<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1997
REGISTRATION NO. 333-20901
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE TORO COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 41-0580470
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
8111 LYNDALE AVENUE SOUTH, BLOOMINGTON, MINNESOTA 55420-1196
(612) 888-8801
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------
J. LAWRENCE MCINTYRE, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
THE TORO COMPANY
8111 LYNDALE AVENUE SOUTH
BLOOMINGTON, MINNESOTA 55420-1196
TELEPHONE: (612) 888-8801
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
<TABLE>
<S> <C>
DEAN R. EDSTROM, ESQ. MITCHELL L. HOLLINS, ESQ.
DOHERTY, RUMBLE & BUTLER PROFESSIONAL SONNENSCHEIN NATH & ROSENTHAL
ASSOCIATION 8000 SEARS TOWER
3500 FIFTH STREET TOWERS CHICAGO, ILLINOIS 60606
150 SOUTH FIFTH STREET TELEPHONE: (312) 876-8144 TELEFAX:
MINNEAPOLIS, MINNESOTA 55402-4235 (312) 876-7934
TELEPHONE: (612) 340-5555 TELEFAX:
(612) 340-5584
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS
DETERMINED BY MARKET CONDITIONS.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
[LOGO] SUBJECT TO COMPLETION, DATED JUNE 9, 1997
$250,000,000
THE TORO COMPANY
DEBT SECURITIES
COMMON STOCK
WARRANTS
UNITS OF SECURITIES
-------------
The Toro Company (the "Company") may from time to time offer (i) its debt
securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness (the "Debt Securities"), (ii) shares of its common stock, $1.00 par
value per share (the "Common Stock"), (iii) warrants to purchase Debt Securities
or Common Stock (the "Warrants") and (iv) units ("Units") consisting of two or
more of the foregoing securities, with an aggregate initial public offering
price of up to $250,000,000 or the equivalent thereof in one or more foreign
currencies or composite currencies, on terms to be determined at the time of
sale. The Debt Securities, Common Stock, Warrants and Units (collectively, the
"Securities") may be offered separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (a "Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable, (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, currency, denominations, maturity,
premium, rate and time of payment of interest, terms for redemption at the
option of the Company or repayment at the option of the holder, terms for
sinking fund payments, covenants, terms for conversion or exchange into shares
of Common Stock and the initial public offering price; (ii) in the case of
shares of Common Stock, the initial public offering price; (iii) in the case of
Warrants, the duration, offering price, exercise price and detachability, and
(iv) in the case of Units, a description of the Securities comprising such Units
and the offering price thereof. Units may be issued in amounts, at prices, on
terms and containing such conditions, covenants and other provisions, and
consisting of such Securities, as will be set forth in a Prospectus Supplement.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable fee, commission, purchase price or discount arrangements with
them, will be set forth, or will be calculable from the information set forth,
in the applicable Prospectus Supplement. See "Plan of Distribution." No
Securities may be sold without delivery of the applicable Prospectus Supplement
describing the method and terms of the offering of such Securities.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is June , 1997.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN AND THEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE OF SUCH PROSPECTUS OR PROSPECTUS SUPPLEMENT OR THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE THEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE OF SUCH PROSPECTUS OR PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Citicorp Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such materials can be obtained from the Public
Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site
(located at http://www.sec.gov) which includes reports, proxy statements and
other information filed electronically by registrants, including the Company,
with the Commission. The Company's Common Stock is listed on the New York Stock
Exchange. Reports, proxy statements and other information concerning the Company
can also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus and any Prospectus Supplement do not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Securities, reference is made to
the Registration Statement, including the exhibits and schedules thereto, which
may be inspected without charge at the principal office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates. Statements contained herein or in any
Prospectus Supplement concerning any document filed as an exhibit to the
Registration Statement do not purport to be complete, and in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
--------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in and made a part of this Prospectus by reference: (i) Annual
Report on Form 10-K for the fiscal year ended October 31, 1996; (ii) Quarterly
Report on Form 10-Q for the three months ended January 31, 1997; (iii) Current
Report on Form 8-K dated December 16, 1996; and (iv) Amendment No. 2 to Current
Report on Form 8-K dated June 6, 1997.
2
<PAGE>
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in any Prospectus Supplement or in a document
incorporated or deemed to be incorporated by reference herein or therein shall
be deemed to be modified or superseded for purposes of this Prospectus and any
Prospectus Supplement to the extent that a statement contained herein or in any
other subsequently filed document which is incorporated or deemed to be
incorporated by reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the information incorporated
herein by reference (other than exhibits, unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to N. Jeanne Ryan, Assistant Secretary, The Toro Company,
8111 Lyndale Avenue South, Bloomington, Minnesota 55420. Telephone requests may
be directed to (612) 888-8801.
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THE COMPANY
The Toro Company is a leading manufacturer of consumer lawn mowers,
snowthrowers, trimmers, commercial mowing and turf maintenance equipment and
underground automatic irrigation systems. These products are sold under the
Toro-Registered Trademark-, Wheel Horse-Registered Trademark-,
Lawn-Boy-Registered Trademark- and other brand names to the consumer market and
professional market, which includes entities that manage or construct golf
courses, parks and other large turf areas. The consumer product line includes
walk-behind mowers; riding mowers and lawn and garden tractors; electrical home
improvement products, such as low voltage lighting, electric trimmers and leaf
blowers; and snow removal products. The professional product line includes
commercial products for professional turf and golf course maintenance, such as
precision cutting mowers and turf aeration equipment, and irrigation products
such as sprinkler heads and control devices for underground irrigation systems.
The Company sells most of its products through domestic and foreign distributors
and mass merchandisers.
The Company was incorporated in Minnesota in 1935 as the successor to a
business founded in 1914. It was reincorporated in Delaware in 1983. The
Company's executive offices are located at 8111 Lyndale Avenue South,
Bloomington, Minnesota 55420, telephone number (612) 888-8801. Unless the
context indicates otherwise, the term "Company" refers to The Toro Company and
its subsidiaries. The Company finances a significant portion of its receivables
through Toro Credit Company, its wholly owned consolidated finance subsidiary
("Toro Credit").
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios (unaudited) of earnings to fixed
charges for the Company and its consolidated subsidiaries for each of the four
fiscal years ended July 31, 1995, for the three month transition period ended
October 31, 1995, for the fiscal year ended October 31, 1996 and for the three
months ended January 31, 1997.
<TABLE>
<CAPTION>
TRANSITION THREE
PERIOD MONTHS
YEAR ENDED JULY 31, ENDED YEAR ENDED ENDED
---------------------------------- OCTOBER 31, OCTOBER 31, JANUARY 31,
1992 1993 1994 1995 1995 1996 1997
--------- ------ ------ ------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)....................... -- (2) 2.12 3.32 5.10 3.02 4.60 2.12
</TABLE>
- --------------
(1) Earnings consist of pre-tax earnings plus fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt expense and
premium, and that portion of rentals representative of interest.
(2) For fiscal year ended July 31, 1992, earnings were insufficient to cover
fixed charges by $34,903,000.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds received by the Company from the sale of the Securities will be
utilized by the Company as required from time to time for working capital and
expansion of the businesses of the Company and its subsidiaries, including Toro
Credit, for the repayment of existing indebtedness and for other general
corporate purposes. To the extent not theretofore utilized, the net proceeds
received by the Company may be placed in short-term investments, including
commercial paper and certificates of deposit, or utilized to reduce other short-
term borrowings. Except as may be indicated in the applicable Prospectus
Supplement, no specific determination has been made as to the use of the
proceeds of the Securities in respect of which this Prospectus is being
delivered.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may not apply thereto will be
described in the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued in one or more series under an
Indenture dated as of January 31, 1997 (the "Indenture") between the Company and
First Trust National Association, as Trustee (the "Trustee"), a copy of which is
filed as an exhibit to the Registration Statement. The following summaries of
certain provisions of the Debt Securities and the Indenture do not purport to be
complete and are subject to, and are qualified in their entireties by reference
to, all of the provisions of the Indenture, including the definitions therein of
certain terms. Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are incorporated by
reference herein.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities of any series may be issued
thereunder up to the aggregate principal
4
<PAGE>
amount which may be authorized from time to time by the Company. The Indenture
does not limit the amount of other indebtedness or securities, other than
certain secured indebtedness as described below, which may be issued by the
Company. All Debt Securities will be unsecured and will rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company. The Trustee will
authenticate and deliver Debt Securities executed and delivered to it by the
Company as set forth in the Indenture.
Reference is made to the related Prospectus Supplement for the following and
other possible terms of each series of the Offered Debt Securities in respect of
which this Prospectus is being delivered: (i) the title of the Offered Debt
Securities; (ii) any limit upon the aggregate principal amount of the Offered
Debt Securities; (iii) if other than 100% of the principal amount, the
percentage of their principal amount at which the Offered Debt Securities will
be offered; (iv) the date or dates on which the principal of the Offered Debt
Securities will be payable; (v) the rate or rates (or method of determination
thereof), if any, at which the Offered Debt Securities will bear interest, the
date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Offered Debt Securities in
registered form, the record dates for the determination of the holders to whom
interest is payable; (vi) if other than as set forth herein, the place or places
where the principal of and interest, if any, on the Offered Debt Securities will
be payable; (vii) the price or prices at which, the period or periods within
which and the terms and conditions upon which the Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company, pursuant to any
sinking fund or otherwise; (viii) if other than the principal amount thereof,
the portion of the principal amount of the Offered Debt Securities which will be
payable upon maturity or acceleration of the maturity thereof; (ix) the
obligation, if any, of the Company to redeem, purchase or repay the Offered Debt
Securities, whether pursuant to any sinking fund or analogous provisions or
pursuant to other provisions set forth therein or at the option of a holder
thereof; (x) whether the Offered Debt Securities will be issuable in registered
or bearer form or both, and the rights of the holders to exchange the Offered
Debt Securities in bearer form for the Offered Debt Securities in registered
form and vice versa and the circumstances under which any such exchanges, if
permitted, may be made; (xi) whether and under what circumstances the Company
will pay additional amounts on the Offered Debt Securities held by a person who
is not a U.S. Person in respect of taxes or similar charges withheld or deducted
and, if so, whether the Company will have the option to redeem the Offered Debt
Securities rather than pay such additional amounts; (xii) whether and under what
circumstances the Offered Debt Securities are convertible into Debt Securities
of a different series; (xiii) information with respect to Warrants, if any;
(xiv) the currency or currency unit in which the Offered Debt Securities are
issued or payable; (xv) whether the Offered Debt Securities will be represented
in whole or in part by one or more global notes registered in the name of a
depositary or its nominee; and (xvi) any other terms or conditions not
inconsistent with the provisions of the Indenture upon which the Offered Debt
Securities will be offered. "Principal" when used herein includes, when
appropriate, the premium, if any, on the Debt Securities.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement or Prospectus Supplements relating to any such series
of Debt Securities. In general, federal income tax consequences applicable to a
series of Debt Securities will be described in the Prospectus Supplement
relating thereto, to the extent applicable.
Unless otherwise provided in the Prospectus Supplement relating to any
Offered Debt Securities, principal and interest, if any, will be payable, and
the Debt Securities will be transferable or exchangeable, at the office or
offices or agency maintained by the Company for such purposes, provided that
payment of interest on any registered Debt Securities will be paid at such place
of payment by check mailed to the persons entitled thereto at the addresses of
such persons appearing on the Debt Securities register. Interest on registered
Debt Securities will be payable on any interest payment date to the
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<PAGE>
persons in whose name the Debt Securities are registered at the close of
business on the record date with respect to such interest payment date.
The Debt Securities may be issued in registered form or, if provided by a
supplement to the Indenture, in bearer form or both as specified in the terms of
the series. Additionally, the Debt Securities may be represented in whole or in
part by one or more global notes registered in the name of a depositary or its
nominee and, if so represented, beneficial interests in such global note will be
shown on, and transfers thereof will be effected only through, records
maintained by the designated depositary and its participants.
The Debt Securities offered hereby will be issued in denominations of $1,000
or any whole multiple of $1,000 or the equivalent thereof in foreign denominated
currency or currency units, unless otherwise specified in the Prospectus
Supplement relating to any Debt Securities.
The Indenture requires the annual filing by the Company with the Trustee of
a certificate as to compliance with certain covenants contained in the
Indenture.
The Company will comply with Section 14(e) under the Exchange Act, and any
other tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of the Company to purchase Offered Debt
Securities at the option of the holders thereof. Any such obligation applicable
to a series of Debt Securities will be described in the Prospectus Supplement or
Prospectus Supplements relating thereto.
The Company may at any time purchase Debt Securities at any price in the
open market or otherwise. Debt Securities so purchased by the Company may, at
its sole option, be held, resold or surrendered to the Trustee in satisfaction
of any sinking fund payment obligation or for cancellation.
Unless otherwise described in a Prospectus Supplement relating to any
Offered Debt Securities, there are no covenants or provisions contained in the
Indenture which may afford the holders of Offered Debt Securities direct
protection in the event of a highly leveraged transaction involving the Company.
EXCHANGE AND TRANSFER
At the option of the holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities (as defined in the Indenture), Debt
Securities of each series will be exchangeable for other Debt Securities of the
same series of any authorized denomination and of like tenor and aggregate
principal amount.
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security Registrar
(as defined in the Indenture) or at the office of any transfer agent designated
by the Company for such purpose. No service charge will be made for any
registration of transfer or exchange of Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Such transfer or exchange will be
effected by the Security Registrar or such transfer agent, as the case may be,
being satisfied with the documents of title and identity of the person making
the request. The Company has appointed the Trustee as Security Registrar. The
Company may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the Company will be required to
maintain a transfer agent in each place of payment for the Debt Securities of
each series.
If the Debt Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company will not be required to (i) issue,
register the transfer of or exchange any Debt Security of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the
6
<PAGE>
opening of business 15 days before the day of mailing of a notice of redemption
of any such Debt Security that may be selected for redemption and ending at the
close of business on the day of such mailing, or (ii) register the transfer of
or exchange any Debt Security so selected for redemption, in whole or in part,
except the unredeemed portion of any such Debt Security being redeemed in part.
RESTRICTIVE COVENANTS
LIMITATIONS ON LIENS
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that, so long as any of the Debt Securities of a series remain
outstanding, the Company will not, and will not permit any Restricted Subsidiary
(as defined below) to, issue, incur, create, assume or guarantee, any debt for
borrowed money secured by a mortgage, security interest, pledge, lien, charge or
other encumbrance ("mortgages") upon any Principal Property (as defined below)
of the Company or any Restricted Subsidiary or upon any shares of stock or
indebtedness of any Restricted Subsidiary (whether such Principal Property,
shares or indebtedness are existing or owned at the date of the Indenture or are
thereafter created or acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation, assumption or guarantee of
any such secured debt, or the grant of a mortgage with respect to any such
indebtedness, that the Securities (together with, if the Company shall so
determine, any other indebtedness of or guarantee by the Company or such
Restricted Subsidiary ranking equally with the Securities) shall be secured
equally and ratably with (or prior to) such secured debt. The foregoing
restriction, however, will not apply to:
(a) mortgages on property existing at the time of acquisition thereof by
the Company or any Subsidiary (as defined below);
(b) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(c) mortgages on property, shares of stock or indebtedness existing at
the time of acquisition thereof by the Company or a Restricted Subsidiary or
mortgages thereon to secure the payment of all or any part of the purchase
price thereof, or mortgages on property, shares of stock or indebtedness to
secure any indebtedness for borrowed money incurred prior to, at the time
of, or within 270 days after, the latest acquisition thereof, or, in the
case of property, the completion of construction, the completion of
improvements, or the commencement of substantial commercial operation of
such property for the purpose of financing all or any part of the purchase
price thereof, such construction, or the making of such improvements;
(d) mortgages to secure indebtedness owing to the Company or to a
Restricted Subsidiary;
(e) mortgages existing at the date of the Indenture;
(f) mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary;
(g) mortgages in favor of certain governmental subdivisions or agencies
to secure indebtedness incurred to finance the purchase, construction or
improvement of the property subject to such mortgages;
(h) mortgages created in connection with the acquisition of assets or a
project financed with, and created to secure; a Nonrecourse Obligation (as
defined below);
(i) extensions, renewals, refinancings or replacements of the foregoing
any mortgage referred to in the foregoing clauses (a), (b), (c), (e), (f),
(g) and (h) provided, however, that any
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<PAGE>
mortgages permitted by any of the foregoing clauses (a), (b), (c), (e), (f),
(g) and (h) shall not extend to or cover any property of the Company or such
Restricted Subsidiary, as the case may be, other than the property, if any,
specified in such clauses and improvements thereto, and provided further
that any refinancing or replacement of any mortgages permitted by the
foregoing clauses (g) and (h) shall be of the type referred to in such
clauses (g) and (h), as the case may be.
Notwithstanding the restrictions described in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Securities,
provided that after giving effect thereto, the aggregate amount of all debt so
secured by mortgages (not including mortgages permitted under clauses (a)
through (i) above) does not exceed 10% of the Consolidated Net Tangible Assets
(as defined below) of the Company as most recently determined on or prior to
such date.
RESTRICTIONS ON SALE AND LEASEBACKS
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that, so long as any of the Debt Securities of a series remain
outstanding, the Company will not, nor will it permit any Restricted Subsidiary
to, enter into any Sale and Leaseback Transaction (as defined below) with
respect to any Principal Property unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur indebtedness secured by a mortgage on the
Principal Property involved in such transaction at least equal in amount to the
Attributable Debt (as defined below) with respect to such Sale and Leaseback
Transaction, without equally and ratably securing the Debt Securities; or (b)
the Company shall apply an amount equal to the greater of the net proceeds of
such sale or the Attributable Debt with respect to such Sale and Leaseback
Transaction within 270 days of such sale to either (or a combination of) the
retirement (other than any mandatory retirement, mandatory prepayment or sinking
fund payment or by payment at maturity) of debt for borrowed money of the
Company or a Restricted Subsidiary that matures more than 12 months after the
creation of such indebtedness or the purchase, construction or development of
other comparable property.
LIMITATION ON SUBSIDIARY DEBT
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that it will not permit any Subsidiary (other than Toro Credit, or any
successor finance Subsidiary so long as such Subsidiary or successor has no
operating assets and is engaged solely in financing activities) to Incur (as
defined below) or have any Debt except: (a) Debt outstanding on the date of the
Indenture; (b) Debt issued to and held by the Company or a Wholly Owned
Subsidiary (as defined below); (c) Debt Incurred by a Person (as defined in the
Indenture) prior to the time such Person became, merges into, or consolidates
with a Subsidiary, or a Subsidiary merges into or consolidates with such Person
and thereby such Person becomes a Subsidiary; (d) Debt which is exchanged for,
or the proceeds of which are used to refinance or refund, any Debt permitted to
be outstanding pursuant to clauses (a) through (c) above (or any extension or
renewal thereof), in an aggregate principal amount not to exceed the principal
amount of the Debt so exchanged, refinanced or refunded and provided such
refinancing or refunding Debt by its terms, or by the terms of any agreement or
instrument pursuant to which such Debt is issued (x) does not provide for
payments of principal at the stated maturity of such Debt or by way of a sinking
fund applicable to such Debt or by way of any mandatory redemption, defeasance,
retirement or repurchase of such Debt by the Company (including any redemption,
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 stated maturity of the
Debt being refinanced or refunded and (y) does not permit redemption or other
retirement (including pursuant to an offer to purchase made by the Company) of
such Debt at the option of the holder thereof prior to the stated maturity of
the Debt being refinanced or refunded, other than a redemption or other
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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 the change of
control of the Company; and (e) Debt having a principal amount and liquidation
value not in excess of 20% of the Consolidated Net Tangible Assets of the
Company.
CERTAIN DEFINITIONS APPLICABLE TO COVENANTS
The term "Attributable Debt" means, at the time of determination, the
present value of the total net amount of rent and other payments required to be
paid under a lease during the remaining term thereof (including any renewal term
or period for which such lease has been extended), discounted at the rate of
interest set forth or implicit in the terms of such lease or, if not practicable
to determine such rate, the weighted average interest rate per annum (in the
case of Original Issue Discount Securities (as defined in the Indenture), the
imputed interest rate) borne by the Debt Securities of each series outstanding
pursuant to the Indenture compounded semi-annually. For purposes of the
foregoing definition, rent shall not include amounts required to be paid by the
lessee, whether or not designated as rent or additional rent, on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) and the net
amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" means, as of any particular
time, total assets (excluding applicable reserves and other properly deductible
items) less: (a) total current liabilities, except for (1) notes and loans
payable, (2) current maturities of long-term debt, and (3) current maturities of
obligations under capital leases; and (b) goodwill, patents and trademarks, to
the extent included in total assets; all as set forth on the most recent
consolidated balance sheet of the Company and its Restricted Subsidiaries and
computed in accordance with generally accepted accounting principles.
The term "Debt" means, with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed, (ii) 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, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) the maximum fixed redemption or repurchase price of redeemable
stock of such Person at the time of determination, (vi) every obligation to pay
rent or other payment amounts of such Person with respect to any Sale and
Leaseback Transaction and (vii) every obligation of the type referred to in
clauses (i) through (vi) 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, directly or indirectly, as obligor, guarantor or
otherwise.
The term "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 the 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.
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The term "Nonrecourse Obligation" means indebtedness or other obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Restricted Subsidiary or (ii) the financing of a project
involving the development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to such indebtedness
or obligation has no recourse to the Company or any Restricted Subsidiary or any
assets of the Company or any Restricted Subsidiary other than the assets which
were acquired with the proceeds of such transaction or the project financed with
the proceeds of such transaction (and the proceeds thereof).
The term "Principal Property" means the land, land improvements, buildings
and fixtures (to the extent they constitute real property interests), (including
any leasehold interest therein) constituting the principal corporate office, any
manufacturing facility, or any distribution center (whether now owned or
hereafter acquired) which: (a) is owned by the Company or any Subsidiary; (b) is
located within the United States; (c) has not been determined in good faith by
the Board of Directors of the Company not to be materially important to the
total business conducted by the Company and its Subsidiaries taken as a whole;
and (d) has a market value on the date as of which the determination is being
made in excess of 1.0% of Consolidated Net Tangible Assets of the Company as
most recently determined on or prior to such date.
The term "Restricted Subsidiary" means any Subsidiary which owns any
Principal Property which has a market value on the date as of which the
determination is being made in excess of 2.0% of Consolidated Net Tangible
Assets of the Company as most recently determined on or prior to such date.
The term "Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
any Principal Property which property has been or is to be sold or transferred
by the Company or such Restricted Subsidiary to such Person.
The term "Subsidiary" means any corporation of which at least a majority of
the outstanding voting stock having the power to elect a majority of the board
of directors of such corporation is at the time owned, directly or indirectly,
by the Company or by one or more other Subsidiaries, or by the Company and one
or more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
The term "Wholly Owned Subsidiary" of any Person means a 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 Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any Person (a
"successor Person"), and may not permit any Person to consolidate with or merge
into, or convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless (i) the successor Person (if any) is a
corporation, partnership, trust or other entity organized and validly existing
under the laws of any domestic jurisdiction and assumes the Company's
obligations on the Debt Securities and under the Company's obligations on the
Debt Securities and under the Indenture, (ii) immediately after giving effect to
the transaction, no Event of Default (as defined below), and not event which,
after notice or lapse of time or both, would become an Event of Default, shall
have occurred and be continuing, (iii) if, as a result of the transaction,
property of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance that would not be permitted under the
limitation on mortgage, pledge, lien, security interest or other encumbrance
described above under "Restrictive Covenants," the Company takes such steps as
shall be necessary to secure the Securities equally and ratably with (or prior
to) the indebtedness secured by such mortgage, pledge, lien, security interest
or other encumbrance and (iv) certain other conditions are met.
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EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as: (i) default in the payment of any interest upon any
Debt Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or (ii) default in the payment of the
principal of or any premium on any Debt Security of that series at its Maturity;
or (iii) default in the deposit of any sinking fund payment, when and as due by
the terms of a Debt Security of that series; or (iv) default in the performance,
or breach, of any other covenant or warranty of the Company in the Indenture
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this paragraph specifically dealt with or which has
expressly been included in the Indenture solely for the benefit of series of
Securities other than that series) and continuance of such default or breach for
a period of 30 days after there has been given to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 10% in principal
amount of the outstanding Debt Securities of that series a written notice as
provided in the Indenture; or (v) a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company (including a
default with respect to Securities of any series other than that series), or
under any mortgage, indenture or instrument (including the Indenture) under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company having an aggregate principal
amount outstanding of at least $10 million, whether such indebtedness now exists
or shall hereafter be created, which default (A) shall constitute a failure to
pay any portion of the principal of such indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto or (B) shall
have resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without, in the case of clause (A), such indebtedness having been discharged or
without, in the case of clause (B), such indebtedness having been discharged or
such acceleration having been rescinded orannulled, in each such case, within a
period of 10 days after there shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
principal amount of the outstanding Debt Securities of that series a written
notice as provided in the Indenture specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled, as the case may be, or (vi) certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary. Additional Events of Default may be prescribed for the benefit of
holders of certain series of Debt Securities which, if prescribed, will be
described in the Prospectus Supplement relating to such Debt Securities.
If a default occurs under the Indenture with respect to Debt Securities of
any series, the Trustee will give the holders of Debt Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act
of 1939; provided, however, that in the case of any default of the character
specified in clause (iv) of the preceding paragraph with respect to Debt
Securities of such series, no such notice to holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this paragraph,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Debt Securities of such
series.
The Indenture provides that if an Event of Default (other than an Event of
Default described in clause (vi) of the second preceding paragraph) with respect
to any series of Debt Securities shall have occurred and be continuing, either
the Trustee or the holders of not less than 25% in aggregate principal amount of
Debt Securities of that series then outstanding by notice as provided in the
Indenture may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities (as defined), such portion of the
principal amount as may be specified in the term of that series) of all the Debt
Securities of that series to automatically, and without any action by the
Trustee or any Holder, become immediately due and payable. After any such
acceleration, but before a judgment or decree based on acceleration, the Holders
of a majority in principal amount of the Outstanding Securities of that series
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default,
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other than the non-payment of accelerated principal (or other specified amount),
have been cured or waived as provided in the Indenture. For information as to
waiver of defaults, see "Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee shall be under no obligation to exercise any of its rights
or powers under the Indenture at the request or direction of any of the holders
of that series, unless such holders shall have offered to the Trustee reasonable
security or indemnity. Subject to such provisions for security for
indemnification and certain limitations contained in the Indenture, the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of each series affected by an Event of Default will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee under the Indenture or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of that series.
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture, or for the appointment
of a receiver or trustee, or for any other remedy thereunder, unless (i) such
holder has previously given the Trustee written notice of a continuing Event of
Default with respect to Debt Securities of that series, (ii) the holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
that series shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee and (iii) the Trustee has
failed to institute such proceeding within 60 days after its receipt of such
notice, request, and offer and has not received from the holders of a majority
in aggregate principal amount of the outstanding Debt Securities of that series
a direction inconsistent with such request. However, the right of a holder of
any Debt Security to receive payment of the principal of and any interest on
such Debt Security on or after the due dates expressed in such Debt Security, or
to institute suit for the enforcement of any such payment on or after such
dates, shall not be impaired without the consent of such holder.
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to the best of
their knowledge, is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults.
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture with respect to any series (except for certain specified
surviving obligations) will be satisfied and discharged upon the satisfaction of
certain conditions, including the deposit with the Trustee of money sufficient
for the payment or redemption of all the Debt Securities of such series in
accordance with the Indenture and terms of the Debt Securities of such series.
MODIFICATION AND WAIVER
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debt Securities of each affected series at the time
outstanding, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of, the Indenture or
any supplemental indenture with respect to the Debt Securities of such series or
modifying in any manner the rights of the holders of the Debt Securities of such
series; provided that no such supplemental indenture may, without the consent of
the holder of each outstanding Debt Security affected thereby, (i) change the
Stated Maturity (as defined in the Indenture) of the principal of, or any
installment of principal of or interest on, any Debt Security, (ii) reduce the
principal amount of, or any premium or interest on, any Debt Security, (iii)
reduce the amount of principal of an Original Issue Discount Security or any
other Debt Security payable upon acceleration of the Maturity (as defined in the
Indenture) thereof, (iv) change the place or currency of payment of principal
of, or any premium or interest on, any Debt Security, (v) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, (vi) reduce the
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percentage in principal amount of outstanding Debt Securities of any series, the
consent of whose holders is required for modification or amendment of the
Indenture, (vii) reduce the percentage in principal amount of outstanding Debt
Securities of any series necessary for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults or (viii) modify
such provisions with respect to modification and waiver.
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may waive compliance by the Company
with certain restrictive provisions of the Indenture. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest and certain covenants and provisions
of the Indenture which cannot be amended without the consent of the holder of
each outstanding Debt Security of such series affected.
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the Indenture
as of any date, (i) the principal amount of an Original Issue Discount Security
that will be deemed to be outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable (for
example, because it is based on an index), the principal amount of such Debt
Security deemed to be outstanding as of such date will be an amount determined
in the manner prescribed for such Debt Security and (iii) the principal amount
of a Debt Security denominated in one or more foreign currencies or currency
units that will be deemed to be outstanding will be the U.S. dollar equivalent,
determined as of such date in the manner of such Debt Security (or, in the case
of a Debt Security described in clause (i) or (ii) above, of the amount
described in such clause). Certain Debt Securities, including those for whose
payment or redemption money has been deposited or set aside in trust for the
holders and those that have been fully defeased pursuant to Section 13.02 of the
Indenture, will not be deemed to be outstanding.
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the holders of
outstanding Debt Securities of any series entitled to give or take any demand,
authorization, direction, notice, consent, waiver or other action under the
Indenture, in the manner and subject to the limitations provided in the
Indenture. In certain limited circumstances, the Trustee will be entitled to set
a record date for action by holders. If a record date is set for any action to
be taken by holders of a particular series, such action may be taken only by
persons who are holders of outstanding Debt Securities of that series on the
record date. To be effective, such action must be taken by holders of the
requisite principal amount of such Debt Securities within a specified period
following the record date. For any particular record date, this period will be
180 days or such shorter period as may be specified by the Company (or the
Trustee, if it set the record date), and may be shortened or lengthened (but not
beyond 180 days) from time to time.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, that, if such provision is made applicable to the
Debt Securities of a series, then the Company may elect either (a) to terminate
(and be deemed to have satisfied) all its obligations with respect to such Debt
Securities (except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary of mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, to compensate and indemnify the Trustee and to punctually pay or
cause to be paid the principal of, and interest on, all Debt Securities of such
series when due) ("Defeasance") or (b) to be released from its obligations
described above under "Limitations on Liens", "Restrictions on Sale and
Leasebacks" and "Limitation on Subsidiary Debt" and certain requirements as to
maintenance of Principal Properties and payment of taxes and other claims
("Covenant Defeasance"), upon the deposit with the Trustee, in trust for such
purpose, of money and/or U.S. Government Obligations which through the payment
of principal and interest in accordance with
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their terms (without consideration of any reinvestment) will provide money, in
an amount sufficient (in the opinion of a nationally recognized firm of
independent public accountants) to pay the principal of and interest, if any, on
the Outstanding Debt Securities of such series, and any mandatory sinking fund
or analogous payments thereon, on the scheduled due dates therefor. Such a trust
may be established only if, among other things, the Company has delivered to the
Trustee an opinion of counsel with regard to certain matters, including an
opinion to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for Federal income tax purposes as a result of
such deposit and discharge and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if such deposit and Defeasance or Covenant Defeasance, as the case may be, had
not occurred. The Prospectus Supplement may further describe the provisions, if
any, permitting Defeasance or Covenant Defeasance with respect to the Debt
Securities of any series.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the law of the State of New York.
CONCERNING THE TRUSTEE
The Company presently does, and may from time to time in the future,
maintain lines of credit and have customary banking relationships with
affiliates of First Trust National Association, the Trustee under the Indenture.
The Company has debt securities outstanding under another indenture for which
the Trustee is serving as trustee and the Trustee may serve as trustee for other
debt securities issued by the Company from time to time.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 35,000,000 shares of
Common Stock, par value $1.00 per share; 1,000,000 shares of Voting Preferred
Stock, par value $1.00 per share; and 1,000,000 shares of Non-Voting Preferred
Stock, par value $1.00 per share, of which 150,000 shares are designated as
Series A $11.28 Cumulative Non-Voting Preferred Stock (the "Series A Preferred
Stock"). The Board of Directors has adopted a certificate of designation with
respect to a series of 150,000 shares of Voting Preferred Stock, the Series B
Junior Participating Voting Preferred Stock, $1.00 par value (the "Series B
Preferred Stock"), in connection with the Company's Rights Agreement dated June
14, 1988 (the "Rights Agreement"). See "--Rights Plan."
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Delaware General Corporation Law
and the Company's Certificate of Incorporation, as amended.
COMMON STOCK
At May 30, 1997, there were 12,076,474 shares of Common Stock outstanding.
All outstanding shares of Common Stock are, and the shares offered hereby, when
issued, will be fully paid and nonassessable. All holders of Common Stock have
voting rights and are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Holders of Common Stock do not
have the right to cumulate votes in the election of directors and do not have a
right of redemption or any preferential right of subscription for any securities
of the Company, except as described below under "Rights Plan."
Subject to preferences that may be applicable to any shares of preferred
stock outstanding at the time, holders of Common Stock are entitled to dividends
when and as declared by the Board of Directors
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from funds legally available therefor and are entitled, in the event of
liquidation, to share ratably in all assets remaining after payment of
liabilities.
PREFERRED STOCK
At May 30, 1997, there were no shares of Series A Preferred Stock or Series
B Preferred Stock outstanding. Previously outstanding shares of Series A
Preferred Stock have been redeemed and may not be reissued as Series A Preferred
Stock; however, the Board of Directors is authorized to retire such series in
which case the shares previously designated as such series shall assume the
status of authorized but unissued shares of Preferred Stock. The Series B
Preferred Stock is issuable in accordance with the terms of the Company's Rights
Agreement. See "Rights Plan" below.
The Board of Directors has the authority, in most instances without further
stockholder action, to issue from time to time all or any part of the authorized
Preferred Stock. Additional Preferred Stock is issuable in one or more series,
and the Board of Directors is authorized to determine the designation of and
number of shares in each series and to fix the dividend, redemption,
liquidation, retirement, conversion and voting rights, if any, of such series,
and any other rights and preferences thereof. Any shares of Preferred Stock
which may be issued may have disproportionately high voting rights or class
voting rights, may be convertible into shares of Common Stock and may rank prior
in right to shares of Common Stock as to payment of dividends and upon
liquidation. Although the issuance of additional Preferred Stock may have an
adverse effect on the rights (including voting rights) of holders of Common
Stock, the consent of the holders of Common Stock would not be required for any
such issuance of Preferred Stock. In addition, the issuance of additional
Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company. The Company has no current plans to issue any
Preferred Stock, except as provided for in the Rights Agreement. See "--Rights
Plan."
RIGHTS PLAN
On June 14, 1988, the Board of Directors declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock to holders of record on June 24, 1988. Each Right entitles the registered
holder to purchase from the Company, at a price of $85, one one-hundredth of a
share of Series B Preferred Stock subject to adjustment as provided in the
Rights Agreement. Pursuant to the Rights Agreement, one Right attaches to and
trades together with each share of Common Stock issued by the Company, including
any shares of Common Stock offered hereby.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the outstanding
Common Stock or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 20% or more of such
outstanding Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be attached to the Common Stock and will
be evidenced by the Common Stock certificate.
Until the Distribution Date, the Rights will be transferred with and only
with the Common Stock. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date. The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 14, 1998 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed by the Company.
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In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, each holder of a Right will thereafter have the right to
receive, upon the exercise at the then current exercise price of the Right,
shares of common stock of the acquiring company which at the time of such
transaction have a market value of two times the exercise price of the Right. In
the event that (i) any person becomes an Acquiring Person (unless such person
first acquires 20% or more of the outstanding Common Stock by a purchase
pursuant to a tender offer for all of the Common Stock for cash, which purchase
increases such person's beneficial ownership to 80% or more of the outstanding
Common Stock) or (ii) during such time as there is an Acquiring Person, there
shall be any reclassification of securities or recapitalization or
reorganization of the Company which has the effect of increasing by more than 1%
the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its subsidiaries beneficially owned by the
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereafter be void), will thereafter have
the right to receive upon exercise Common Stock having a market value of two
times the exercise price of the Right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock and prior to the acquisition by such person or group of 50% or more
of the outstanding Common Stock, the Board of Directors may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of Common Stock, or one
one-hundredth of a share of Series B Preferred Stock (or of a share of a class
or series of the Company's Preferred Stock having equivalent rights, preferences
and privileges), per Right.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
In addition, if a bidder who does not beneficially own more than 1% of the
Common Stock (and who has not within the past year owned in excess of 1% of the
Common Stock and, at a time he held such greater than 1% stake, disclosed, or
caused the disclosure of, an intention which relates to or would result in the
acquisition or influence of control of the Company) proposes to acquire all of
the Common Stock (and all other shares of capital stock of the Company entitled
to vote with the Common Stock in the election of directors or on mergers,
consolidations, sales of all or substantially all of the Company's assets,
liquidations, dissolutions or windings up) for cash at a price which a
nationally recognized investment banker selected by such bidder states in
writing is fair, and such bidder has obtained written financing commitments (or
otherwise has financing) and complies with certain procedural requirements, then
the Company, upon the request of the bidder, will hold a special stockholders
meeting to vote on a resolution requesting the Board of Directors to accept the
bidder's proposal. If a majority of the outstanding shares entitled to vote on
the proposal vote in favor of such resolution, then for a period of 60 days
after such meeting the Rights will be automatically redeemed at the Redemption
Price immediately prior to the consummation of any tender offer for all of such
shares at a price per share in cash equal to or greater than the price offered
by such bidder. No redemption will be permitted or required after the
acquisition by any person or group of affiliated or associated persons of
beneficial ownership of 20% or more of the outstanding Common Stock. Immediately
upon redemption, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including without limitation, the right to vote
or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
unless the offer is conditional on a substantial number of Rights being
acquired. The Rights, however, should not affect any prospective offeror willing
to make an offer at an equitable price and which is otherwise in the best
interests of the Company and its stockholders, as determined by the Board of
Directors. The Rights should not interfere with any merger or other
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business combination approved by the Board of Directors since the Board of
Directors may, at its option, redeem the Rights at any time until there is an
Acquiring Person.
The foregoing summary of certain terms of the Rights is qualified in its
entirety by reference to the Rights Agreement, a copy of which is incorporated
by reference as an exhibit to the Registration Statement.
CHANGE OF CONTROL
Certain provisions of the Company's Certificate of Incorporation may have
the effect of preventing, discouraging or delaying any change in the control of
the Company. The following provisions may have anti-takeover effects: (a) the
Board of Directors is classified into three classes, each of which serves for
three years, with one class being elected each year; (b) directors may be
removed only for cause and only with the approval of holders of at least 80% of
the then outstanding shares of the capital stock entitled to vote generally in
the election of directors ("Voting Stock"); (c) any vacancy on the Board may be
filled only by the remaining directors then in office; (d) stockholder action
must be taken at a meeting of stockholders and stockholders may not act by
written consent; (e) special meetings of stockholders of the Company may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the entire Board; (f) a "fair price" provision requires the approval
by the holders of 80% of the then outstanding Voting Stock as a condition for
mergers and certain other business combinations of the Company with any holder
of more than 10% of such voting power (an "Interested Stockholder") unless
either (i) the transaction is approved by a majority of the members of the Board
of Directors who are unaffiliated with the Interested Stockholder and were
members of the Board of Directors prior to the time the Interested Stockholder
became an Interested Stockholder or (ii) certain minimum price and procedural
requirements are met; and (g) the stockholder vote required to alter, amend or
repeal the foregoing provisions is 80% of the then outstanding Voting Stock.
These provisions, individually and collectively, will make difficult and may
discourage a merger, tender offer or proxy fight, even if such transaction or
occurrence may be favorable to the interests of the stockholders, and may delay
or frustrate the assumption of control by a holder of a large block of the
Common Stock and the removal of incumbent management. Furthermore, these
provisions may deter or could be utilized to frustrate a future takeover attempt
which is not approved by the incumbent Board of Directors, but which the holders
of a majority of the shares may deem to be in their best interests or in which
stockholders may receive a substantial premium for their stock over prevailing
market prices of such stock. By discouraging takeover attempts, these provisions
might have the incidental effect of inhibiting certain changes in management
(some or all of the members of which might be replaced in the course of a change
of control) and also the temporary fluctuations in the market price of the stock
which often result from actual or rumored takeover attempts.
In addition, Section 203 of the Delaware General Corporation Law restricts
certain business combinations between the Company and a stockholder who acquires
15% or more of the outstanding voting stock of the Company (an "interested
stockholder"). Unless an exception from the restriction is available, the
Company may not engage in certain business combinations involving the interested
stockholder or its affiliates for a period of three years from the time the
interested stockholder became such. The restriction does not apply if (i) prior
to the interested stockholder becoming an interested stockholder the Board
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder, (ii) the interested
stockholder acquires 85% of the outstanding voting stock in the same transaction
in which the 15% threshold is exceeded or (iii) the proposed business
combination is approved by the Board of Directors and authorized at a
stockholders' meeting by at least 66 2/3% of the outstanding disinterested
voting stock not owned by the interested stockholder. The three year probation
will also be inapplicable if the Board of Directors and a majority of the
Company's continuing directors approves a merger or sale or does not oppose a
tender offer for at least 50% of the outstanding voting stock.
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TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Norwest Bank
Minnesota, National Association. Its mailing address is 161 North Concord
Exchange, South St. Paul, Minnesota 55075-0738.
DESCRIPTION OF WARRANTS
The Corporation may issue Warrants for the purchase of Debt Securities
("Debt Warrants") or for the purchase of Common Stock ("Common Stock Warrants").
Warrants may be issued independently or together with Debt Securities or shares
of Common Stock offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities or shares of Common Stock. Each series of
Warrants will be issued under a separate warrant agreement (a "Warrant
Agreement") to be entered into between the Corporation and a bank or trust
company, as Warrant Agent, all as set forth in the Prospectus Supplement
relating to the particular issue of Warrants. The Warrant Agent will act solely
as an agent of the Corporation in connection with the Warrants and will not
assume any obligation or relationship of agency or trust for or with any holders
of Warrants or beneficial owners of Warrants. Copies of the forms of Warrant
Agreements, including the forms of Warrant certificates representing the
Warrants, will be filed as exhibits or incorporated by reference in the
Registration Statement to which this Prospectus pertains. The following
summaries of certain provisions of the forms of Warrant Agreements and Warrant
certificates do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Warrant Agreements
and the Warrant certificates.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Debt Warrants, the
following where applicable: (i) the offering price; (ii) the currencies in which
such Debt Warrants are being offered; (iii) the designation, aggregate principal
amount, currencies, denominations and terms of the series of Debt Securities
purchasable upon exercise of such Debt Warrants; (iv) the designation and terms
of any series of Debt Securities with which such Debt Warrants are being offered
and the number of such Debt Warrants being offered with each such Debt Security
or share of Common Stock; (v) the date on and after which such Debt Warrants and
the related series of Debt Securities or shares of Common Stock will be
transferable separately; (vi) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Debt Warrant and the price at
which and currencies in which such principal amount of Debt Securities of such
series may be purchased upon such exercise; (vii) the date on which the right to
exercise such Debt Warrants shall commence and the date (the "Expiration Date")
on which such right shall expire; (viii) whether the Debt Warrants will be
issued in registered or bearer form; (ix) United States federal income tax
consequences; and (x) any other terms of such Debt Warrants.
In the case of Common Stock Warrants, the applicable Prospectus Supplement
will describe the terms of such Common Stock Warrants, including the following
where applicable: (i) the offering price; (ii) the aggregate number of shares of
Common Stock purchasable upon exercise of such Common Stock Warrants; (iii) the
designation and terms of the series of Debt Securities or shares of Common Stock
with which such Common Stock Warrants are being offered and the number of such
Common Stock Warrants being offered with each such Debt Security or share of
Common Stock; (iv) the date on and after which such Common Stock Warrants and
the related series of Debt Securities or shares of Common Stock will be
transferable separately; (v) the number of shares of Common Stock purchasable
upon exercise of each such Common Stock Warrant and the price at which such
number of shares of Common Stock may be purchased upon each exercise; (vi) the
date on which the right to exercise such Common Stock Warrants shall commence
and the Expiration Date; (vii) United States federal income tax consequences;
and (viii) any other terms of such Common Stock Warrants. Common Stock Warrants
will be offered and exercisable for U.S. dollars only and will be in registered
form only.
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Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement. Prior to the exercise of any Debt Warrant, holders of such Debt
Warrants will not have any of the rights of holders of the Debt Securities
purchasable upon such exercise, including the right to receive payments of
principal of, premium, if any, or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the Indenture. Prior
to the exercise of any Common Stock Warrants, holders of such Common Stock
Warrants will not have any rights of holders of shares of Common Stock
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the shares of Common Stock purchasable upon such exercise
or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Common Stock, as the case may
be, at such exercise price as shall in each case be set forth in, or calculable
from, the Prospectus Supplement relating to the offered Warrants. After the
close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by the Company), unexercised Warrants will
become void.
Warrants may be exercised by delivering to the Warrant Agent payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities or shares of Common Stock, as the case may be,
purchasable upon such exercise together with certain information set forth on
the reverse side of the Warrant certificate. Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price, subject to the
receipt, within five business days, of the Warrant certificate evidencing such
Warrants. Upon receipt of such payment and the Warrant certificate properly
completed and duly executed at the corporate trust office of the Warrant Agent
or any other office indicated in the applicable Prospectus Supplement, the
Company will, as soon as practicable, issue and deliver the Debt Securities or
shares of Common Stock, as the case may be, purchasable upon such exercise. If
fewer than all of the Warrants represented by such Warrant certificate are
exercised, a new Warrant certificate will be issued for the remaining amount of
Warrants. The holder of a Warrant will be required to pay any tax or other
governmental charge that may be imposed in connection with any transfer involved
in the issuance of the Debt Securities or shares of Common Stock, as the case
may be.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent of
the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a Common
Stock Warrant are subject to adjustment in certain events, including (i) the
issuance of capital stock as a dividend or distribution on shares of the Common
Stock; (ii) subdivisions and combinations of the shares of Common Stock; (iii)
the issuance to all holders of shares of the Common Stock of certain rights or
warrants entitling them to subscribe for or purchase shares of the Common Stock
within 45 days after the date fixed for the determination of the stockholders
entitled to receive such rights or warrants at less than the current market
price (as defined in the Warrant Agreement for such series of Common Stock
Warrants); and (iv) the distribution to all holders of shares of the Common
Stock of evidences of indebtedness or assets of the Company (excluding certain
cash dividends and distributions described below) or rights or warrants
(excluding those referred to above). In the event that the Company shall
distribute any rights or warrants to acquire
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capital stock pursuant to clause (iii) above (the "Capital Stock Rights"),
pursuant to which separate certificates representing such Capital Stock Rights
will be distributed subsequent to the initial distribution of such Capital Stock
Rights (whether or not such distribution shall have occurred prior to the date
of the issuance of a series of Common Stock Warrants), such subsequent
distribution shall be deemed to be the distribution of such Capital Stock
Rights; provided that the Company may, in lieu of making any adjustment in the
exercise price of and the number of shares of Common Stock covered by a Common
Stock Warrant upon a distribution of separate certificates representing such
Capital Stock Rights, make proper provision so that each holder of such a Common
Stock Warrant who exercises such Common Stock Warrant (or any portion thereof)
(a) before the record date for such distribution of separate certificates shall
be entitled to receive upon such exercise shares of Common Stock issued with
Capital Stock Rights and (b) after such record date and prior to the expiration,
redemption or termination of such Capital Stock Rights shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, the same number of such Capital Stock Rights as would a
holder of the number of shares of Common Stock that such Common Stock Warrant so
exercised would have entitled the holder thereof to acquire in accordance with
the terms and provisions applicable to the Capital Stock Rights if such Common
Stock Warrant was exercised immediately prior to the record date for such
distribution. Common Stock owned by or held for the account of the Company or
any majority owned subsidiary shall not be deemed outstanding for the purpose of
any adjustment.
No adjustment in the exercise price of and the number of shares of Common
Stock covered by a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any such adjustment
not so made will be carried forward and taken into account in any subsequent
adjustment; and provided further that any such adjustment not so made shall be
made no later than three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Except as stated above, the exercise
price of and the number of shares of Common Stock covered by a Common Stock
Warrant will not be adjusted for the issuance of shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock, or
securities carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company or (iii) a sale or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of the
Company's Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the holders of the Common Stock Warrants then outstanding will be
entitled thereafter to convert such Common Stock Warrants into the kind and
amount of shares of stock and other securities or property which they would have
received upon such reclassification, change, consolidation, merger, sale or
conveyance had such Common Stock Warrants been exercised immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance.
DESCRIPTION OF UNITS OF SECURITIES
The Company may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time specified
therein may be transferable as, a single Security only, as distinguished from
the separate constituent Securities comprising such Units. Any such Units will
be offered pursuant to a Prospectus Supplement which will (i) identify and
designate the title of any series of Units; (ii) identify and describe the
separate constituent Securities comprising such Units; (iii) set forth the price
or prices at which such Units will be issued; (iv) describe, if applicable, the
date on and after which the constituent Securities comprising the Units will
become separately transferable; (v) provide information with respect to
book-entry procedures, if any; (vi) discuss applicable United
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States federal income tax considerations relating to the Units; and (vii) set
forth any other terms of the Units and their constituent Securities.
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through underwriters and also may
sell Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., or a group of underwriters
represented by firms including Goldman, Sachs & Co. Goldman, Sachs & Co. may
also act as agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions. Underwriters
may sell Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Unless otherwise indicated in a Prospectus Supplement, certain legal matters
regarding the Securities will be passed upon for the Company by Doherty, Rumble
& Butler Professional Association, Minneapolis, Minnesota, and for the
underwriters, if any, by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedule of The Toro Company and
subsidiaries as of October 31, 1995 and 1996 and for the years ended July 31,
1994 and 1995, the three months ended October 31, 1995 and the year ended
October 31, 1996, incorporated by reference herein, have been incorporated
herein in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public
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accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The combined financial statements of James Hardie Irrigation, Inc., James
Hardie Irrigation Pty Limited and James Hardie Irrigation Europe S.p.A. as of
December 1, 1996 and for the year then ended, incorporated by reference herein,
have been incorporated herein in reliance on the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
Registration Fee................................................ $ 75,758
*Legal Fees and Expenses......................................... 150,000
*Trustee Fees and Expenses....................................... 6,000
*Accounting Fees and Expenses.................................... 60,000
*Blue Sky Fees and Expenses...................................... 10,000
*Printing and Engraving Fees..................................... 40,000
*Rating Agency Fees.............................................. 100,000
*Miscellaneous................................................... 38,242
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Total.......................................................... $ 480,000
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* Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware empowers
a corporation incorporated under the statute to indemnify its directors,
officers, employees and agents and its former directors, officers, employees and
agents and those who serve in such capacities with another enterprise at the
corporation's request against expenses (including attorneys' fees), as well as
judgments, fines and settlements, actually and reasonably incurred by them in
connection with any action, suit or proceeding in which they or any of them were
or are made parties or are threatened to be made parties by reason of their
serving or having served in such capacity. The power to indemnify exists only
where such officer, director, employee or agent has acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation and, in the case of a criminal action, where such
person had no reasonable cause to believe his conduct was unlawful. Unless a
court determines to the contrary, a corporation has no power of indemnification
in any action or suit by or in the right of the corporation, where such person
has been adjudged liable to the corporation. Indemnification against expenses is
mandatory to the extent a claim, issue or matter has been successfully defended.
Indemnification and advancement of expenses are not deemed exclusive of any
other rights to which those indemnified may be entitled under any bylaw,
agreement, vote of stockholders or otherwise. A Delaware corporation also has
the power to purchase and maintain insurance on behalf of any person it has the
power to indemnify, whether or not indemnity against liability would be allowed
under the statute.
Section 1 of Article XI of the Registrant's Certificate of the Incorporation
provides, in accordance with Section 102(b)(7) of the Delaware General
Corporation Law, for the elimination or limitation of the personal liability of
a director to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as a director under certain circumstances.
Section 2 of Article XI of the Registrant's Certificate of Incorporation
mandates indemnification of a director or officer of Registrant or a person
serving at the request of the Registrant as a director, officer, employee or
agent of another entity to the fullest extent authorized by the Delaware General
Corporation Law against expenses, liability and loss and authorizes the Board to
express such rights in written contract.
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The Registrant also maintains liability insurance policies which provide for
indemnification of a director or officer of Registrant or a person serving at
the request of the Registrant as a director, officer, employee or agent of
another entity against certain liabilities under certain circumstances.
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<C> <S>
*1 Form of Underwriting Agreement for Debt Securities.
4(a) Certificate of Incorporation of the Registrant as amended and
corrected through May 18, 1987 (incorporated by reference to Exhibit
4.2 to Registrant's Registration Statement on Form S-3, Registration
No. 33-16125).
4(b) Certificate of Amendment to Certificate of Incorporation dated
December 8, 1987 (incorporated by reference to Exhibit 3 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
January 29, 1988, Commission File No. 1-8649).
4(c) Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to
Registrant's Annual Report on Form 10-K for the year ended July 31,
1991, Commission File No. 1-8649).
4(d) Rights Agreement dated as of June 14, 1988, between the Registrant and
Norwest Bank Minnesota National Association, relating to rights to
purchase Series B Junior Participating Voting Preferred Stock
(incorporated by reference to Exhibit 1 to Registrant's Registration
Statement on Form 8-A dated June 17, 1988, Commission File No.
1-8649).
4(e) Amendment to Rights Agreement dated as of August 14, 1990, between the
Registrant and Norwest Bank Minnesota National Association
(incorporated by reference to Exhibit 1 to Registrant's Report on
Form 8-K dated August 14, 1990, Commission File No. 1-8649).
4(f) Specimen form of Common Stock certificate (incorporated by reference
to Exhibit 4(c) to Registrant's Registration Statement on Form S-8,
Registration No. 2-94417).
4(g) Form of Indenture.
4(h) Forms of Debt Securities (filed as part of Exhibit 4(g)).
5 Opinion of Doherty, Rumble & Butler Professional Association.
*12 Computations of ratio of earnings to fixed charges.
23(a) Consent of Doherty, Rumble & Butler Professional Association (included
as part of Exhibit 5).
*23(b) Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney (included on the signature pages of this
Registration Statement).
*25 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of First Trust National Association as Trustee.
</TABLE>
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* Filed or amended herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commissions such indemnification is against public policy as expressed in the
act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has bene settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Toro Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bloomington and the State of
Minnesota, on the 9th day of June 1997.
THE TORO COMPANY
By /s/ KENDRICK B. MELROSE
-----------------------------------------
Kendrick B. Melrose
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
Chairman and Chief
/s/ KENDRICK B. MELROSE Executive Officer
- ------------------------------ (Principal Executive June 9, 1997
Kendrick B. Melrose Officer)
Vice President and Chief
/s/ STEPHEN P. WOLFE Financial Officer
- ------------------------------ (Principal Financial June 9, 1997
Stephen P. Wolfe Officer)
* Vice President and
- ------------------------------ Controller (Principal
Randy B. James Accounting Officer)
*
- ------------------------------ Director
Ronald O. Baukol
*
- ------------------------------ Director
Robert C. Buhrmaster
*
- ------------------------------ Director
Janet K. Cooper
*
- ------------------------------ Director
Alex A. Meyer
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
*
- ------------------------------ Director
Robert H. Nassau
*
- ------------------------------ Director
Dale R. Olseth
*
- ------------------------------ Director
Edwin H. Wingate
</TABLE>
*By: /s/ KENDRICK B.
MELROSE
------------------------- June 9, 1997
Kendrick B. Melrose
ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT INDEX
DOCUMENT DESCRIPTION
<TABLE>
<CAPTION>
FORM OF FILING
---------------------------
<C> <S> <C>
*1 Form of Underwriting Agreement for Debt Securities........................ Electronic Transmission
4(a) Certificate of Incorporation of the Registrant (incorporated by reference
to Exhibit 4.2 to Registrant's Registration Statement on Form S-3,
Registration No. 33-16125).
4(b) Certificate of Amendment to Certificate of Incorporation dated December 8,
1987 (incorporated by reference to Exhibit 3 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended January 29, 1988, Commission
File No. 1-8649).
4(c) Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to
Registrant's Annual Report on Form 10-K for the year ended July 31,
1991, Commission File No. 1-8649).
4(d) Rights Agreement dated as of June 14, 1988, between the Registrant and
Norwest Bank Minnesota National Association, relating to rights to
purchase Series B Junior Participating Voting Preferred Stock
(incorporated by reference to Exhibit 1 to Registrant's Registration
Statement on Form 8-A dated June 17, 1988, Commission File No. 1-8649).
4(e) Amendment to Rights Agreement dated as of August 14, 1990, between the
Registrant and Norwest Bank Minnesota National Association (incorporated
by reference to Exhibit 1 to Registrant's Report on Form 8-K dated
August 14, 1990, Commission File No. 1-8649).
4(f) Specimen form of Common Stock certificate (incorporated by reference to
Exhibit 4(c) to Registrant's Registration Statement on Form S-8,
Registration No. 2-94417).
4(g) Form of Indenture (filed with the Registration Statement).
4(h) Debt Securities (filed as part of Exhibit 4(g)).
5 Opinion of Doherty, Rumble & Butler Professional Association (filed with
the Registration Statement).
*12 Computations of ratio of earnings to fixed charges (filed with the
Registration Statement)................................................. Electronic Transmission
23(a) Consent of Doherty, Rumble & Butler Professional Association (included as
part of Exhibit 5).
*23(b) Consent of KPMG Peat Marwick LLP (filed with the Registration
Statement).............................................................. Electronic Transmission
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
FORM OF FILING
---------------------------
<C> <S> <C>
24 Powers of Attorney (included on the signature pages of this Registration
Statement).
*25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Trust National Association as Trustee............................. Electronic Transmission
</TABLE>
- --------------
* Filed or amended herewith.
II-7
<PAGE>
THE TORO COMPANY
DEBT SECURITIES
---------------
UNDERWRITING AGREEMENT
----------------------
June ...., 1997
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time The Toro Company, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing
Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate principal amount
of such Designated Securities, the initial public offering price of such
Designated Securities, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters and the
principal amount of such Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of
the Underwriters under this Agreement and each Pricing Agreement shall be
several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-20901 in
respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement,
as amended by pre-effective amendment number 1 thereto (as amended,
the "Initial Registration Statement"), and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits thereto, but
including all documents incorporated by reference in the prospectus
contained therein, to the Representatives for each of the other
Underwriters, has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such
part of the registration statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Securities,
in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as
of the date of such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Sections 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the
2
<PAGE>
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder 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; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements
of the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain 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 this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities;
there is no material document of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed
as required;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its
3
<PAGE>
subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the current or future
position (financial or otherwise), stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, upon
the Company's ability to perform its obligations under this Agreement
or upon the validity or consummation of the transactions contemplated
by this Agreement (a "Material Adverse Effect"); and each subsidiary
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect;
(f) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and as set forth or
incorporated by reference in the Registration Statement) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit
to the Registration Statement; the Indenture has been duly authorized
and duly qualified under the Trust Indenture Act and, at the Time of
Delivery for such Designated Securities (as defined in Section 4
hereof), the Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles; and the Indenture conforms, and the
Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented with respect to
such Designated Securities;
4
<PAGE>
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any of its subsidiaries or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or any Pricing Agreement
or the Indenture, except such as have been, or will have been prior to
the Time of Delivery, obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(i) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities,"
"Description of Securities," "Description of Capital Stock,"
"Description of Warrants" and "Description of Units of Securities,"
insofar as they purport to constitute a summary of the terms of such
securities, and under the captions "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and fairly
and correctly present in all material respects the information
required to be presented by the Act or the rules and regulations of
the Commission thereunder;
(j) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(k) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) The Company is not and, after giving effect to the offering and
sale of the Securities, 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
"Investment Company Act");
(m) To the best of the Company's knowledge, neither the Company nor
any of its affiliates does business with the government of Cuba or
with any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes;
5
<PAGE>
(n) KPMG Peat Marwick LLP, who have audited certain financial
statements of the Company and its subsidiaries, and who have audited
certain combined financial statements of James Hardie Irrigation (a
division of James Hardie Irrigation, Inc.), James Hardie Irrigation
Pty. Limited and James Hardie Irrigation Europe S.p.A. (collectively,
the "James Hardie Irrigation Group"), included or incorporated by
reference in the Prospectus, are independent certified public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(o) The consolidated financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position of the
Company as of the respective dates of such financial statements, and
the consolidated results of operations and cash flows of the Company
for the respective periods covered thereby, all in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed in the
Prospectus. The combined financial statements and schedules of The
James Hardie Irrigation Group included or incorporated by reference in
the Registration Statement present fairly the consolidated financial
position of the covered entities as of the date of such financial
statements, and the results of operations and cash flows of the
covered entities for the period covered thereby, all in conformity
with generally accepted accounting principles consistently applied
throughout the period involved, except as disclosed in the Prospectus.
The supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The
financial information set forth in the Prospectus as amended or
supplemented under the captions "Selected Historical and Pro Forma
Financial and Other Data" and "Ratios of Earnings to Fixed Charges"
presents fairly, on the basis stated therein, the information set
forth therein. The pro forma information included or incorporated by
reference in the Prospectus as amended or supplemented presents fairly
the information shown therein, has been prepared in accordance with
generally accepted accounting principles and the Commission's rules
and guidelines with respect to pro forma information, has been
properly compiled on the pro forma basis described therein, and, in
the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate under the circumstances;
(p) The Company together with its subsidiaries owns and possesses
all right, title and interest in and to, or has duly licensed from
third parties a valid, enforceable right to use, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names (collectively, "Patent and Proprietary Rights")
currently or proposed to be employed by it in connection with its
business, except where the failure to own or license such Patent and
Proprietary Rights would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries has received any notice of infringement or
misappropriation of or conflict with asserted rights of others with
respect to any Patent or Proprietary Rights, or of any facts which
would render any Patent or Proprietary Rights invalid or inadequate to
protect the interest of the Company or its subsidiaries therein, and
which asserted infringement, misappropriation or conflict or
invalidity or inadequacy, individually or in the aggregate, would or
could reasonably be expected to result in a Material Adverse Effect;
6
<PAGE>
(q) The Company and its subsidiaries (A) are in compliance in all
respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not
have a Material Adverse Effect; and (B) possess and are in compliance
with the terms and conditions of such licenses, permits, consents,
orders, certificates or authorizations issued by the appropriate
federal, state, foreign or local regulatory agencies or bodies
necessary to conduct the businesses now operated by each of them,
except for licenses, permits, consents, orders, certificates or
authorizations, the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect; neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or authorizations
other than revocations or modifications which, individually or in the
aggregate, would not have a Material Adverse Effect;
(r) The Company and each of its subsidiaries has filed all
necessary foreign, federal and state income, value-added, franchise,
telecommunications excise, sales and use and similar tax returns and
has paid all taxes shown as due thereon, and there is no tax
deficiency that has been, or to the knowledge of the Company might be,
asserted against the Company, any of its subsidiaries, or any of their
respective properties or assets that would or could be expected to
have a Material Adverse Effect; and
(s) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is reasonable for
the conduct of their businesses and the value of their properties and
as is customary for companies engaged in similar businesses in similar
industries.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to
the Representatives for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by certified
or official bank check or checks, payable to the order of the Company in the
funds specified in such Pricing Agreement, all in the manner and at the place
and time and date specified in such Pricing Agreement or at such other place
and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery" for
such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business
on the second business day following the execution and delivery of the
Pricing Agreement relating to the applicable Designated Securities or,
if applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as
7
<PAGE>
amended or supplemented after the date of the Pricing Agreement relating
to such Securities and prior to the Time of Delivery for such Securities
which shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after such Time of Delivery
and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Securities, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, to promptly use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of each Pricing Agreement and
from time to time, to furnish the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may from time to time reasonably
request, and, if the delivery of a prospectus is required at any time
in connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives
and upon their request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance;
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<PAGE>
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the later of (i) the termination of trading restrictions for
such Designated Securities, as notified to the Company by the
Representatives and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year
after such Time of Delivery and which are substantially similar to
such Designated Securities, without the prior written consent of the
Representatives;
(f) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
(g) To use the net proceeds received by it from the sale of
Designated Securities pursuant to this Agreement in the manner
specified in the Prospectus, as amended or supplemented prior to the
Time of Delivery, under the caption "Use of Proceeds."
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and Legal Investment Surveys; (iv) any fees
charged by securities rating services for rating the Securities; (v) any
filing fees incident to, and the reasonable fees and disbursements of counsel
for the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs
9
<PAGE>
and expenses, including the fees of their counsel, transfer taxes on resale
of any of the Securities by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement; 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; and all requests for additional
information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions dated the Time of Delivery
for such Designated Securities, with respect to the incorporation of
the Company, the validity of the Indenture, the validity of the
Designated Securities being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and such other related matters
as the Representatives may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to the Representatives
shall have furnished to the Representatives their written opinion,
dated the Time of Delivery for such Designated Securities, in the form
presented to the Representatives prior to the execution of this
Agreement and in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and
non-assessable;
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and all of
the issued shares of capital stock of each such Significant
Subsidiary have been duly
10
<PAGE>
and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and
as set forth or incorporated by reference in the Registration
Statement) are owned directly or indirectly by the Company;
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
(vi) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute
valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture; and the Designated
Securities and the Indenture conform in all material respects to
the descriptions thereof in the Prospectus as amended or
supplemented;
(vii) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles; and the Indenture has been duly qualified under the
Trust Indenture Act;
(viii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, this Agreement and the
Pricing Agreement with respect to the Designated Securities and
the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(ix) No consent, approval, authorization, order, filing,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Designated Securities or the consummation by the Company of
the transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, filings, registrations or
qualifications as may be required under state
11
<PAGE>
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(x) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its
By-laws or Certificate of Incorporation;
(xi) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities,"
"Description of Securities," "Description of Capital Stock,"
"Description of Warrants" and "Description of Units of
Securities," insofar as they purport to constitute a summary of
the terms of such securities, and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to
therein, are accurate and fairly and correctly present in all
material respects the information required to be presented by the
Act or the rules and regulations of the Commission thereunder;
(xii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
(xiii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such
counsel need 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 Act
or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and
(xiv) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than the financial statements and
related schedules therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder.
Such counsel shall also advise the Underwriters that, although
such counsel is not passing upon and assumes no responsibility or liability
for the accuracy, completeness or fairness of the statements contained in the
documents incorporated by reference in the Prospectus as amended or
supplemented, they have no reason to believe that any such documents
incorporated by reference (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may be,
contained, in the case of a registration statement which became effective
under the Act, 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, in the case of other documents which
were filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
Such counsel shall also advise the Underwriters that, although
such counsel is not passing upon and assumes no responsibility or liability
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus as amended or supplemented, during the
course of its representation of the Company in connection with
12
<PAGE>
the preparation of the Registration Statement and the Prospectus as amended
or supplemented, and on the basis of conferences with officers of the
Company, examination of documents referred to in the Registration Statement
and Prospectus as amended or supplemented and such other procedures as such
counsel deemed appropriate, nothing has come to the attention of such counsel
that causes such counsel to believe that as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
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, as of its date, the Prospectus as
amended or supplemented prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented prior to the Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering the foregoing opinions, such counsel may rely (i)
as to matters of law other than the law of the States of Delaware and
Minnesota and federal law, upon the opinion or opinions of local counsel
provided that the extent of such reliance is specified in such opinion and
that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel
deems reasonable, upon certificates of officers of the Company and
governmental authorities provided that the extent of such reliance is
specified in such opinion;
(d) The general counsel of the Company or other counsel for the
Company satisfactory to the Representatives shall have furnished to
the Representatives his written opinion, dated the Time of Delivery
for such Designated Securities, in the form presented to the
Representatives prior to the execution of this Agreement and in form
and substance satisfactory to the Representatives, to the effect that:
(i) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and all of
the issued shares of capital stock of each such Significant
Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and (except for directors'
qualifying shares and as set forth or incorporated by reference
in the Registration Statement) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances,
equities or claims;
(ii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
13
<PAGE>
subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iii) To the best of such counsel's knowledge, the Company
together with its subsidiaries owns and possesses all right,
title and interest in and to, or has duly licensed from third
parties a valid, enforceable right to use, all Patent and
Proprietary Rights currently or proposed to be employed by it in
connection with its business. To the best of such counsel's
knowledge, neither the Company nor any of its subsidiaries has
received any notice of infringement or misappropriation of or
conflict with asserted rights of others with respect to any
Patent or Proprietary Rights, or of any facts which would render
any Patent or Proprietary Rights invalid or inadequate to protect
the interest of the Company or its subsidiaries therein, and
which asserted infringement, misappropriation or conflict or
invalidity or inadequacy, individually or in the aggregate, would
or could reasonably be expected to result in a Material Adverse
Effect;
(iv) To the best of such counsel's knowledge, the Company and
each of its subsidiaries has filed all necessary federal and
state income, franchise, sales and use tax returns and has paid
all taxes shown as due thereon, and there is no tax deficiency
that has been, or to the best of such counsel's knowledge, might
be, asserted against the Company, any of its subsidiaries, or any
of their respective properties or assets that would or could be
expected to have a Material Adverse Effect;
(v) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its
By-laws or Certificate of Incorporation or is in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or any of its properties may
be bound;
(vi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements
and related schedules therein, as to which such counsel need
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 Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and
(vii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than the financial statements and
related schedules therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder.
Such counsel shall also advise the Underwriters that, although
such counsel is not passing upon and assumes no responsibility or liability
for the accuracy, completeness or fairness of the statements contained in the
documents incorporated by reference in the Prospectus as amended or
supplemented, he has no reason to believe that any of such documents
incorporated by reference (other than the financial statements and related
14
<PAGE>
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may be,
contained, in the case of a registration statement which became effective
under the Act, 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, in the case of other documents which
were filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
Such counsel shall also advise the Underwriters that, although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus as amended or supplemented, during the
course of its representation of the Company in connection with the
preparation of the Registration Statement and the Prospectus as amended or
supplemented, and on the basis of conferences with officers of the Company,
examination of documents referred to in the Registration Statement and
Prospectus as amended or supplemented and such other procedures as such
counsel deemed appropriate, nothing has come to the attention of such counsel
that causes such counsel to believe that as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
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, as of its date, the Prospectus as
amended or supplemented prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented prior to the Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering the foregoing opinions, such counsel may rely (i) as to
matters of law other than the law of the States of Delaware and Minnesota and
federal law, upon the opinion or opinions of local counsel provided that the
extent of such reliance is specified in such opinion and that such counsel
shall state that such opinion or opinions of local counsel are satisfactory
to him and that he believes that he and you are justified in relying thereon
and (ii) as to matters of fact, to the extent such counsel deems reasonable,
upon certificates of officers of the Company and governmental authorities
provided that the extent of such reliance is specified in such opinion;
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to such Designated Securities and at the Time of Delivery
for such Designated Securities, KPMG Peat Marwick LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements of the Company and
incorporated by
15
<PAGE>
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, in the form presented to the Representatives prior to the
execution of this Agreement and in form and substance satisfactory to
the Representatives, to the effect set forth in Annex II hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to
the Designated Securities any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus as amended or supplemented prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii)
since the respective dates as of which information is given in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Securities there shall not have
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries, or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented prior to the date of the Pricing Agreement
relating to the Designated Securities, the effect of which, in any
such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or Nasdaq Stock
Market; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either
Federal, New York or Illinois authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(i) The Company shall have furnished or caused to be furnished to the
16
<PAGE>
Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in the introductory paragraph of
this Section, subsection (e) of this Section and as to such other
matters as the Representatives may reasonably request; and
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of such Pricing Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating
17
<PAGE>
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action 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) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters of the Designated Securities on the other from the offering of
the Designated Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters of the Designated Securities on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by such
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge,
18
<PAGE>
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined
by PRO RATA allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Designated Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute
are several in proportion to their respective underwriting obligations with
respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Designated Securities, or the
Company notifies the Representatives that it has so arranged for the purchase
of such Designated Securities, the Representatives or the Company shall have
the right to postpone the Time of Delivery for such Designated Securities for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to the
Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated
19
<PAGE>
Securities of a defaulting Underwriter or Underwriters by the Representatives
and the Company as provided in subsection (a) above, the aggregate principal
amount of such Designated Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of the Designated
Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Securities and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Securities, but the Company shall then be
under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters,
and the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by
such Representatives jointly or by such of the Representatives, if any, as
may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to
20
<PAGE>
the Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in
the Registration Statement: Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of
this Agreement or any such Pricing Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by
reason of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. As used herein, "Significant
Subsidiaries" shall mean all direct and indirect subsidiaries of the Company
as of the Time of Delivery other than any subsidiaries which, considered in
the aggregate as a single subsidiary as of the end of the most recent fiscal
year of the Company, would not constitute a significant subsidiary as defined
in Rule 1-02 of Regulation S-X (or any successor thereto).
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
THE TORO COMPANY
By:
.......................
Name:
Title:
1254484.8
21
<PAGE>
ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.,
[Names of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
..................., 199..
Ladies and Gentlemen:
The Toro Company, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated June ...., 1997 (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities").
Each of the provisions of the Underwriting Agreement is incorporated herein
by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein
shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation
and warranty as of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented relating to the Designated Securities
which are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein
as therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the
address of the Representatives referred to in such Section 12 are set forth
at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the principal amount of Designated Securities set forth opposite
the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ___ [one for the Company and each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Representatives as to the authority of
the signers thereof.
Very truly yours,
THE TORO COMPANY
By:
----------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
[By:
-------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
22
<PAGE>
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Goldman, Sachs & Co........................................ $
[Name(s) of Co-Representative(s)...........................
[Names of other Underwriters]..............................
--------
Total................................................... $
--------
--------
3
<PAGE>
SCHEDULE II
Title of Designated Securities:
Aggregate principal amount:
Price to Public:
Purchase Price by Underwriters:
Form of Designated Securities:
Specified funds for payment of purchase price:
Time of Delivery:
Indenture:
Indenture dated .................., 1997 between the Company and
..................., as Trustee
Maturity:
Interest Rate:
Interest Payment Dates:
Redemption Provisions:
Sinking Fund Provisions:
Extendable provisions (if any):
Floating rate provisions (if any):
Defeasance provisions:
4
<PAGE>
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Other Terms:
5
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, KPMG Peat Marwick
LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries and with respect to the James
Hardie Irrigation Group within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules of the Company and
the James Hardie Irrigation Group audited (and, if applicable,
financial forecasts and/or pro forma financial information) or examined
by them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been
separately furnished to the Representatives; and on the basis of
specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that (i) the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations; or (ii) any material
modification should be made to the unaudited condensed consolidated
financial statements;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with
the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for five such fiscal years
which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
<PAGE>
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus for them to be
in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included
in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for
the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the
most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments
2
<PAGE>
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period of the preceding year
and with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by
the Representatives which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part
II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
3
<PAGE>
EXHIBIT 12
THE TORO COMPANY AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Transition
period
Year ended July 31, ended Year ended
------------------------------------------- October 31, October 31,
1992 1993 1994 1995 1995 1996
- ------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings before income
taxes $ (34,903) $21,355 $ 37,050 $61,112 $6,606 $60,180
Plus: Fixed charges (1) 21,253 19,142 15,989 14,892 3,266 16,728
- ------------------------------------------------------------------------------------------------------
Earnings available to cover
fixed charges $ --(2) $40,497 $53,039 $76,004 $9,872 $76,908
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Ratio of earnings to
fixed charges --(2) 2.12 3.32 5.10 3.02 4.60
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Fixed Charges consisted of the following:
<TABLE>
<CAPTION>
Transition
period
Year ended July 31, ended Year ended
------------------------------------------- October 31, October 31,
1992 1993 1994 1995 1995 1996
- ------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest expense $18,726 $17,150 $13,562 $11,902 $2,532 $13,590
Rentals (interest factor) 2,527 1,992 2,427 2,990 734 3,138
- ------------------------------------------------------------------------------------------------------
Total fixed charges $21,253 $19,142 $15,989 $14,892 $3,266 $16,728
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(2) For fiscal year ended July 31, 1992, earnings were insufficient to
cover fixed charges by $34,903,000.
<PAGE>
THE TORO COMPANY AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Pro forma Three Months Ended
Year ended Year ended Year ended Year ended Year ended Year ended ------------------------
October 30, October 29, October 28, October 31, October 31, October 31, February 2, January 31,
1992 1993 1994 1995 1996 1996 1996 1996
- ------------------------------------------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings before income
taxes $ (31,792) $24,868 $54,045 $53,881 $60,180 $50,286 $14,049 $4,117
Plus: Fixed charges (1) 20,730 18,405 15,273 14,944 16,728 26,246 4,632 3,689
- --------------------------------------------------------------------------------------------------------------------------------
Earnings available to cover
fixed charges $ --(3) $43,273 $69,318 $68,825 $76,908 $76,532 18,681 7,806
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of earnings to
fixed charges --(3) 2.35 4.54 4.61 4.60 2.92 4.03 2.12
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Fixed Charges consisted of the following:
<TABLE>
<CAPTION>
Pro forma Three Months Ended
Year ended Year ended Year ended Year ended Year ended Year ended ------------------------
October 30, October 29, October 28, October 31, October 31, October 31, February 2, January 31,
1992 1993 1994 1995 1996 1996 1996 1996
- ------------------------------------------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest expense $18,337 $16,304 $12,705 $11,954 $13,590 $22,735 $3,847 $2,969
Rentals (interest factor) 2,393 2,101 2,568 2,990 3,138 3,511 785 720
- ---------------------------------------------------------------------------------------------------------------------------------
Total fixed charges $20,730 $18,405 $15,273 $14,944 $16,728 $26,246 4,632 3,689
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(3) For fiscal year ended October 31, 1992, earnings were insufficient to
cover fixed charges by $31,792,000.
<PAGE>
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Toro Company:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the headings "Selected Historical and Pro
Forma Financial and Other Data" and "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 9, 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
THE TORO COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 41-0580470
(State of Incorporation) (I.R.S. Employer
Identification No.)
8111 Lyndale Avenue South
Bloomington, Minnesota 55420-1196
(Address of Principal Executive Offices) (Zip Code)
Debt Securities
(Title of the Indenture Securities)
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GENERAL
1. GENERAL INFORMATION Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's knowledge
the obligor is not in default under any Indenture for which the Trustee acts
as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number 333-24029.
* Incorporated by reference to Registration Number 22-27000.
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NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within
three years prior to the date of filing this statement, or what persons are
owners of 10% or more of the voting securities of the obligors, or
affiliates, are based upon information furnished to the Trustee by the
obligors. While the Trustee has no reason to doubt the accuracy of any such
information, it cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement
of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed
and attested, all in the City of Saint Paul and State of Minnesota on the 5th
day of June, 1997.
FIRST TRUST NATIONAL ASSOCIATION
[SEAL]
/s/ R. Prokosch
------------------------
Richard H. Prokosch
Trust Officer
/s/ K. Barrett
- ---------------------
Kathe M. Barrett
Assistant Secretary
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EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: June 5, 1997
FIRST TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
---------------------------------
Richard H. Prokosch
Trust Officer
