan and lease losses 199,642
c. LESS: Allocated transfer risk reserve 0
---------
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)......... 5,969,411
5. Assets held in trading accounts................................ 6,790
6. Premises and fixed assets (including capitalized leases)....... 120,117
7. Other real estate owned........................................ 8,382
8. Investments in unconsolidated subsidiaries and associated
companies...................................................... 0
9. Customers' liability to this bank on acceptances outstanding... 1,068
10. Intangible assets............................................. 8,282
11. Other assets.................................................. 140,991
---------
12. Total assets (sum of items 1 through 11)...................... $8,820,181
=========
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
LIABILITIES
13. Deposits:
a. In domestic offices....................................... $5,843,745
(1) Noninterest-bearing(1).................. $1,047,220
(2) Interest-bearing........................ 4,796,525
----------
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................... 310,222
(1) Noninterest-bearing..................... $ 0
(2) Interest-bearing........................ 310,222
----------
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................... 1,722,160
b. Securities sold under agreements to repurchase............ 101,514
15. a. Demand notes issued to the U.S. Treasury.................. 102,294
b. Trading liabilities....................................... 2,874
16. Other borrowed money:
a. With original maturity of one year or less................ 0
b. With original maturity of more than one year.............. 0
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... 513
18 Bank's liability on acceptances executed and outstanding.. 1,068
19. Subordinated notes and debentures......................... 75,000
20. Other liabilities......................................... 91,092
21. Total liabilities (sum of items 13 through 20)............ 8,250,482
---------
22. Limited-life preferred stock and related surplus.......... 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. 0
24. Common stock.............................................. 120,635
25. Surplus (exclude all surplus related to preferred stock).. 87,524
26. a. Undivided profits and capital reserves................ 391,161
b. Net unrealized holding gains (losses) on available-
for-sale securities................................... (29,621)
27. Cumulative foreign currency translation adjustments....... 0
28. Total equity capital (sum of items 23 through 27)......... 569,699
---------
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).............. $8,820,181
=========
- -------------
(1) Includes total demand deposits and noninterest-bearing
time and savings deposits.
<PAGE>
I, Randall A. Krolewicz, A.V.P. of the named bank do hereby declare
that this Report of Condition and Income has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and belief.
/S/ RANDALL A. KROLEWICZ
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/21/94
- ----------------------------------------------
Date of Signature
We, the undersigned directors (trustees), attest to the correctness
of this Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true and correct.
/S/ ROBERT G. WILMERS
- ----------------------------------------------
Director (Trustee)
/S/ BRENT D. BAIRD
- ----------------------------------------------
Director (Trustee)
/S/ RAYMOND D. STEVENS, JR.
- ----------------------------------------------
Director (Trustee)
<PAGE>
EXHIBIT 25.3
================================================================================
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) ___________________
-----------------------
MANUFACTURERS AND TRADERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 16-0538020
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a national bank) identification No.)
One M&T Plaza
Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
-----------------------
VARITY CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 22-3091314
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
672 Delaware Avenue
Buffalo, New York 14209
(Address of principal executive offices) (Zip Code)
----------------------
SENIOR DEBT SECURITIES
(Title of indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Bank of the State of New York, 2 World Trade Center,
New York, NY 10047 and Albany, NY 12203.
Federal Reserve Bank of New York, 33 Liberty Street, New York, NY
10045.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 1 -
<PAGE>
ITEM 16 LIST OF EXHIBITS
Exhibit 1. Organization Certificate of the Trustee as Now in Effect.
Incorporated by reference herein to Exhibit 1, Form T-1,
Registration Statement No. 33-7309.
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business. Incorporated by reference herein to Exhibit 2,
Form T-1, Registration Statement No. 33-7309.
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust
Powers. Incorporated by reference herein to Exhibit 3, Form
T-1, Registration Statement No. 33-7309.
Exhibit 4. Existing By-Laws of the Trustee. Incorporated by reference
herein to Exhibit 4, Form T-1, Registration Statement No.
33-7309.
Exhibit 5. Not Applicable.
Exhibit 6. Consent of the Trustee. Incorporated by reference herein to
Exhibit 6, Form T-1, Registration Statement No. 33-7309.
Exhibit 7. Report of Condition of the Trustee.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
Manufacturers and Traders Trust Company, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Buffalo, and State of New York, on
the 17th day of January 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Russell T. Whitley
-----------------------------------
Russell T. Whitley
Assistant Vice President
- 2 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
MANUFACTURERS & TRADERS TRUST COMPANY
ONE M&T PLAZA, BUFFALO, NY 14203-0223,
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1994,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE
FEDERAL RESERVE BANK OF THIS DISTRICT PURSUANT
TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
Dollar Amounts
in Thousands
- --------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin(1)....... $ 329,227
b. Interest-bearing balances(2)................................ 70,043
2. Securities:
a. Held-to-maturity securities................................. 224,213
b. Available-for-sale securities............................... 1,382,841
3. Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold.......................................... 227,750
b. Securities purchased under agreements to resell............. 331,066
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income $6,169,053
b. LESS: Allowance for loan and lease losses 199,642
c. LESS: Allocated transfer risk reserve 0
----------
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)......... 5,969,411
5. Assets held in trading accounts................................ 6,790
6. Premises and fixed assets (including capitalized leases)....... 120,117
7. Other real estate owned........................................ 8,382
8. Investments in unconsolidated subsidiaries and associated
companies...................................................... 0
9. Customers' liability to this bank on acceptances outstanding... 1,068
10. Intangible assets............................................. 8,282
11. Other assets.................................................. 140,991
----------
12. Total assets (sum of items 1 through 11)...................... $8,820,181
==========
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
LIABILITIES
13. Deposits:
a. In domestic offices....................................... $5,843,745
(1) Noninterest-bearing(1).................. $1,047,220
(2) Interest-bearing........................ 4,796,525
---------
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................... 310,222
(1) Noninterest-bearing..................... $ 0
(2) Interest-bearing........................ 310,222
----------
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................... 1,722,160
b. Securities sold under agreements to repurchase............ 101,514
15. a. Demand notes issued to the U.S. Treasury.................. 102,294
b. Trading liabilities....................................... 2,874
16. Other borrowed money:
a. With original maturity of one year or less................ 0
b. With original maturity of more than one year.............. 0
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... 513
18 Bank's liability on acceptances executed and outstanding.. 1,068
19. Subordinated notes and debentures......................... 75,000
20. Other liabilities......................................... 91,092
21. Total liabilities (sum of items 13 through 20)............ 8,250,482
---------
22. Limited-life preferred stock and related surplus.......... 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. 0
24. Common stock.............................................. 120,635
25. Surplus (exclude all surplus related to preferred stock).. 87,524
26. a. Undivided profits and capital reserves................ 391,161
b. Net unrealized holding gains (losses) on available-
for-sale securities................................... (29,621)
27. Cumulative foreign currency translation adjustments....... 0
28. Total equity capital (sum of items 23 through 27)......... 569,699
---------
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).............. $8,820,181
==========
- -------------
(1) Includes total demand deposits and noninterest-bearing
time and savings deposits.
<PAGE>
I, Randall A. Krolewicz, A.V.P. of the named bank do hereby declare
that this Report of Condition and Income has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and belief.
/S/ RANDALL A. KROLEWICZ
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/21/94
- ----------------------------------------------
Date of Signature
We, the undersigned directors (trustees), attest to the correctness
of this Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true and correct.
/S/ ROBERT G. WILMERS
- ----------------------------------------------
Director (Trustee)
/S/ BRENT D. BAIRD
- ----------------------------------------------
Director (Trustee)
/S/ RAYMOND D. STEVENS, JR.
- ----------------------------------------------
Director (Trustee)
<PAGE>
EXHIBIT 25.4
================================================================================
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) ___________________
-----------------------
MANUFACTURERS AND TRADERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 16-0538020
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a national bank) identification No.)
One M&T Plaza
Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
-----------------------
VARITY CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 22-3091314
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
672 Delaware Avenue
Buffalo, New York 14209
(Address of principal executive offices) (Zip Code)
----------------------
SUBORDINATED DEBT SECURITIES
(Title of indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Bank of the State of New York, 2 World Trade Center,
New York, NY 10047 and Albany, NY 12203.
Federal Reserve Bank of New York, 33 Liberty Street, New York, NY
10045.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 1 -
<PAGE>
ITEM 16 LIST OF EXHIBITS
Exhibit 1. Organization Certificate of the Trustee as Now in Effect.
Incorporated by reference herein to Exhibit 1, Form T-1,
Registration Statement No. 33-7309.
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business. Incorporated by reference herein to Exhibit 2,
Form T-1, Registration Statement No. 33-7309.
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust
Powers. Incorporated by reference herein to Exhibit 3, Form
T-1, Registration Statement No. 33-7309.
Exhibit 4. Existing By-Laws of the Trustee. Incorporated by reference
herein to Exhibit 4, Form T-1, Registration Statement No.
33-7309.
Exhibit 5. Not Applicable.
Exhibit 6. Consent of the Trustee. Incorporated by reference herein to
Exhibit 6, Form T-1, Registration Statement No. 33-7309.
Exhibit 7. Report of Condition of the Trustee.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
Manufacturers and Traders Trust Company, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Buffalo, and State of New York, on
the 17th day of January 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Russell T. Whitley
-----------------------------------
Russell T. Whitley
Assistant Vice President
- 2 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
MANUFACTURERS & TRADERS TRUST COMPANY
ONE M&T PLAZA, BUFFALO, NY 14203-0223,
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1994,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE
FEDERAL RESERVE BANK OF THIS DISTRICT PURSUANT
TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
Dollar Amounts
in Thousands
- --------------------------------------------------------------------------------
ASSETS
1. Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin(1)....... $ 329,227
b. Interest-bearing balances(2)................................ 70,043
2. Securities:
a. Held-to-maturity securities................................. 224,213
b. Available-for-sale securities............................... 1,382,841
3. Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold.......................................... 227,750
b. Securities purchased under agreements to resell............. 331,066
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income $6,169,053
b. LESS: Allowance for loan and lease losses 199,642
c. LESS: Allocated transfer risk reserve 0
----------
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)......... 5,969,411
5. Assets held in trading accounts................................ 6,790
6. Premises and fixed assets (including capitalized leases)....... 120,117
7. Other real estate owned........................................ 8,382
8. Investments in unconsolidated subsidiaries and associated
companies...................................................... 0
9. Customers' liability to this bank on acceptances outstanding... 1,068
10. Intangible assets............................................. 8,282
11. Other assets.................................................. 140,991
----------
12. Total assets (sum of items 1 through 11)...................... $8,820,181
==========
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
LIABILITIES
13. Deposits:
a. In domestic offices....................................... $5,843,745
(1) Noninterest-bearing(1).................. $1,047,220
(2) Interest-bearing........................ 4,796,525
----------
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................... 310,222
(1) Noninterest-bearing..................... $ 0
(2) Interest-bearing........................ 310,222
----------
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................... 1,722,160
b. Securities sold under agreements to repurchase............ 101,514
15. a. Demand notes issued to the U.S. Treasury.................. 102,294
b. Trading liabilities....................................... 2,874
16. Other borrowed money:
a. With original maturity of one year or less................ 0
b. With original maturity of more than one year.............. 0
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... 513
18 Bank's liability on acceptances executed and outstanding.. 1,068
19. Subordinated notes and debentures......................... 75,000
20. Other liabilities......................................... 91,092
21. Total liabilities (sum of items 13 through 20)............ 8,250,482
---------
22. Limited-life preferred stock and related surplus.......... 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. 0
24. Common stock.............................................. 120,635
25. Surplus (exclude all surplus related to preferred stock).. 87,524
26. a. Undivided profits and capital reserves................ 391,161
b. Net unrealized holding gains (losses) on available-
for-sale securities................................... (29,621)
27. Cumulative foreign currency translation adjustments....... 0
28. Total equity capital (sum of items 23 through 27)......... 569,699
---------
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).............. $8,820,181
==========
- -------------
(1) Includes total demand deposits and noninterest-bearing
time and savings deposits.
<PAGE>
I, Randall A. Krolewicz, A.V.P. of the named bank do hereby declare
that this Report of Condition and Income has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and belief.
/S/ RANDALL A. KROLEWICZ
- ----------------------------------------------
Signature of Officer Authorized to Sign Report
10/21/94
- ----------------------------------------------
Date of Signature
We, the undersigned directors (trustees), attest to the correctness
of this Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory
authority and is true and correct.
/S/ ROBERT G. WILMERS
- ----------------------------------------------
Director (Trustee)
/S/ BRENT D. BAIRD
- ----------------------------------------------
Director (Trustee)
/S/ RAYMOND D. STEVENS, JR.
- ----------------------------------------------
Director (Trustee)
