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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 1, 1999
APPLIED POWER INC.
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(Exact name of Registrant as specified in its charter)
Wisconsin 1-11288 39-0168610
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(State of Incorporation) (Commission File No.) (I.R.S. Employer Id. No.)
13000 West Silver Spring Drive
Butler, Wisconsin 53007
Mailing address: P. O. Box 325, Milwaukee, Wisconsin 53201
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(Address of principal executive offices) (Zip Code)
(414) 783-9279
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On April 1, 1999, the Company sold $200,000,000 aggregate principal amount
of its 8.75% Senior Subordinated Notes due 2009 (the "Notes") in an underwritten
public offering pursuant to Registration Statement No. 333-47493, as amended.
The purpose of this report is to file certain exhibits in connection with the
offering of the Notes.
Item 7. Financial Statement and Exhibits.
(c) Exhibits. The following exhibits are filed with this Report:
1.1 Underwriting Agreement.
4.1 Indenture for Debt Securities of Applied Power Inc. dated as of
April 1, 1999.
4.2 Securities Resolution No. 1 pursuant to the Indenture relating to
the 8.75% Senior Subordinated Notes due 2009.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
APPLIED POWER INC.
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(Registrant)
Date: April 13, 1999 By:/s/Robert C. Arzbaecher
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Robert C. Arzbaecher
Senior Vice President and
Chief Financial Officer
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APPLIED POWER INC.
INDEX TO EXHIBITS
FORM 8-K CURRENT REPORT
(Date of Report: April 1, 1999)
The following exhibits are filed with this Report:
1.1 Underwriting Agreement.
4.1 Indenture for Debt Securities of Applied Power Inc. dated as of
April 1, 1999.
4.2 Securities Resolution No. 1 pursuant to the Indenture relating to
the 8.75% Senior Subordinated Notes due 2009.
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EXHIBIT 1.1
APPLIED POWER INC.
(a Wisconsin corporation)
UNDERWRITING AGREEMENT
March 26, 1999
To the Underwriters set forth
on Schedule A hereto
Ladies and Gentlemen:
Applied Power Inc., a Wisconsin corporation (the "Company"), proposes
to issue and sell certain of its debt securities (the "Securities") to one or
more underwriters (the "Underwriters") named in Schedule A to this purchase
agreement (this "Agreement"). The Securities will be issued under an indenture,
dated as of April 1, 1999 (the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"), in one or more series,
which series may vary as to interest rates, maturities, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Securities being determined at the time of sale.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as their representative or representatives
(the "Representatives") deem advisable after this Agreement has been executed
and delivered.
The Company and the Underwriters, in accordance with the requirements
of Rule 2710 (c)(8) and Rule 2720 ("Rule 2720") of the National Association of
Securities Dealers, Inc. (the "NASD") and subject to the terms and conditions
stated herein, also hereby confirm the engagement of the services of Goldman,
Sachs & Co. (the "Independent Underwriter") as a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720 in connection
with the offering and sale of the Securities.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
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represents and warrants to each Underwriter and the Independent Underwriter as
of the date hereof and as of the Closing Time referred to in Section 2(b)
hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. A registration
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statement on Form S-3 (File No. 333-47493), as amended by two pre-effective
amendments
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thereto, in respect of the Securities and certain other securities of the
Company and related business trusts, has been filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and delivered to the
Representatives; such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to the
Representatives, have been declared effective by the Commission in such
form; 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; the various parts of such
registration statement, including (i) all exhibits thereto, (ii) the
information contained in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the 1933 Act ("Rule 424(b)") in accordance
with Section 3(a) hereof and (iii) the documents incorporated by reference
in the prospectus contained in the registration statement at the time such
part of such registration statement became effective, each as amended at
the time such part of such registration statement became effective, are
referred to herein collectively as the "Registration Statement"; the final
prospectus, as supplemented by the related prospectus supplement, in the
form first filed with respect to the Securities pursuant to Rule 424(b), is
referred to herein collectively as the "Prospectus"; any preliminary form
of the Prospectus which has heretofore been filed pursuant to Rule 424(b)
is hereinafter called the "Preliminary Prospectus"; any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include the Company's most recent
annual report on Form 10-K, quarterly reports on Form 10-Q or current
reports on Form 8-K, if any, filed pursuant to Section 13 or 15(d) of the
1934 Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission. The Registration Statement and any amendment
thereto heretofore filed, at the time of filing thereof and at the time it
became effective, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933
Act and the rules and regulations of the Commission thereunder (the "1933
Act Regulations"), and did not contain an untrue statement of a material
fact or omit to state a
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material fact required to be stated therein or necessary to make the
statements therein not misleading; when (a) the Prospectus is first filed
or transmitted for filing pursuant to Rule 424, (b) prior to the Closing
Time, any amendment to the Registration Statement becomes effective
(including the filing of any document incorporated by reference in the
Registration Statement), (c) any amendment or supplement to the Prospectus
is hereafter filed with the Commission and (d) at the Closing Time, (i) the
Registration Statement as then amended as of any such time, and the
Prospectus, as then amended or supplemented as of such time, and the
Indenture will comply in all material respects with the applicable
requirements of the 1933 Act and the 1933 Act Regulations, the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and the rules and
regulations of the Commission thereunder and (ii) neither the Registration
Statement, as then amended as of such time, nor the Prospectus, as then
amended or supplemented, as of such time, will 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;
provided, however, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the 1939 Act of the Trustee
or (ii) any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through the Representatives expressly for use therein. Each of the
Preliminary Prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"), except
to the extent permitted by the rules and regulations governing EDGAR.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "described," "disclosed,"
"included," "referred to" or "stated" in the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement to
any thereof (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment
or supplement to any thereof, as the case may be, and each such reference
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to EDGAR and Regulation S-T.
(ii) Incorporated Documents. The documents incorporated by reference
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in the Prospectus, when they were filed with the Commission, complied in
all material respects to the requirements of the 1934 Act and the rules and
regulations of the
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Commission thereunder (the "1934 Act Regulations"), and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the 1934 Act and the 1934 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
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the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statements
of operations, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The pooling of interests method of accounting has been
properly applied under GAAP to the combination of the financial statements
of the Company and ZERO Corporation. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial statements, if any,
and the related notes thereto included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects
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of the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock in amounts per share that
are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Status of the Company. The Company has been duly organized
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and is validly existing as a corporation in active status under the laws of
the State of Wisconsin and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing (or equivalent status) in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing (or
equivalent status) would not result in a Material Adverse Effect.
(vii) Status of Subsidiaries. Each significant subsidiary of the
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Company listed on Schedule C hereto (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing (or equivalent status) under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing (or equivalent status) in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing (or equivalent
status) would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable (except as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted) and is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectus in the
Company's consolidated financial
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statements (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus). The shares of issued
and outstanding capital stock have been duly authorized and validly issued
and are fully paid and non-assessable (except as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted); none of the outstanding shares of capital stock
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
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authorized by the Company and duly qualified under the 1939 Act and, when
duly executed and delivered by the Company and the Trustee, will constitute
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
(xi) Authorization of the Securities. The Securities have been
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duly authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(xii) Description of the Securities and the Indenture. The
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Securities and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Prospectus and will
be in substantially the respective forms filed or incorporated by
reference, as the case may be, as exhibits to the Registration Statement.
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(xiii) Absence of Defaults and Conflicts. Neither the Company nor
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any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults as would not result
in a Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, Repayment Events or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-
laws of the Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their assets, properties or operations.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment (through acceleration or otherwise) of
all or a portion of such indebtedness by the Company or any Subsidiary
other than the intended repayment of indebtedness described under "Use of
Proceeds" in the Prospectus.
(xiv) Absence of Labor Disputes. No labor dispute with the
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employees of the Company or any Subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, could reasonably be expected to result in a Material
Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit,
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proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, do-
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mestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
Subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents
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which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvii) Possession of Intellectual Property. The Company and its
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Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xix) Registration Rights. There are no contracts, agreements or
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understandings between the Company and any person granting such person the
right to
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require the Company to file a registration statement under the 1933 Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the 1933 Act.
(xx) Possession of Licenses and Permits. The Company and its
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Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxi) Title to Property. The Company and its Subsidiaries have
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good and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease, except in any such case as could not reasonably be
expected to result in a Material Adverse Effect.
(xxii) Investment Company Act. The Company is not, and upon the
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issuance and sale of the Securities as herein contemplated and the
application of the net pro-
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ceeds therefrom as described in the Prospectus will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxiii) Environmental Laws. Except as described in the
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Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, ground-water, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiv) The Company is taking reasonable measures to update and
upgrade its operating systems and software to correct for any dating system
flaws which may potentially cause errors in such systems or software due to
the advent of the year 2000 and the description with respect thereto in the
Prospectus is accurate and complete in all material respects.
(b) Officer's Certificates. Any certificate signed by any
----------------------
officer of the Company or any of its Subsidiaries delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
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(a) Securities. On the basis of the representations and warranties
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herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price and with the terms set forth in Schedule B, the aggregate principal
amount of Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional amount of Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
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certificates for, the Securities shall be made at the offices of the
Representatives, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available or next day funds as set forth in Schedule B to a bank account(s)
designated by the Company against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to
purchase.
(c) Denominations; Registration. Certificates for the Securities
---------------------------
shall be in such principal amounts and registered in such names as the
Representatives may request in writing at least one full business day before the
Closing Time. The certificates for the Securities will be made available for
examination and packaging by the Representatives in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time.
(d) Engagement of Independent Underwriter. (i) The Company hereby
-------------------------------------
confirms its engagement of the services of the Independent Underwriter as, and
the Independent Underwriter hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 with respect to the offering and sale of the
Securities.
<PAGE>
-12-
(ii) The Independent Underwriter hereby represents and warrants to,
and agrees with, the Company and the Underwriters that with respect to the
offering and sale of the Securities as described in the Prospectus:
(A) The Independent Underwriter constitutes a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule 2720;
(B) The Independent Underwriter has participated in the preparation
of the Registration Statement and the Prospectus and has exercised the
usual standards of "due diligence" in respect thereto;
(C) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the 1933 Act
specifically including those inherent in Section 11 thereof;
(D) Based upon (I) a review of the Company, including an examination
of the Registration Statement, information regarding the earnings, assets,
capital structure and growth rate of the Company and other pertinent
financial and statistical data, (II) inquiries of and conferences with the
management of the Company and its counsel and independent public
accountants regarding the business and operations of the Company, (III)
consideration of the prospects for the industry in which the Company
competes, estimates of the business potential of the Company, assessments
of its management, the general condition of the securities markets, market
prices of the capital stock and debt securities of, and financial and
operating data concerning, companies believed by the Independent
Underwriter to be comparable to the Company with debt securities of
maturity and seniority similar to the Securities and the demand for
securities of comparable companies similar to the Securities, and (IV) such
other studies, analyses and investigations as the Independent Underwriter
has deemed appropriate, and assuming that the offering and sale of the
Securities is made as contemplated herein and in the Prospectus, the
Independent Underwriter recommends, as of the date of the execution and
delivery of this Agreement, that the yield on the Securities be not less
than 8.75% (corresponding to an initial public offering price of 100.00%),
which minimum yield should in no way be considered or relied upon as an
indication of the value of the Securities; and
(E) Subject to the provisions of Section 5 hereof, the Independent
Underwriter will furnish to the Underwriters at the Closing Time a letter,
dated the Closing Time, in form and substance satisfactory to the
Underwriters, to the effect of clauses (A) through (D) above.
<PAGE>
-13-
(iii) The Independent Underwriter hereby agrees with the Company and
the Underwriters that, as part of its services hereunder, in the event of any
amendment or supplement to the Prospectus, the Independent Underwriter will
render services as a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 with respect to the offering and sale of the
Securities as described in the Prospectus as so amended or supplemented that are
substantially the same as those services being rendered with respect to the
offering and sale of the Securities as described in the Prospectus (including
those described in subsection (ii) above).
(iv) The Company, the Underwriters and the Independent Underwriter
agree to comply in all material respects with all of the requirements of Rule
2720 applicable to them in connection with the offering and sale of the
Securities. The Company agrees to cooperate with the Underwriters and the
Independent Underwriter to enable the Underwriters to comply with Rule 2720 and
the Independent Underwriter to perform the services contemplated by this
Agreement.
(v) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $10,000 at the
Closing Time. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this Agreement
and the services to be rendered hereunder as the Independent Underwriter.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
--------------------------------------------------------------
The Company, subject to Section 3(b), will prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to Rule
424(b) within the time prescribed under Rule 424(b) and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems neces-
<PAGE>
-14-
sary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
--------------------
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment, supplement or revision to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
-----------------------------------
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
------------------------
Underwriter, without charge, as many copies of each Preliminary Prospectus
relating to the Securities as such Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
-----------------------------------------
comply with the 1933 Act and the 1933 Act Regulations and the 1934
<PAGE>
-15-
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
-----------------------
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
--------
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
<PAGE>
-16-
(i) Listing. The Company will use its best efforts to effect the
-------
listing of the Securities on any such stock exchange or exchanges as are
set forth in Schedule B hereto.
(j) Restriction on Sale of Securities. During a period of 90 days
---------------------------------
following the Closing Time, the Company will not, without the prior written
consent of Goldman, Sachs & Co., sell or contract to sell or announce the
offering of, any debt securities of the Company with characteristics and
terms similar to those of the Securities.
(k) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
--------
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits and the Form T-1) as originally
filed and of each amendment thereto, (ii) the preparation, printing,
reproduction and delivery to the Underwriters of this Agreement, any Agreement
among Underwriters, the Indenture and such other documents as may be required
in connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith, (vi) the printing and delivery to the
Underwriters of copies of each Preliminary Prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (viii) any fees payable in
connection with the rating of the Securities, (ix) the fees and expenses
incurred in connection with the listing, if applicable, of the Securities on any
such exchange or exchanges as are listed on Schedule B hereto, and (x) the fees
and expenses of the Independent Underwriter.
(b) Termination of Agreement. If this Agreement is terminated by the
------------------------
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
<PAGE>
-17-
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1(a) hereof
or in certificates of any officer of the Company or any Subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Prospectus shall
---------------------------------------
have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the 1933 Act
Regulations and in accordance with Section 3(a) hereof; and no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission.
(b) Opinion of Counsel for Company. At Closing Time, the
------------------------------
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Quarles & Brady LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters and addressed to the Underwriters to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of
the State of Wisconsin and the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Representatives, or may arrange for the
Representatives to receive separate opinions of counsel satisfactory to the
Representatives as to such matters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its Subsidiaries and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
-----------------------------------
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Cahill Gordon & Reindel, the counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters and addressed to the Underwriters with respect to such
matters as the Representatives may reasonably request. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent
<PAGE>
-18-
they deem proper, upon certificates of officers of the Company and its
Subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
---------------------
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are, to the knowledge of
such officers, contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
---------------------------
Agreement, the Representatives shall have received from the Company's
independent public accountants a letter dated such date, in form and
substance satisfactory to the Representatives (substantially in the form of
Exhibit B hereto), together with signed or reproduced copies of such letter
for each of the other Underwriters and addressed to the Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
-------------------------
shall have received from the Company's independent public accountants a
letter, dated as of Closing Time, together with signed or reproduced copies
of such letter for each of the other Underwriters and addressed to the
Underwriters, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be
---------------------
rated by each of Moody's Investor's Service Inc. and Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. as set
forth in Schedule B hereto. Since the date of this Agreement, there shall
not have occurred a downgrading in the rating
<PAGE>
-19-
assigned to the Securities or any of the Company's other debt securities by
any "nationally recognized statistical rating agency," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act, and no such organization shall have publicly announced that is has
under surveillance or review its rating of the Securities or any of the
Company's other debt securities.
(h) Approval of Listing. At Closing Time, the Securities shall have
-------------------
been approved for listing on such exchange or exchanges, if any, as are
listed on Schedule B hereto, subject only to official notice of issuance.
(i) Additional Documents. At Closing Time counsel for the
--------------------
Underwriters shall have been furnished with such documents and opinions as
they reasonably may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(j) Termination of Agreement. If any condition specified in this
------------------------
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time and such termination shall
be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to
<PAGE>
-20-
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above;
provided, however, that (i) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto) and (ii) the Company
shall not be liable to any Underwriter (or any person controlling such
Underwriter) under the indemnity agreement in this subsection (a) with respect
to any Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the 1933 Act, if the Company had previously furnished copies
thereof to such Underwriter in the quantity requested, and the loss, claim,
damage or liability of such Underwriter arises from an untrue statement or
omission of a material fact or an allegedly untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was corrected in the
Prospectus (excluding documents incorporated by reference) or in the Prospectus
as then amended or supplemented (excluding documents incorporated by reference)
and all changes from the Preliminary Prospectus made to such Prospectus were
made known to the Underwriters by the Company. In addition to and without
limitation of the Company's obligation to indemnify the Independent Underwriter
as an Underwriter, the Company also agrees to indemnify and hold harmless the
Independent Underwriter and each person who controls the Independent Underwriter
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
<PAGE>
-21-
1934 Act, from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, incurred as a result of the Independent
Underwriter's participation in connection with the offering of the Securities as
such, if any, to the extent not already indemnified as an Underwriter. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Indemnification of Company, Directors and Officers. Each
--------------------------------------------------
Underwriter and the Independent Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives or by the
Independent Underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment thereto) or such Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided that, if indemnity is sought by the Independent Underwriter pursuant to
Section 6(a), then, in addition to the fees and expenses of such counsel for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one counsel (in addition to any local
counsel) separate from its own counsel and that of the other indemnified
<PAGE>
-22-
parties for the Independent Underwriter in its capacity as a "qualified
independent underwriter" and all persons, if any, who control the Independent
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances if, in the judgment of the Independent Underwriter,
there may exist a conflict of interest between the Independent Underwriter and
the other indemnified parties. Any such separate counsel for the Independent
Underwriter and such control persons of the Independent Underwriter shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters or the Independent Underwriter, as
the case may be, on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) 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 of the Underwriters or the Independent
Underwriter, as the case
<PAGE>
-23-
may be, on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters or the Independent Underwriter, as the case may be, on the other
hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, and the fee payable to the Independent Underwriter pursuant to
the first sentence of Section 2(d)(v) hereof, respectively, bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company on the one hand and the Underwriters
or the Independent Underwriter, as the case may be, on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by an
Underwriter in writing through the Representatives or by the Independent
Underwriter, as the case may be, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Underwriters and the Independent Underwriter agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the Underwriters and the
Independent Underwriter were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, neither the
Underwriters nor the Independent Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which any such Underwriter or the Independent
Underwriter, as the case may be, has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
<PAGE>
-24-
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or the Independent Underwriter, as the case may be, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Underwriter, or the Independent
Underwriter, as the case may be, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
--------------------
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq Stock Market has been suspended or
materially limited (other than to provide for an orderly market), or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said ex-
<PAGE>
-25-
changes or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
-----------
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail at Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such principal amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of the Defaulted Securities
does not exceed 10% of the aggregate principal amount of the Securities to
be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased on such date, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement either (i) the Representatives or (ii) the Company
shall have the right to postpone Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
<PAGE>
-26-
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at the address set forth
on Schedule B; notices to the Company shall be directed to it at P.O. Box 325,
Milwaukee, Wisconsin 53201, attention of Chief Financial Officer.
SECTION 12. Parties. This Agreement shall each inure to the benefit
-------
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
------------------
herein are for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
S-1
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Underwriters.
Very truly yours,
APPLIED POWER INC.
By:/s/ Robert C. Arzbaecher
----------------------------
Name: Robert C. Arzbaecher
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
S-2
The foregoing Agreement is hereby con-
firmed and accepted as of the date first
above written.
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
NationsBanc Montgomery Securities LLC
By: /s/ Goldman, Sachs & Co.
--------------------------
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE A
----------
APPLIED POWER INC.
Debt Securities
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------
<S> <C>
Goldman, Sachs & Co. $120,000,000
Credit Suisse First Boston Corporation 50,000,000
NationsBanc Montgomery Securities LLC 30,000,000
------------
Total.......................................... $200,000,000
============
</TABLE>
<PAGE>
SCHEDULE B
----------
APPLIED POWER INC.
Debt Securities
TITLE: 8.75% Senior Subordinated Notes due 2009.
PRINCIPAL AMOUNT: $200,000,000.
INTEREST: 8.75% per annum, from April 1, 1999, payable semiannually
on April 1 and October 1, commencing October 1, 1999, to holders of record on
the preceding March 15 or September 15, as the case may be.
MATURITY: April 1, 2009.
OPTIONAL REDEMPTION: Three year equity claw for 35% at 108.75% on or
before April 1, 2002.
CALLABLE: April 1, 2004 at 104.375%,
April 1, 2005 at 102.916%,
April 1, 2006 at 101.458%, and
April 1, 2007 at 100.000%.
SINKING FUND: None.
LISTING: None.
RATING: Moody's Investor's Service Inc.: B1
Standard & Poor's Ratings Services: B+
PURCHASE PRICE: 97.50% of principal amount, plus accrued interest, if
any, from April 1, 1999.
EXPECTED REOFFERING PRICE: 100% of principal amount, subject to
change by the Representatives.
CLOSING: 9:00 A.M. on April 1, 1999, at the offices of Cahill Gordon
& Reindel, in New York, in Federal (same day) funds.
SETTLEMENT AND TRADING: Book-Entry Only via the Depository Trust
Company ("DTC"). The Securities will trade in DTC's Same Day Funds Settlement
System.
<PAGE>
NOTICES: Notices to be given to the Underwriters should be directed
to the Representatives as follows:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
NationsBanc Montgomery Securities LLC
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
The respective principal amounts of the Securities to be purchased by each of
the Underwriters are set forth opposite their names in Schedule A hereto.
<PAGE>
SCHEDULE C
----------
APPLIED POWER INC.
Debt Securities
List of Significant Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
- ------------------ -----------------------------
Applied Power Investments II Inc. Nevada
Versa Technologies, Inc. Delaware
Wright Line, Inc. Massachusetts
Zero Corporation Delaware
High Speed Production Limited United Kingdom
Vero Electronics Ltd. United Kingdom
<PAGE>
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Defined terms used herein shall have the same definitions as set forth
in the underwriting agreement (the "Agreement") to which this Exhibit A is
attached.
(i) The Company has been duly incorporated and is validly existing
as a corporation in active status under the laws of the State of Wisconsin.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Agreement.
(iii) Each Subsidiary is validly existing as a corporation in good
standing (or equivalent status) under the laws of the jurisdiction of its
incorporation, and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable (except as otherwise provided
in Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted) and, to the best of our knowledge, is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
(iv) The Agreement has been duly authorized, executed and delivered
by the Company.
(v) The Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the 1939 Act and (assuming the due
authorization, execution and delivery thereof by the Trustee) constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(vi) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, assuming that the Securities have
been duly
A-1
<PAGE>
authenticated by the Trustee in the manner described in its certificate
delivered to you today (which fact such counsel need not determine by an
inspection of the Securities), the Securities have been duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and are entitled to the benefits of the Indenture.
(vii) The Securities and the Indenture conform as to legal matters
in all material respects to the descriptions thereof contained in the
Prospectus.
(viii) The Registration Statement has been declared effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b); and,
to the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
(ix) The Registration Statement, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements, including any pro forma financial information,
and supporting schedules included therein or omitted therefrom and the Statement
of Eligibility on Form T-1 of the Trustee, as to which we express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act.
(x) The documents incorporated by reference in the Prospectus
(other than the financial statements, including any pro forma financial
information, and supporting schedules included therein or omitted therefrom, as
to which we express no opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
(xi) The information in the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of legal matters,
the Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(xii) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
A-2
<PAGE>
(xiii) All descriptions in the Registration Statement of written
contracts and other documents to which the Company or its Subsidiaries are a
party are accurate in all material respects; to the best of our knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xiv) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations and the 1939 Act, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Agreement or for the offering,
issuance, sale or delivery of the Securities.
(xvi) To the best of our knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the 1933 Act with respect to any securities of the company owned or to be owned
by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the 1933 Act.
(xvii) The execution, delivery and performance of the Agreement, the
Indenture and the Securities and the consummation of the transactions
contemplated in the Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Company with its obligations under the
Agreement, the Indenture and the Securities do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to any written contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Subsidiary is subject
(except for such conflicts, breaches, Repayment Events
A-3
<PAGE>
or defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any Subsidiary, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties, assets or operations.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
We have participated in conferences with officers and other
representatives of the Company, representatives of the Underwriters and
representatives of the independent public accountants for the Company at which
conferences the contents of the Prospectus and the Registration Statement and
related matters were discussed and, although we have not independently verified,
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, we advise you that, on the basis of the foregoing
(relying as to materiality to a certain extent upon the opinions of officers and
other representatives of the Company), no facts have come to our attention that
lead us to believe that the Registration Statement or any amendment thereto, at
the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date or as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that we express no comment with respect to the Statement of
Eligibility on Form T-1 by the Trustee or the financial statements, including
the notes thereto, or any other financial data found in or derived from the
internal accounting and other records of the Company and its Subsidiaries set
forth or referred to in the Registration Statement or the Prospectus).
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of Wisconsin and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
Such opinion shall not state that it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-4
<PAGE>
EXHIBIT B
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
------------------------------------------------------------
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the published rules and regulations thereunder; [ ]
(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for the
three month periods ended ____________ and ____________ , the three and six
month periods ended ____________ and ____________ and the three and nine
month periods ended ____________ and ____________, included or incorporated
by reference in the Registration Statement and the Prospectus
(collectively, the "10-Q Financials") , a reading of the unaudited interim
consolidated financial statements of the Company for the _____-month
periods ended ____________ and ____________, included in the Registration
Statement and the Prospectus (the "____-month financials") , a reading of
the latest available unaudited interim consolidated financial statements of
the Company, a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and the ____________ and
____________ Committees of the Company's Board of Directors and any
subsidiary committees since day after end of last audited period, inquiries
of certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a review of interim financial information
in accordance with standards established by the American Institute of
Certified Public Accountants in Statement on Auditing Standards No. 71,
Interim Financial Information ("SAS 71"), with respect to the description
of relevant periods and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us to
believe that:
(A) the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the 1934 Act and the 1934 Act Regulations applicable to unaudited
financial statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials incorporated by
reference in the Registration Statement and the Prospectus for them to
be in conformity with generally accepted accounting principles;
B-1
<PAGE>
(B) the _____-month financials included in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations applicable to unaudited interim financial
statements included in registration statements or any material
modifications should be made to the _____-month financials included in
the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;
(C) at ____________ and at a specified date not more than five
days prior to the date of this Agreement, there was any change in the
Shareholders' Equity of the Company and its subsidiaries or any
decrease in the Total Current Assets of the Company and its
subsidiaries or any increase in the Long -term Debt of the Company and
its subsidiaries, in each case as compared with amounts shown in the
latest balance sheet included in the Registration Statement, except in
each case for changes, decreases or increases that the Registration
Statement discloses have occurred or may occur; or
(D) for the period from ____________ to ____________ and for
the period from ____________ to a specified date not more than five
days prior to the date of this Agreement, there was any decrease in
Net Sales, Earnings Before Extraordinary Loss or Net Earnings, in each
case as compared with the comparable period in the preceding year,
except in each case for any decreases that the Registration Statement
discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial Data included in the Registration Statement
and a reading of the financial statements from which such data were derived,
nothing came to our attention that caused us to believe that the Selected
Financial Data included in the Registration Statement do not comply as to form
in all material respects with the disclosure requirements of Item 301 of
Regulation S-K, that the amounts included in the Selected Financial Data are not
in agreement with the corresponding amounts in the audited consolidated
financial statements for the respective periods or that the financial statements
not included in the Registration Statement from which certain of such data were
derived are not in conformity with generally accepted accounting principles;
(iv) we have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K and,
on the basis of limited procedures specified herein, nothing came to our
attention that caused us to believe that this information does not comply as to
form in all material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
B-2
<PAGE>
(v) based upon the procedures set forth in clause (ii) above, a
reading of the unaudited financial statements of the Company for the most recent
period that have not been included in the Registration Statement and a review of
such financial statements in accordance with SAS No. 71, nothing came to our
attention that caused us to believe that the unaudited amounts for Net Sales,
Net Earnings or Shareholders' Equity for the most recent period do not agree
with the amounts set forth in the unaudited consolidated financial statements
for those periods or that such unaudited amounts were not determined on a basis
substantially consistent with that of the corresponding amounts in the audited
consolidated financial statements;
(vi) we are unable to and do not express any opinion on the Pro
Forma Combining Statement of Operations (the "Pro Forma Statement") included in
the Registration Statement or on the pro forma adjustments applied to the
historical amounts included in the Pro Forma Statement; however, for purposes of
this letter we have:
(A) read the Pro Forma Statement;
(B) performed a review in accordance with SAS No. 71 of the
financial statements to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis
for their determination of the pro forma adjustments and whether the
Pro Forma Statement complies as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-
X;
(D) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the Pro Forma
Statement;
on the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe that
the Pro Forma Statement included in the Registration Statement does not comply
as to form in all material respects with the applicable requirements of Rule 11-
02 of Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;] and
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are specified herein,
and have compared certain of such items with, and have found such items to be in
agreement with, the accounting and financial records of the Company.
B-3
<PAGE>
EXHIBIT 4.1
================================================================================
APPLIED POWER INC.
DEBT SECURITIES
--------------------------------
INDENTURE
DATED AS OF APRIL 1, 1999
________________________________
THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE
================================================================================
<PAGE>
<TABLE>
<CAPTION>
PARTIAL CROSS-REFERENCE TABLE
INDENTURE SECTION TIA SECTION
<S> <C>
2.05................................................. 317(b)
2.06................................................. 312(a), 313(c)
2.11................................................. 316(a) (last sentence)
4.04................................................. 314(a)(4)
4.05................................................. 314(a)(1)
6.03................................................. 317(a)(1)
6.04................................................. 316(a)(1)(B)
6.05................................................. 316(a)(1)(A)
6.07................................................. 317(a)(1)
7.01................................................. 315(a), 315(d)
7.04................................................. 315(b)
7.05................................................. 313(a), 313(d)
7.07................................................. 310(a), 310(b)
7.09................................................. 310(a)(2)
8.02................................................. 310(a), 310(b)
10.04................................................ 316(c)
11.01................................................ 318(a)
11.02................................................ 313(c)
11.03................................................ 314(c)(1), 314(c)(2)
11.04................................................ 314(e)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 -- DEFINITIONS
<S> <C>
SECTION 1.01. Definitions...........................................................................1
SECTION 1.02. Other Definitions.....................................................................3
SECTION 1.03. Rules of Construction.................................................................4
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series....................................................................4
SECTION 2.02. Execution and Authentication..........................................................6
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other Agents.................7
SECTION 2.04. Bearer Securities.....................................................................7
SECTION 2.05. Paying Agent to Hold Money in Trust...................................................8
SECTION 2.06. Securityholder Lists..................................................................8
SECTION 2.07. Transfer and Exchange.................................................................8
SECTION 2.08. Replacement Securities................................................................9
SECTION 2.09. Outstanding Securities................................................................9
SECTION 2.10. Discounted Debt Securities............................................................9
SECTION 2.11. Treasury Securities..................................................................10
SECTION 2.12. Global Securities....................................................................10
SECTION 2.13. Temporary Securities.................................................................10
SECTION 2.14. Cancellation.........................................................................10
SECTION 2.15. Defaulted Interest...................................................................11
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee...................................................................11
SECTION 3.02. Selection of Securities to Be Redeemed...............................................11
SECTION 3.03. Notice of Redemption.................................................................11
SECTION 3.04. Effect of Notice of Redemption.......................................................12
SECTION 3.05. Payment of Redemption Price..........................................................12
SECTION 3.06. Securities Redeemed in Part..........................................................13
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities................................................................13
SECTION 4.02. Overdue Interest.....................................................................13
SECTION 4.03. No Lien Created, etc.................................................................13
SECTION 4.04. Compliance Certificate...............................................................13
SECTION 4.05. SEC Reports..........................................................................14
SECTION 4.06. Costs and Expenses of Applied Power Trusts...........................................14
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ARTICLE 5 -- SUCCESSORS
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SECTION 5.01. When Company May Merge, etc..........................................................14
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default....................................................................15
SECTION 6.02. Acceleration.........................................................................16
SECTION 6.03. Other Remedies.......................................................................17
SECTION 6.04. Waiver of Past Defaults..............................................................17
SECTION 6.05. Control by Majority..................................................................17
SECTION 6.06. Limitation on Suits..................................................................17
SECTION 6.07. Collection Suit by Trustee...........................................................18
SECTION 6.08. Priorities...........................................................................18
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee....................................................................18
SECTION 7.02. Individual Rights of Trustee.........................................................19
SECTION 7.03. Trustee's Disclaimer.................................................................19
SECTION 7.04. Notice of Defaults...................................................................19
SECTION 7.05. Reports by Trustee to Holders........................................................20
SECTION 7.06. Compensation and Indemnity...........................................................20
SECTION 7.07. Replacement of Trustee...............................................................20
SECTION 7.08. Successor Trustee by Merger, etc.....................................................21
SECTION 7.09. Trustee's Capital and Surplus........................................................21
ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance...........................................................................22
SECTION 8.02. Conditions to Defeasance.............................................................22
SECTION 8.03. Application of Trust Money...........................................................23
SECTION 8.04. Repayment to Company.................................................................23
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege.................................................................23
SECTION 9.02. Conversion Procedure.................................................................24
SECTION 9.03. Taxes on Conversion..................................................................25
SECTION 9.04. Company Determination Final..........................................................25
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer..........................................25
SECTION 9.06. Company to Provide Conversion Securities.............................................25
SECTION 9.07. Cash Settlement Option...............................................................25
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock............................26
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market Price.............27
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SECTION 9.10. Adjustment for Other Distributions...................................................28
SECTION 9.11. Voluntary Adjustment.................................................................29
SECTION 9.12. When Adjustment May Be Deferred......................................................29
SECTION 9.13. When No Adjustment Required..........................................................30
SECTION 9.14. Notice of Adjustment.................................................................30
SECTION 9.15. Notice of Certain Transactions.......................................................30
SECTION 9.16. Reorganization of the Company........................................................31
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders..........................................................31
SECTION 10.02. With Consent of Holders.............................................................31
SECTION 10.03. Compliance with Trust Indenture Act.................................................32
SECTION 10.04. Effect of Consents..................................................................32
SECTION 10.05. Notation on or Exchange of Securities...............................................33
SECTION 10.06. Trustee Protected...................................................................33
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.................................................................33
SECTION 11.02. Notices.............................................................................33
SECTION 11.03. Certificate and Opinion as to Conditions Precedent.................................34
SECTION 11.04. Statements Required in Certificate or Opinion......................................35
SECTION 11.05. Rules by Company and Agents.........................................................35
SECTION 11.06. Legal Holidays......................................................................35
SECTION 11.07. No Recourse Against Others..........................................................35
SECTION 11.08. Duplicate Originals.................................................................35
SECTION 11.09. Governing Law.......................................................................35
SIGNATURES.........................................................................................S-1
EXHIBIT A: A Form of Registered Security..........................................................A-1
EXHIBIT B: A Form of Bearer Security..............................................................B-1
Notes to Exhibits A and B
EXHIBIT C: Assignment Form........................................................................C-1
EXHIBIT D: Conversion Notice......................................................................D-1
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<PAGE>
INDENTURE dated as of April 1, 1999 between APPLIED POWER INC., a
corporation organized and existing under the laws of the State of Wisconsin
(hereinafter called the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO
("Trustee").
Each party agrees as follows for the benefit of the Holders of
the Company's debt securities issued under this Indenture:
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions.
"AFFILIATE" means any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Transfer Agent, Paying Agent,
Conversion Agent or other Agent appointed by the Company.
"APPLIED POWER TRUST" means a statutory business trust created
under Delaware law pursuant to a trust agreement executed by the Company, as
depositor of such Applied Power Trust, and the trustees of such Applied Power
Trust named therein and pursuant to a certificate of trust filed with the
Delaware Secretary of State, which Applied Power Trust exists for the purposes
of (i) issuing and selling its trust securities, (ii) using the proceeds from
the sale of such trust securities to acquire a series of Securities issued by
the Company under this Indenture and (iii) engaging in only those other
activities necessary, convenient or incidental thereto.
"AUTHORIZED NEWSPAPER" means a newspaper that is:
(1) printed in the English language or in an official language of
the country of publication;
(2) customarily published on each business day in the place of
publication; and
(3) of general circulation in the relevant place or in the
financial community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business days and in the
same or different Authorized Newspapers.
"BEARER SECURITY" means a Security payable to bearer.
"BOARD" means the Board of Directors of the Company or any
authorized committee of the Board.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of any
person and all warrants or options to acquire such capital stock.
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"COMMON STOCK" means the Class A Common Stock, par value $.20 per
share, of the Company.
"COMPANY" means the party named as such above until a successor
replaces it and thereafter means the successor.
"CONVERSION RATE" means such number or amount of shares of Common
Stock or other equity or debt securities for which $1,000 aggregate principal
amount of Securities of any series is convertible, initially as stated in the
Securities Resolution authorizing the series and as adjusted pursuant to the
terms of this Indenture and the Securities Resolution.
"COUPON" means an interest coupon for a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of
time would be, an Event of Default (as defined below).
"DISCOUNTED DEBT SECURITY" means a Security where the amount of
principal due upon acceleration is less than the stated principal amount.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Registered Security is registered and the bearer of a Bearer Security or coupon.
"INDENTURE" means this Indenture and any Securities Resolution as
amended from time to time.
"LIEN" means any mortgage, pledge, security interest or other
lien.
"OFFICER" means the Chairman, any Vice-Chairman, the President,
any Executive or Senior Vice President, any Vice-President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel
who is acceptable to the Trustee, and delivered to the Trustee. The counsel may
be an employee of or counsel to the Company or the Trustee.
"PRINCIPAL" of a debt security means the principal of the
security plus the premium, if and when applicable, on the security.
"REGISTERED SECURITY" means a Security registered as to principal
and interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the debt securities issued under this
Indenture.
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"SECURITIES RESOLUTION" means a resolution adopted by the Board
or by a committee of Officers or an Officer pursuant to Board delegation
authorizing a series or a supplemental indenture authorizing a series executed
by an authorized Officer.
"SERIES" means a series of Securities or the Securities of the
series.
"SUBSIDIARY" means a corporation a majority of whose Voting Stock
is owned by the Company or a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.
77aaa-77bbbb), as amended.
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Market Price is open for trading
or quotation.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
"TRUST OFFICER" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"TRUST SECURITIES" means securities issued by an Applied Power
Trust.
"UNITED STATES" means the United States of America, its
territories and possessions and other areas subject to its jurisdiction.
"VOTING STOCK" means capital stock having voting power under
ordinary circumstances to elect directors.
"YIELD TO MATURITY" means the yield to maturity on a Security at
the time of its issuance or at the most recent determination of interest on the
Security.
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
"ACTUAL KNOWLEDGE" 7.01
"BANKRUPTCY LAW" 6.01
"CONDITIONAL REDEMPTION" 3.04
"CONVERSION AGENT" 2.03
"CONVERSION DATE" 9.02
"CONVERSION NOTICE" 9.02
"CONVERSION RIGHT" 9.01
"CUSTODIAN" 6.01
"EVENT OF DEFAULT" 6.01
"LEGAL HOLIDAY" 11.06
"MARKET PRICE" 9.07
"PAYING AGENT" 2.03
"PRICE PER SHARE" 9.09
<PAGE>
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"REGISTRAR" 2.03
"TRANSFER AGENT" 2.03
"TREASURY REGULATIONS" 2.04
"U.S. GOVERNMENT OBLIGATIONS" 8.02
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally
accepted accounting principles in the United States;
(3) generally accepted accounting principles are those
applicable from time to time;
(4) all terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute
or defined by SEC rule under the TIA have the
meanings assigned to them by such definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in the
plural include the singular.
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be issued
under this Indenture is unlimited. The Securities may be issued from time to
time in one or more series. Each series shall be created by a Securities
Resolution that establishes the terms of the series, which may include the
following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of
calculating the interest rate or rates;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered
Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
<PAGE>
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(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by
the Company including any sinking fund;
(11) the terms of any redemption at the option of Holders;
(12) the denominations in which Securities are issuable;
(13) whether Securities will be issuable as Registered
Securities, Bearer Securities or uncertificated
Securities;
(14) whether and upon what terms Registered Securities,
Bearer Securities and uncertificated Securities may
be exchanged;
(15) whether any Securities will be represented by a
Security in global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite currency) in
which principal or interest may be paid;
(19) if payments of principal or interest may be made in a
currency other than that in which Securities are
denominated, the manner for determining such
payments;
(20) if amounts of principal or interest may be determined
by reference to an index, formula or other method,
the manner for determining such amounts;
(21) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(22) the portion of principal payable upon acceleration of a
Discounted Debt Security;
(23) whether any Events of Default or covenants in addition
to or in lieu of those set forth in this Indenture
apply;
(24) whether and upon what terms Securities may be defeased;
(25) the forms of the Securities or any coupon, which may be
in the form of Exhibit A or B;
(26) any terms that may be required by or advisable under
U.S. or other applicable laws or regulations;
<PAGE>
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(27) whether and upon what terms the Securities will be
convertible into or exchangeable for Common Stock of
the Company or other equity or debt securities, which
may include the terms provided in Article 9;
(28) the ranking of the Securities, including the relative
degree, if any, to which the Securities of such
series shall be subordinated to one or more other
series of Securities in right of payment, whether
outstanding or not;
(29) any provisions relating to extending or shortening
the date on which the principal and premium, if any,
of the Securities of such series is payable;
(30) any provisions relating to the deferral of payment of
any interest;
(31) if such Securities are to be issued to an Applied
Power Trust, the forms of the related trust agreement
and guarantee agreement relating thereto;
(32) the additions or changes, if any, to this Indenture
with respect to the Securities of such series as
shall be necessary to permit or facilitate the
issuance of such Securities to an Applied Power
Trust; and
(33) any other terms not inconsistent with this Indenture.
All Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series.
The creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An Officer
shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no
longer holds that office at the time the Security is authenticated or delivered,
the Security and coupons shall nevertheless be valid.
A Security and its coupons shall not be valid until the Security
is authenticated by the manual or facsimile signature of the Registrar. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security shall be dated the date of its original
issuance or as provided in the Securities Resolution.
Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued without the
signatures or seal contemplated by this Section 2.02.
<PAGE>
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SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other
Agents.
The Company shall maintain an office or agency where Securities
may be authenticated ("Registrar"), where Securities may be presented for
registration of transfer or for exchange ("Transfer Agent"), where Securities
may be presented for payment ("Paying Agent") and where Securities may be
presented for conversion ("Conversion Agent"). Whenever the Company must issue
or deliver Securities pursuant to this Indenture, the Registrar shall
authenticate the Securities at the Company's request. The Transfer Agent shall
keep a register of the Securities and of their transfer and exchange.
The Trustee shall be, and is hereby appointed as, Registrar. The
Company may appoint more than one Transfer Agent, Paying Agent or Conversion
Agent or other Agent for a series. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the Company does
not appoint or maintain a Transfer Agent, Paying Agent or Conversion Agent for a
series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or exchanges of
and payments on Bearer Securities. Therefore, except as provided below:
(1) Bearer Securities will be offered, sold or delivered
only outside the United States and will be delivered
in connection with their original issuance only upon
presentation of a certificate in a form prescribed by
the Company to comply with U.S. laws and regulations.
(2) Bearer Securities will not be issued in exchange for
Registered Securities.
(3) All payments of principal and interest (including
original issue discount) on Bearer Securities will be
made outside the United States by a Paying Agent
located outside the United States unless the Company
determines that:
(A) such payments may not be made by such Paying
Agent because the payments are illegal or
prevented by exchange controls as described
in Treasury Regulation ss. 1.163-5(c)(2)(v);
and
(B) making the payments in the United States would
not have an adverse tax effect on the Company.
If there is a change in the relevant provisions of U.S. laws
or Treasury Regulations or the judicial or administrative interpretation
thereof, a restriction set forth in paragraph (1), (2) or (3) above will not
apply to a series if the Company determines that the relevant provisions no
longer apply to the series or that failure to comply with the relevant
provisions would not have an adverse tax effect on the Company or on
Securityholders or cause the series to be treated as "registration-required"
obligations under U.S. law.
The Company shall notify the Trustee of any determinations
by the Company under this Section.
<PAGE>
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"TREASURY REGULATIONS" means regulations of the U.S. Treasury
Department under the Internal Revenue Code of 1986, as amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series other
than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of the persons entitled thereto all money held by the Paying
Agent for the payment of principal of or interest on the series, and will notify
the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying
Agent to pay all money so held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent shall have no further liability for the
money.
If the Company or an Affiliate acts as Paying Agent for a series,
it shall segregate and hold as a separate trust fund all money held by it as
Paying Agent for the series.
The Company may elect not to exchange or register the transfer of
any Security for a period of 15 days before a selection of Securities to be
redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Transfer Agent, the Company shall
furnish to the Trustee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders of Registered Securities and
Holders of Bearer Securities whose names are on the list referred to below.
The Transfer Agent shall keep a list of the names and addresses of
Holders of Bearer Securities who file a request to be included on such list. A
request will remain in effect for two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a notice
to all Holders of Registered Securities of a series, it also shall mail the
notice to Holders of Bearer Securities of the series whose names are on the
list.
Whenever the Company is required to publish a notice to all
Holders of Bearer Securities of a series, it also shall mail the notice to such
of them whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to the
Transfer Agent with a request to register a transfer or to exchange them for an
equal principal amount of Registered Securities of other denominations of the
same series, the Transfer Agent shall register the transfer or make the exchange
if its requirements for such transactions are met. Where Bearer Securities of a
series are presented to the Transfer Agent with a request to exchange them for
an equal principal amount of Bearer Securities of other denominations of the
same series, the Transfer Agent shall make the exchange if its requirements for
such transactions are met.
<PAGE>
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The Transfer Agent may require a Holder to pay a sum sufficient to
cover any taxes imposed on a transfer or exchange.
If a series provides for Registered and Bearer Securities and for
their exchange, Bearer Securities may be exchanged for Registered Securities and
Registered Securities may be exchanged for Bearer Securities as provided in the
Securities or the Securities Resolution if the requirements of the Transfer
Agent for such transactions are met and in the case of the exchange of
registered securities for bearer securities if Section 2.04 permits the
exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has been
lost, destroyed or wrongfully taken, then, in the absence of notice to the
Company or the Trustee that the Security or coupon has been acquired by a bona
fide purchaser, the Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and
any taxes for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those, if
any, on the replaced Security.
Every replacement Security or coupon is an additional obligation
of the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Registrar except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to
be outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease
to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or
an Affiliate holds the Security.
SECTION 2.10. Discounted Debt Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent, the
principal amount of a Discounted Debt Security shall be the amount of principal
that would be due as of the date of such determination if payment of the
Security were accelerated on that date.
<PAGE>
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SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or an Affiliate shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Securities Resolution so provides, the Company may issue
some or all of the Securities of a series in temporary or permanent global form.
A global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that amount
of Securities of a series as specified in the global Security or as endorsed
thereon from time to time. At the 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 Securities Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between the
depository and beneficial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for delivery,
the Company may use temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Temporary Securities
may be in global form. Temporary Bearer Securities may have one or more coupons
or no coupons. Without unreasonable delay, the Company shall deliver definitive
Securities in exchange for temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Registrar
for cancellation. The Transfer Agent and the Paying Agent shall forward to the
Registrar any Securities and coupons surrendered to them for payment, exchange
or registration of transfer. The Registrar shall cancel all Securities or
coupons surrendered for payment, registration of transfer, exchange or
cancellation. The Registrar also will cancel all Bearer Securities and unmatured
coupons unless the Company requests the Registrar to hold the same for
redelivery. Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy cancelled
Securities and coupons unless the Company otherwise directs.
Unless the Securities Resolution otherwise provides, the Company
may not issue new Securities to replace Securities that the Company has paid or
that the Company has delivered to the Registrar for cancellation.
<PAGE>
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SECTION 2.15. Defaulted Interest.
If the Company defaults in a payment of interest on Registered
Securities, it need not pay the defaulted interest to Holders on the regular
record date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest, or the Company may pay defaulted
interest in any other lawful manner.
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall
be redeemable in accordance with their terms and, unless the Securities
Resolution otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall
notify the Trustee of the redemption date and the principal amount of Securities
to be redeemed. The Company shall notify the Trustee at least 45 days before the
redemption date unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it may reduce the
principal amount of Securities required to be redeemed to the extent that it is
permitted a credit against such redemption requirement by the terms of the
Securities Resolution and notifies the Trustee of the amount of such credit and
the basis for it. If the reduction is based on a credit for acquired or redeemed
Securities that the Company has not previously delivered to the Registrar for
cancellation, the Company shall deliver the Securities at the same time as the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be redeemed,
the Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities of the series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Registered Securities whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company shall publish
a notice of redemption in an Authorized Newspaper as provided in the Securities.
A notice shall identify the Securities of the series to be
redeemed and shall state:
(1) the redemption date;
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(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together with all
coupons, if any, maturing after the redemption date, must
be surrendered to the Paying Agent to collect the
redemption price;
(5) that interest on Securities called for redemption ceases
to accrue on and after the redemption date;
(6) whether the redemption by the Company is mandatory or
optional; and
(7) whether the redemption is conditional as provided in
Section 3.04, and if so, the terms of the conditions,
and that, if the conditions are not satisfied or are
not waived by the Company, the Securities will not be
redeemed and such a failure to redeem will not
constitute an Event of Default.
A redemption notice given by publication need not identify
Registered Securities to be
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is given,
Securities called for redemption become due and payable on the redemption date
at the redemption price stated in the notice.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as described
in such notice ("Conditional Redemption"), and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the redemption
have occurred on or before such date or have been waived by the Company in its
sole discretion.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall deposit with
the Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder on
the redemption date the redemption price and accrued interest to such date,
except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Registered
Securities if the redemption date occurs on an interest payment
date; and
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(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender of
such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security are
void absent a payment default on that date. Nevertheless, if a Holder surrenders
for redemption a Bearer Security missing any such coupons, the Company may
deduct the face amount of such coupons from the redemption price. If thereafter
the Holder surrenders to the Paying Agent the missing coupons, the Company will
return the amount so deducted. The Company may waive surrender of the missing
coupons if it receives an indemnity bond satisfactory to the Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall deliver to the Holder a new Security of the same series equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series in
accordance with the terms of the Securities for the series, any related coupons,
and this Indenture. Principal and interest on a series shall be considered paid
on the date due if the Paying Agent for the series holds on that date money
sufficient to pay all principal and interest then due on the series.
SECTION 4.02. Overdue Interest.
Unless the Securities Resolution otherwise provides, the Company
shall pay interest on overdue principal of a Security of a series at the rate
(or Yield to Maturity in the case of a Discounted Debt Security) borne by the
series; the Company shall pay interest on overdue installments of interest at
the same rate or Yield to Maturity to the extent lawful.
SECTION 4.03. No Lien Created, etc.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (determined without
regard to any period of grace or requirement of notice provided herein).
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Any other obligor on the Securities shall also deliver to the
Trustee such a certificate as to its compliance with this Indenture within 120
days after the end of each of its fiscal years.
The certificates need not comply with Section 11.04.
SECTION 4.05. SEC Reports.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents, and other reports (or such portions of the
foregoing as the SEC may prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Any other obligor on the Securities shall do likewise as to the
above items which it is required to file with the SEC pursuant to those
sections.
SECTION 4.06. Costs and Expenses of Applied Power Trusts.
The Company shall pay all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of any Applied Power
Trust (including, but not limited to, all costs and expenses relating to the
organization of the applicable Applied Power Trust, the fees and expenses of any
trustee or trustees for the Applied Power Trust and all costs and expenses
relating to the operation of the applicable Applied Power Trust (other than with
respect to the Trust Securities)) and to pay any and all taxes, duties,
assessments or other governmental charges of whatever nature (other than United
States withholding taxes) imposed by the United States or any other taxing
authority, so that the net amounts received and retained by the applicable
Applied Power Trust after paying such fees, expenses, debts and obligations will
be equal to the amounts the applicable Applied Power Trust would have received
and retained had no such fees, expenses, debts and obligations been incurred by
or imposed on the applicable Applied Power Trust. The foregoing obligations of
the Company are for the benefit of, and shall be enforceable by, any person to
whom such fees, expenses, debts and obligations are owed (each, a "Creditor"),
whether or not such Creditor has received notice thereof. Any such Creditor may
enforce such obligations of the Company directly against the Company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against the applicable Applied Power Trust or any other person
before proceeding against the Company. The Company shall execute such additional
agreements as may be necessary to give full effect to the foregoing.
ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Securities Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into, or transfer all
or substantially all of its assets to, any person in any transaction in which
the Company is not the survivor unless:
(1) the person is organized under the laws of the United
States or a State thereof or is organized under the
laws of a foreign jurisdiction and consents to the
jurisdiction of the courts of the United States or a
State thereof;
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(2) the person assumes by supplemental indenture all the
obligations of the Company under this Indenture, the
Securities and any coupons;
(3) all required approvals of any regulatory body having
jurisdiction over the transaction shall have been
obtained;
(4) immediately after the transaction no Default exists; and
(5) the Company provides an Officers' Certificate and an
Opinion of Counsel to the effect that all the
provisions in this Section 5.01 have been complied
with.
The successor shall be substituted for the Company, and
thereafter all obligations of the Company under this Indenture, the Securities
and any coupons shall terminate.
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Securities Resolution otherwise provides, an "EVENT
OF DEFAULT" on a series occurs if:
(1) the Company defaults in any payment of interest on
any Securities of the series when the same becomes
due and payable and the Default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal
and premium, if any, of any Securities of the series
when the same becomes due and payable at maturity or
upon redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction
of any sinking fund obligation with respect to any
Securities of the series as required by the
Securities Resolution establishing such series;
(4) the Company defaults in the performance of any of its
other agreements applicable to the series and the
Default continues for 60 days after the notice
specified below;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian for it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
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(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian for the Company or for all
or substantially all of its property, or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect
for 60 days; or
(7) there occurs any other Event of Default provided for in
the series.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the series notify
the Company of the Default and the Company does not cure the Default within the
time specified after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of Default."
If Holders notify the Company of a Default, they shall notify the Trustee at the
same time .
The failure to redeem any Security subject to a Conditional
Redemption is not an Event of Default if any event on which such redemption is
so conditioned does not occur and is not waived before the scheduled redemption
date.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to an Applied Power
Trust, so long as any of the related preferred securities of such Applied Power
Trust remain outstanding, if, upon such Event of Default, the Trustee or the
Holders of not less than 25% in aggregate principal amount of such series fail
to declare the principal of all the Securities of such series to be so
immediately due and payable, the holders of 25% in aggregate liquidation amount
of such preferred securities then outstanding shall have such right) by notice
to the Company and the Trustee, may declare the principal of and accrued
interest on all the Securities of the series to be due and payable immediately.
Discounted Debt Securities may provide that the amount of principal due upon
acceleration is less than the stated principal amount.
The Holders of a majority in principal amount of the series by
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default on the series have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration;
provided, that in the case of a series issued to an Applied Power Trust, so long
as any of the related preferred securities of such Applied Power Trust remain
outstanding, the holders of a majority in aggregate liquidation amount of such
preferred securities then outstanding shall also have such right to rescission
of acceleration and its consequences with respect to such series, subject to the
same conditions set forth above.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a series, the
Trustee may pursue any available remedy to collect principal or interest then
due on the series, to enforce the performance of any provision applicable to the
series, or otherwise to protect the rights of the Trustee and Holders of the
series.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or coupons or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Unless the Securities Resolution otherwise provides, the Holders
of a majority in principal amount of a series (or, in the case of a series
issued to an Applied Power Trust, so long as any of the related preferred
securities of such Applied Power Trust remain outstanding, the holders of a
majority in aggregate liquidation amount of such preferred securities then
outstanding) by notice to the Trustee may waive an existing Default on the
series and its consequences except:
(1) a Default in the payment of the principal of or
interest on the series, or
(2) a Default in respect of a provision that under
Section 10.02 cannot be amended without the consent
of each Securityholder affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred on the
Trustee, with respect to such series. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or if the Trustee in
good faith shall determine that the action or direction might involve the
Trustee in personal liability.
SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with respect to
the series only if:
(1) the Holder gives to the Trustee notice of a
continuing Event of Default on the series;
(2) the Holders of at least 25% in principal amount of
the series make a request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
indemnity; and
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(5) during such 60-day period the Holders of a majority
in principal amount of the series do not give the
Trustee a direction inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
In the case of a series issued to an Applied Power Trust, any
holder of the related preferred securities of such Applied Power Trust shall
have the right, upon the occurrence and continuance of an Event of Default
described in Sections 6.01(1) and (2) hereof with respect to such series, to
institute a suit directly against the Company to enforce payment to such holder
of the principal of, and premium, if any, and interest on, the Securities having
a principal amount equal to the aggregate liquidation amount of such preferred
securities held by such holder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal or
sinking fund specified in Section 6.01(1), (2) or (3) occurs and is continuing
on a series, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.06;
Second: to Securityholders of the series for amounts due and
unpaid for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable for
principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to
Securityholders.
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may rely 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.
(2) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of
Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in
reliance on the Certificate or Opinion.
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(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any
agent appointed with due care.
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section
6.05.
(5) The Trustee may refuse to perform any duty or
exercise any right or power which it reasonably
believes may expose it to any loss, liability or
expense unless it receives indemnity satisfactory to
it against such loss, liability or expense.
(6) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree
with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the
extent required by law.
(7) The Trustee shall have no duty with respect to a
Default unless a Trust Officer has actual knowledge
of the Default. As used herein, the term "actual
knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation
with regard thereto.
(8) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it
believes to be authorized and within its powers.
(9) Any Agent shall have the same rights and be protected
to the same extent as if it were Trustee.
(10) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers
and duties hereunder.
SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities or any coupons; it shall not be accountable
for the Company's use of the proceeds from the Securities; it shall not be
responsible for any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for determining
whether the form and terms of any Securities or coupons were established in
conformity with this Indenture; it shall not be responsible for determining
whether any Securities were issued in accordance with this Indenture; and it
shall not be responsible for the acts or omissions of any other Trustees
appointed hereunder.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if the
Trustee has actual knowledge of such Default, the Trustee shall mail a notice of
the Default within 90 days after it occurs to Holders of Regis-
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tered Securities of the series. Except in the case of a Default in payment on a
series, the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold notice of a
Default described in Section 6.01(4) until at least 60 days after it occurs.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA ss. 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before May 15th of each
year.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which any
Securities are listed. The Company shall notify the Trustee when any Securities
are listed on a stock exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or
liability incurred by it. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall 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 consent.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(5) or (6) occurs, such expenses and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
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The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee with the
Company's consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA (S) 310(a)
or (S) 310(b) or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of
the Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(5) or
(6) occurs with respect to the Trustee.
The Company also may remove the Trustee with or without cause if
the Company so notifies the Trustee three months in advance and if no Default
occurs during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b)
or with Section 7.09, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published report
of financial condition.
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ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with their
terms and, unless the Securities Resolution otherwise provides, in accordance
with this Article.
The Company at any time may terminate as to a series all of
its obligations under this Indenture, the Securities of the series and any
related coupons ("legal defeasance option"). The Company at any time may
terminate as to a series its obligations, if any, under any restrictive
covenants which may be applicable to a particular series ("covenant defeasance
option"). However, in the case of the legal defeasance option, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.06, 7.07 and 8.04
shall survive until the Securities of the series are no longer outstanding;
thereafter the Company's obligations in Section 7.06 shall survive.
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its legal defeasance option, a series may not be accelerated
because of an Event of Default. If the Company exercises its covenant defeasance
option, a series may not be accelerated by reference to any restrictive
covenants as to which the covenant defeasance option applicable to such series
has been so exercised.
The Trustee upon request shall acknowledge in writing the
discharge of those obligations or restrictions that the Company terminates by
defeasance.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defeasance
option or its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with the
Trustee or another trustee money or U.S. Government
Obligations;
(2) the Company delivers to the Trustee a certificate
from a nationally recognized firm of independent
accountants expressing their opinion that the
payments of principal and interest when due on the
deposited U.S. Government Obligations without
reinvestment plus any deposited money without
investment will provide cash at such times and in
such amounts as will be sufficient to pay principal
and interest when due on all the Securities of the
series to maturity or redemption, as the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under any
other agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a
conflicting interest under TIA (S) 310(a) or (S) 310(b)
as to another series;
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(6) the Company delivers to the Trustee an Opinion of
Counsel to the effect that Holders of the series will
not recognize income, gain or loss for Federal income
tax purposes as a result of the defeasance;
(7) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 6.01(5)
or (6) occurs that is continuing at the end of the
period; and
(8) the Company provides an Officers' Certificate and an
Opinion of Counsel to the effect that all conditions
precedent pursuant to this Section 8.02 have been
satisfied.
Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of (i) the
United States or (ii) an agency or instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.02. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
and interest on Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Company, Securityholders
entitled to the money must look to the Company for payment as unsecured general
creditors unless an abandoned property law designates another person.
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege.
If the Securities Resolution establishing the terms of a series of
securities so provides, Securities of any series may be convertible at the
option of the holders into or for Common Stock or other equity or debt
securities (a "Conversion Right"). The Securities Resolution may establish,
among other things, the Conversion Rate, provisions for adjustments to the
Conversion Rate and limitations upon exercise of the Conversion Right.
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Unless the Securities Resolution otherwise provides, a Holder may
convert a portion of a Security if the portion is $1,000 or an integral
multiples thereof. Provisions of this Indenture that apply to the conversion of
the aggregate principal amount of a Security also apply to conversion of a
portion of it.
The Securities Resolution providing for Securities with a
Conversion Right may establish any terms in addition to, or other than
(including terms inconsistent with), those set forth in this Article 9 with
respect to the conversion of the Securities established thereby (other than
those of Section 9.16).
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all requirements in
the Securities or the Securities Resolution and (i) complete and manually sign
the conversion notice (the "Conversion Notice") provided for in the Securities
Resolution or the Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other office or agency
maintained for such purpose, (ii) surrender the Security to the Conversion Agent
or at such other office or agency by physical delivery, (iii) if required,
furnish appropriate endorsements and transfer documents, and (iv) if required,
pay all transfer or similar taxes. The date on which such notice shall have been
received by and the Security shall have been so surrendered to the Conversion
Agent is the "Conversion Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conversion of
Securities not later than the fifth business day following the Conversion Date
in respect of the cash portion elected to be delivered in lieu of the securities
into which the Security is convertible and not later than the seventh business
day following the Conversion Date in respect of the portion to be settled in
such securities.
If any Security is converted between the record date for the
payment of interest and the next succeeding interest payment date, such Security
must be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless such Security
shall have been called for redemption during such period, in which case no such
payment shall be required). A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid on such interest payment date to
the registered holder of such Security on the immediately preceding record date.
Subject to the aforesaid right of the registered holder to receive interest, no
payment or adjustment will be made on conversion for interest accrued on the
converted Security or for interest, dividends or other distributions payable on
any security issued on conversion.
If a Holder converts more than one Security at the same time, the
securities into which the Security is convertible issuable or cash payable upon
the conversion shall be based on the total principal amount of the Securities
converted.
Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered; except that if a global
Security is so surrendered the Trustee shall authenticate and, if applicable,
deliver to the depository a new global Security in a denomination equal to and
in exchange for the unconverted portion of the principal of the global Security
so surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
<PAGE>
-25-
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion Right, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of the securities into which the Security is convertible upon the
conversion. However, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes pursuant to
this Article 9 or consistent with terms provided for in any Securities
Resolution is conclusive, absent manifest error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the Company) has
no duty to determine when or if an adjustment under this Article 9 or any
Securities Resolution should be made, how it should be made or calculated or
what it should be. The Trustee (and each Conversion Agent other than the
Company) makes no representation as to the validity or value of any securities
issued upon conversion of Securities. The Trustee (and each Conversion Agent
other than the Company) shall not be responsible for the Company's failure to
comply with this Article 9 or any provision of a Securities Resolution relating
to a Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but unissued
Common Stock or its Common Stock held in treasury sufficient shares to permit
the conversion of all of the Securities convertible into Common Stock. The
Company shall arrange and make available for issuance upon conversion the full
amount of any other securities into which the Securities are convertible to
permit such conversion of the Securities.
All shares of Common Stock or other equity securities of any
person which may be issued upon conversion of the Securities shall be validly
issued, fully paid and non-assessable, subject to the personal liability which
may be imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law (or any successor provision), as judicially
interpreted, for debts owing to employees for services performed.
The Company will comply with all securities laws regulating the
offer and delivery of securities upon conversion of Securities.
SECTION 9.07. Cash Settlement Option.
If the Securities Resolution so provides, the Company may elect to
satisfy, in whole or in part, a Conversion Right of Securities convertible into
Common Stock or other securities of any person by the delivery of cash. The
amount of cash to be delivered shall be equal to the Market Price on the last
Trading Day preceding the applicable Conversion Date of a share of Common Stock
or other securities of any person into which the Securities are convertible
multiplied by the number of shares of Common Stock or the number of shares or
principal amount of other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver cash. If the
Company elects to satisfy, in whole or in part, a Conversion Right by the
delivery of shares of Common Stock or other securities, no fractional shares or
portion of other securities
<PAGE>
-26-
will be delivered. Instead, the Company will pay cash based on the Market Price
for such fractional share of Common Stock or portion of other securities.
The "MARKET PRICE" of the Common Stock into which Securities or
other equity securities into which the Securities are convertible may be
converted pursuant to a Securities Resolution or this Article 9 on any Trading
Day means the weighted average per share sale price for all sales of the Common
Stock or other equity securities on such Trading Day (or, if the information
necessary to calculate such weighted average per share sale price is not
reported, the average of the high and low sale prices, or if no sales are
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and average ask prices), as reported in the
composite transactions for the New York Stock Exchange, or if the Common Stock
or other equity securities into which the Securities are convertible are not
listed or admitted to trading on such exchange, as reported in the composite
transactions for the principal national or regional United States securities
exchange on which the Common Stock or other equity securities into which the
Securities are convertible are listed or admitted to trading or, if the Common
Stock or other equity securities into which the Securities are convertible are
not listed or admitted to trading on a United States national or regional
securities exchange, as reported by NASDAQ or by the National Quotation Bureau
Incorporated, or if not so reported, as determined in the manner set forth in
the appropriate Securities Resolution. In the absence of such quotations, the
Company shall be entitled to determine the Market Price on the basis of such
quotations as it considers appropriate.
The "MARKET PRICE" of any debt security into which Securities are
convertible shall be determined as set forth in the applicable Securities
Resolution.
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock.
If the Securities are convertible into Common Stock and the
Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(3) combines its outstanding shares of Common Stock into
a smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock in shares of its Capital Stock other than Common
Stock; or
(5) issues by reclassification of its Common Stock any
shares of its Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company (or, at the Company's option, an equivalent amount in cash) which he
would have owned immediately following such action if he had converted the
Security immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If the security into which the Securities are convertible is other
than Common Stock of the Company, the conversion rate shall be subject to
adjustment as set forth in the applicable Securities Resolution.
<PAGE>
-27-
If after an adjustment a Holder of a Security may, upon
conversion, receive shares of two or more classes of Capital Stock of the
Company or other securities, the Board of Directors of the Company shall
determine the allocation of the adjusted Conversion Rate between or among the
classes of Capital Stock or other securities. After such allocation, the
conversion privilege and the Conversion Rate of each class of Capital Stock or
other securities shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Article or in such Securities
Resolution.
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market
Price.
If the Securities are convertible into Common Stock, and the
Company issues to all holders of Common Stock rights, options or warrants to
subscribe for or purchase shares of Common Stock, or any securities convertible
into or exchangeable for shares of Common Stock, or rights, options or warrants
to subscribe for or purchase such convertible or exchangeable securities at a
Price Per Share (as defined and determined according to the formula given below)
lower than the current Market Price on the date of such issuance, the Conversion
Rate shall be adjusted in accordance with the following formula:
AC = CC .(O + N )
--------
O . R
-
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding immediately prior to
such issuance (which number shall include shares owned or held by or
for the account of the Company).
N = the "Number of Shares," which (i) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable for shares of Common Stock,
is the maximum number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the case of
rights, options or warrants to subscribe for or purchase convertible or
exchangeable securities, is the maximum number of shares of Common
Stock initially issuable upon the conversion or exchange of the
convertible or exchangeable securities issuable upon the exercise of
such rights, options or warrants.
R = the proceeds received or receivable by the Company, which (i) in the case
of rights, options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or exchangeable for
shares of Common Stock, is the aggregate amount received or receivable
by the Company in consideration for the sale and issuance of such
rights, options, warrants or convertible or exchangeable securities,
plus the minimum aggregate amount of additional consideration, other
than the convertible or exchangeable securities, payable to the Company
upon exercise, conversion or exchange thereof; and (ii) in the case of
rights, options or warrants to subscribe for or purchase convertible or
exchangeable securities, is the aggregate amount received or receivable
by the Company in consideration for the sale and issuance of such
rights, options or warrants, plus the minimum aggregate consideration
payable to the Company upon the exercise thereof, plus the minimum
aggregate amount of additional consideration, other than the
convertible or exchangeable securities, payable upon the conversion or
exchange of the convertible or exchangeable securities; provided, that
--------
in each case the proceeds received or receiv-
<PAGE>
-28-
able by the Company shall be deemed to be the amount of gross cash
proceeds without deducting therefrom any compensation paid or discount
allowed in the sale, underwriting or purchase thereof by underwriters
or dealers or others performing similar services or any expenses
incurred in connection therewith.
M = the current Market Price per share of Common Stock on the date of issue
of the rights, options or warrants to subscribe for or purchase shares
of Common Stock or the securities convertible into or exchangeable for
shares of Common Stock or the rights, options or warrants to subscribe
for or purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined according to
the following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants or
convertible or exchangeable securities with respect to its Common Stock for a
consideration consisting, in whole or in part, of property other than cash the
amount of such consideration shall be determined in good faith by the Board of
Directors whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors filed with the Trustee.
The adjustment shall be made successively whenever any such
additional rights, options, warrants or convertible or exchangeable securities
with respect to its Common Stock are issued, and shall become effective
immediately after the date of issue of such shares, rights, options, warrants or
convertible or exchangeable securities.
To the extent that such rights, options or warrants to acquire
Common Stock expire unexercised or to the extent any convertible or exchangeable
securities with respect to its Common Stock are redeemed by the Company or
otherwise cease to be convertible or exchangeable into shares of Common Stock,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustment made upon the date of issuance of such rights,
options, warrants or convertible or exchangeable securities been made upon the
basis of the issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which such rights,
options or warrants were actually exercised and the number of shares of Common
Stock that were actually issued upon the conversion or exchange of the
convertible or exchangeable securities.
If the Securities are convertible into securities other than the
Common Stock, any adjustment in the Conversion Rate required for the issuance or
sale of the securities into which the Securities are convertible shall be made
as set forth in the Securities Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Common Stock and
the Company distributes to all holders of its Common Stock any of its assets or
debt securities or any rights or warrants to purchase assets or
<PAGE>
-29-
debt securities of the Company, the Conversion Rate shall be adjusted in
accordance with the following formula:
AC = CC. (O . M)
----------
((O . M)- F)
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
mentioned below (which number shall include shares owned or held by or
for the account of the Company).
M = the current Market Price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants distributed. The Board of Directors of the Company
shall determine the fair market value.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.
If the securities into which the Securities are convertible
are other than Common Stock, any adjustments for such other distribution shall
be made as set forth in the Securities Resolution.
This Section does not apply to cash dividends or distributions
or to reclassifications or distributions referred to in Section 9.08. Also, this
Section does not apply to shares issued below Market Price referred to in
Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion Rate,
temporarily or otherwise, by any amount but in no event shall such Conversion
Rate result in the issuance of Capital Stock at a price less than the par value
of such Capital Stock at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the
adjustment would require a change of at least 1% in the Conversion Rate. Any
adjustments that are not made due to the immediately preceding sentence shall be
carried forward and taken into account in any subsequent adjustment; provided,
--------
that any adjustment carried forward shall be deferred not in excess of three
years, whereupon any adjustment to the Conversion Rate will be effected.
All calculations under this Article 9 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
<PAGE>
-30-
SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in the
Conversion Rate shall be made because the Company issues, in exchange for cash,
property or services, shares of Common Stock, or any securities convertible into
shares of Common Stock, or securities carrying the right to purchase shares of
Common Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for rights to
purchase or the sale of Common Stock pursuant to a Company plan providing for
reinvestment of dividends or interest.
No adjustment in the Conversion Rate need be made for a change
in the par value of the Common Stock or other securities having a par value.
No adjustment need be made for a transaction referred to in
Section 9.08, 9.09 or 9.10 if Securityholders are to participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock or other securities into which the Securities are convertible
participate in the transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall
promptly mail to Holders of Securities affected a notice of the adjustment. The
Company shall file with the Trustee an Officers' Certificate or a certificate
from the Company's independent public accountants stating the facts requiring
the adjustment and the manner of computing it. The certificate shall be
conclusive evidence that the adjustment is correct, absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would
require an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that would
require a supplemental indenture pursuant to Section
9.16, or
(3) there is a proposed liquidation or dissolution of the
Company or of the issuer of any other security into
which the Securities are convertible,
the Company shall mail to registered Holders of Securities of any affected
series a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
<PAGE>
-31-
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to Section
5.01, the successor corporation (if other than the Company) shall enter into a
supplemental indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or transfer if he
had converted the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article. The successor company shall mail to Holders of Securities
of any affected series a notice briefly describing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10 do not
apply.
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the
Securities or any coupons without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5 or Section 9.16;
(3) to provide that specific provisions of this Indenture
shall not apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more
series; or
(6) to make any change that does not materially adversely
affect the rights of any Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Securities Resolution otherwise provides, the
Company and the Trustee may amend this Indenture, the Securities and any coupons
with the written consent of the Holders of a majority in principal amount of the
Securities of all series affected by the amendment voting as one class; provided
that, in the case of a series issued to an Applied Power Trust, so long as any
of the related preferred securities of such Applied Power Trust remains
outstanding, no such amendment shall be made that adversely affects the holders
of such preferred securities in any material respect, and no termination of this
Indenture shall occur, without the prior consent of the holders of not less than
a majority in aggregate liquidation amount of such preferred securities then
outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and unpaid interest thereon have been
paid in full; and provided further that, in the case a series issued to an
Applied Power Trust, so long as any of the related preferred securities of such
Applied Power Trust remain outstanding, no amendment shall be made to the third
paragraph of Section 6.06 of this Indenture without the
<PAGE>
-32-
prior consent of the holders of each such preferred security then outstanding
unless and until the principal (and premium, if any) of the Securities of such
series and all accrued and unpaid interest thereon have been paid in full.
However, without the consent of each Securityholder affected, an amendment under
this Section may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the interest on or change the time for payment
of interest on any Security;
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Debt
Security or reduce the amount of principal of any
Discounted Debt Security that would be due upon an
acceleration thereof;
(5) change the currency in which principal or interest on a
Security is payable;
(6) make any change that materially adversely affects the
right to convert or exchange any Security; or
(7) make any change in Section 6.04 or 10.02, except to
increase the amount of Securities whose Holders must
consent to an amendment or waiver or to provide that
other provisions of this Indenture cannot be amended or
waived without the consent of each Securityholder
affected thereby.
An amendment of a provision included solely for the benefit of
one or more series does not affect Securityholders of any other series.
Securityholders need not consent to the exact text of a
proposed amendment or waiver; it is sufficient if they consent to the substance
thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall be
set forth in a supplemental indenture (except any amendment pursuant to Section
10.01(4), which may be set forth in a Securities Resolution) that complies with
the TIA.
If a provision of the TIA requires or permits a provision of
this Indenture and the TIA provision is amended, then the Indenture provision
shall be automatically amended to like effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with
its terms and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security
is a continuing consent by the Holder and every subsequent Holder of a Security
that evidences the same debt as the consenting Holder's Security. Any Holder or
subsequent Holder may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or waiver becomes
effective.
<PAGE>
-33-
The Company may fix a record date for the determination of
Holders of Registered Securities entitled to give a consent. The record date
shall not be less than 10 nor more than 60 days prior to the first written
solicitation of Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation
about an amendment or waiver on any Security thereafter authenticated. The
Company may issue in exchange for affected Securities new Securities that
reflect the amendment or waiver.
SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that
adversely affects its rights. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate each stating that the execution of any amendment or supplement or
waiver authorized pursuant to this Article is authorized or permitted by this
Indenture, and that such amendment or supplement or waiver constitutes the
legal, valid and binding obligation of the Company.
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA ss.ss. 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not expressly set forth herein.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. 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 11.02. Notices.
Any notice by one party to another is duly given if in writing
and delivered in person, sent by facsimile transmission confirmed by mail or
mailed by first-class mail to the other's address shown below:
Company:
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007
Fax: (414) 783-9790
Attention: Chief Financial Officer
<PAGE>
-34-
Trustee:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Fax: (312)407-1708
Attention: Corporate Trust Division
A party by notice to the other parties may designate
additional or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed to his
address shown on the register kept by the Transfer Agent or on the list referred
to in Section 2.06. Failure to mail a notice to a Securityholder or any defect
in a notice mailed to a Securityholder shall not affect the sufficiency of the
notice mailed to other Securityholders or the sufficiency of any published
notice.
If a notice is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Securityholders, it shall
mail a copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure to
publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All notices shall be in the English language, except that any
published notice may be in an official language of the country of publication.
A "notice" includes any communication required by this
Indenture.
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall if so requested
furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion
of the signers, all conditions 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>
-35-
SECTION 11.04. 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 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 informed
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.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a
meeting of Securityholders. An Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.06. Legal Holidays.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions are not required to be open. If a payment date is a Legal
Holiday at a place of payment, unless the Securities Resolution establishing a
series otherwise provides with respect to Securities of the series, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
One signed copy is enough to prove this Indenture.
SECTION 11.09. Governing Law.
The laws of the State of Wisconsin shall govern this
Indenture, the Securities and any coupons, unless federal law governs.
<PAGE>
S-1
SIGNATURES
Dated: April 1, 1999 APPLIED POWER INC.
By /s/Richard G. Sim
______________________
Name: Richard G. Sim
Title: President and
Chief Executive Officer
Dated: April 1, 1999 THE FIRST NATIONAL BANK OF CHICAGO
By /s/Leland Hansen
________________________
Name: Leland Hansen
Title: Asst. Vice President
<PAGE>
EXHIBIT A
A Form of Registered Security
No. [$]
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:______________________________
[Title of Authorized Officer]
By:______________________________
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:__________________________
Authorized Signature
A-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
Applied Power Inc. ("Company"), a corporation organized and
existing under the laws of the State of Wisconsin, promises to
pay interest on the principal amount of this Security at the
rate per annum shown above. The Company will pay interest on
and of each year commencing , . Interest on the
Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from
, . Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT./2/
The Company will pay interest on the Securities to the persons
who are registered holders of Securities at the close of
business on the record date for the next interest payment
date, except as otherwise provided in the Indenture. Holders
must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and
interest in money of the United States that at the time of
payment is legal tender for payment of public and private
debts. The Company may pay principal and interest by check
payable in such money. It may mail an interest check to a
holder's registered address.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention:
Corporate Trust Division, will act as Paying Agent, Transfer
Agent and Registrar. The Company may change any Paying Agent
or Transfer Agent without notice or provide for more than one
such agent. The Company or any Affiliate may act in any such
capacity. Subject to certain conditions, the Company may
change the Trustee.
4. INDENTURE.
The Company issued the securities of this series
("Securities") under an Indenture dated as of , 1999
("Indenture") between the Company and The First National Bank
of Chicago ("Trustee"). The terms of the Securities include
those stated in the Indenture and in the Securities Resolution
creating the Securities and those made part of the Indenture
by the Trust Indenture Act of 1939 (15 U.S. Code (SS). 77aaa-
77bbbb). Securityholders are referred to the Indenture, the
Securities Resolution and the Act for a statement of such
terms.
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities at
any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal
amount), plus accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
A-2
<PAGE>
Year Percentage Year Percentage
and thereafter at 100%.
6. MANDATORY REDEMPTION./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued
interest to the redemption date./5/ The Company may reduce the
principal amount of Securities to be redeemed pursuant to this
paragraph by subtracting 100% of the principal amount
(excluding premium) of any Securities (i) that the Company has
acquired or that the Company has redeemed other than pursuant
to this paragraph and (ii) that the Company has delivered to
the Registrar for cancellation. The Company may so subtract
the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./6/
In addition to redemptions pursuant to the above paragraph(s),
the Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus
accrued interest to the redemption date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be mailed at least 30 but not more
than 60 days before the redemption date to each holder of
Securities to be redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such
redemption as described in such notice ("Conditional
Redemption") and such notice of Conditional Redemption shall
be of no effect unless all such conditions to the redemption
have occurred before such date or have been waived by the
Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the
Company or cash, or a combination thereof, at the Company's
option, at any time before the close of business on
___________, or, if the Security is called for redemption, the
Holder may convert it at any time before the close of business
on the redemption date. The initial Conversion Rate is
____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as
provided in Article 9 of the Indenture.9 The Company will
deliver a check in lieu of any fractional share. On conversion
no payment or adjustment for interest accrued on the
Securities will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted between the
record date for the payment of interest and the next
succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such
succeeding interest payment date on the principal amount so
converted (unless such Security shall have been called for
redemption, in which case no such payment shall be required).
A Security converted on an interest payment date
A-3
<PAGE>
need not be accompanied by any payment, and the interest on
the principal amount of the Security being converted will be
paid on such interest payment date to the registered holder of
such Security on the immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender
the Security to a Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the
Registrar or Conversion Agent and (4) pay any transfer or
similar tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral multiple of
$1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in
denominations of $1,000/10/ and whole multiples of $1,000. The
transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Transfer Agent may
require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and
fees required by law or the Indenture. The Transfer Agent need
not exchange or register the transfer of any Security or
portion of a Security selected for redemption. Also, it need
not exchange or register the transfer of any Securities for a
period of 15 days before a selection of Securities to be
redeemed.
11. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its
owner for all purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities
may be amended with the consent of the holders of a majority
in principal amount of the securities of all series affected
by the amendment./11/ Subject to certain exceptions, a default
on a series may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the Indenture or
the Securities may be amended, among other things, to cure any
ambiguity, omission, defect or inconsistency; to provide for
assumption of Company obligations to Securityholders; or to
make any change that does not materially adversely affect the
rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the
Company limited to $ principal amount. The Indenture does not
limit other unsecured debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company
under the Securities and the Indenture, the Company will be
released from those obligations.
A-4
<PAGE>
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or
maturity. U.S. Government Obligations are securities backed by
the full faith and credit of the United States of America or
certificates representing an ownership interest in such
Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default14 includes: default for 30 days in payment
of interest on the Securities; default in payment of principal
on the Securities; default in payment or satisfaction of any
sinking fund obligation; default by the Company for a
specified period after notice to it in the performance of any
of its other agreements applicable to the Securities; certain
events of bankruptcy or insolvency; and any other Event of
Default provided for in the series. If an Event of Default
occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare
the principal15 of all the Securities to be due and payable
immediately.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces
the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of
principal or interest) if it determines that withholding
notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the
Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of
the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations
or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a
manual signature of the Registrar.
A-5
<PAGE>
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entirety), JT TEN (=joint
tenants with right of survivorship and not as tenants in
common), CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors
Act) and U/T/M/A (=Uniform Transfers to Minors Act).
A-6
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. [$]
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to
bearer
the principal sum of
Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By: :________________________________
[Title of Authorized Officer]
By: :________________________________
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:_______________________________
Authorized Signature
B-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
APPLIED POWER INC. ("Company"), a corporation organized and
existing under the laws of the State of Wisconsin, promises to
pay to bearer interest on the principal amount of this
Security at the rate per annum shown above. The Company will
pay interest on and of each year commencing , . Interest
on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid,
from , . Interest will be computed on the basis of a 360-
day year of twelve 30-day months.
2. METHOD OF PAYMENT./2/
Holders must surrender Securities and any coupons to a Paying
Agent to collect principal and interest payments. The Company
will pay principal and interest in money of the United States
that at the time of payment is legal tender for payment of
public and private debts. The Company may pay principal and
interest by check payable in such money.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention:
Corporate Trust Division, will act as Transfer Agent, Paying
Agent and Registrar. The Company may change any Paying Agent
or Transfer Agent without notice or provide for more than one
such agent. The Company or any Affiliate may act in any such
capacity. Subject to certain conditions, the Company may
change the Trustee.
4. INDENTURE.
The Company issued the securities of this series
("Securities") under an Indenture dated as of , 1999
("Indenture") between the Company and The First National Bank
of Chicago ("Trustee"). The terms of the Securities include
those stated in the Indenture and the Securities Resolution
and those made part of the Indenture by the Trust Indenture
Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb).
Securityholders are referred to the Indenture, the Securities
Resolution and the Act for a statement of such terms.
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities at
any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal
amount), plus accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
B-2
<PAGE>
and thereafter 100%.
6. MANDATORY REDEMPTION./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a redemption price
of 100% of principal amount, plus accrued interest to the
redemption date./5/ The Company may reduce the principal
amount of Securities to be redeemed pursuant to this paragraph
by subtracting 100% of the principal amount (excluding
premium) of any Securities (i) that the Company has acquired
or that the Company has redeemed other than pursuant to this
paragraph and (ii) that the Company has delivered to the
Registrar for cancellation. The Company may so subtract the
same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION/.6/
In addition to redemptions pursuant to the above paragraph(s),
the Company may redeem not more than $ principal amount of
Securities on and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be published once in an Authorized
Newspaper in the City of New York and if the Securities are
listed on any stock exchange located outside the United States
and such stock exchange so requires, in any other required
city outside the United States at least 30 but not more than
60 days before the redemption date. Notice of redemption also
will be mailed to holders who have filed their names and
addresses with the Transfer Agent within the two preceding
years. A holder of Securities may miss important notices if he
fails to maintain his name and address with the Transfer
Agent.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such
redemption as described in such notice ("Conditional
Redemption") and such notice of Conditional Redemption shall
be of no effect unless all such conditions to the redemption
have occurred before such date or have been waived by the
Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the
Company or cash, or a combination thereof, at the Company's
option, at any time before the close of business on
___________, or, if the Security is called for redemption, the
Holder may convert it at any time before the close of business
on the redemption date. The initial Conversion Rate is
____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as
provided in Article 9 of the Indenture.9 The Company will
deliver a check in lieu of any fractional share. On conversion
no payment or adjustment for interest accrued on the
Securities will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted between the
record date for the payment of interest and the next
succeeding interest payment date, such Security must be
accompanied by
B-3
<PAGE>
funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted
(unless such Security shall have been called for redemption,
in which case no such payment shall be required). A Security
converted on an interest payment date need not be accompanied
by any payment, and the interest on the principal amount of
the Security being converted will be paid on such interest
payment date to the registered holder of such Security on the
immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender
the Security to a Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the
Registrar or Conversion Agent and (4) pay any transfer or
similar tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral multiple of
$1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in bearer form with coupons in
denominations of $5,00010 and whole multiples of $5,000. The
Securities may be transferred by delivery and exchanged as
provided in the Indenture. Upon an exchange, the Transfer
Agent may require a holder, among other things, to furnish
appropriate documents and to pay any taxes and fees required
by law or the Indenture. The Transfer Agent need not exchange
any Security or portion of a Security selected for redemption.
Also, it need not exchange any Securities for a period of 15
days before a selection of Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The holder of a Security or coupon may be treated as its owner
for all purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities
may be amended with the consent of the holders of a majority
in principal amount of the securities of all series affected
by the amendment.11 Subject to certain exceptions, a default
on a series may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the Indenture or
the Securities may be amended, among other things, to cure any
ambiguity, omission, defect or inconsistency; to provide for
assumption of Company obligations to Securityholders; or to
make any change that does not materially adversely affect the
rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the
Company limited to $ principal amount. The
Indenture does not limit other unsecured debt.
B-4
<PAGE>
14. SUCCESSORS.
When a successor assumes all the obligations of the Company
under the Securities, any coupons and the Indenture, the
Company will be released from those obligations.
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities,
any coupons and the Indenture if the Company deposits with the
Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or
maturity. U.S. Government Obligations are securities backed by
the full faith and credit of the United States of America or
certificates representing an ownership interest in such
Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/14/ includes: default for 30 days in
payment of interest on the Securities; default in payment of
principal on the Securities; default in payment or
satisfaction of any sinking fund obligation; default by the
Company for a specified period after notice to it in the
performance of any of its other agreements applicable to the
Securities; certain events of bankruptcy or insolvency; and
any other Event of Default provided for in the series. If an
Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the Securities
may declare the principal/15/ of all the Securities to be due
and payable immediately.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces
the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of
principal or interest) if it determines that withholding
notice is in their interests. The Company must furnish annual
compliance certificates to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the
Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of
the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations
or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
B-5
<PAGE>
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a
manual signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entirety), JT TEN (=joint
tenants with right of survivorship and not as tenants in
common), CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors
Act) and U/T/M/A (=Uniform Transfers to Minors Act).
B-6
<PAGE>
[$]..............
Due..............
APPLIED POWER INC.
[Title of Security]
Unless the Security attached to this coupon has been called
for redemption, Applied Power Inc. ("Company") will pay to bearer, upon
surrender, the amount shown hereon when due. This coupon may be surrendered for
payment to any Paying Agent listed on the back of this coupon unless the Company
has replaced such Agent. Payment may be made by check. This coupon represents
months' interest.
APPLIED POWER INC.
By__________________________
[REVERSE OF COUPON]
PAYING AGENTS
B-7
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate per annum, insert
a description of the manner in which the rate of interest is to be
determined. If the Security is not to bear interest prior to maturity, so
state.
2 If the method or currency of payment is different, insert a statement
thereof.
2A As is done in Section 2.03 of the Indenture, the Trustee must be appointed
Registrar under Section 182.23, Wis. Stats., in order for Officers'
signatures on Securities and the corporate seal to be facsimiles.
3 If applicable. If the Security is to be subject to a nonrefunding
restriction, insert a brief summary thereof. If the redemption is to be
subject to a condition, insert a brief summary thereof.
4 Such provisions as are applicable, if any.
5 If the Security is a Discounted Debt Security, insert amount to be
redeemed or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for repayment of
Securities at the option of the Securityholder.
7 If applicable.
8 If applicable. If convertible into securities other than Common Stock,
insert appropriate summary.
9 If additional or different adjustment provisions apply so specify.
10 If applicable. Insert additional or different denominations and terms as
appropriate.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants apply, insert a brief
summary thereof.
13 If applicable. If different defeasance terms apply, insert a brief summary
thereof.
14 If additional or different Events of Default apply, insert a brief summary
thereof.
15 If the Security is a Discounted Debt Security, set forth the amount due
and payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted Debt and Bearer
Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: _______________ Your Signature:_______________________
_______________________
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:___________________________________
(All signatures must be
guaranteed by an "eligible
guarantor institution" as
defined by Rule 17Ad-15 of the
Securities Exchange Act of
1934, as amended)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security, check the box:
[ ]
To convert only part of this Security, state the amount
(must be in integral multiples of $1,000);
$_____________________________
If you want the securities delivered upon conversion made
out in another person's name, fill in the form below:
(Insert other person's Social Security or Tax I.D. Number)
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
(Print or type other person's name, address and zip code)
Date: Signature(s):
-------------------- -----------------------
----------------------------------------------
(Sign exactly as your name(s)
appear(s) on the other side of this Security)
Signature(s) guaranteed by:
-----------------------------
(All signatures must be
guaranteed by an "eligible
guarantor institution" as
defined by Rule 17Ad-15 of
the Securities Exchange Act
of 1934, as amended)
D-1
<PAGE>
EXHIBIT 4.2
OFFICERS' CERTIFICATE
RELATING TO
SECURITIES RESOLUTION NO. 1
OF
APPLIED POWER INC.
The undersigned, as Officers of Applied Power Inc. (the "Company"), do
-------
hereby certify that the attached is a true and correct copy of Securities
Resolution No. 1, relating to the Indenture, dated as of April 1, 1999 between
the Company and The First National Bank of Chicago, as trustee (the
"Indenture"), which has been duly adopted by an Officer of the Company as of
---------
April 1, 1999 pursuant to Board delegation on the 10th day of March, 1999; and
that said resolution has not been rescinded and remains in full force and
effect. Capitalized terms used but not defined herein have the meanings given
such terms in the Indenture.
IN WITNESS WHEREOF, this Officers' Certificate has been duly executed
on this 1st day of April, 1999.
By: /s/Richard G. Sim
_____________________________
Name: Richard G. Sim
Title: President and Chief
Executive Officer
By: /s/Robert C. Arzbaecher
_____________________________
Name: Robert C. Arzbaecher
Title: Chief Financial Officer
<PAGE>
SECURITIES RESOLUTION NO. 1
OF
APPLIED POWER INC.
The actions described below are taken as of April 1, 1999 by the Board
of Directors (the "Board") of APPLIED POWER INC. (the "Company"), or by an
----- -------
Officer or committee of Officers pursuant to Board delegation on the 10th day of
March, 1999, and Section 2.01 of the Indenture, dated as of April 1, 1999, (the
"Indenture") between the Company and The First National Bank of Chicago, as
---------
trustee (the "Trustee"). Capitalized terms used but not defined herein have the
-------
meanings given such terms in the Indenture.
RESOLVED, that a new series of Securities is authorized as follows:
1. The title of the series is 8.75% Senior Subordinated Notes due 2009
(the "Securities").
----------
2. The form and terms of the Securities shall be substantially as set
forth in Exhibit 1 hereto.
3. The Company is hereby authorized to issue $200 million in aggregate
principal amount of the Securities and to offer such Securities pursuant to the
Company's Prospectus dated January 27, 1999 and the Prospectus Supplement dated
March 26, 1999. The Company is also hereby authorized, upon the approval of the
Board in the form of a resolution by the Board, to issue up to $100 million
aggregate principal amount of additional Securities under the Indenture with the
same terms (including interest rate, maturity and redemption terms) as the
Securities (the "Additional Securities") except that no Additional Securities
may be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Internal
Revenue Code and provided such issuance complies with Section 10.1 of the
Securities.
This Securities Resolution shall be effective as of April 1, 1999.
<PAGE>
EXHIBIT 1
Form of Security
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
No. 1 $200,000,000
APPLIED POWER INC.
8.75% Senior Subordinated Notes due 2009
CUSIP No. 038225AA6
APPLIED POWER INC.
promises to pay to Cede & Co.
or registered assigns
the principal sum of $200,000,000 Dollars on April 1, 2009
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: April 1, 1999
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:_____________________________
By:_____________________________
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:
Authorized Signature
<PAGE>
8.75% Senior Subordinated Notes due 2009
1. INTEREST.
Applied Power Inc. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay interest on
the principal amount of this Security at the rate per annum shown
above. The Company will pay interest on April 1 and October 1 of each
year commencing October 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid or,
if no interest has been paid, April 1, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the
record date for the next interest payment date, except as otherwise
provided in the Indenture. Principal of and premium, if any, and
interest on the Securities will be payable, and the Securities may be
presented for registration of transfer and exchange, at the office or
agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered
address.
3. SECURITIES AGENTS.
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of April 1, 1999 ("Indenture") between the
Company and The First National Bank of Chicago ("Trustee"). The terms
of the Securities include those stated in the Indenture and in the
Securities Resolution creating the Securities and those made part of
the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) (the "TIA"). All references to "Article" and "Section"
---
contained herein refer to the relevant article or section, as the case
may be, in the Indenture and all references to "Paragraph" contained
herein refer to the numbered Paragraphs of this Security.
Securityholders are referred to the Indenture, the Securities
Resolution and the TIA for a statement of such terms.
5. OPTIONAL REDEMPTION.
The Securities will be subject to redemption, at the option of the
Company, in whole or in part, at any time on or after April 1, 2004
and prior to maturity, upon not less than 30 nor more than 60 days'
notice mailed to each Holder of Securities to be redeemed at such
Holder's address appearing in the register for the Securities, in
amounts of $1,000 or an integral multiple of $1,000, at the following
redemption prices (expressed as percentages of the principal amount)
plus accrued interest to but excluding the redemption date (subject to
the right of Holders of
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<PAGE>
record on the relevant regular record date to receive interest due on
an interest payment date that is on or prior to the redemption date),
if redeemed during the 12-month period beginning April 1 of the years
indicated:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2004................................................ 104.375%
2005................................................ 102.916%
2006................................................ 101.458%
2007 and thereafter................................. 100.000%
</TABLE>
In addition, if on or before April 1, 2002, the Company receives net
proceeds from the sale of its Common Stock in one or more Public
Equity Offerings, the Company may, at its option, use all or a portion
of any such net proceeds to redeem Securities in an aggregate
principal amount of up to 35% of the sum of (i) the aggregate
principal amount of the Securities issued in this offering and (ii)
the aggregate principal amount of any Additional Securities issued
hereafter, provided, however, that at least 65% of each of (i) the
aggregate principal amount of Securities originally issued and (ii)
the aggregate amount of any Additional Securities issued hereafter
remains outstanding after such redemption. Such redemption must occur
on a redemption date within 75 days of such sale and upon not less
than 30 nor more than 60 days' notice mailed to each Holder of
Securities (and Additional Securities, if any) to be redeemed at such
Holder's address appearing in the register for the Securities or
register for the Additional Securities, as the case may be, in amounts
of $1,000 or an integral multiple of $1,000, at a redemption price of
108.75% of the principal amount of the Securities (and Additional
Securities, if any) plus accrued interest to but excluding the
redemption date (subject to the right of Holders of record on the
relevant regular record date to receive interest due on an interest
payment date that is on or prior to the redemption date).
If less than all the Securities are to be redeemed, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the
particular Securities to be redeemed or any portion thereof that is an
integral multiple of $1,000.
6. SUBORDINATION OF SECURITIES.
6.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Paragraph 6
(subject to the provisions of Article 8), the payment of the principal
of (and premium, if any) and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right
of payment to the prior payment in full of all Senior Debt of the
Company. No provisions of this Paragraph 6 shall prevent the
occurrence of any Event of Default.
6.2. Payment Over of Proceeds Upon Dissolution, Etc.
Upon (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any
such event specified in (a),
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<PAGE>
(b) or (c) above (each such event, if any, herein sometimes referred
to as a "Proceeding") the holders of Senior Debt of the Company shall
be entitled to receive payment in full of all amounts due or to become
due on or in respect of all Senior Debt of the Company, or provision
shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt of
the Company, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character, whether
in cash, property or securities, on account of principal of (or
premium, if any) or interest on the Securities or on account of any
purchase or other acquisition of Securities by the Company or any
Subsidiary of the Company (all such payments, distributions, purchases
and acquisitions, other than subordinated consideration (as defined
below), herein referred to, individually and collectively, as a
"Securities Payment"), and to that end the holders of Senior Debt of
the Company shall be entitled to receive, for application to the
payment thereof, any Securities Payment which may be payable or
deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Paragraph 6, the Trustee or the Holder of any Security shall have
received any Securities Payment before all Senior Debt of the Company
is paid in full or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt of the Company, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such
Securities Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior
Debt of the Company remaining unpaid, to the extent necessary to pay
all Senior Debt of the Company in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Debt of the Company.
For purposes of this Paragraph 6 only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include a payment or distribution
of stock or securities of the Company which stock or securities are
subordinated in right of payment to all then outstanding Senior Debt
of the Company to substantially the same extent as, or greater than,
the Securities are so subordinated as provided in this Paragraph 6
("subordinated consideration"). The consolidation of the Company with,
or the merger of the Company into, another Person or the liquidation
or dissolution of the Company following the conveyance or transfer of
all or substantially all of its properties and assets as an entirety
to another Person upon the terms and conditions set forth in Paragraph
10.15 and Article 5 shall not be deemed a Proceeding for the purposes
of this Paragraph 6 if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or transfer such properties and assets as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Paragraph 10.15 and
Article 5.
6.3. No Payment When Senior Debt of the Company in Default.
In the event that any Senior Payment Default (as defined below) shall
have occurred and be continuing, then no Securities Payment shall be
made unless and until such Senior Payment Default shall have been
cured or waived or shall have ceased to exist or all amounts then due
and payable in respect of Senior Debt of the Company shall have been
paid in full, or provision shall have been made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt of the Company.
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<PAGE>
"Senior Payment Default" means any default in the payment of principal
of or premium, if any, or interest on any Senior Debt when due,
whether at the Stated Maturity of any such payment or by declaration
of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by the
Company and the Trustee of written notice of such Senior Nonmonetary
Default from the agent for the Senior Debt which is the subject of
such Senior Nonmonetary Default, no Securities Payment shall be made
during the period (the "Payment Blockage Period") commencing on the
date of such receipt of such written notice and ending on the earlier
of (i) the date on which such Senior Nonmonetary Default shall have
been cured or waived or shall have ceased to exist or all Senior Debt
the subject of such Senior Nonmonetary Default shall have been
discharged; (ii) the 179th day after the date of such receipt of such
written notice; or (iii) the date on which the Payment Blockage Period
shall have been terminated by written notice to the Company or the
Trustee from the agent for the Senior Debt initiating the Payment
Blockage Period. No more than one Payment Blockage Period may be
commenced with respect to the Securities during any 360-day period and
there shall be a period of at least 181 consecutive days during each
360-day period when no Payment Blockage Period is in effect. In
addition, no Senior Payment Default or Senior Nonmonetary Default that
existed or was continuing on the date of commencement of any Payment
Blockage Period shall be, or be made, the basis for the commencement
of a subsequent Payment Blockage Period, whether or not within a
period of 360 consecutive days, unless such Senior Payment Default or
Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days.
"Senior Nonmonetary Default" means the occurrence or existence and
continuance of an event of default with respect to any Senior Debt,
other than a Senior Payment Default, permitting the holders of such
Senior Debt (or a trustee or agent on behalf of the holders thereof)
then to declare such Senior Debt due and payable prior to the date on
which it would otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by
the foregoing provisions of this Paragraph 6, and if such fact shall,
at or prior to the time of such Securities Payment, have been made
known to the Trustee or, as the case may be, such Holder, then and in
such event such Securities Payment shall be paid over and delivered
forthwith to the Company.
The provisions of this Paragraph 6.3 shall not apply to any Securities
Payment with respect to which Paragraph 6.2 would be applicable.
6.4. Payment Permitted If No Default.
Nothing contained in this Paragraph 6.4 or in the Indenture or
elsewhere in any of the Securities shall prevent (a) the Company, at
any time except during the pendency of any Proceeding referred to in
Paragraph 6.2 or under the conditions described in Paragraph 6.3, from
making Securities Payments, or (b) the application by the Trustee of
any money deposited with it hereunder to Securities Payments or the
retention of such Securities Payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge that
such Securities Payment would have been prohibited by the provisions
of this Paragraph 6.
6.5. Subrogation to Rights of Holders of Senior Debt of the Company.
-5-
<PAGE>
Subject to the payment in full of all amounts due or to become due on
or in respect of Senior Debt of the Company, or the provision for such
payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt of the Company, the Holders
of the Securities shall be subrogated to the rights of the holders of
such Senior Debt of the Company to receive payments and distributions
of cash, property and securities applicable to the Senior Debt of the
Company until the principal of (and premium, if any) and interest on
the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Debt of the Company of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for
the provisions of this Paragraph 6, and no payments over pursuant to
the provisions of this Paragraph 6 to the holders of Senior Debt of
the Company by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt of
the Company and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Debt of the Company.
6.6. Provisions Solely to Define Relative Rights.
The provisions of this Paragraph 6 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand
and the holders of Senior Debt of the Company on the other hand.
Nothing contained in this Paragraph 6 or in the Indenture or elsewhere
in the Securities is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior Debt of the
Company and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to
the rights under this Paragraph 6 of the holders of Senior Debt of the
Company, is intended to rank equally with all other general
obligations of the Company), to pay to the Holders of the Securities
the principal of (and premium, if any) and interest on the Securities
as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of
the Holders of the Securities and creditors of the Company other than
the holders of Senior Debt of the Company; or (c) prevent the Trustee
or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject
to the rights, if any, under this Paragraph 6 of the holders of Senior
Debt of the Company to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
6.7. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance hereof authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in
this Paragraph 6 and appoints the Trustee his attorney-in-fact for any
and all such purposes.
6.8. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt of the
Company to enforce subordination as herein provided shall at any time
in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company with
the terms, provisions and covenants of the Indenture and the
Securities, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt of the Company may, at any time and from
time to time, without the consent of or notice
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<PAGE>
to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Paragraph 6 or the
obligations hereunder of the Holders of the Securities to the holders
of Senior Debt of the Company, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Debt of the Company, or
otherwise amend or supplement in any manner Senior Debt of the Company
or any instrument evidencing the same or any agreement under which
Senior Debt of the Company is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt of the Company; (iii) release any
Person liable in any manner for the collection of Senior Debt of the
Company; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
6.9. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Paragraph 6 or any other
provision of the Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt of the
Company or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Article
7, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received
the notice provided for in this Paragraph 6 at least three Business
Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest on any
Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior
to such date.
Subject to the provisions of Article 7, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt of the Company (or
a trustee therefor) to establish that such notice has been given by a
holder of Senior Debt of the Company (or a trustee therefor). In the
event that the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or
distribution pursuant to Article 7 or this Paragraph 6, the Trustee
may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the
Company held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under Article 7 or this
Paragraph 6, and if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
6.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Paragraph 6, the Trustee, subject to the provisions of Article
7, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in
which such Proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of
Securities, for the pur-
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<PAGE>
pose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Debt of the Company
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 Paragraph 6.
6.11. Trustee Not Fiduciary for Holders of Senior Debt of the Company.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of the Company and shall not be liable to any
such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other
Person cash, property or securities to which any holders of Senior
Debt of the Company shall be entitled by virtue of this Paragraph 6 or
otherwise.
6.12. Rights of Trustee as Holder of Senior Debt of the Company;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Paragraph 6 with respect to any Senior Debt
of the Company which may at any time be held by it, to the same extent
as any other holder of Senior Debt of the Company, and nothing in the
Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Paragraph 6 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.06 of the Indenture.
6.13. Paragraph 6 Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Paragraph 6 shall in such case (unless the
context otherwise requires) be construed as extending to and including
such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Paragraph 6 in
addition to or in place of the Trustee; provided, however, that
Paragraph 6.12 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
6.14. Defeasance of this Paragraph 6.
The subordination of the Securities of a series provided by this
Paragraph 6 is expressly made subject to the provisions for defeasance
or covenant defeasance in Article 8 and, anything herein to the
contrary notwithstanding, upon the effectiveness of any such
defeasance or covenant defeasance, the Securities of such series then
outstanding shall thereupon cease to be subordinated pursuant to this
Paragraph 6.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
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<PAGE>
8. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples thereof. The transfer of Securities
may be registered and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and
to pay any taxes and fees required by law or the Indenture. The
Transfer Agent need not exchange or register the transfer of any
Security or portion of a Security selected for redemption. Also, it
need not exchange or register the transfer of any Securities for a
period of 15 days before a selection of Securities to be redeemed. No
service charge will be made or any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
9. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner for
all purposes.
10. RESTRICTIVE COVENANTS.
In addition to the covenants set forth in Article 4, the following
covenants apply to the Securities:
10.1 Limitation on Consolidated Debt
The Company may not, and may not permit any of its Restricted
Subsidiaries to, Incur any Debt (including Acquired Debt) unless
immediately after giving pro forma effect to the Incurrence of such
Debt (and Acquired Debt) and the receipt and application of the
proceeds thereof, the Consolidated Cash Flow Coverage Ratio of the
Company would be greater than 2.0 to 1.
Notwithstanding the foregoing limitation, the Company may, and may
permit any Restricted Subsidiary of the Company to, Incur the
following Debt:
(1) Debt under the Senior Bank Facility in an
aggregate principal amount at any one time not to exceed
$850 million, less any amounts by which any revolving credit
facility commitments under the Senior Bank Facility are
permanently reduced pursuant to Paragraph 10.7 (so long as
and to the extent that any required payments in connection
therewith are actually made), and any renewal, extension,
refinancing or refunding thereof in an amount which,
together with any amount remaining outstanding or available
under the Senior Bank Facility, does not exceed the amount
permitted under this clause (1);
(2) Debt owed by the Company to any Wholly Owned
Restricted Subsidiary of the Company for which fair value
has been received or Debt owed by a Subsidiary of the
Company to the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided, however, that:
(a) any such Debt owing by the Company to a
Wholly Owned Restricted Subsidiary shall be
Subordinated Debt evidenced by an intercompany
promissory note, and
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<PAGE>
(b) upon either:
(i) the transfer or other disposition by such Wholly
Owned Restricted Subsidiary or the Company of any Debt so
permitted to a Person other than the Company or another Wholly
Owned Restricted Subsidiary of the Company, or
(ii) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition of shares
of Capital Stock (including by consolidation or merger) of
such Wholly Owned Restricted Subsidiary to a Person other than
the Company such Wholly Owned Restricted Subsidiary,
the provisions of this clause (2) shall no longer be
applicable to such Debt and such Debt shall be deemed
to have been Incurred at the time of such transfer or
other disposition;
(3) Debt consisting of the Securities
(4) Debt consisting of Permitted Interest Rate or
Currency Price Agreements;
(5) Debt which is exchanged for or the proceeds of
which are used to refinance or refund, or any extension
or renewal of (each of the foregoing, a "refinancing"):
(a) the Securities,
(b) any Debt that is not described in any other
clause hereof that was outstanding on the date of
original issuance of the Securities,
(c) outstanding Debt Incurred pursuant to the first
sentence of this Paragraph 10.1, or
(d) any Debt Incurred under this clause (5) or
clause (6) below,
in each case in an aggregate principal amount not to exceed the
principal amount of the Debt so refinanced plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of the Debt so refinanced or the amount of any
premium reasonably determined by the Company as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the expenses of the Company or the
Restricted Subsidiary, as the case may be, incurred in connection with
such refinancing; provided, however, that:
(i) Debt the proceeds of which are used to refinance
the Securities or Debt which is pari passu with or
subordinate in right of payment to the Securities shall only
be permitted if (x) in the case of any refinancing of the
Securities or Debt which is pari passu to the Securities,
the refinancing Debt is made pari passu to the Securities or
subordinated to the Securities, and (y) in the case of any
refinancing of Debt which is subordinated to the Securities,
the refinancing Debt constitutes Subordinated Debt; and
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<PAGE>
(ii) in the case of any refinancing of Debt Incurred by
the Company, the refinancing Debt may be Incurred only by
the Company, and in the case of any refinancing of Debt
Incurred by a Restricted Subsidiary of the Company, the
refinancing Debt may be Incurred only by such Restricted
Subsidiary;
and provided, further, that Debt Incurred pursuant to this clause (5)
may not be Incurred more than 45 days prior to the application of the
proceeds to repay the Debt to be refinanced; and
(6) Debt not otherwise permitted to be Incurred
pursuant to clauses (1) through (5) above, which,
together with any other outstanding Debt Incurred
pursuant to this clause (6), has an aggregate principal
amount not in excess of $50 million at any time
outstanding.
For purposes of determining compliance with this Paragraph 10.1 in the
event that an item of proposed Debt meets the criteria of more than
one of the categories of Debt described in clauses (1) through (6)
above, or is entitled to be Incurred pursuant to the first paragraph
of this covenant, the Company will be permitted to classify such item
of Debt in any manner that complies with this covenant.
10.2 Limitation on Senior Subordinated Debt
The Company may not Incur any Debt which by its terms is (1)
subordinated in right of payment to any Senior Debt and (2) senior in
right of payment to the Securities.
10.3 Limitation on Issuance of Guarantees of Subordinated Debt
The Company may not permit any Restricted Subsidiary of the Company,
directly or indirectly, to assume, Guarantee or in any other manner
become liable with respect to any Debt of the Company that by its
terms is subordinate or junior in right of payment to the Securities.
10.4 Limitation on Liens Securing Subordinated Debt
The Company may not, and may not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Lien on
or with respect to any property or assets of the Company or any
Restricted Subsidiary of the Company now owned or hereafter acquired
to secure any Debt of the Company or any Restricted Subsidiary that is
expressly by its terms subordinate or junior in right of payment to
any other Debt of the Company or such Restricted Subsidiary, without
making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities (1) equally and ratably with
such Debt as to such property or assets for so long as such Debt will
be so secured or (2) if such Debt is subordinate in right of payment
to the Securities, prior to such Debt as to such property or assets
for so long as such Debt will be so secured.
10.5 Limitation on Restricted Payments
A. The Company:
(1) may not, directly or indirectly, declare or pay any
dividend or make any distribution (including any payment in
connection with any merger or consolidation derived from
assets of the Company or any Restricted Subsidiary of the
Company) in respect of its Capital Stock or to the holders
thereof, excluding any dividends or distributions by the
Company payable solely in shares of its Capital Stock (other
than
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<PAGE>
Redeemable Stock) or in options, warrants or other rights to
acquire its Capital Stock (other than Redeemable Stock),
(2) may not, and may not permit any Restricted Subsidiary
of the Company to, purchase, redeem, or otherwise acquire or
retire for value:
(a) any Capital Stock of the Company or any Restricted
Subsidiary of the Company, or
(b) any options, warrants or other rights to acquire
shares of Capital Stock of the Company or any
Restricted Subsidiary of the Company or any securities
convertible or exchangeable into shares of Capital
Stock of the Company or any Restricted Subsidiary of
the Company,
(3) may not make, or permit any Restricted Subsidiary of the
Company to make, any Investment other than a Permitted
Investment, and
(4) may not, and may not permit any Restricted Subsidiary
of the Company to, redeem, repurchase, defease or otherwise
acquire or retire for value prior to any scheduled maturity,
repayment or sinking fund payment Debt of the Company which
is subordinate or junior in right of payment to the
Securities.
(each of clauses (1) through (4) being a "Restricted Payment") unless:
(a) no Event of Default, or an event that with the
passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and
is continuing or would result from such Restricted
Payment,
(b) after giving pro forma effect to such Restricted
Payment as if such Restricted Payment had been made at
the beginning of the applicable four-fiscal-quarter
period, the Company could Incur at least $1.00 of
additional Debt pursuant to the terms of the Indenture
described in the first sentence of Paragraph 10.1
above, and
(c) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments from the date of
issuance of the Securities does not exceed the sum of:
(i) 50% of cumulative Consolidated Net Income
(or, in case Consolidated Net Income is negative, less 100%
of such deficit) of the Company since March 1, 1999 through
the last day of the last full fiscal quarter ending
immediately preceding the date of such Restricted Payment
for which quarterly or annual financial statements are
available (taken as a single accounting period), plus
(ii) 100% of the aggregate net proceeds received
by the Company after the date of original issuance of the
Securities, including the fair market value of property
other than cash (determined in good faith by the Board as
evidenced by a resolution of the Board filed with the
Trustee), from contributions of capital or the issuance and
sale (other than to a Restricted Subsidiary) of Capital
Stock (other than Redeemable Stock) of the Company, options,
warrants or other rights to acquire Capital Stock (other
than Redeemable Stock) of the Company
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and Debt of the Company that has been converted into or
exchanged for Capital Stock (other than Redeemable Stock and
other than by or from a Restricted Subsidiary) of the
Company after the date of original issuance of the
Securities, provided that any such net proceeds received by
the Company from an employee stock ownership plan financed
by loans from the Company or a Restricted Subsidiary of the
Company shall be included only to the extent such loans have
been repaid with cash on or prior to the date of
determination, plus
(iii) an amount equal to the net reduction in
Investments by the Company and its Restricted Subsidiaries,
subsequent to the date of issuance of the Securities, in any
Person subject to clause (3) above upon the disposition,
liquidation or repayment (including by way of dividends)
thereof or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries, but in each such case only to
the extent such amounts are not included in Consolidated Net
Income of the Company and not to exceed in the case of any
one Person the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Person.
Prior to the making of any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate setting forth the computations by which the
determinations required by clauses (b) and (c) above were made and stating that
no Event of Default, or event that with the passing of time or the giving of
notice, or both, would constitute an Event of Default, has occurred and is
continuing or will result from such Restricted Payment.
B. Notwithstanding the foregoing, so long as no Event of Default, or
event that with the passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and is continuing or would
result therefrom:
(1) the Company may pay any dividend on Capital Stock of any class
within 60 days after the declaration thereof if, on the date when the
dividend was declared, the Company could have paid such dividend in
accordance with the foregoing provisions,
(2) the Company may refinance any Debt otherwise permitted by the
provision of the Indenture described in clause (5) of the second paragraph
under Paragraph 10.1 above or redeem, repurchase or otherwise acquire and
retire for value any Debt solely in exchange for or out of the net proceeds
of the substantially concurrent sale (other than from or to a Restricted
Subsidiary or from or to an employee stock ownership plan financed by loans
from the Company or a Restricted Subsidiary of the Company) of shares of
Capital Stock (other than Redeemable Stock) of the Company, provided that
the amount of net proceeds from such exchange or sale shall be excluded
from the calculation of the amount available for Restricted Payments
pursuant to the preceding paragraph,
(3) the Company may purchase, redeem, acquire or retire any shares of
Capital Stock of the Company solely in exchange for or out of the net
proceeds of the substantially concurrent sale (other than from or to a
Restricted Subsidiary of the Company or from or to an employee stock
ownership plan financed by loans from the Company or a Restricted
Subsidiary of the Company) of shares of Capital Stock (other than
Redeemable Stock) of the Company,
(4) the Company or a Restricted Subsidiary may purchase or redeem any
Senior Debt from Net Available Proceeds to the extent permitted under
Paragraph 10.7,
(5) the Company may make dividends or distributions pro rata to its
shareholders of shares of Capital Stock in any of its Subsidiaries (a
"Spin-off"), provided, that (i) immediately after giving effect to such
Spin-off, the Company could Incur at least $1.00 of additional Debt
pursuant to the first
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sentence of Paragraph 10.1, (ii) the greater of the aggregate fair market
value and aggregate book value of all such shares dividended or distributed
(measured at the time of such dividend or distribution) shall not exceed 5%
of the Consolidated Net Worth of the Company before giving effect to any
such Spin-off and (iii) the Consolidated Cash Flow Available for Fixed
Charges of the Company shall not decrease by more than 5% after giving
effect to any such Spin-off,
(6) the Company may acquire shares of Capital Stock to be contributed
by the Company on behalf of its employees to employee benefit programs;
provided that in each such case the amount to be purchased shall not exceed
5% of the compensation of such employee in any fiscal year, and
(7) the Company or any Restricted Subsidiary of the Company may make
Restricted Payments, in addition to Restricted Payments permitted by
clauses (1) through (6) above, not in excess of $20 million in the
aggregate after the date of the Indenture.
Any payment made pursuant to clauses (1), (3) or (5) of this Paragraph 10.5B
shall be a Restricted Payment for purposes of calculating aggregate Restricted
Payments pursuant to the preceding Paragraph 10.5A.
10.6 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company may not, and may not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company:
(1) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock or pay any Debt or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company,
(2) to make loans or advances to the Company or any other Restricted
Subsidiary of the Company, or
(3) to transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary of the Company to, suffer to exist any such encumbrance or
restriction:
(a) pursuant to any agreement in effect on the date of original
issuance of the Securities, including the Senior Bank Facility,
as described in a schedule to the Indenture,
(b) pursuant to an agreement relating to any Debt Incurred by a
Person (other than a Restricted Subsidiary of the Company
existing on the date of original issuance of the Securities or
any Restricted Subsidiary of the Company carrying on any of the
businesses of any such Restricted Subsidiary) prior to the date
on which such Person became a Restricted Subsidiary of the
Company and outstanding on such date and not Incurred in
anticipation of becoming a Restricted Subsidiary of the Company,
which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person
so acquired,
(c) pursuant to an agreement effecting a renewal, refunding or
extension of Debt Incurred pursuant to an agreement referred to
in clause (a) or (b) above, provided, however, that the
provisions contained in such renewal, refunding or extension
agreement relating to such encumbrance or restriction are no more
restrictive in any material re-
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<PAGE>
spect than the provisions contained in the agreement the subject
thereof, as determined in good faith by the Board and evidenced
by a resolution of the Board filed with the Trustee,
(d) in the case of clause (3) above, restrictions contained in
any security agreement (including a capital lease) securing Debt
of a Restricted Subsidiary otherwise permitted hereunder, but
only to the extent such restrictions restrict the transfer of the
property subject to such security agreement,
(e) in the case of clause (3) above, customary nonassignment
provisions entered into in the ordinary course of business
consistent with past practices in leases and other contracts to
the extent such provisions restrict the transfer or subletting of
any such lease or the assignment of rights under any such
contract,
(f) any restriction with respect to a Restricted Subsidiary of
the Company imposed pursuant to an agreement for the sale or
disposition of all or substantially all of the Capital Stock or
assets of such Restricted Subsidiary, provided that such
restriction terminates if such sale or disposition is closed or
abandoned, or
(g) such encumbrance or restriction is the result of applicable
corporate law or regulation relating to the payment of dividends
or distributions.
10.7 Limitation on Asset Dispositions
The Company may not, and may not permit any of its Restricted
Subsidiaries to, make any Asset Disposition in one or more related transactions
unless:
(1) the Company or the Restricted Subsidiary, as the case may be,
receives consideration for such disposition at least equal to the fair
market value for the assets sold or disposed of as determined by the Board
in good faith and evidenced by a resolution of the Board filed with the
Trustee,
(2) at least 75% of the consideration for such disposition consists of
cash or readily marketable cash equivalents or the assumption of Debt
(other than Debt that is subordinated to the Securities) relating to such
assets and release from all liability on the Debt assumed, and
(3) all Net Available Proceeds, less any amounts invested within 360
days of such disposition in assets related to the business of the Company,
are applied within 360 days of such disposition:
(a) first, to the permanent repayment or reduction of Senior Debt
then outstanding under any agreements or instruments which would
require such application or prohibit payments pursuant to clause
(b) following,
(b) second, to the extent of remaining Net Available Proceeds, to
make an Offer to Purchase outstanding Securities at 100% of their
principal amount plus accrued interest to the date of purchase
and, to the extent required by the terms thereof, any other Debt
of the Company that is pari passu with the Securities at a price
no greater than 100% of the principal amount thereof plus accrued
interest to the date of purchase, and
(c) third, to the extent of any remaining Net Available Proceeds,
to any other use as determined by the Company which is not
otherwise prohibited by the Indenture.
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<PAGE>
Pending final application of the Net Available Proceeds, the Company
may use the proceeds in any manner not prohibited hereunder and may temporarily
reduce Senior Debt then outstanding, provided that this temporary use will not
affect its obligations hereunder.
Notwithstanding the foregoing, the Company shall not be required to
make an Offer to Purchase pursuant to clause 3(b) above if the remaining Net
Available Proceeds after giving effect to the application required by clause
3(a) are less than $10 million.
10.8 Limitation on Sale and Leaseback Transactions
The Company may not, and may not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction unless the Sale
and Leaseback Transaction is treated as an Asset Disposition and all of the
conditions of Paragraph 10.7 (including the provisions concerning the
application of Net Available Proceeds) are satisfied with respect to such Sale
and Leaseback Transaction, treating all of the consideration received in such
Sale and Leaseback Transaction as Net Available Proceeds for purposes of such
covenant.
10.9 Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries
The Company may not, and may not permit any of its Restricted
Subsidiaries to, directly or indirectly, issue, transfer, convey, sell, lease or
otherwise dispose of any shares of Capital Stock (including options, warrants or
other rights to purchase shares of such Capital Stock) of such or any other
Restricted Subsidiary of the Company (other than to the Company or a Wholly
Owned Restricted Subsidiary of the Company or in respect of any director's
qualifying shares or the ownership by foreign nationals of such Capital Stock to
the extent mandated by applicable law) to any Person unless:
(A) such issuance, transfer, conveyance, sale, lease or other
disposition, including the application of the Net Available Proceeds therefrom,
is made in accordance with the provisions of Paragraph 10.7 or the provisions of
clause (5) of Paragraph 10.5 B, and
(B) immediately after giving effect to such issuance, transfer,
conveyance, sale, lease or other disposition, (i) such Subsidiary would no
longer constitute a Restricted Subsidiary of the Company, and (ii) the Company
could make a Restricted Payment in an amount equal to the greater of the fair
market value and book value of the Company's remaining ownership interests in
such Subsidiary pursuant to the provisions described under Paragraph 10.5 and
such amount is thereafter treated as a Restricted Payment for the purpose of
calculating the aggregate amount available for Restricted Payments thereunder.
10.10 Transactions with Affiliates
The Company may not, and may not permit any of its Restricted
Subsidiaries to, enter into any transaction (or series of related transactions)
with an Affiliate of the Company (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company), including any Investment, either directly
or indirectly, unless such transaction is on terms no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate and
is in the best interests of the Company or such Restricted Subsidiary.
For any transaction that involves:
(1) in excess of $2 million a majority of the disinterested members
of the Board shall determine that the transaction satisfies the above
criteria and shall evidence such a determination by a resolution of the
Board filed with the Trustee, or
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(2) in excess of $10 million the Company shall also obtain an opinion
from a nationally recognized expert with experience in appraising the terms
and conditions of the type of transaction (or series of related transactions)
for which the opinion is required stating that such transaction (or series of
related transactions) is on terms no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate of the
Company, which opinion shall be filed with the Trustee.
The foregoing requirements shall not apply to:
(1) Any employment agreement or employee benefit arrangement with any
officer or director entered into in the ordinary course of business and
consistent with past practice;
(2) Payment of reasonable directors' fees to directors who are not
employees of the Company;
(3) Reasonable and customary indemnification of officers and directors
of the Company or any Restricted Subsidiary pursuant to bylaws, statutory
provisions or indemnification agreements;
(4) any Restricted Payment that is permitted to be paid under the
provisions of Paragraph 10.5;
(5) Purchases and sales of goods and services in the ordinary course
of business on terms customary in the industry;
(6) Any transaction pursuant to agreements in effect on the date of
issuance of the Securities; and
(7) Written agreements entered into or assumed in connection with
acquisitions of other businesses with persons who were not Affiliates prior
to such transactions.
10.11 Change of Control
Within 30 days of the occurrence of a Change of Control, the Company
will be required to make an Offer to Purchase all outstanding Securities at a
purchase price equal to 101% of their principal amount plus accrued interest to
the date of purchase. A "Change of Control" will be deemed to have occurred at
such time as:
(1) any Person or any Persons acting together that would constitute a
"group" (a "Group") for purposes of Section 13 (d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor provision
thereto, together with any Affiliates thereof, shall beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act or any successor provision
thereto), directly or indirectly, at least 50% of the aggregate voting power
of all classes of Voting Stock of the Company (for the purposes of this
clause (1) a Person shall be deemed to beneficially own the Voting Stock of a
corporation that is beneficially owned (as defined above) by another
corporation (a "parent corporation") if such Person beneficially owns (as
defined above) at least 50% of the aggregate voting power of all classes of
Voting Stock of such parent corporation), or
(2) any Person or Group, together with any Affiliates thereof, shall
succeed in having a sufficient number of its nominees elected to the Board of
the Company such that such nominees, when added to any existing director
remaining on the Board of the Company after such election who was a nominee
of or is an Affiliate of such Person or Group, will constitute a majority of
the Board of the Company, or
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(3) the Company shall, directly or indirectly, transfer, sell, lease
or otherwise dispose of all or substantially all of its assets, or
(4) there shall be adopted a plan of liquidation or dissolution of
the Company.
Notwithstanding the foregoing, a transaction effected to create a holding
company of the Company shall not be deemed to involve a "Change of Control" if
(1) pursuant to such transaction the Company becomes a wholly owned Subsidiary
of such holding company and (2) as a result of such transaction the holders of
Capital Stock of such holding company are substantially the same as the holders
of Capital Stock of the Company immediately prior to such transaction; provided
that following any such holding company transaction, this covenant shall apply
to both the Company and such holding company, and references in this definition
of "Change of Control" to the Company shall thereafter be treated as references
to either the Company or such holding company, as applicable.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act.
10.12 Payments for Consent
The Company may not, and may not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Securities unless such consideration is
offered to be paid or is paid to all Holders of the Securities that consent,
waive or agree to amend in the time frame set forth in the solicitation document
relating to such consent, waiver or agreement.
10.13 Provision of Financial Information
For so long as any of the Securities are outstanding, the Company
shall file with the SEC the annual reports, quarterly reports and other
documents which a reporting company is required to file with the SEC pursuant to
Section 13 (a) or 15 (d) of the Exchange Act or any successor provisions
thereto.
10.14 Unrestricted Subsidiaries
The Company may designate any of its Subsidiaries to be an
"Unrestricted Subsidiary" as provided below in which event such Subsidiary and
each other Person that is then or thereafter becomes a Subsidiary of such
Subsidiary will be deemed to be an Unrestricted Subsidiary.
An "Unrestricted Subsidiary" means:
(1) any Subsidiary designated as such by the Board as set forth
below where:
(a) neither the Company nor any of its other Subsidiaries (other
than another Unrestricted Subsidiary):
(i) provides credit support for, or any Guarantee of, any
Debt of such Subsidiary or any Subsidiary of such Subsidiary
(including any undertaking, agreement or instrument evidencing
such Debt), or
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(ii) is directly or indirectly liable for any Debt of such
Subsidiary or any Subsidiary of such Subsidiary, and
(b) no default with respect to any Debt of such Subsidiary or any
Subsidiary of such Subsidiary (including any right which the
holders thereof may have to take enforcement action against such
Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Debt of the Company and its Subsidiaries (other
than another Unrestricted Subsidiary) to declare a default on such
other Debt or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity, and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board may designate any Subsidiary to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary, provided that either (1) the Subsidiary to be so designated has
total assets of $1,000 or less or (2) immediately after giving effect to such
designation, the Company could Incur at least $1.00 of additional Debt pursuant
to the first sentence of Paragraph 10.1 and provided, further, that the Company
could make a Restricted Payment in an amount equal to the greater of the fair
market value and book value of such Subsidiary pursuant to Paragraph 10.5 and
such amount is thereafter treated as a Restricted Payment for the purpose of
calculating the aggregate amount available for Restricted Payments thereunder.
10.15. Mergers, Consolidations and Certain Sales of Assets
The Company may not, in a single transaction or a series of related
transactions, consolidate with or merge into any other Person or permit any
other Person to consolidate with or merge into the Company or directly or
indirectly, transfer, sell, lease or otherwise dispose of all or substantially
all of its assets unless:
(1) in a transaction in which the Company does not survive or in which
the Company sells, leases or otherwise disposes of all or substantially all
of its assets, the successor entity to the Company is organized under the
laws of the United States of America or any State thereof or the District of
Columbia and shall expressly assume, by a supplemental indenture executed and
delivered to the Trustee in form satisfactory to the Trustee, all of the
Company's obligations under the Indenture,
(2) immediately before and after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the transaction, no
Event of Default or event that with the passing of time or the giving of
notice, or both, would constitute an Event of Default shall have occurred and
be continuing,
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or other successor entity to the
Company) is equal to or greater than that of the Company immediately prior to
the transaction,
(4) immediately after giving effect to such transaction and treating
any Debt which becomes an obligation of the Company or a Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the transaction, the
Company (including any successor entity to the Company) could Incur at least
$1.00 of additional Debt pursuant to the first sentence of Paragraph 10.1 and
(5) the provisions of Section 5.01 (3) and (5) of the Indenture have
been complied with.
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Except as provided in clause (5) of this Paragraph 10.15, the
provisions of Article 5 of the Indenture do not apply to the Securities.
11. MODIFICATION AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment.
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder
provided, however, that no such modification or amendment may, without
the consent of the Holder of each outstanding Security affected
thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security,
(2) reduce the principal amount of, or the premium or interest on, any
Security,
(3) change the place or currency of payment of principal of or premium
or interest on any Security,
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security,
(5) reduce the above-stated percentage of outstanding Securities
necessary to modify or amend the Indenture or the Securities,
(6) reduce the percentage of aggregate principal amount of outstanding
Securities necessary for waiver of compliance with certain provisions of
the Indenture or the Securities or for waiver of certain defaults,
(7) modify any provisions of the Indenture or the Securities relating
to the modification and amendment of the Indenture or the Securities or the
waiver of past defaults or covenants, except as otherwise specified,
(8) modify any of the provisions of the Indenture or the Securities
relating to the subordination of the Securities in a manner adverse to the
Holders, or
(9) following the mailing of any Offer to Purchase, modify any Offer
to Purchase for the Securities required under Paragraphs 10.7 or 10.11 in a
manner materially adverse to the Holders thereof.
The foregoing clauses (1) through (9) shall apply to the modifications
or amendments to the Securities and replace clauses (1) through (7) of Section
10.02 of the Indenture to the extent such clauses would otherwise be applicable
to the Securities.
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12. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture (in accordance with the provisions
thereof), the Company will be released from those obligations.
13. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY; SATISFACTION AND DISCHARGE.
Subject to certain conditions contained in Article 8 of the Indenture,
the Company at any time may terminate some or all of its obligations
under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity.
U.S. Government Obligations are securities backed by the full faith
and credit of the United States of America or certificates
representing an ownership interest in such Obligations. The
Securities Resolution creating the Securities and the Indenture to the
extent governing the Securities will cease to be of further effect as
to all outstanding Securities, if: (1) the Company will have paid or
caused to be paid the principal of and interest on the Securities as
and when the same will have become due and payable, or (2) all
outstanding Securities (except lost, stolen or destroyed Securities
which have been replaced or paid) have been delivered to the Trustee
for cancellation; provided, that notwithstanding the foregoing the
--------
Indenture shall remain in effect with respect to: (a) rights of
registration of transfer and exchange and the Company's right of
optional redemption, (b) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (c) rights of Holders
to receive payment of principal of and interest on the Securities, (d)
rights, obligations and immunities of the Trustee under the Indenture,
and (e) rights of the Holders of the Securities as beneficiaries of
the Indenture with respect to any property deposited with the Trustee
payable to all or any of them.
14. DEFAULTS AND REMEDIES.
The following will be Events of Default with respect to the
Securities:
(1) failure to pay principal of (or premium, if any, on) any Security
when due,
(2) failure to pay any interest on any Security when due, continued
for 30 days,
(3) default in the payment of principal and interest on Securities
required to be purchased pursuant to an Offer to Purchase as described
under Paragraphs 10.7 and 10.11 when due and payable,
(4) failure to perform or comply with the provisions described under
Paragraph 10.15,
(5) failure to perform any other covenant or agreement of the Company
under the Indenture or the Securities continued for 60 days after written
notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of outstanding Securities,
(6) default under the terms of any instrument evidencing or securing
Debt for money borrowed by the Company or any Restricted Subsidiary of the
Company having an outstanding principal amount of $20 million individually
or in the aggregate which default results in the acceleration of the
payment of such indebtedness or constitutes the failure to pay such
indebtedness when due,
(7) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any Restricted Subsidiary of the Company in
an amount in excess of $20 million which re
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mains undischarged or unstayed for a period of 60 days after the date on
which the right to appeal has expired, and
(8) any of the events described in Section 6.01 (5) or (6) of the
Indenture.
If an Event of Default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the Securities may
declare the principal of all of the Securities to be due and payable
immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations specified in the Indenture, holders of
a majority in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company
must furnish an annual compliance certificate to the Trustee.
15. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
17. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
19. DEFINITIONS
The following definitions of certain terms used in this Security shall
apply to such terms as used herein and in the Indenture to the extent
applicable to the Securities.
"Acquired Debt" of any particular Person means Debt of any other
Person existing at the time such other Person merged with or into or became a
Subsidiary of such particular Person or assumed by such particular Person in
connection with the acquisition of assets from any other Person, and not
incurred by such
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other Person in connection with, or in contemplation of, such other Person
merging with or into such particular Person or becoming a Subsidiary of such
particular Person or such acquisition.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided, that direct
or indirect beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control.
"Asset Disposition" by any Person means any transfer, conveyance,
sale, lease or other disposition by such Person or any of its Restricted
Subsidiaries (including any issuance or sale by a Restricted Subsidiary of
Capital Stock of such Restricted Subsidiary and including a consolidation or
merger or other sale of any such Restricted Subsidiary with, into or to another
Person in a transaction in which such Restricted Subsidiary ceases to be a
Restricted Subsidiary, but excluding a disposition by a Restricted Subsidiary of
such Person to such Person or a Wholly Owned Restricted Subsidiary of such
Person or by such Person to a Wholly Owned Restricted Subsidiary of such Person)
of:
(1) shares of Capital Stock (other than directors' qualifying shares)
or other ownership interests of a Restricted Subsidiary of such Person,
(2) substantially all of the assets of such Person or any of its
Restricted Subsidiaries representing a division or line of business, or
(3) other assets or rights of such Person or any of its Restricted
Subsidiaries outside of the ordinary course of business;
provided in each case that the aggregate consideration for such transfer,
conveyance, sale, lease or other disposition is equal to $5 million or more.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with generally accepted
accounting principles. The stated maturity of such obligation shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty. The principal amount of such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person.
"Cash Equivalents" means:
(1) direct obligations of the United States of America or any agency
thereof having maturities of not more than one year from the date of
acquisition,
(2) time deposits and certificates of deposit of any domestic
commercial bank of recognized standing having capital and surplus in excess
of $500 million, with maturities of not more than one year from the date of
acquisition,
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(3) repurchase obligations issued by any bank described in clause (2)
above with a term not to exceed 30 days,
(4) commercial paper rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's, in each case
maturing within one year after the date of acquisition, and
(5) shares of any money market mutual fund, or similar fund, in each
case having assets in excess of $500 million, which invests predominantly
in investments of the types describes in clauses (1) through (4) above.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of:
(1) Consolidated Interest Expense of the Company and its Restricted
Subsidiaries for such period,
(2) Consolidated Income Tax Expense of the Company and its Restricted
Subsidiaries for such period,
(3) the consolidated depreciation and amortization expense included in
the income statement of the Company and its Restricted Subsidiaries for
such period, and
(4) all other non-cash items reducing Consolidated Net Income of the
Company and its Restricted Subsidiaries, less all non-cash items increasing
Consolidated Net Income of the Company and its Restricted Subsidiaries;
provided, however, that there shall be excluded therefrom the Consolidated Cash
Flow Available for Fixed Charges (if positive) of any Restricted Subsidiary of
the Company (calculated separately for such Restricted Subsidiary in the same
manner as provided above for the Company) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"Consolidated Cash Flow Coverage Ratio" as of any date of
determination means the ratio of:
(1) Consolidated Cash Flow Available for Fixed Charges of the Company
and its Restricted Subsidiaries for the period of the most recently
completed four consecutive fiscal quarters for which quarterly or annual
financial statements are available, to
(2) Consolidated Fixed Charges of the Company and its Restricted
Subsidiaries for such period;
provided, however, that Consolidated Fixed Charges shall be adjusted to give
effect on a pro forma basis to any Debt that has been Incurred by the Company or
any Restricted Subsidiary since the beginning of such period that remains
outstanding and to any Debt that is proposed to be Incurred by the Company or
any Restricted Subsidiary as if in each case such Debt had been incurred on the
first day of such period and as if any Debt that (1) is or will no longer be
outstanding as the result of the Incurrence of any such Debt or (2) had been
repaid or retired during such period had not been outstanding as of the first
day of such period; provided further, however,
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that in making such computation, the Consolidated Interest Expense of the
Company and its Restricted Subsidiaries attributable to interest on any proposed
Debt bearing a floating interest rate shall be computed on a pro forma basis as
if the rate in effect on the date of computation had been the applicable rate
for the entire period; and provided further that, in the event the Company or
any of its Restricted Subsidiaries has made Asset Dispositions or acquisitions
of assets not in the ordinary course of business (including acquisitions of
other Persons by merger, consolidation or purchase of Capital Stock) during or
after such period, the computation of the Consolidated Cash Flow Coverage Ratio
shall be made on a pro forma basis in accordance with Regulation S-X promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), as if the
Asset Dispositions or acquisitions had taken place on the first day of such
period.
"Consolidated Fixed Charges" for any period means the sum of:
(1) Consolidated Interest Expense, and
(2) the consolidated amount of interest capitalized by the Company and
its Restricted Subsidiaries during such period calculated in accordance
with generally accepted accounting principles.
"Consolidated Income Tax Expense" for any period means the
consolidated provision for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means for any period the consolidated
Interest expense included in a consolidated income statement (without deduction
of interest income) of the Company and its Restricted Subsidiaries for such
period calculated on a consolidated basis in accordance with generally accepted
accounting principles, including without limitation or duplication (or, to the
extent not so included, with the addition of):
(1) the amortization of Debt discounts,
(2) the amortization of any payments or fees with respect to letters
of credit, bankers' acceptances or similar facilities,
(3) the amortization of fees with respect to interest rate swap or
similar agreements or foreign currency hedge, exchange or similar
agreements,
(4) Preferred Stock dividends of the Company or Restricted
Subsidiaries of the Company (other than such dividends (a) in respect of
Redeemable Stock or (b) payable in Capital Stock other than Redeemable
Stock) declared and paid or payable,
(5) accrued dividends on Redeemable Stock of the Company or its
Restricted Subsidiaries (other than such dividends payable solely in
Capital Stock other than Redeemable Stock), whether or not declared or
paid,
(6) interest on Debt Guaranteed by the Company and its Restricted
Subsidiaries, and
(7) the portion of any rental obligation allocable to interest
expense.
"Consolidated Net Income" for any period means the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom:
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(1) the net income (or loss) of any Person acquired by of the Company
or a Restricted Subsidiary of the Company in a pooling-of-interests
transaction for any period prior to the date of such transaction,
(2) the net income (or loss) of any Person that is not a Subsidiary of
the Company except to the extent of the amount of dividends or other
distributions actually paid to the Company or a Subsidiary of the Company
by such Person during such period,
(3) gains or losses on Asset Dispositions by the Company or its
Restricted Subsidiaries,
(4) all extraordinary gains and extraordinary losses,
(5) the cumulative effect of changes in accounting principles, and
(6) the tax effect of any of the items described in clauses (1)
through (5) above;
provided, further, that for purposes of any determination pursuant to Paragraph
10.5, there shall further be excluded therefrom the net income (but not net
loss) of any Restricted Subsidiary of the Company that is subject to a
restriction which prevents the payment of dividends or the making of
distributions to the Company or another Restricted Subsidiary of the Company to
the extent of such restriction.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Redeemable Stock of such Person; provided that, with respect to
the Company, adjustments following the date of the Indenture to the accounting
books and records of the Company in accordance with Accounting Principles Board
Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise resulting
from the acquisition of control of the Company by another Person shall not be
given effect to.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent:
(1) every obligation of such Person for money borrowed,
(2) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses,
(3) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(4) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(5) every Capital Lease Obligation of such Person,
(6) all Receivables Sales of such Person, together with any obligation
of such Person to pay any discount, interest, fees, indemnities, penalties,
recourse, expenses or other amounts in connection therewith,
(7) all Redeemable Stock issued by such Person,
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(8) Preferred Stock of Restricted Subsidiaries of such Person held by
Persons other than such Person or one of its Wholly Owned Restricted
Subsidiaries,
(9) every obligation under Interest Rate or Currency Agreements of
such Person, and
(10) every obligation of the type referred to in clauses (1) through
(9) of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed or is responsible or
liable for, directly or indirectly, as obligor, Guarantor or otherwise.
Debt shall not include any obligation to pay contingent purchase price
payments, earn-outs, indemnification obligations or similar items to the buyer
or seller of any business or assets acquired or sold by the Company or a
Restricted Subsidiary to the extent such obligations are not required to be
reflected on the balance sheet of the Company or such Restricted Subsidiary in
accordance with generally accepted accounting principles (footnote disclosure of
such obligations shall not be deemed to be reflected on the balance sheet for
this purpose).
The "amount" or "principal amount" of Debt at any time of
determination as used herein represented by (1) any Receivables Sale, shall be
the amount of the unrecovered capital or principal investment of the purchaser
(other than the Company or a Wholly Owned Restricted Subsidiary of the Company)
thereof (excluding amounts representative of yield or interest earned on such
investment with respect to which such purchaser has recourse to the seller and
(2) any Redeemable Stock, shall be the maximum fixed redemption or repurchase
price in respect thereof.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Debt,
(2) to purchase property, securities or services for the purpose of
assuring the holder of such Debt of the payment of such Debt, or
(3) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Debt (and "Guaranteed," "Guaranteeing" and
"Guarantor" shall have meanings correlative to the foregoing);
provided, however, that the Guarantee by any Person shall not include
endorsements by such Person for Collection or deposit, in either case, in the
ordinary course of business.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring"
shall have meanings correlative to the foregoing); provided, however, that a
change in generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt.
"Interest Rate or Currency Agreement" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors,
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collars and similar agreements) relating to, or the value of which is dependent
upon, interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) to, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person, including any payment on a Guarantee of any
obligation of such other Person.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
"Moody's" means Moody's Investors Services, Inc.
"Net Available Proceeds" from any Asset Disposition by any Person
means cash or readily marketable cash equivalents received (including by way of
sale or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquired of Debt or other obligations relating to such properties or assets)
therefrom by such Person, net of:
(1) all legal, title and recording tax expenses, commissions and other
fees and expenses Incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of such
Asset Disposition,
(2) all payments made by such Person or its Restricted Subsidiaries on
any Debt which is secured by such assets in accordance with the terms of
any Lien upon or with respect to such assets or which must by the terms of
such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition,
(3) all distributions and other payments made to minority interest
holders in Restricted Subsidiaries of such Person or joint ventures as a
result of such Asset Disposition, and
(4) appropriate amounts to be provided by such Person or any
Restricted Subsidiary thereof, as the case may be, as a reserve in
accordance with generally accepted accounting principles against any
liabilities associated with such assets and retained by such Person or any
Restricted Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination
costs associated with such Asset Disposition, in each case as determined by
the Board, in its reasonable good faith judgment evidenced by a resolution
of the Board filed with the Trustee; provided, however, that any reduction
in such reserve following the consummation of such Asset Disposition will
be treated for all purposes of the Indenture and the Securities as a new
Asset Disposition at the time of such reduction with Net Available Proceeds
equal to the amount of such reduction.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer describing the
transaction or transactions necessitating the Offer and offering to purchase up
to the principal amount of Securities specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to the Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applica-
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ble law, not less than 30 days or more than 60 days after the date of such Offer
and a settlement date (the "Purchase Date") for purchase of Securities within
five Business Days after the Expiration Date. The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Offer to Purchase.
"Permitted Interest Rate or Currency Agreement" of any Person means
any Interest Rate or Currency Agreement entered into with one or more financial
institutions in the ordinary course of business that is designed to protect such
Person against fluctuations in interest rates or currency exchange rates with
respect to Debt Incurred and which shall have a notional amount no greater than
the payments due with respect to the Debt being hedged thereby, or in the case
of currency protection agreements, against currency exchange rate fluctuations
in the ordinary course of business relating to then existing financial
obligations or then existing or sold production and not for purposes of
speculation.
"Permitted Investments" means:
(1) an Investment in the Company or a Wholly Owned Restricted
Subsidiary of the Company,
(2) an Investment in a Person, if such Person or a Subsidiary of such
Person will, as a result of the making of such Investment and all other
contemporaneous related transactions, become a Wholly Owned Restricted
Subsidiary of the Company or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to the Company or a
Wholly Owned Restricted Subsidiary of the Company,
(3) a Temporary Cash Investment,
(4) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with generally accepted accounting principles,
(5) stock, obligations or securities received in settlement of debts
owing to the Company or a Restricted Subsidiary of the Company as a result
of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection, enforcement or agreement in lieu of foreclosure of any Lien in
favor of the Company or a Restricted Subsidiary of the Company,
(6) any consolidation or merger of a Wholly Owned Restricted
Subsidiary of the Company to the extent otherwise permitted under the
Indenture or the Securities,
(7) trade accounts arising in the ordinary course of business and any
commercially reasonable refinancing or restructuring thereof undertaken in
good faith,
(8) any Investment made as a result of the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and in
compliance with Paragraph 10.7,
(9) any acquisition of assets solely in exchange for the issuance of
Capital Stock (other than Redeemable Stock) of the Company,
(10) Investments in Permitted Interest Rate or Currency Agreements,
(11) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value),
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when taken together with all other Investments made pursuant to this clause
(11) since the date of the Indenture, not to exceed $25 million.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money.
"Receivables Sale" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in connection
with a disposition of the business operations of such Person relating thereto or
a disposition of defaulted Receivables for purpose of collection and not as a
financing arrangement.
"Redeemable Stock" of any Person means any Capital Stock of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (including upon the
occurrence of an event) matures or is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or is convertible into or exchangeable for
Debt or is redeemable at the option of the holder thereof, in whole or in part,
at any time prior to the final Stated Maturity of the Securities.
"Restricted Subsidiary" means any Subsidiary, whether existing on or
after the date of the Indenture, unless such Subsidiary is an Unrestricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Services a division of The
McGraw-Hill Companies, Inc.
"Sale and Leaseback Transaction" of any person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty.
"Senior Bank Facility" means our Multicurrency Credit Agreement, dated
as of October 14, 1998, as it may be amended or restated from time to time.
"Senior Debt" with respect to any Person, means:
(1) the principal of (and premium, if any) and interest (including
interest accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to such Person whether or not such claim for
post-petition interest is allowed in such proceeding) on, and penalties and
any obligation of such Person for reimbursement, indemnities and fees
relating to, the Senior Bank Facility,
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(2) the principal of (and premium, if any) and interest on Debt of
such Person for money borrowed, whether Incurred on or prior to the date of
original issuance of the Securities or thereafter, and any amendments,
renewals, extensions, modifications, refinancings and refundings of any
such Debt,
(3) any reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person, and
(4) Permitted Interest Rate or Currency Agreements entered into with
respect to Debt described in clauses (1), (2) and (3) above.
Notwithstanding the foregoing, none of the following shall constitute Senior
Debt of any Person:
(a) any Debt as to which the terms of the instrument creating or
evidencing the same provide that such Debt is on a parity with, or not
superior in right of payment to, the Securities,
(b) any Debt which is subordinated in right of payment in any
respect to any other Debt of such Person,
(c) Debt evidenced by the Securities,
(d) any Debt owed to the Company or to a Person when such Person
is a Subsidiary of the Company,
(e) any obligation of such Person arising from Redeemable Stock of
such Person,
(f) that portion of any Debt which is Incurred in violation of the
Indenture, and
(g) Debt which, when Incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is without
recourse to such Person.
"Subordinated Debt" means Debt of the Company as to which the payment
of principal of (and premium, if any) and interest and other payment obligations
in respect of such Debt shall be subordinate to the prior payment in full of the
Securities to at least the following extent:
(1) no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Debt may be permitted for so long as any
default in the payment of principal of (or premium, if any) or interest on
the Securities exists,
(2) in the event that any other default that with the passing of time
or the giving of notice, or both, would constitute an Event of Default
exists with respect to the Securities, upon notice by 25% or more in
principal amount of the Securities to the Trustee, the Trustee shall have
the right to give notice to the Company and the holders of such Debt (or
trustees or agents therefor) of a payment blockage, and thereafter no
payments of principal of (or premium, if any) or interest on or otherwise
due in respect of such Debt may be made for a period of 179 days from the
date of such notice, and
(3) such Debt may not:
(a) provide for payments of principal of such Debt at the
stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any
re-
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demption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each
case prior to the final Stated Maturity of the Securities, or
(b) permit redemption or other retirement (including pursuant to an offer
to purchase made by the Company) of such other Debt at the option of the
holder thereof prior to the final Stated Maturity of the Securities, other
than a redemption or other retirement at the option of the holder of such
Debt (including Pursuant to an offer to purchase made by the Company) which
is conditioned upon a change of control of the Company pursuant to
provisions substantially similar to those described under Paragraph 10.11
(and which shall provide that such Debt will not be repurchased pursuant to
such provisions prior to the Company's repurchase of the Securities
required to be repurchased by the Company pursuant to the provisions of
Paragraph 10.11).
"Subsidiary" of any Person means (1) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (2) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Temporary Cash Investments" means any Investment in the following
kinds of instruments:
(1) readily marketable obligations issued or unconditionally
Guaranteed as to principal and interest by the United States of America or
by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America if, on the date of purchase
or other acquisition of any such instrument by the Company or any
Restricted Subsidiary of the Company, the remaining term to maturity or
interest rate adjustment is not more than two years;
(2) obligations (including, but not limited to, demand or time
deposits, bankers' acceptances and certificates of deposit) issued or
Guaranteed by a depository institution or trust company incorporated under
the laws of the United States of America, any state thereof or the District
of Columbia, provided that:
(a) such instrument has a final maturity nor more than one year
from the date of purchase thereof by the Company or any Restricted
Subsidiary of the Company, and
(b) such depository institution or trust company has at the time
of the Company's or such Restricted Subsidiary's Investment
therein or contractual commitment providing for such Investment:
(i) capital, surplus and undivided profits (as of the date
such institution's most recently published financial
statements) in excess of $100 million, and
(ii) the long-term unsecured debt obligations (other than
such obligations rated on the basis of the credit of a Person
other than such institution) of such institution, at the time
of the Company's or such Restricted Subsidiary's Investment
therein or contractual commitment providing for such
Investment, are rated in the highest rating category of both
S&P and Moody's;
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(3) commercial paper issued by any corporation, if such commercial
paper has, at the time of the Company's or any Restricted Subsidiary of the
Company's Investment therein or contractual commitment providing for such
Investment credit ratings of at least A-1 by S&P and P-1 by Moody's;
(4) money market mutual or similar funds having assets in excess of
$100 million;
(5) readily marketable debt obligations issued by any corporation, if
at the time of the Company's or any Restricted Subsidiary of the Company's
Investment therein or contractual commitment providing for such Investment:
(a) the remaining term to maturity is not more than two years,
and
(b) such debt obligations are rated in one of the two highest
rating categories of both S&P and Moody's;
(6) demand or time deposit accounts used in the ordinary course of
business with commercial banks the balances in which are at all times fully
Insured as to principal and interest by the Federal Deposit Insurance
Corporation or any successor thereto; and
(7) to the extent not otherwise included herein, Cash Equivalents. In
the event that either S&P or Moody's ceases to publish ratings of the type
provided herein, a replacement rating agency shall be selected by the
Company with the consent of the Trustee, and in each case the rating of
such replacement rating agency most nearly equivalent to the corresponding
S&P or Moody's rating, as the case may be, shall be used for purposes
hereof.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
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