<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE PROGRESSIVE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
OHIO 34-0963169
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
(440) 461-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID M. SCHNEIDER, Secretary
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
(440) 446-7870
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
R. STEVEN KESTNER KEITH L. KEARNEY
BAKER & HOSTETLER LLP DAVIS POLK & WARDWELL
3200 National City Center 450 Lexington Avenue
Cleveland, Ohio 44114 New York, New York 10017
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities................. $300,000,000(2) 100% $300,000,000 $88,500
========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Plus such additional amount as may be necessary such that, if any Debt
Securities are issued with an original discount, the aggregate initial
offering price will equal $300,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 31, 1998
PROSPECTUS
THE PROGRESSIVE CORPORATION
DEBT SECURITIES
------------------------
The Progressive Corporation (the "Company") may offer, from time to time in
one or more transactions, its notes, debentures or other unsecured evidences of
indebtedness (the "Debt Securities") with an aggregate initial public offering
price of up to $300,000,000. The Debt Securities will rank equally with all
other current and future unsecured and unsubordinated indebtedness of the
Company and prior to subordinated indebtedness, if any.
The terms of the Debt Securities of each series will be specified in a
supplement to this Prospectus (a "Prospectus Supplement"). Among other items,
such terms may include the following:
- title of the series
- aggregate principal amount
- purchase price
- maturity date
- interest rate and interest payment dates
- any optional or mandatory redemption terms
- any sinking fund provisions
- listing on a securities exchange
- name of each dealer, underwriter or agent involved in the offering
- any compensation payable to any such dealer, underwriter or agent
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR THE NORTH CAROLINA
INSURANCE COMMISSIONER NOR HAS THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR SUCH COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1998
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES NOT CONSTITUTE
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 ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION MAY NOT BE LEGALLY MADE. THE DELIVERY OF THIS PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, Suite 1300, New York, New York
10048, and The Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street N.W.,
Washington, D.C. 20549. The Company files such material with the Commission
electronically. The Commission maintains a Web site that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission. The address of such Web site is
http://www.sec.gov. Reports, proxy statements and other information concerning
the Company may also be inspected at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the securities offered hereby. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. These
documents may be inspected without charge at the office of the Commission at
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 or at the
Commission's Web site, and copies may be obtained at fees and charges prescribed
by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1997, filed by the Company with the Commission on March 27, 1998, as amended by
the Company's Form 10-K/A-No. 1 filed with the Commission on March 30, 1998,
pursuant to the Exchange Act, is incorporated herein by reference.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of this offering are hereby incorporated by
reference into this Prospectus and shall be deemed a part hereof from the
respective dates of filing of such reports and documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus 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.
The Company will furnish without charge to each person to whom a Prospectus
is delivered, upon written or oral request, a copy of any or all of the
foregoing documents incorporated herein by reference (other than certain
exhibits). Requests for such documents should be directed to Jeffrey W. Basch,
Chief Accounting Officer, The Progressive Corporation, at 6300 Wilson Mills
Road, Mayfield Village, Ohio 44143 or by telephone at (440) 446-2851.
2
<PAGE> 4
THE COMPANY
The Company is an insurance holding company which has 88 operating
subsidiaries and one mutual insurance company affiliate. Progressive Casualty
Insurance Company is the principal operating subsidiary. The Company's insurance
subsidiaries and affiliate provide personal automobile insurance and other
specialty property/casualty insurance and related services throughout the United
States and in Canada. Of the approximately 250 United States insurance company
groups writing private passenger auto insurance, the Progressive insurance group
ranked 6th in size based on 1996 direct premiums written, as reported by A.M.
Best Company Inc. in their 1996 A(2) report for all private passenger auto
insurance writers.
The Company's core business, which accounted for 96% of the Company's total
net premiums written in 1997, writes insurance for private passenger
automobiles, recreational vehicles and small fleets of commercial vehicles. The
Progressive insurance group is a major participant in the nonstandard automobile
segment of the property/casualty insurance industry. The Company also writes
standard and preferred auto risks.
The Company's diversified businesses, which accounted for 4% of total net
premiums written in 1997, offer collateral protection coverage and loan tracking
for automobile lenders and financial institutions, directors and officers
liability and fidelity coverage for American Bankers Association member
community banks, nonstandard auto insurance and underwriting and claim servicing
for state involuntary residual market commercial and personal auto programs.
The Company's principal executive office is located at 6300 Wilson Mills
Road, Mayfield Village, Ohio 44143, and its telephone number is (440) 461-5000.
USE OF PROCEEDS
Except as otherwise provided in an applicable Prospectus Supplement, the
net proceeds will be used by the Company for general corporate purposes. Unless
and until otherwise applied, the net proceeds will be added to the investment
portfolios of the Company or its subsidiaries and may be used, in whole or in
part, to support premium growth. Such proceeds will be invested in securities of
approximately the same quality and maturities as those currently held in such
investment portfolios. A discussion of the nature of such securities, and the
risks relating thereto, is set forth in the "Investments" section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's 1997 Annual Report on Form 10-K.
RATIO OF EARNINGS TO FIXED CHARGES
The following table represents the Company's ratio of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
9.2x 7.7x 6.6x 7.3x 9.2x
</TABLE>
Earnings consist of income before income taxes and before fixed charges.
Fixed charges consist of interest and amortization on indebtedness and the
portion of rents representative of the interest factor.
3
<PAGE> 5
DESCRIPTION OF DEBT SECURITIES
The Company may offer under this Prospectus and one or more Prospectus
Supplements Debt Securities not exceeding $300,000,000 in aggregate initial
public offering price. The following description of the terms of the Debt
Securities sets forth certain general terms and provisions of the Debt
Securities which may be offered under a Prospectus Supplement. The particular
terms and provisions of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities offered hereby will represent unsecured general
obligations of the Company and will rank on a parity with all other existing and
future unsecured and unsubordinated indebtedness of the Company and prior to
subordinated indebtedness, if any. The Debt Securities are to be issued under an
Indenture dated as of September 15, 1993 (which, as supplemented and amended, is
referred to herein as the "Indenture") between the Company and State Street Bank
and Trust Company, as Trustee (the "Trustee"). Debt Securities may be issued in
one or more series under the Indenture. The Indenture does not limit the amount
of Debt Securities or any other debt which may be incurred by the Company. In
addition, the provisions of the Indenture do not afford holders of the Debt
Securities protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company that may adversely affect holders of the Debt Securities. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture, which is an exhibit to the Registration Statement
of which this Prospectus is a part. Certain capitalized terms used herein are
defined in the Indenture. References are to sections or articles of the
Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued in series
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Debt Securities may be denominated and payable
in U.S. dollars, foreign currencies or units based on or relating to U.S. or
foreign currencies. Debt Securities may be offered to the public on terms
determined by market conditions at the time of sale. (Section 2.3 of the
Indenture.)
Reference is made to the appropriate Prospectus Supplement for the
following terms of each series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the title, aggregate principal amount and
authorized denominations of such Debt Securities; (2) the purchase price of such
Debt Securities (expressed as a percentage of the principal amount thereof); (3)
the date on which such Debt Securities will mature; (4) the rate or rates (which
may be fixed or variable) per annum at which such Debt Securities will bear
interest, if any, or the method by which such rate or rates will be determined;
(5) the coin or currency or units based on or relating to currencies in which
Debt Securities may be purchased and in which payment of principal and interest
will be made; (6) the periods for which and the dates on which such interest, if
any, will be payable; (7) the place or places where the principal of and premium
and interest, if any, on such Debt Securities will be payable; (8) the terms of
any mandatory or optional redemption (including any sinking fund); (9) whether
such Debt Securities will be issuable in registered form or bearer form (with or
without coupons) or both, and, if Debt Securities in bearer form will be issued,
restrictions applicable to the exchange of one form for another and to the
offer, sale and delivery of Debt Securities in bearer form; (10) whether, and
under what circumstances, the Company will pay additional amounts on such Debt
Securities held by a person who is not a U.S. person (as defined in an
appropriate Prospectus Supplement) in respect of any tax, assessment or
governmental charge withheld or deducted, and if so, whether the Company will
have the option to redeem such Debt Securities rather than pay such additional
amounts; and (11) any other specific terms of such series. If a Prospectus
Supplement specifies that Debt Securities are denominated in a currency other
than U.S. dollars or U.S. currency units, such Prospectus Supplement shall also
specify the denomination in which such Debt Securities will be issued and the
coin or currency or currency unit in which the principal of and premium and
interest, if any, on such Debt Securities will be payable, which may be U.S.
dollars based upon the exchange rate for such other currency or currency unit
existing on or about the time a payment is due. (Section 2.3 of the Indenture.)
4
<PAGE> 6
Debt Securities may be presented for exchange and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Indenture. Such services will be
provided without charge, other than any tax or other governmental charge payable
in connection therewith, but subject to the limitations provided in the
Indenture. Debt Securities in bearer form and the coupons, if any, pertaining
thereto will be transferable by delivery. (Section 2.8 of the Indenture.)
The Debt Securities will be unsecured. The Debt Securities will rank on a
parity with all other existing and future unsecured and unsubordinated
indebtedness of the Company and prior to subordinated indebtedness, if any.
Because the Company is a holding company, however, its rights and the rights of
its creditors to participate in the assets of any subsidiary upon the latter's
liquidation or recapitalization (and thus the ability of holders of the Debt
Securities to benefit as creditors of the Company in such liquidation or
recapitalization) will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims (other than as a holder of the subsidiary's outstanding shares
of capital stock) against the subsidiary.
In addition, insurance statutes in many states limit the extent to which
regulated insurance companies may pay dividends and transfer assets to their
affiliates and either prohibit or require prior regulatory approval for the
payment of dividends and other distributions in excess of such limits. Since a
source of the Company's internally generated cash flow is dividends paid to it
by its subsidiaries, the Company's ability to meet its obligations (including
the obligation to pay principal of and premium, if any, and interest on the Debt
Securities) may be affected by any such limitations or prior approval
requirements.
GLOBAL SECURITIES
The Debt Securities may be issued in the form of one or more global
securities (a "Global Security") that will be deposited with a depositary (a
"Depositary") or with a nominee for a Depositary identified in an appropriate
Prospectus Supplement and registered in the name of the Depositary or a nominee
thereof. In such case, one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
transferred, except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any Debt
Securities to be represented by a Global Security will be described in a
Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, WAIVER AND NOTICE
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or premium, if
any, on the Debt Securities of such series when due either at maturity, upon
redemption, by declaration or otherwise; (c) default in the payment of a sinking
fund installment, if any, on the Debt Securities of such series; (d) default by
the Company in the performance of any other covenant or warranty contained in
the Indenture for the benefit of such series which shall not have been remedied
for a period of 60 days after notice given as specified in the Indenture; and
(e) certain events of bankruptcy, insolvency and reorganization of the Company.
(Section 5.1 of the Indenture.) An Event of Default with respect to a particular
series of Debt Securities issued under the Indenture does not necessarily
constitute an Event of Default with respect to any other series of Debt
Securities issued thereunder. The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any default
(except in payment of principal of, or premium, if any, or interest on such Debt
Securities) if the Trustee determines, in good faith, that it is in the interest
of the holders of Debt Securities of such series to do so; provided, however,
that in the case of a default of the character specified in clause (d) above, no
such notice to holders of Debt Securities of such series shall be given until at
least 30 days after the occurrence thereof. (Section 5.11 of the Indenture.)
5
<PAGE> 7
The Indenture provides that (1) if an Event of Default described in clause
(a), (b), (c) or (d) above with respect to a particular series of Debt
Securities shall have occurred and be continuing, either the Trustee or the
holders of at least 25% in principal amount of the Debt Securities of such
series then outstanding may declare the entire principal (or, in the case of
original issue discount Debt Securities, the portion thereof specified in the
terms thereof) of all outstanding Debt Securities of such series and the
interest accrued thereon, if any, to be due and payable immediately and (2) if
an Event of Default described in clause (e) above shall have occurred and be
continuing, either the Trustee or the holders of at least 25% in principal
amount of all Debt Securities then outstanding thereunder (voting as one class)
may declare the entire principal (or, in the case of original issue discount
Debt Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding thereunder and the interest accrued thereon, if any,
to be due and payable immediately, but upon certain conditions such declarations
may be annulled and past defaults (except for defaults in the payment of
principal of or premium, if any, or interest on such Debt Securities) may be
waived by the holders of a majority in principal amount of the Debt Securities
of such series (or of all series thereunder, as the case may be) then
outstanding. (Sections 5.1, 5.10 and 8.1 of the Indenture.)
The Indenture provides that holders of a majority in principal amount of
the outstanding Debt Securities of each series affected (with each series voting
as a separate class) shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee under the
Indenture with respect to Debt Securities of such series, subject to certain
limitations specified in the Indenture, provided that the holders of Debt
Securities shall have offered to the Trustee reasonable security or indemnity
against expenses and liabilities. (Sections 5.9 and 6.2(d) of the Indenture.)
The Indenture requires the annual delivery by the Company to the Trustee of a
written statement as to the absence of certain defaults under the Indenture.
(Section 3.5 of the Indenture.) Whenever the Indenture provides for an action
by, or the determination of any of the rights of, or any distribution to,
holders of Debt Securities denominated in U.S. dollars and in any other currency
or currency unit, in the absence of any provision to the contrary in the form of
Debt Security of any particular series, any amount in respect of any Debt
Security denominated in a currency or currency unit other than U.S. dollars
shall be treated for any such action or distribution as the amount of U.S.
dollars that could be obtained for such amount on such reasonable basis of
exchange and as of such date as the Company reasonably specifies to the Trustee
or in the absence of such specification, as the Trustee may determine. (Section
11.11 of the Indenture.) Under the terms of the Indenture, the holders of a
majority in aggregate principal amount of all series of the Debt Securities to
be affected thereby at the time outstanding may waive compliance with certain
covenants contained in the Indenture. (Section 5.10 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Debt Securities of all series affected by such modification at the
time outstanding (voting as one class), to modify the Indenture or any
supplemental indenture or the rights of the holders of such Debt Securities;
provided that no such modification shall (i) extend the final maturity of any
Debt Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or change the currency or
currency unit of payment thereof, or change the method by which amounts of
payments of principal or interest thereon are determined, or reduce the portion
of the principal amount of an original issue discount Debt Security due and
payable upon acceleration of the maturity thereof or the portion of the
principal amount thereof provable in bankruptcy, or reduce any amount payable
upon redemption of any Debt Security, or impair or affect the right of a holder
to institute suit for the payment thereof or, if the Debt Securities provide
therefor, any right of repayment at the option of the holder of a Debt Security,
without the consent of the holders of each Debt Security so affected or (ii)
reduce the aforesaid percentage of Debt Securities of any series, the consent of
the holders of which is required for any such modification, without the consent
of the holder of each Debt Security so affected. (Section 8.2 of the Indenture.)
The Indenture also provides that the Company and the Trustee may from time to
time execute supplemental indentures. (Section 8.1 of the Indenture.)
6
<PAGE> 8
CONSOLIDATIONS, MERGERS AND SALES OF ASSETS
The Company may not merge or consolidate with any other corporation or sell
or convey all or substantially all of its assets to any Person, unless either
the Company shall be the continuing corporation or the successor corporation
shall be a corporation organized under the laws of the United States or any
state thereof and shall expressly assume the payment of the principal of and
interest on the Debt Securities and the performance and observance of all the
covenants and conditions of the Indenture binding upon the Company, and,
immediately after such merger or consolidation, or such sale or conveyance, the
Company or such successor corporation shall not be in default in the performance
of any such covenant or condition. (Article Nine of the Indenture.)
DEFEASANCE
The Indenture provides that, unless the terms of any series of Debt
Securities provide otherwise, the Company will be discharged from obligations in
respect of the outstanding Debt Securities of any series and the provisions of
the Indenture with respect thereto (excluding certain obligations, such as
obligations to register the transfer or exchange of such outstanding Debt
Securities, to replace stolen, lost or mutilated certificates or coupons, and to
hold moneys for payment in trust), upon the irrevocable deposit, in trust, of
cash or U.S. Government Obligations (as defined in the Indenture) which, through
the payment of interest and principal thereof in accordance with their terms,
will provide cash in an amount sufficient to pay the principal of and premium,
if any, and interest on and mandatory sinking fund payments, if any, in respect
of all outstanding Debt Securities of such series on the stated dates such
payments are due in accordance with the terms of the Indenture and such
outstanding Debt Securities, provided that the Company has received an opinion
of counsel to the effect that such a discharge will not be deemed, or result in,
a taxable event with respect to holders of such outstanding Debt Securities and
that certain other conditions are met. (Section 10.1(B) of the Indenture.)
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect and the Trustee, on demand
of and at the expense of the Company, shall execute appropriate instruments
acknowledging the satisfaction and discharge of the Indenture upon compliance
with certain enumerated conditions, including (a) the Company having paid all
sums payable by the Company under the Indenture, as and when the same shall be
due and payable, (b) the Company shall have delivered to the Trustee for
cancellation all Debt Securities theretofore authenticated under the Indenture
or (c) all Debt Securities not theretofore delivered to the Trustee for
cancellation shall have become due and payable or are by their terms to become
due and payable within one year and the Company shall have deposited with the
Trustee sufficient cash or U.S. Government Obligations which, through the
payment of principal and interest thereon in accordance with their terms, will
provide sufficient cash to pay, at maturity or upon redemption, all Debt
Securities of any series outstanding under the Indenture. (Section 10.1(A) of
the Indenture.)
GOVERNING LAW
The Debt Securities and the Indenture will be governed by the laws of the
State of New York. (Section 11.8 of the Indenture.)
CONCERNING THE TRUSTEE
The Company entered into the Indenture with The First National Bank of
Boston, as Trustee ("FNBB"), pursuant to which the Company may issue one or more
series of its Debt Securities. Effective October 2, 1995, State Street Bank and
Trust Company acquired the trust business of FNBB, and, as a result, State
Street Bank and Trust Company became and is currently the Trustee under the
Indenture. State Street Bank and Trust Company may from time to time make loans
to the Company, and various subsidiaries of the Company may participate in loan
syndications or other investments offered by State Street Bank and Trust Company
from time to time, in the normal course of business. State Street Bank and Trust
Company also serves as trustee for the Company's outstanding 10% Notes due
December 15, 2000, 10 1/8% Subordinated Notes due December 15, 2000, 8 3/4%
Notes due June 1, 1999, 7% Notes due October 1, 2013, 6.60% Notes due January
15, 2004 and 7.30% Notes due June 1, 2006.
7
<PAGE> 9
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby (i) through
agents, (ii) through underwriters, (iii) through dealers or (iv) directly to one
or more purchasers. The Prospectus Supplement with respect to a particular
offering of Debt Securities will set forth the terms of the offering of such
Debt Securities, including the name or names of the specific agents, dealers or
underwriters (including managing underwriters, if any), the purchase price and
the proceeds to the Company from such sales, any underwriting discounts, agency
fees or commissions and other items constituting compensation to the
underwriters, agents or dealers, initial public offering price, any discounts or
concessions to be allowed or reallowed or paid to dealers, the securities
exchange, if any, on which such Debt Securities may be listed, and the place and
time of delivery of the Debt Securities offered.
Debt Securities may be offered and sold through agents designated by the
Company from time to time. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of any Debt
Securities so offered and sold. Agents may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of any Debt
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached.
Such underwriter or underwriters will acquire Debt Securities for their own
account and may resell such Debt Securities from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined at the time of sale. Debt Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or by underwriters without a syndicate. The underwriters
may be entitled, under the relevant underwriting agreement, to indemnification
by the Company against certain liabilities, including liabilities under the
Securities Act. If any underwriter or underwriters are utilized in the sale of
any Debt Securities, unless otherwise set forth in the applicable Prospectus
Supplement, the underwriting agreement will provide that the obligations of the
underwriters will be subject to certain conditions precedent and that the
underwriters with respect to a sale of such Debt Securities will be obligated to
purchase all such Debt Securities if any are purchased.
If a dealer is utilized in the sale of any Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter, as such term is
defined in the Securities Act, of the Debt Securities so offered and sold.
Dealers may be entitled, under agreements which may be entered into with the
Company, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The name of any such dealer and
the terms of the transaction will be set forth in a Prospectus Supplement
relating thereto.
Offers to purchase Debt Securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any sale thereof. The terms of any such sales
will be described in a Prospectus Supplement relating thereto.
The place and time of delivery of the Debt Securities in respect of which
this Prospectus is delivered will be set forth in an accompanying Prospectus
Supplement.
LEGAL MATTERS
Unless otherwise indicated in a Prospectus Supplement relating to the Debt
Securities, certain legal matters in connection with the Debt Securities will be
passed upon for the Company by Baker & Hostetler LLP, Cleveland, Ohio. Certain
legal matters in connection with the Debt Securities offered hereby will be
passed upon for any purchasers, dealers, underwriters or agents by Davis Polk &
Wardwell, New York, New York. Davis Polk
8
<PAGE> 10
& Wardwell may rely as to all matters of Ohio law on the opinion of Baker &
Hostetler LLP, and Baker & Hostetler LLP may rely as to all matters of New York
law on the opinion of Davis Polk & Wardwell. Davis Polk & Wardwell may represent
the Company from time to time in connection with certain legal matters.
EXPERTS
The consolidated financial statements and financial statement schedules of
The Progressive Corporation and subsidiaries as of December 31, 1997 and 1996,
and for each of the three years in the period ended December 31, 1997, all
incorporated by reference in the Registration Statement of which this Prospectus
forms a part, have been incorporated herein in reliance on the reports of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
9
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the Registration Fee, all fees and expenses are estimated:
<TABLE>
<S> <C>
Registration Fee -- Securities and Exchange Commission...... $ 88,500
Trustee's Fees and Expenses................................. 10,000
Accounting Fees and Expenses................................ 20,000
Legal Fees and Expenses..................................... 35,000
Blue Sky Fees and Expenses (including related fees and
expenses of counsel)...................................... 10,000
Printing Expenses........................................... 10,000
Rating Agency Fees.......................................... 132,500
Miscellaneous Expenses...................................... 4,000
--------
Total.................................................. $310,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Code of Regulations of the Company provides for
indemnification of any director, officer or employee in certain instances, as
permitted under Section 1701.13(E) of the Ohio Revised Code, against expenses,
judgments, decrees, fines, penalties or amounts paid in settlement in connection
with the defense of any action, suit or proceeding, criminal or civil, to which
he was, is or may be a party by reason of his status as such director, officer
or employee.
A director, officer or employee is entitled to indemnification if he is
successful on the merits or otherwise in the defense of any such action, suit or
proceeding or if a determination is made pursuant to Article VI of the Code of
Regulations (i) by the directors of the Company acting at a meeting at which a
quorum consisting of directors who neither were nor are parties to or threatened
with any such action, suit or proceeding is present or (ii) by the shareholders
of the Company at a meeting held for such purpose by the affirmative vote of the
holders of shares entitling them to exercise a majority of the voting power of
the Company on such proposal or without a meeting by the written consent of the
holders of shares entitling them to exercise two-thirds of the voting power on
such proposal, that such director, officer or employee (a) was not, and has not
been adjudicated to have been, negligent or guilty of misconduct in the
performance of his duty to the Company, (b) acted in good faith and in a manner
he reasonably believed to be in the best interest of the Company and (c) in any
matter the subject of a criminal action, suit or proceeding, had no reasonable
cause to believe that his conduct was unlawful.
The expenses of each director, officer or employee incurred in defending
any such action, suit or proceeding, whether threatened or actual, may be paid
by the Company as they are incurred in advance of the final disposition of such
action, suit or proceeding, as authorized by the Board of Directors in the
specific case, upon receipt of an undertaking by the director, officer or
employee to repay such expenses unless it shall ultimately be determined that he
is entitled to be indemnified by the Company.
Additionally, Section 1701.13(E)(5)(a) of the Ohio Revised Code provides
that, unless prohibited by specific reference in a corporation's articles of
incorporation or code of regulations (which prohibition is not contained in the
Company's Articles of Incorporation or Code of Regulations), a corporation shall
pay a director's expenses, including attorneys' fees, as such expenses are
incurred, in defending an action, suit or proceeding brought against a director
in such capacity, whether such action, suit or proceeding is brought by a third
party or by or in the right of the corporation, provided the director delivers
to the corporation an undertaking to (a) repay such amount if it is proved by
clear and convincing evidence in a court of competent jurisdiction that his
action or failure to act was undertaken with deliberate intent to injure the
corporation or with reckless disregard for the best interests of the corporation
and (b) reasonably cooperate with the corporation in such action, suit or
proceeding.
II-1
<PAGE> 12
Section 1701.13(E)(7) of the Ohio Revised Code provides that a corporation
may purchase insurance or furnish similar protection for any director, officer
or employee against any liability asserted against him in any such capacity,
whether or not the corporation would have power to indemnify him under Ohio law.
Such insurance may be purchased from or maintained with a person in which the
corporation has a financial interest.
The Company maintains directors and officers liability insurance in the
amount of $20,000,000 under a policy issued by a wholly owned subsidiary of the
Company. The risks covered by such policy include certain liabilities under the
securities laws.
See the proposed form of Underwriting Agreement, filed as Exhibit 1, for
certain provisions relating to indemnification of the Company and its directors
and officers.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
1 -- Proposed Form of Underwriting Agreement
4.1 -- Indenture between the Registrant and The First National Bank
of Boston, Trustee, dated as of September 15, 1993 (the
"Indenture")
4.2 -- First Supplemental Indenture dated March 15, 1996 between
the Registrant and State Street Bank and Trust Company,
evidencing the designation of State Street Bank and Trust
Company as successor trustee under the Indenture, is
incorporated by reference to Exhibit 4.2 of the Company's
Registration Statement No. 333-01745 (filed with the
Commission on March 15, 1996)
4.3 -- Proposed Form of Debt Security
5 -- Opinion of Baker & Hostetler LLP
12 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Baker & Hostetler LLP (included in Exhibit 5)
24.1 -- Powers of Attorney
24.2 -- Certified resolution of the Company's Board of Directors
authorizing the signing on behalf of the Company pursuant to
a power of attorney
25 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of State Street Bank and
Trust Company
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. 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
II-2
<PAGE> 13
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; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(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.
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.
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 Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person of the Registrant in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of 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.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Mayfield Village, State of Ohio, on March 31, 1998.
THE PROGRESSIVE CORPORATION
By: /s/ DAVID M. SCHNEIDER
------------------------------------
David M. Schneider, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 31, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
* Chairman, President and Director
- ------------------------------------------------ (Principal Executive Officer)
Peter B. Lewis
/s/ CHARLES B. CHOKEL Treasurer (Principal Financial
- ------------------------------------------------ Officer)
Charles B. Chokel
/s/ JEFFREY W. BASCH Principal Accounting Officer
- ------------------------------------------------
Jeffrey W. Basch
* Director
- ------------------------------------------------
Milton N. Allen
* Director
- ------------------------------------------------
B. Charles Ames
* Director
- ------------------------------------------------
Charles A. Davis
* Director
- ------------------------------------------------
Stephen R. Hardis
* Director
- ------------------------------------------------
Janet Hill
* Director
- ------------------------------------------------
Norman S. Matthews
* Director
- ------------------------------------------------
Donald B. Shackelford
* Director
- ------------------------------------------------
Paul B. Sigler
</TABLE>
* David M. Schneider, by signing his name hereto, does sign this Registration
Statement on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons filed as an Exhibit to the Registration
Statement.
By: /s/ DAVID M. SCHNEIDER
----------------------------------
David M. Schneider,
Attorney-in-Fact
II-4
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S> <C>
1 -- Proposed Form of Underwriting Agreement
4.1 -- Indenture between the Registrant and The First National Bank
of Boston, Trustee, dated as of September 15, 1993 (the
"Indenture")
4.2 -- First Supplemental Indenture dated March 15, 1996 between
the Registrant and State Street Bank and Trust Company,
evidencing the designation of State Street Bank and Trust
Company as successor trustee under the Indenture, is
incorporated by reference to Exhibit 4.2 of the Company's
Registration Statement No. 333-01745 (filed with the
Commission on March 15, 1996)
4.3 -- Proposed Form of Debt Security
5 -- Opinion of Baker & Hostetler LLP
12 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Baker & Hostetler LLP (included in Exhibit 5)
24.1 -- Powers of Attorney
24.2 -- Certified resolution of the Company's Board of Directors
authorizing the signing on behalf of the Company pursuant to
a power of attorney
25 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of State Street Bank and
Trust Company
</TABLE>
II-5
<PAGE> 1
EXHIBIT NO. 1
-------------
Proposed Form of Underwriting Agreement
<PAGE> 2
UNDERWRITING AGREEMENT
___________ __, 199_
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Ladies and Gentlemen:
___________________ as underwriter (hereinafter referred to as the
"Manager" or the "Underwriter") understands that The Progressive Corporation,
an Ohio corporation (the "Company"), proposes to issue and sell $___________
aggregate principal amount of its [Interest Rate]% [Type of Debt Security] due
[Maturity Date] (the "Offered Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriter agrees to
purchase a total of $___________ principal amount of the Offered Securities at
a purchase price equal to ______% of the principal amount of the Offered
Securities plus accrued interest on the Offered Securities from __________ __,
____ to the date of payment and delivery. The Offered Securities will be
offered to the public at ______% of the principal amount, the underwriting
discount will be ____%, the selling concession to dealers will be ___% and the
reallowance concession will be ___%.
The Underwriter will pay for such Offered Securities upon delivery thereof
at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017 at 10:00 A.M. (New York time) on _______ __, ____, or at such other
time, not later than _______ __, ____, as shall be designated by the
Underwriter with the consent of the Company, which consent shall not
unreasonably be withheld. Payment for the Offered Securities shall be made in
U.S. dollars in immediately available funds.
The Offered Securities shall have the following terms:
<PAGE> 3
Maturity: _______ __, ____
Interest Rate: _____
Interest Payment Date: __________ and __________
Redemption Provisions,
if any:
Trustee: State Street Bank and
Trust Company
Except as otherwise set forth herein, all the provisions contained in the
document entitled "The Progressive Corporation Underwriting Agreement Standard
Provisions (Debt)" dated March 1998, a copy of which you have previously
received, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein.
Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below and returning the signed copy to us
and, in addition, have an authorized officer send us no later than 11:00 A.M.
[business day following date] by wire, telex or other written means, the
following message:
"We have entered into the Underwriting Agreement dated _______, ____
relating to the Offered Securities referred to therein by signing a copy of the
Underwriting Agreement and returning the same or depositing the same in the
mail to you."
Very truly yours,
[Name of Manager]
By__________________________
Title:
Accepted:
THE PROGRESSIVE CORPORATION
By_________________________
Title:
<PAGE> 4
THE PROGRESSIVE CORPORATION
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (DEBT)
March 1998
<PAGE> 5
From time to time, The Progressive Corporation, an Ohio corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in
any such underwriting agreement (an "Underwriting Agreement"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is sometimes herein referred to as "this Agreement." Unless
otherwise defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.
I.
The Company proposes to issue from time to time debt securities to
be issued pursuant to the provisions of one or more Indentures, including any
amendments or supplements thereto (individually, an "Indenture") between the
Company and a trustee named therein. Such debt securities will have varying
designations, maturities, rates and times of payment of interest, selling
prices, redemption terms and other terms. Any such debt securities are herein
sometimes referred to as the "Securities."
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement including one or more prospectuses
relating to the Securities and has filed with, or mailed for filing to, the
Commission, pursuant to Rule 424 under the Securities Act of 1933, as amended,
a prospectus supplement or supplements specifically relating to the Securities
to be sold ("Offered Securities"). The term "Registration Statement" means the
registration statement as amended to the date of the Underwriting Agreement.
The term "Basic Prospectus" means the prospectus included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus, together with the
prospectus supplement (other than a preliminary prospectus supplement)
specifically relating to the Offered Securities as filed with, or mailed for
filing to, the Commission pursuant to Rule 424. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Securities, together with the Basic Prospectus. As used herein,
the terms "Registration Statement," "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the material, if any,
incorporated by reference therein.
The term "Underwriters' Securities" means the Offered Securities
to be purchased by the Underwriters herein. The term "Contract Securities"
means the Offered
<PAGE> 6
Securities, if any, to be purchased pursuant to the delayed delivery contracts
referred to below.
II.
If the Prospectus provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company hereby authorizes the
Underwriters to solicit offers to purchase Contract Securities on the terms and
subject to the conditions set forth in the Prospectus pursuant to delayed
delivery contracts substantially in the form of Schedule I attached hereto
("Delayed Delivery Contracts") but with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are to be with institutional
investors approved by the Company and of the types set forth in the Prospectus.
On the Closing Date (as hereinafter defined), the Company will pay the Manager
as compensation, for the accounts of the Underwriters, the fee set forth in the
Underwriting Agreement in respect of the Contract Securities. The Underwriters
will not have any responsibility in respect of the validity or the performance
of Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts
with institutional investors, the Offered Securities comprising the Contract
Securities shall be deducted from the Offered Securities comprising the
Underwriters' Securities to be purchased by the several Underwriters and the
aggregate principal amount of Offered Securities to be purchased by each
Underwriter shall be reduced pro rata in the same proportion as the principal
amount of Offered Securities set forth opposite such Underwriter's name in the
Underwriting Agreement bears to the total principal amount of all Offered
Securities in the Underwriting agreement, except to the extent that the Manager
determines that such reduction shall be otherwise and so advises the Company.
III.
The Company is advised by the Manager that the Underwriters
propose to make a public offering of their respective portions of the
Underwriters' Securities as soon after this Agreement is entered into as in the
Manager's judgment is advisable. The terms of the public offering of the
Underwriters' Securities are set forth in the Prospectus.
3
<PAGE> 7
IV.
Payment for the Underwriters' Securities shall be made by payment
in full of the requisite amount of funds determined in the Underwriting
Agreement and in accordance with the procedures set forth in the Underwriting
Agreement, upon delivery to the Manager for the respective accounts of the
several Underwriters of the Underwriters' Securities registered in such names
and in such denominations as the Manager shall request in writing not less than
two full business days prior to the date of delivery. The time and date of
such payment and delivery with respect to the Underwriters' Securities are
herein referred to as the "Closing Date."
V.
The several obligations of the Underwriters hereunder are subject
to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission and there shall have been no
material adverse change (not in the ordinary course of business) in the
condition of the Company and its subsidiaries, taken as a whole, from that set
forth in the Registration Statement and the Prospectus; and the Manager shall
have received, on the Closing Date, a certificate, dated the Closing Date and
signed by an executive officer of the Company, to the foregoing effect. The
officer making such certificate may rely upon the best of his knowledge as to
the proceedings pending or threatened.
(b) The Manager shall have received on the Closing Date an opinion of
Baker & Hostetler LLP, counsel for the Company, dated the Closing Date, as to
the matters set forth in Schedule II attached hereto. In giving their opinion
required by this Section V(b), Baker & Hostetler LLP may rely as to all matters
of New York law on the opinion of counsel for the Underwriters.
(c) The Manager shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the Underwriters, dated the Closing Date, in
form and substance satisfactory to the Manager.
(d) The Manager shall have received on the date of the Underwriting
Agreement a letter dated such date, and also on the Closing Date a letter dated
the Closing Date, in form and substance satisfactory to the Manager, from
Coopers &
4
<PAGE> 8
Lybrand L.L.P., independent public accounts, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained or incorporated by reference in the Registration
Statement and the Prospectus.
VI.
In further consideration of the agreements of the Underwriters
contained in this Agreement, the Company covenants as follows:
(a) To furnish the Manager, without charge, a copy of the
Registration Statement including exhibits and materials, if any,
incorporated by reference therein and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, and documents
incorporated by reference therein and any supplements and amendments
thereto as the Manager may reasonably request. The terms "supplement" and
"amendment" or "amend" as used in this Agreement with respect to the
Registration Statement, Prospectus or preliminary prospectus shall include
all documents filed by the Company with the Commission subsequent to the
date of the Basic Prospectus, pursuant to the Securities Exchange Act of
1934, as amended, which are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus with respect to the Offered Securities, to furnish the
Manager a copy of each such proposed amendment or supplement.
(c) If, during such period after the commencement of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered with respect
thereto, any event shall occur as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading,
or if it is necessary to amend or supplement the Prospectus to comply with
law, forthwith at its own expense, to amend or to supplement the Prospectus
and to furnish such amendment or supplement to the Underwriters, so as to
correct such statement or omission or effect such compliance.
5
<PAGE> 9
(d) To qualify the Offered Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with the determination of the eligibility of the Offered
Securities for investment under the laws of such jurisdictions as the
Manager may reasonably designate; provided that the Company shall not be
required to qualify to do business in any jurisdiction where it is not now
qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(e) To make generally available to the Company's security holders
as soon as practicable an earnings statement covering a 12-month period
beginning after the date of the Underwriting Agreement, which shall satisfy
the provisions of Section 11(a) of the Securities Act of 1933, as amended,
and Rule 158 and other applicable rules and regulations of the Commission
thereunder.
VII.
The Company represents and warrants to each Underwriter that (i)
each document filed or to be filed pursuant to the Securities Exchange Act of
1934, as amended, and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with such Act and the
applicable rules and regulations thereunder, (ii) each part of the Registration
Statement (including the documents incorporated by reference therein), filed
with the Commission pursuant to the Securities Act of 1933, as amended,
relating to the Securities, when such part became effective, did not contain
any untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances then existing, not misleading, (iii) each preliminary
prospectus, if any, filed pursuant to Rule 424 under the Securities Act of
1933, as amended, complied when so filed in all material respects with such Act
and the applicable rules and regulations thereunder, (iv) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act of
1933, as amended, and the applicable rules and regulations thereunder and (v)
the Registration Statement and the Prospectus do not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit
6
<PAGE> 10
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the above representations and warranties do not apply to statements
or omissions in the Registration Statement, any preliminary prospectus or the
Prospectus based upon information furnished to the Company in writing by any
Underwriter expressly for use therein. In addition to the representations and
warranties set forth in this Article VII, the Company also makes the
representations and warranties set forth in Schedule III attached hereto.
The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of
either Section 15 of the Securities Act of 1933, as amended, or Section 20 of
the Securities Exchange Act of 1934, as amended, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (if used within the
period set forth in paragraph (c) of Article VI hereof and as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except to the extent that such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by any Underwriter expressly for use therein; provided, however, that
the foregoing indemnity with respect to preliminary prospectuses or
Prospectuses shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Securities if such untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus is eliminated or remedied in the
Prospectus or the Prospectus as amended or supplemented (copies of which were
delivered to such Underwriter) and a copy of the Prospectus or the Propsectus
as amended or supplemented (excluding documents incorporated by reference) has
not been furnished to such person at or prior to the written confirmation of
the sale of such Offered Securities to such person.
Each underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
any person controlling the
7
<PAGE> 11
Company to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information furnished by such
Underwriter in writing expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus.
If any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one proceeding in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated
in writing by the Manager in the case of parties indemnified pursuant to the
immediately preceding paragraph and by the Company in the case of parties
indemnified pursuant to the second preceding paragraph. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent of if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
If the indemnification provided for in this Article VII is
unavailable to an indemnified party under the second or third paragraphs hereof
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
8
<PAGE> 12
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other in connection
with the offering of the Offered Securities shall be deemed to be in the same
proportion as the total net proceeds from the offering of such Offered
Securities (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters in
respect thereof. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relevant intent, knowledge, 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 Article VII were determined by
pro rata allocation or by any method of allocation which does not take account
of the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten and distributed to the
public by such Underwriter 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.
9
<PAGE> 13
No person guilty of such fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Article VII are several, in proportion to the respective principal amounts
of Offered Securities purchased by each of such Underwriter, and not joint.
The indemnity and contribution agreements contained in this
Article VII and the representations and warranties of the Company in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by any
Underwriter or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, its directors or officers or any
person controlling the Company, and (iii) acceptance of and payment for any of
the Offered Securities.
VIII.
This Agreement shall be subject to termination in the absolute
discretion of the Manager, by notice given to the Company, if prior to the
Closing Date (i) any change in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken as
a whole, from that set forth in the Prospectuses, which is material and
adverse; (ii) any downgrading in, or notice of any proposal to downgrade, the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act of 1933, as amended) or any public announcement that any
such organization has under surveillance or review the rating of the Company's
debt securities with negative implications or without indicating the direction
of possible change; (iii) any suspension or limitation of trading in securities
generally on or by the New York Stock Exchange, the American Stock Exchange or
the National Association of Securities Dealers, Inc., or any setting of minimum
prices for trading on such exchange; (iv) any suspension of trading of any
securities of the Company on any exchange; (v) any banking moratorium declared
by Federal or New York authorities; or (vi) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event set forth in
(i) through (vi), in the judgment of the Manager, makes it impractical or
inadvisable to proceed with the public
10
<PAGE> 14
offering or the delivery of the Offered Securities on the terms and in the
manner contemplated by the Prospectus.
IX.
If any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder,
and the aggregate principal amount of Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Offered
Securities, the other Underwriters shall be obligated severally in the
proportions which the aggregate principal amounts of Offered Securities set
forth opposite their names in the Underwriting Agreement bear to the aggregate
principal amount of Offered Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the principal amount of Offered Securities which any
Underwriter has agreed to purchase pursuant to the Underwriting Agreement be
increased pursuant to this paragraph by an amount in excess of one-ninth of
such principal amount of Offered Securities, without the written consent of
such Underwriter. In any such case either the Manager or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may
be effected. If any Underwriter or Underwriters shall fail or refuse to
purchase Offered Securities and the aggregate principal amount of Offered
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Offered Securities and arrangements
satisfactory to the Manager and the Company for the purchase of such Offered
Securities are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or of
the Company. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters or any
of them because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its
11
<PAGE> 15
obligations under this Agreement, the Company will reimburse the Underwriters
or such Underwriters as have so terminated this Agreement, with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with the Offered Securities.
This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
12
<PAGE> 16
SCHEDULE I
DELAYED DELIVERY CONTRACT
, 19
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Dear Sirs:
The undersigned hereby agrees to purchase from The Progressive
Corporation, an Ohio corporation (the "Company"), and the Company agrees to
sell to the undersigned $ principal amount of the Company's __%
Notes due _____________, ____ (the "Offered Securities"), offered by the
Company's Prospectus dated , 19__ and Prospectus Supplement dated , 19__,
receipt of copies of which is hereby acknowledged, at a purchase price of %
of the principal amount of such Offered Securities plus accrued interest from
, 19__ to the delivery date or dates thereof [and] [amortization of the
original issue discount from ,19__ to the delivery date or dates
thereof] and on the further terms and conditions set forth in this contract.
The undersigned does not contemplate selling Offered Securities
prior to making payment therefor.
The undersigned will purchase from the Company the principal
amounts of Offered Securities on the delivery dates set forth below:
[Plus Accrued Interest From:
Delivery [and][Amortization of
Date Principal Amount Original Issue Discount From:]
- ---- ---------------- ------------------------------
________ ___________________ ______________________________
________ ___________________ ______________________________
________ ___________________ ______________________________
Each such date on which Offered Securities are to be purchased
hereunder is hereinafter referred to as a "Delivery Date."
Payment for the Offered Securities which the undersigned has
agreed to purchase on each Delivery Date shall be made in U.S. dollars or the
equivalent thereof in a
I-1
<PAGE> 17
foreign denominated coin or currency or units based on or relating to
currencies (including European Currency Units (ECU)) [by certified or official
bank check or checks payable to the Company or by bank wire transfer] [by bank
wire transfer] in immediately available funds at the office of New York, N.Y.,
at _____ A.M. (New York time) on the Delivery Date, upon delivery to the
undersigned of the Offered Securities to be purchased by the undersigned on the
Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communicated addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for the
Offered Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Offered Securities to be made by the undersigned shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which the undersigned is subject and (2) the Company shall have sold, and
delivery shall have taken place to the underwriters (the "Underwriters") named
in the Prospectus Supplement referred to above, of such part of the Offered
Securities as is to be sold to them. Promptly after completion of sale and
delivery to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
Failure to take delivery of and make payment for Offered
Securities by any purchaser under any other Delayed Delivery Contract shall not
relieve the undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this contract is acceptable to the Company, it is requested
that the Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at is address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
I-2
<PAGE> 18
This contract shall be governed by and construed in accordance
with the laws of the State of New York.
Yours very truly,
____________________________
(Purchaser)
By:_________________________
____________________________
(Title)
____________________________
____________________________
(Address)
Accepted:
THE PROGRESSIVE CORPORATION
By:_______________________
Title:
I-3
<PAGE> 19
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name, telephone number and department of the representatives
of the Purchaser with whom details of delivery on the Delivery Date may be
discussed are as follows: (Please print)
Telephone No.
(Including
Name Area Codes) Department
- ---- ----------- ----------
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
I-4
<PAGE> 20
SCHEDULE II
-----------
(i) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Ohio, with all requisite corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) the Indenture has been duly authorized, executed and delivered by
the Company and, assuming due execution and delivery thereof by
the Trustee, is a valid and binding agreement of the Company and
has been duly qualified under the Trust Indenture Act of 1939, as
amended;
(iii) the Debt Securities have been duly authorized and executed by the
Company and, assuming due authentication of the Debt Securities by
the Trustee in accordance with the terms of the Indenture, upon
delivery to the Underwriters against payment therefor in
accordance with the terms of the Underwriting Agreement, will be
valid and binding obligations of the Company;
(iv) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(v) the issuance and sale of the Debt Securities as provided in the
Underwriting Agreement, the execution and delivery of the
Underwriting Agreement, the consummation of the transactions
contemplated thereby and compliance with the terms and provisions
thereof will not conflict with or result in a breach of any of the
terms or provisions of the Amended Articles of Incorporation or
the Code of Regulations or of any material agreement or instrument
known to us to which the Company is a party or by which the
Company is bound and will not constitute a default thereunder or
result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or
assets of the Company under any such agreement or instrument;
II-1
<PAGE> 21
(vi) no consent, approval, authorization or other order of or filing
with any regulatory authority or other governmental body in the
United States of America is required for execution and delivery
of the Underwriting Agreement by the Company, except such as have
been obtained and made under the Securities Act of 1933, as
amended (the "Act"), the Trust Indenture Act of 1939 and the
General Corporation Law of Ohio (except for consents, approvals,
authorizations, orders or filings under any securities or "blue
sky" laws or any insurance laws of any state, as to which we do
not express an opinion); and
(vii) (A) the Registration Statement has become effective under the
Act, and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are
pending or threatened under the Act, (B) the Registration
Statement and the Prospectus, as of their respective effective or
issue dates (except for financial statements and financial data
and related schedules and notes, as to which we do not express an
opinion), appeared on their face to be appropriately responsive in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and (C) the
descriptions in the Registration Statement and the Prospectus, as
of their respective effective or issue dates, of statues, legal
and governmental proceedings and contracts and other documents,
insofar as such descriptions constitute a summary of such
statutes, legal and governmental proceedings and contracts and
other documents, fairly presented in all material respects the
information required to be stated under the Act, the Securities
Exchange Act of 1934, as amended, and the respective rules and
regulations of the Commission thereunder, and we do not know of
any legal or governmental proceedings pending or threatened to
which the Company is a party or to which any property of the
Company is subject which are required to be described in the
Prospectus, as of its issue date, which were not described as
required, or of any
II-2
<PAGE> 22
contracts or other documents of a character required to be
described in the Registration Statement or the Prospectus, as of
their respective effective or issue dates, or to be filed as
exhibits to the Registration Statement, as of its effective date,
which were not described and filed as required (the opinion
expressed in this subparagraph being based solely on our review of
the Registration Statement and the Prospectus and discussion of
the same with certain officers of the Company, but without
independent check or verification, except as specified).
II-3
<PAGE> 23
SCHEDULE III
(i) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(ii) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(iii) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure
to be so incorporated or qualified or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and has been
duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, assuming the due
authorization, execution and delivery by
III-1
<PAGE> 24
the Trustee, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of
general applicability.
(vi) The Delayed Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, assuming the due authorization,
execution and delivery by the other party, enforceable in
accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally
and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
(vii) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the
case of the Underwriters' Securities, or by institutional
investors in accordance with the terms of the Delayed Delivery
Contracts, if any, in the case of the Contract Securities, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, in each case enforceable in
accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration, if any, and the availability of
equitable remedies may be limited by equitable principles of
general applicability.
III-2
<PAGE> 25
(viii) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the
Indenture, the Offered Securities, and the Delayed Delivery
Contracts, if any, will not contravene in any material respect any
provision of applicable law or the Articles of Incorporation or
Code of Regulations of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary that is material to the Company and its subsidiaries,
taken as a whole, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Offered Securities or the
Delayed Delivery Contracts, except such as may be required by the
securities or Blue Sky laws or any insurance laws of the various
states in connection with the offer and sale of the Offered
Securities.
(ix) There has not occurred any material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus.
(x) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a
party or to which any of the properties of the Company or any of
its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required.
III-3
<PAGE> 26
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(xii) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(xiii) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
(xiv) The ratios and other financial and statistical data contained in
the Registration Statement and the Prospectus have been prepared
in conformity in all material respects with the requirements of
the insurance laws, rules and regulations of any jurisdiction to
which the Company's subsidiaries are subject or generally accepted
accounting principles, as applicable, and present fairly the
information purported to be shown.
(xv) The reserves reflected in the Company's most recent quarterly
or annual report filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended, for payment of all
outstanding benefits, losses, claims and
III-4
<PAGE> 27
expenses under insurance policies and programs issued or provided
by the Company's subsidiaries are adequate, based on generally
accepted actuarial techniques applied on a consistent basis, to
cover in all material respects the total amount of all outstanding
liabilities incurred as of the date of such report under all
such insurance policies and programs under which such subsidiaries
may have any liability as of such date.
III-5
<PAGE> 1
EXHIBIT NO. 4.1
---------------
Indenture between the Registrant and The First National Bank of Boston, Trustee,
dated as of September 15, 1993 (the "Indenture")
<PAGE> 2
THE PROGRESSIVE CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON,
TRUSTEE
_____________
INDENTURE
_____________
DATED AS OF SEPTEMBER 15, 1993
<PAGE> 3
CROSS-REFERENCE SHEET*
____________
BETWEEN
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of September 15, 1993 between THE PROGRESSIVE CORPORATION and THE FIRST
NATIONAL BANK OF BOSTON, Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
- ------------------ --------------------
<S> <C>
310(a)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
310(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9(a), (b) and (d)
310(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(a) and (b)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
</TABLE>
__________________________________
* This Cross Reference Sheet is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2 Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3 Amount Unlimited; Issuable in Series. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Authentication and Delivery of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5 Execution of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.6 Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.7 Denomination and Date of Securities; Payments of Interest. . . . . . . . . . . . . . . . . . . . 10
SECTION 2.8 Registration, Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10 Cancellation of Securities; Destruction Thereof. . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.11 Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.2 Offices for Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.4 Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.5 Written Statement to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders. . . . . . . 18
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists. . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
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SECTION 4.3 Reports by the Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.4 Reports by the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default. . . . . . . . . . . . . . 21
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt. . . . . . . . . . . . . . . . . . 24
SECTION 5.3 Application of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.4 Suits for Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.6 Limitations on Suits by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.7 Unconditional Right of Securityholders to Institute Certain Suits. . . . . . . . . . . . . . . . 29
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. . . . . . . . . . . . . 29
SECTION 5.9 Control by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.10 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances. . . . . . . . . . 30
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs. . . . . . . . . . . . . . . . . . 31
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default. . . . . . . . . . 31
SECTION 6.2 Certain Rights of the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, etc. . . . . . . . . . . . . . . 34
SECTION 6.5 Moneys Held by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim. . . . . . . . . . . . . . . . . 35
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc. . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.8 Persons Eligible for Appointment as Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.9 Resignation and Removal; Appointment of Successor Trustee. . . . . . . . . . . . . . . . . . . . 36
SECTION 6.10 Acceptance of Appointment by Successor Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
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SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business of Trustee. . . . . . . . . . . . . 39
SECTION 6.12 Preferential Collection of Claims Against the Issuer. . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.13 Indentures Not Creating Potential Conflicting Interests for the Trustee. . . . . . . . . . . . . 39
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities. . . . . . . . . . . . . . . . . 40
SECTION 7.3 Holders to Be Treated as Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.5 Right of Revocation of Action Taken. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders. . . . . . . . . . . . . . . . . . . 43
SECTION 8.2 Supplemental Indentures With Consent of Securityholders. . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.3 Effect of Supplemental Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.4 Documents to Be Given to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures. . . . . . . . . . . . . . . . . . 46
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.2 Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.3 Opinion of Counsel to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities. . . . . . . . . . . . . . . 50
SECTION 10.3 Repayment of Moneys Held by Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. . . . . . . . . . . . 51
SECTION 10.5 Indemnity for U.S. Government Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of Issuer Exempt from Individual
Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Securityholders. . . . . . . . . . . 52
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.4 Notices and Demands on Issuer, Trustee and Securityholders. . . . . . . . . . . . . . . . . . . 52
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained Therein. . . . . . . 53
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939. . . . . . . . . . . . . 54
SECTION 11.8 New York Law to Govern. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.10 Effect of Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.11 Securities in Foreign Currencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.2 Notice of Redemption; Partial Redemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.3 Payment of Securities Called for Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption. . . . . . . . . . 58
SECTION 12.5 Mandatory and Optional Sinking Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
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<PAGE> 8
THIS INDENTURE, dated as of September 15, 1993, between THE
PROGRESSIVE CORPORATION, an Ohio corporation (the "Issuer"), and THE FIRST
NATIONAL BANK OF BOSTON, a national banking association (the "Trustee"),
WITNESSETH:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture and to provide, among other things, for the authentication, delivery
and administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective Holders from time to
time of the Securities and of the Coupons, if any, appertaining thereto as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939 including terms defined therein by reference to the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise clearly requires), shall have the meanings assigned to
such terms in said Trust Indenture Act and in said Securities Act as in force
at the date of this Indenture. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof," and
"hereunder" and other words of similar import refer to this Indenture as a
whole and not to any particular Article,
<PAGE> 9
Section or other subdivision. The terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular.
"Authorized Newspaper" means The Wall Street Journal, The New York
Times or other newspaper of general circulation throughout the United States of
America.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act hereunder.
"Business Day" means, with respect to any Security, a day that in the
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized by law or regulation to close or a day on which
transactions in the currency in which the Securities are payable are not
conducted.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if any time after the execution and delivery of this Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act of 1939, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 150 Royall Street, Canton, Massachusetts 02021,
Attn: Corporate Trust Administration.
"Coupon" means any interest coupon appertaining to a Security.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Foreign Currency" means a currency issued by the government of a
country other than the United States.
"Holder," "holder of Securities," "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms
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and terms of particular series of Securities established as contemplated
hereunder.
"Interest" means, when used with respect to non-interest-bearing
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article Six THE
PROGRESSIVE CORPORATION, an Ohio corporation, and, subject to Article Nine, its
successors and assigns.
"Officers' Certificate" means a certificate signed by the chairman of
the Board of Directors or the president or any vice president or by the
treasurer and by the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or other counsel who
shall be satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.5, if and to the extent required hereby.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, subject to the provisions of Section 7.4, means,
as of any particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the holders of such Securities (if the Issuer
shall act as its own paying agent), provided that if such Securities,
or portions thereof, are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided, or
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<PAGE> 11
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to any
such Security as to which proof satisfactory to the Trustee is
presented that such Security is held by a person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
In determining whether the holders of the requisite principal amount
of Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Registered Security" means any Security registered on the Security
Register of the Issuer.
"Responsible Officer" when used with respect to the Trustee means any
officer or assistant officer assigned by the Trustee to administer its
corporate trust matters.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Security Register" shall have the meaning set forth in Section 2.8.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
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"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" means direct obligations of the United
States of America, backed by its full faith and credit.
"vice president" when used with respect to the Issuer, means any vice
president, whether or not designated by a number or a word or words added
before or after the title of "vice president."
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form
(not inconsistent with this Indenture) as shall be established by or pursuant
to a resolution of the Board of Directors or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities and
Coupons, as evidenced by their execution of the Securities and Coupons.
The definitive Securities and Coupons shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities and Coupons, as
evidenced by their execution of such Securities and Coupons.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
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This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
<TABLE>
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TRUSTEE,
as Trustee
By
_________________________________
Authorized Signatory
</TABLE>
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable or the method by which such date
or dates shall be determined;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate or rates
shall be determined, the date or dates from which such interest shall
accrue, the interest payment dates on which such interest shall be
payable and the record dates for the determination of Holders to whom
interest is payable;
(5) the place or places where the principal and any interest
on Securities of the series shall be payable;
(6) the price or prices at which, the period or periods
within which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the
Issuer, pursuant to any sinking fund or otherwise;
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(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and
the price or prices at which and the period or periods within which
and the terms and conditions upon which Securities of the series shall
be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligation;
(8) if other than denominations of U.S. $1,000 and any
integral multiple thereof, in the case of Registered Securities, or
U.S. $1,000 in the case of Unregistered Securities, the denominations
in which Securities of the series shall be issuable;
(9) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 5.1 or provable in bankruptcy pursuant to Section
5.2;
(10) any authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities of such
series;
(11) if other than such coin or currency of the United States
of America as at the time of payment is legal tender for payment of
public or private debts, the coin or currency or units based on or
relating to currencies in which payment of the principal of and
interest, if any, on the securities of that series shall be payable;
(12) if the principal of or interest, if any, on the
Securities of that series are to be payable, at the election of the
Issuer or a Holder thereof, in a coin or currency or units based on or
relating to currencies other than that in which the Securities are
stated to be payable, the period or periods within which, and the
terms and conditions upon which, such election may be made;
(13) if the amount of payments of principal of or interest,
if any, on the Securities of the series may be determined with
reference to an index, formula or other method based on a coin or
currency or units based on or relating to currencies other than that
in which the Securities are stated to be payable, the manner in which
such amounts shall be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities or Unregistered Securities (with or without
Coupons), or both, any restrictions applicable to the offer, sale or
delivery of Unregistered Securities and, if other than as provided in
Section 2.8, the
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terms upon which Unregistered Securities of any series may be
exchanged for Registered Securities of such series and vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a Person
who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the
Issuer will have the option to redeem such Securities rather than pay
such additional amounts;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions
not otherwise set forth herein, then the form and terms of such
certificates, documents or conditions; and
(17) any other terms of the series, including provisions for
payment by wire transfers, if any, or modifications of the definition
of Business Day (which terms shall not adversely affect the interests
of the holders of the Securities).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
SECTION 2.4 Authentication and Delivery of Securities. At any time
and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Securities of any series (having attached thereto
appropriate Coupons, if any), executed by the Issuer to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver such
Securities and Coupons, if any, to or upon the written order of the Issuer,
signed by both (a) the chairman of its Board of Directors, or any vice chairman
of its Board of Directors, or its president or any vice president or its
treasurer or any assistant treasurer and (b) by its secretary or any assistant
secretary, without any further action by the Issuer. In authenticating such
Securities and Coupons, if any, and accepting the additional responsibilities
under this Indenture in relation to such Securities and Coupons, if any, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of
Directors by or pursuant to which the form and terms of such series
were established in each case certified by the secretary or an
assistant secretary of the Issuer;
(2) an executed supplemental indenture, if any;
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(3) an Officers' Certificate setting forth the form and terms
of the Securities and Coupons, if any, as required pursuant to Section
2.3, and prepared in accordance with Section 11.5;
(4) an Opinion of Counsel, prepared in accordance with
Section 11.5, which shall state
(a) that the form or forms and terms of such
Securities and Coupons, if any, have been established by or
pursuant to a resolution of the Board of Directors or by a
supplemental indenture as permitted by Sections 2.1 and 2.3 in
conformity with the provisions of this Indenture;
(b) that such Securities and Coupons, if any, when
authenticated and delivered by the Trustee and issued by the
Issuer in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and binding
obligations of the Issuer;
(c) that all laws and requirements in respect of the
execution and delivery by the Issuer of the Securities and
Coupons, if any, have been complied with; and
(d) such other matters as the Trustee may reasonably
request.
The Trustee shall have the right to decline to authenticate and
deliver any Securities and Coupons, if any, under this Section if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
by the Issuer or if the Trustee in good faith by its board of directors or
board of trustees, executive committee, or a trust committee of directors,
trustees or Responsible Officers shall determine that such action would expose
the Trustee to personal liability to existing Holders.
SECTION 2.5 Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto, shall be signed on behalf of the
Issuer by both (a) the chairman of its Board of Directors or any vice chairman
of its Board of Directors or its president or any vice president or its
treasurer or any assistant treasurer and (b) by its secretary or any assistant
secretary, under its corporate seal, if any, which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security or Coupon that has been duly
authenticated and delivered by the Trustee.
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In case any officer of the Issuer who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Security or
Coupon so signed (or the Security to which the Coupon so signed appertains)
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security or Coupon nevertheless may be authenticated and delivered
or disposed of as though the person who signed such Security or Coupon had not
ceased to be such officer of the Issuer; and any Security or Coupon may be
signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture. No Coupon
shall be entitled to the benefits of this Indenture or shall be valid or
obligatory for any purpose until such certificate by the Trustee shall have
become duly executed on the Security to which such Coupon appertains.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable as Registered Securities or
Unregistered Securities in such denominations as shall be specified as
contemplated by Section 2.3. In the absence of any such specification with
respect to the Registered Securities of any series, the Registered Securities
of such series shall be issuable in dominations of U.S. $1,000 and any integral
multiple thereof. In the absence of any such specification with respect to the
Unregistered Securities, Unregistered Securities shall be issued in the
denomination of U.S. $1,000. The Securities shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of
the Trustee as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
resolution or resolutions of the Board of Directors of the Issuer or the
supplemental indenture referred to in Section 2.3. The Securities of each
series shall bear interest, if any, from the date, and such interest shall be
payable on the dates, established as contemplated by Section 2.3.
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The person in whose name any Registered Security on the Security
Register maintained by the Issuer pursuant to Section 2.8 of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business
on a subsequent record date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the holders of Registered
Securities not less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) shall mean the date specified as such
in the terms of the Registered Securities of any particular series, or, if no
such date is so specified, if such interest payment date is the first day of a
calendar month, the fifteenth day of the next preceding calendar month or, if
such interest payment date is the fifteenth day of a calendar month, the first
day of such calendar month, whether or not such record date is a Business Day.
Any defaulted interest payable in respect of any Unregistered Security
shall be payable pursuant to such procedures as are satisfactory to the Trustee
and in such manner so that there is no discrimination as between the holders of
Registered Securities and Unregistered Securities of the same series and notice
of the payment date therefor shall be given by the Trustee in the name and at
the expense of the Issuer by publication at least once in an Authorized
Newspaper. In case an Unregistered Security is surrendered in exchange for a
Registered Security after the close of business on any record date for the
payment of defaulted interest and before the opening of business on the
proposed date of payment of such defaulted interest, the Coupon appertaining to
such surrendered Unregistered Security and due for payment on such proposed
date of payment will not be surrendered with such surrendered Unregistered
Security and interest payable on such proposed date of payment will be made
only to the holder of such Coupon on such proposed date.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep or cause to be kept at each office or agency to be maintained for the
purpose as provided in Section 3.2 a register or registers for each series of
Registered Securities issued hereunder (collectively, the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, it
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will register, and will register the transfer of, or cause the registration of
transfer of, Registered Securities as in this Article provided. Such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series in
authorized denominations for a like aggregate principal amount.
Unregistered securities (except for any temporary Unregistered
Securities) and Coupons (except for Coupons attached to any temporary
Unregistered Securities) shall be transferable by delivery.
Any Registered Security or Registered Securities of any series may be
exchanged for a Registered Security or Registered Securities of the same series
in other authorized denominations, in an equal aggregate principal amount.
Registered Securities of any series to be exchanged shall be surrendered at any
office or agency maintained by the Issuer for the purpose as provided in
Section 3.2, and the Issuer shall execute and the Trustee shall authenticate
and deliver in exchange therefor the Registered Security or Registered
Securities of the same series which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.3, at
the option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series, maturity date and interest
rate, of any authorized denominations and in a like aggregate principal amount,
upon surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2, with, in the case of Unregistered Securities that have Coupons attached,
all unmatured Coupons and all matured Coupons in default thereto appertaining,
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. At the option of the Holder thereof, if Unregistered Securities of
any series, maturity date, interest rate and original issue date are issued in
more than one authorized denomination, except as otherwise specified pursuant
to Section 2.3, such Unregistered Securities may be exchanged for Unregistered
Securities of such series, maturity date, interest rate and original issue
date, of other authorized denominations and in a like aggregate principal
amount, upon surrender of such Unregistered Securities to be exchanged at the
agency of the
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Issuer that shall be maintained for such purpose in accordance with Section 3.2
or as specified pursuant to Section 2.3, with, in the case of Unregistered
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Issuer shall
so require, of the charges hereinafter provided. Unless otherwise specified
pursuant to Section 2.3, Registered Securities of any series may not be
exchanged for Unregistered Securities of such series. Whenever any Securities,
and the Coupons appertaining thereto, if any, are so surrendered for exchange,
the Issuer shall execute, and the Trustee shall authenticate and deliver, the
Securities, and the Coupons appertaining thereto, if any, which the Holder
making the exchange is entitled to receive. Notwithstanding the foregoing, if
an Unregistered Security of any series is surrendered at any such office or
agency in exchange for a Registered Security of the same series after the close
of business at such office or agency on any record date and before the opening
of business at such office or agency on the applicable interest payment date,
such Unregistered Security shall be surrendered without the Coupon, if any,
relating to such interest payment date. All Securities and Coupons surrendered
upon any exchange or transfer provided for in this Indenture shall be promptly
canceled and disposed of by the Trustee and the Trustee will deliver a
certificate of disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities and shall not be required to exchange
or register a transfer of any Securities until such payment is made. No
service charge shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed, or (b) any Securities selected, called or being called for redemption
except, in the case of any Security where public notice has been given that
such Security is to be redeemed in part, the portion thereof not so to be
redeemed and except that an Unregistered Security may be exchanged for a
Registered Security of the same series being called for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this
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Indenture, as the Securities surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, neither the Issuer nor the Trustee (which shall
rely on an Officers' Certificate and an Opinion of Counsel) shall be required
to exchange any Unregistered Security for a Registered Security if such
exchange would result in adverse Federal income tax consequences to the Issuer
(including, without limitation, the inability of the Issuer to deduct from its
income, as computed for Federal income tax purposes, the interest payable on
the Unregistered Securities) under then applicable United States Federal income
tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and
deliver, a new Security of the same series, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
or defaced Security, or in lieu of and substitution for the Security so
destroyed, lost or stolen, with Coupons corresponding to the Coupons
appertaining to the Security so mutilated, defaced, destroyed, lost or stolen,
or in exchange or substitution for the Security to which such mutilated,
defaced, destroyed, lost or stolen Coupons appertained, with Coupons
appertaining thereto corresponding to the Coupons so mutilated, defaced,
destroyed, lost or stolen. In every case, the applicant for a substitute
Security or Coupon shall furnish to the Issuer and to the Trustee and any agent
of the Issuer or the Trustee such security or indemnity as may be required by
them to indemnify and defend and to save each of them harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be
destroyed, lost or stolen, the Issuer may, at its sole discretion, instead of
issuing a substitute Security or Coupon, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated or defaced
Security or Coupon), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft,
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the applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered
hereunder. All Securities or Coupons shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced or
destroyed, lost or stolen Securities or Coupons and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Destruction Thereof. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Securities or
Coupons shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall destroy cancelled
Securities and Coupons held by it and deliver a certificate of destruction to
the Issuer. If the Issuer shall acquire any of the Securities or Coupons, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities or Coupons unless and until the
same are delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without Coupons, or as Unregistered
Securities with or without Coupons attached thereto, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series, but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the
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concurrence of the Trustee. Temporary Securities may contain such reference to
any provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities. Without unreasonable delay, the Issuer
shall execute and shall furnish definitive Securities of such series and
thereupon temporary Securities of such series may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Issuer
for that purpose pursuant to Section 3.2, and in the case of Unregistered
Securities, together with any unmatured Coupons and any matured Coupons in
default appertaining thereto, at any agency maintained by the Issuer for such
purpose as specified pursuant to Section 3.2, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series a like aggregate principal amount of definitive Securities of the same
series of authorized denominations. Until so exchanged, the temporary
Securities and any unmatured Coupons appertaining thereto of any series shall
be entitled to the same benefits under this Indenture as definitive Securities
and any unmatured Coupons appertaining thereto of such series. The provisions
of this Section are subject to any restrictions or limitations on the issue and
delivery of temporary Unregistered Securities of any series that may be
established pursuant to Section 2.3 (including any provision that Unregistered
Securities of such series initially be issued in the form of a single global
Unregistered Security to be delivered to a depositary or agency of the Issuer
located outside the United States and the procedures pursuant to which
definitive Unregistered Securities of such series would be issued in exchange
for such temporary global Unregistered Security).
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series at the place or places, at the respective times
and in the manner provided in such Securities. Except as specified in Section
2.3, the interest on Securities with Coupons attached (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature.
Except as specified in Section 2.3, the interest on any temporary Unregistered
Securities (together with any additional amounts payable pursuant to the terms
of such Securities) shall be paid, as to the installments of interest evidenced
by Coupons attached thereto, if any, only upon presentation and surrender
thereof,
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and, as to the other installments of interest, if any, only upon presentation
of such Securities for notation thereon of the payment of such interest. Each
installment of interest on the Registered Securities of any series may be paid
by mailing checks for such interest payable to or upon the written order of the
holders of Registered Securities entitled thereto as they shall appear on the
registry books of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Securities remain outstanding, the Issuer will maintain the following for each
series: an office or agency (a) where the Registered Securities may be
presented for payment, (b) where the Registered Securities may be presented for
registration of transfer and for exchange as in this Indenture provided and (c)
where notices and demands to or upon the Issuer in respect of the Registered
Securities or of this Indenture may be served.
The Issuer will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. With respect
to each series of Securities and Coupons whose terms are established pursuant
to Section 2.3, the Issuer hereby designates the Corporate Trust Office as the
initial office to be maintained by it for each such purpose. In case the
Issuer shall fail to so designate or maintain any such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest on the Securities of
such series (whether such sums have been paid to it by the Issuer or
by any other obligor on the Securities of such series) in trust for
the benefit of the holders of the Securities of such series or the
Coupons appertaining thereto or of the Trustee, and
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to
make any payment of the principal of or
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interest on the Securities of such series when the same shall be due
and payable.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities or the Coupons appertaining thereto of any series, it will, on or
before each due date of the principal of or interest on the Securities or the
Coupons appertaining thereto of such series, set aside, segregate and hold in
trust for the benefit of the holders of the Securities or the Coupons
appertaining thereto of such series a sum sufficient to pay such principal or
interest so becoming due. The Issuer will promptly notify the Trustee of any
failure to take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge with
respect to one or more or all series of Securities hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for any
such series by the Issuer or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Issuer will deliver to
the Trustee on or before April 30 in each year (beginning with April 30, 1994)
a brief certificate (which need not comply with Section 11.5) from the
principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Issuer's compliance with
all conditions and covenants under this Indenture (such compliance to be
determined without respect to any period of grace or requirement of notice
provided under the Indenture).
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the
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names and addresses of the holders of the Securities of each series:
(a) semiannually and not more than 15 days after each record
date for the payment of interest on such Securities, as hereinabove
specified, as of such record date and on dates to be determined
pursuant to Section 2.3 for non-interest- bearing securities in each
year, and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such
request as of a date not more than 15 days prior to the time such
information is furnished,
provided that if and so long as the Trustee shall be the Security registrar for
such series and all of the Securities of such series are Registered Securities,
such list shall not be required to be furnished. The Trustee shall, at the
request of the Issuer, provide such list to the Issuer for so long as the
Trustee shall be the Security registrar.
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
each series of Securities (i) contained in the most recent list furnished to it
as provided in Section 4.1, (ii) received by it in the capacity of Security
registrar for such series, if so acting and (iii) filed with it within the
preceding two years pursuant to Section 4.4(c)(ii). The Trustee may destroy
any list furnished to it as provided in Section 4.1 upon receipt of a new list
so furnished.
(b) In case three or more holders of Securities (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Securities of a particular series (in which case the applicants must all
hold Securities of such series) or with holders of all Securities with respect
to their rights under this Indenture or under such Securities and such
application is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section, or
(ii) inform such applicants as to the approximate number of
holders of Securities of such series or all Securities, as the case
may be, whose names and addresses appear in the
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information preserved at the time by the Trustee, in accordance with
the provisions of subsection (a) of this Section, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Securities, as
the case may be, whose name and address appears in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Securities of such series
or all Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of Securities and Coupons, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Securities in accordance with the provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under such subsection
(b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants to file with
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
any other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
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Issuer may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, or if the Issuer is not
required to file information, documents, or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents, and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934, or in
respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations. The
Issuer shall also comply with the provisions of Section 314(a) of the Trust
Indenture Act of 1939.
SECTION 4.4 Reports by the Trustee. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted or
filed, as the case may be, on or before July 15 in each year beginning July 15,
1994, as provided in Sections 313(b), 313(c) and 313(d) of the Trust Indenture
Act of 1939, so long as any Securities are Outstanding hereunder, and shall be
dated as of a date convenient to the Trustee no more than 60 days prior
thereto.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any instalment of interest upon
any of the Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of all or any part of the
principal on any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon redemption, by
declaration or otherwise; or
(c) default in the payment of any sinking fund instalment as
and when the same shall become due and payable by the terms of the
Securities of such series; or
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(d) default in the performance, or breach, of any covenant or
warranty of the Issuer in respect of the Securities of such series
(other than a covenant or warranty in respect of the Securities of
such series, a default in the performance or breach of which is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Issuer by the Trustee
or to the Issuer and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of all series affected
thereby, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or shall appoint a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of
the Issuer or for any substantial part of its property or ordering the
winding up or liquidation of its affairs, and such decree or order
shall remain unstayed and in effect for a period of 90 consecutive
days; or
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case commenced against the Issuer under any such law,
or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Issuer or for any substantial part of its property,
or make any general assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental
indenture or resolution of the Board of Directors under which such
series of Securities is issued or in the form of Security for such
series.
If an Event of Default with respect to a particular series of Securities
described in clauses (a), (b), (c) or (d) above occurs and is continuing, then,
and in each and every such case, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding hereunder (each such series voting as a separate class) by notice
in writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if the Securities of such series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) of all Securities of such series and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become
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immediately due and payable. If an Event of Default described in clause (e) or
(f) occurs and is continuing, then and in each and every such case, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
all the Securities then Outstanding hereunder (treated as one class), by notice
in writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if any Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities then Outstanding and interest accrued thereon,
if any, to be due and payable immediately, and upon any such declaration the
same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as
the case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the Issuer shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured installments of interest upon
all the Securities of such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments
of interest, at the same rate as the rate of interest or Yield to Maturity (in
the case of original Issue Discount Securities) specified in the Securities of
such series (or at the respective rates of interest or Yields to Maturity of
all the Securities, as the case may be, to the date of such payment or deposit)
and such amount as shall be sufficient to cover reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of negligence or bad faith, and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 6.6, and if any and all Events of
Default under the Indenture, other than the nonpayment of the principal of
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein--then and in every such case
the holders of a majority in aggregate principal amount of all the Securities
of such series, each series voting as a separate class (or of all the
Securities, as the case may be, voting as a single class), then Outstanding, by
written notice to the Issuer and to the Trustee, may waive all defaults with
respect to such series (or with respect to all the Securities, as the case may
be) and rescind and annul such declaration and its consequences, but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
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For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Discount Securities shall
be deemed, for all purposes hereunder, to be such portion of the principal
thereof as shall be due and payable as a result of such acceleration, and
payment of such portion of the principal thereof as shall be due and payable as
a result of such acceleration, together with interest, if any, thereon and all
other amounts owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the
payment of any instalment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by declaration or
otherwise--then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the holders of the Securities of such series the whole
amount that then shall have become due and payable on all Securities of such
series, and Coupons appertaining thereto, for principal or interest, as the
case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of original Issue Discount
Securities) specified in the Securities of such series); and in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of its negligence or bad faith,
and all other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 6.6.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the Holders,
whether or not the principal of and interest on the Securities of such series
be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute
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any action or proceeding at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceeding to judgment or
final decree, and may enforce any such judgment or final decree against the
Issuer or other obligor upon such Securities and collect in the manner provided
by law out of the property of the Issuer or other obligor upon such Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) shall have been appointed for or taken
possession of the Issuer or its property or such other obligor, or in case of
any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities of any series, or Coupons appertaining thereto, or
to the creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest (or, if the Securities of any series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and
unpaid in respect of the Securities of any series, and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence
or bad faith, and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 6.6) and of the
Securityholders allowed in any judicial proceedings relative to the
Issuer or other obligor upon the Securities of any series, or to the
creditors or property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Securities of any series in any
election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
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(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official is hereby authorized
by each of the Securityholders to make payments to the Trustee, and,
in the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith and all other amounts due to the
Trustee or any predecessor Trustee pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or Coupons appertaining thereto of any
series or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Securityholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, or Coupons appertaining thereto, may be enforced
by the Trustee without the possession of any of the Securities, or Coupons
appertaining thereto, or the production thereof on any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of the expenses,
disbursements, compensation and all other amounts due pursuant to Section 6.6
to the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the holders of the Securities,
or Coupons appertaining thereto, in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Securities in respect to which such action was taken, and it
shall not be necessary to make any holders of such Securities parties to any
such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on
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account of principal or interest, upon presentation of the several Securities,
and Coupons appertaining thereto, in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to
such series in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee
and their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the Trustee in the
exercise of its rights or discharge of its duties hereunder and each
predecessor Trustee except as a result of negligence or bad faith, and
all other amounts due to the Trustee or any predecessor Trustee
pursuant to Section 6.6;
SECOND: In case the principal of the Securities of such
series in respect of which moneys have been collected shall not have
become and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for principal
and interest, with interest upon the overdue principal, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over principal, or of
any instalment of interest over any other instalment of interest, or
of any Security of such series over any other Security of such series,
ratably to the aggregate of such principal and accrued and unpaid
interest or Yield to Maturity; and
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FOURTH: To the payment of the remainder, if any, to the
Issuer or any other person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No holder of
any Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceedings at law or in equity or in bankruptcy or otherwise
upon or under or with respect to this Indenture, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, or sequestrator (or other
similar official) or for any other remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof, as hereinbefore provided, and unless
also the holders of not less than 25% in aggregate principal amount of the
Securities of such series then Outstanding shall have made written request upon
the Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action
or proceeding and no direction inconsistent with such written request shall
have been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the holder of every Security or
Coupon with every other Holder and the Trustee, that no one or more holders of
Securities of any series or of any Coupon appertaining thereto shall have any
right in any manner whatever by virtue or by availing themselves of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other such holder of
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Securities or Coupons, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities of the applicable series or of any
Coupon appertaining thereto. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 5.7 Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon, or in
any Coupon appertaining thereto, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.6, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
SECTION 5.9 Control by Securityholders. The holders of a majority in
aggregate principal amount of the Securities of each series affected (with each
series voting as a separate class) at the time Outstanding shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture and provided further that (subject to the
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provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or Responsible Officers of the
Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forbearances are
unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Securities of any series as provided in
Section 5.1, the holders of a majority in aggregate principal amount of the
Securities of such series at the time Outstanding may on behalf of the holders
of all the Securities of such series waive any past default or Event of Default
described in Section 5.1 and its consequences except a default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the holder of each Security affected. In the case of any such
waiver, the Issuer, the Trustee and the holders of the Securities of such
series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within 90 days after the occurrence
of a default known to the Trustee with respect to the Securities of any series,
provide notice to the holders of Securities of such series and Coupons
appertaining thereto, if any, (i) if any Unregistered Securities of that series
are then Outstanding, to the Holders thereof, by publication at least once in
an Authorized Newspaper, (ii) if any Unregistered Securities of that series are
then Outstanding, to all Holders
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thereof who have filed their names and addresses with the Trustee pursuant to
Section 4.4(c)(ii), by mailing such notice to such Holders at such addresses
and (iii) to all holders of then Outstanding Registered Securities of that
series, by mailing such notice to such Holders at their addresses as they shall
appear in the registry books, unless such defaults shall have been cured before
the giving of such notice (the term "default" or "defaults" for the purposes of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
series; provided, further, that in the case of any default of the character
specified in clause (d) of Section 5.1, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. The parties to this Indenture agree, and each holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than 10%
in aggregate principal amount of the Securities Outstanding of such series, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of or interest on any Security or Coupon on or after the due
date expressed in such Security or Coupon.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving
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of all Events of Default which may have occurred with respect to such series,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or
waiving of all such Events of Default with respect to such series
which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the holders pursuant to Section 5.9 relating to
the time, method and place of conducting any proceeding for any remedy
available to the
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Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate or order of the Issuer (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Trustee by a copy thereof
certified by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action reasonably taken, suffered or
omitted to be taken by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the trusts, rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any
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investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to
do by the holders of not less than a majority in aggregate principal
amount of the Securities of all series then Outstanding; provided
that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall
be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder; and
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and, subject to Sections 6.8 and 6.13, if operative, may
otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent
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of the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of
liability in the premises. The obligations of the Issuer under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Securities and Coupons upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the holders of particular Securities or
Coupons, and the Securities and Coupons are hereby subordinated to such senior
claim.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Persons Eligible for Appointment as Trustee. The Trustee
for each series of Securities hereunder shall at all
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times be a corporation organized and doing business under the laws of the
United States of America or of any State or the District of Columbia having a
combined capital and surplus of at least $50,000,000, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 6.8, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.8, the Trustee shall resign immediately in the manner and with
the effect specified in Section 6.9.
No obligor upon the Securities or person directly or indirectly
controlling, controlled by or under common control with such obligor shall
serve as Trustee for any series of Securities.
The Trustee shall comply with Section 310(b) of the Trust Indenture
Act of 1939.
The provisions of this Section 6.8 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
SECTION 6.9 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide holder of a Security or
Securities of the applicable series for at least six months may, subject to the
provisions of Section 5.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with
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respect to any series of Securities after written request therefor by
the Issuer or by any Securityholder who has been a bona fide holder of
a Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.8 and shall fail to resign after written
request therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to
any series of Securities, or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors of the Issuer, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.1, any Securityholder who has been a bona fide holder
of a Security or Securities of such series for at least six months may on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.9 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.10.
SECTION 6.10 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.9 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect
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to all or any applicable series shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations with respect to such series of its
predecessor hereunder, with like effect as if originally named as trustee for
such series hereunder; but, nevertheless, on the written request of the Issuer
or of the successor trustee, upon payment of its charges then unpaid, the
trustee ceasing to act shall, subject to Section 10.4, pay over to the
successor trustee all moneys at the time held by it hereunder and shall execute
and deliver an instrument transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers. Any trustee ceasing to act shall, nevertheless, retain
a prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees or co- trustees of the
same trust and that each such trustee shall be trustee of a trust or trusts
under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.10 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of
the Trust Indenture Act of 1939 and eligible under the provisions of Section
6.8.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.10, the Issuer shall mail notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof,
by publication of such notice at least once in an Authorized Newspaper, (b) if
any Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 4.4(c)(ii), by mailing such notice to such holders at such
addresses as were so furnished to
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the Trustee (and the Trustee shall make such information available to the
Issuer for such purpose) and (c) to the holders of Registered Securities of
each series affected, by first-class mail to such holders of Securities of any
series for which such successor trustee is acting as trustee at their last
addresses as they shall appear in the Security register. If the Issuer fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Issuer.
SECTION 6.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided, that such
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 6.8, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.12 Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act of 1939.
Any Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act of 1939 to the extent indicated
therein.
SECTION 6.13 Indentures Not Creating Potential Conflicting
Interests for the Trustee. The following indentures are hereby specifically
described for the purposes of Section 310(b)(1) of
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the Trust Indenture Act of 1939: Indenture dated as of November 15, 1988
between the Issuer and The First National Bank of Boston, as Trustee, pursuant
to which the Issuer's 10% Notes Due December 15, 2000 were issued.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments
of deeds or administer oaths that the person executing such
instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf
of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of
the person executing the same. The fact of the holding by any holder
of an Unregistered Security of any series, and the identifying number
of such Security and the date of his holding the same, may be proved
by the production of such Security or by a certificate executed by any
trust company, bank, banker or recognized securities dealer wherever
situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall
be dated and shall state that on the date thereof a Security of such
series bearing a specified identifying number was deposited with or
exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in
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such certificate. Any such certificate may be issued in respect of
one or more Unregistered Securities of one or more series specified
therein. The holding by the person named in any such certificate of
any Unregistered Securities of any series specified therein shall be
presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding
(1) another certificate bearing a later date issued in respect of the
same Securities shall be produced, or (2) the Security of such series
specified in such certificate shall be produced by some other person,
or (3) the Security of such series specified in such certificate shall
have ceased to be Outstanding. Subject to Sections 6.1 and 6.2, the
fact and date of the execution of any such instrument and the amount
and numbers of Securities of any series held by the person so
executing such instrument and the amount and numbers of any Security
or Securities for such series may also be proven in accordance with
such reasonable rules and regulations as may be prescribed by the
Trustee for such series or in any other manner which the Trustee for
such series may deem sufficient.
SECTION 7.3 Holders to Be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any
agent of the Issuer or the Trustee shall be affected by any notice to the
contrary. The Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder of any Unregistered Security and the holder of any Coupon
as the absolute owner of such Unregistered Security or Coupon (whether or not
such Unregistered Security or Coupon shall be overdue) for the purpose of
receiving payment thereof or on account thereof and for all other purposes and
neither the Issuer, the Trustee, nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or
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indirect common control with the Issuer or any other obligor on the Securities
with respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Securities which the
Trustee knows are so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice. Upon request of
the Trustee, the Issuer shall furnish to the Trustee promptly a written
statement by two of its officers (which need not comply with Section 11.5)
listing and identifying all Securities, if any, known by the Issuer to be owned
or held by or for the account of any of the above-described persons; and,
subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the
holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities
issued in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the holders of all the Securities affected by such action.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Securities or Coupons, and to make the occurrence, or
the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of such series to waive such an
Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of the Securities;
(e) to provide for the issuance of Securities of any series
and related Coupons, if any, as permitted by Sections 2.1 and 2.3
hereof and to establish the form and term thereof;
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(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series, or of the Coupons appertaining to such Securities, and
to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the
requirements of Section 6.10; and
(g) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect and maintain
the qualification of this Indenture under the Trust Indenture Act of
1939, or under any similar Federal statute hereafter enacted, and to
add to this Indenture such other provisions and make such other
changes to this Indenture as may be expressly permitted by the Trust
Indenture Act of 1939, or under any similar Federal statute hereafter
enacted, excluding however, the provisions referred to in section
316(a)(2) of the Trust Indenture Act of 1939 or any corresponding
provisions in any similar Federal statute hereafter enacted.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than 66 2/3% in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as
one class), the Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may, from time to time and at any time, enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Securities of each such series or the coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a) extend the
final maturity of any Security, or reduce the principal amount thereof
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or the method in which amounts of payments of principal or interest thereon are
determined, or reduce the rate or extend the time of payment of interest
thereon, or change the coin or currency or units based on or related to
currencies of payment thereof, or reduce any amount payable on redemption
thereof or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof pursuant to Section 5.1 or the amount thereof provable in bankruptcy
pursuant to Section 5.2, or impair or affect the right of any Securityholder to
institute suit for the payment thereof or, if the Securities provide therefor,
any right of repayment at the option of the Securityholder without the consent
of the holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the holder
of each Security so affected.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors certified by the secretary or an assistant secretary
of the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail or publish a notice thereof (i) by first class mail to the holders
of then Outstanding Registered Securities of each series affected thereby at
their addresses as they shall appear on the registry books of the Issuer, (ii)
if any Unregistered Securities of a series affected thereby are then
Outstanding, to the Holders thereof who have filed their names and addresses
with the Trustee pursuant to section 4.4(c)(ii), by mailing a notice thereof by
first class mail to such Holders at such addresses as were so furnished to the
Trustee and (iii) if any Unregistered Securities of a series affected thereby
are then Outstanding, to all holders thereof, by publication of a notice
thereof at least once in an Authorized Newspaper, and in each case such notice
shall set forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to mail or publish such notice, or any defect
therein, shall not, however,
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in any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Issuer and the holders of
Securities of each series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article Eight complies with the applicable
provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. The
Issuer covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Issuer shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Issuer (if other than the Issuer) shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of and interest on all the Securities and Coupons, according to their
tenor, and the due and
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punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Issuer, by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee by
such corporation, and (ii) the Issuer or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any such covenant or
condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named
herein. Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession
any or all of the Securities issuable hereunder, together with any Coupons
appertaining thereto, which theretofore shall not have been signed by the
Issuer and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Issuer and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities, together with any Coupons appertaining thereto,
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities, together with any
Coupons appertaining thereto, which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the
Securities, together with any Coupons appertaining thereto, so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities, together with any Coupons appertaining thereto, theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities and Coupons had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities and Coupons thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease), the Issuer or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel,
prepared in accordance with Section 11.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such
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liquidation or dissolution, complies with the applicable provisions of this
Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities or Coupons which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for cancellation
all Securities of any series theretofore authenticated and all unmatured
Coupons appertaining thereto (other than any Securities or Coupons of such
series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.9) or (c) (i) all the Securities
of such series not theretofore delivered to the Trustee for cancellation shall
have become due and payable, or are by their terms to become due and payable
within one year or are to be or may be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 10.4) or U.S. Government Obligations, maturing as to
principal and interest in such amounts and at such times as will insure the
availability of cash (without consideration of any reinvestment of such
principal or interest), or a combination of U.S. Government Obligations and
cash sufficient to pay at maturity or upon redemption all Securities of such
series not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity as the
case may be, and if, in any such case, the Issuer shall also pay or cause to be
paid all other sums payable hereunder by the Issuer with respect to Securities
of such series and Coupons appertaining thereto, then this Indenture shall
cease to be of further effect with respect to Securities of such series and
Coupons appertaining thereto (except as to (i) rights of registration of
transfer and exchange, and the Issuer's right of optional redemption, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities or
Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto
to receive payments of principal thereof and interest thereon, upon the
original stated due dates therefor (but not upon acceleration) and remaining
rights of the holders to receive mandatory sinking fund payments, if any, (iv)
the rights, obligations, duties and immunities of the Trustee
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hereunder, including those under Section 6.6, (v) the rights of the
Securityholders of such series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them, and (vi)
the obligations of the Issuer under Section 3.2, and the Trustee, on demand of
the Issuer accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture with respect
to such series; provided, that the rights of holders of the Securities and
Coupons to receive amounts in respect of principal of and interest on the
Securities and Coupons held by them shall not be delayed longer than required
by then-applicable mandatory rules or policies of any securities exchange upon
which the Securities are listed. The Issuer agrees to reimburse the Trustee
for any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities and
Coupons of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of a series and Coupons appertaining thereto
on the 121st day after the date of the deposit referred to in subparagraph (a)
below, and the provisions of this Indenture with respect to the Securities of
such series and Coupons appertaining thereto shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series, and of Coupons appertaining thereto, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii)
rights of holders of Securities and Coupons appertaining thereto to receive,
from the trust fund described in subparagraph (a) below, payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but
not upon acceleration) and remaining rights of the holders to receive sinking
fund payments, if any, (iv) the rights, obligation, duties and immunities of
the Trustee hereunder, including those under Section 6.6, (v) the rights of the
holders of Securities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them and (vi) the obligations of the Issuer under
Section 3.2, and the Trustee, at the expense of the Issuer, shall at the
Issuer's request, execute proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the
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holders of the Securities of such series and Coupons appertaining
thereto (i) cash, or (ii) U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will
insure the availability of cash or (iii) a combination thereof, in an
amount sufficient, in the opinion or a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and
interest on all Securities of such series and Coupons appertaining
thereto on the date that such principal or interest is due and payable
and (B) any mandatory sinking fund payments on the day on which such
payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an opinion of
independent legal counsel satisfactory to the Trustee to the effect
that holders of the Securities of such series and Coupons appertaining
thereto will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge and
will be subject to Federal income tax on the same amount and in the
same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with, and the
Opinion of Counsel shall also state that such deposit does not violate
applicable law.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 10.1 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Securities of
such series and of Coupons appertaining thereto for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with
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respect to such series of Securities shall, upon demand of the Issuer, be
repaid to it or paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any
Security of any series and not applied but remaining unclaimed for two years
after the date upon which such principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the holder of the Security of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease; provided, the Trustee or such paying agent, before being required to
make any such repayment with respect to moneys deposited with it for any
payment (a) in respect of Registered Securities of any series, may at the
expense of the Issuer, mail by first class mail to Holders of such Securities
at their addresses as they shall appear on the Security Register, and (b) in
respect of Unregistered Securities of any series, may at the expense of the
Issuer cause to be published once, in an Authorized Newspaper, notice, that
such moneys remain and that, after a date specified therein, which shall not be
less than thirty days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security or Coupon appertaining thereto, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such or against
any past, present or future shareholder, officer or director, as such, of the
Issuer or of any successor, either directly or through the Issuer or any
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successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities and any Coupons appertaining thereto by the
holders thereof and as part of the consideration for the issue of the
Securities and any Coupons appertaining thereto.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities and any
Coupons appertaining thereto, expressed or implied, shall give or be construed
to give to any person, firm or corporation, other than the parties hereto and
their successors and the holders of the Securities or Coupons, any legal or
equitable right, remedy or claim under this Indenture or under any covenant or
provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the holders of
the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities or Coupons to or on the Issuer may be given or served by being
deposited postage prepaid, first-class mail (except as otherwise specifically
provided herein) addressed (until another address of the Issuer is filed by the
Issuer with the Trustee) to The Progressive Corporation, 6000 Parkland
Boulevard, Mayfield Heights, Ohio 44124, Attn: Treasurer. Any notice,
direction, request or demand by the Issuer or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) (i) in the
case of holders of Registered Securities and holders of Unregistered Securities
who have filed their names and addresses with the Trustee pursuant to Section
4.4(c)(ii), if in writing and mailed, first-class postage prepaid, to each
holder entitled thereto, at his last address as it appears in the registry
books or as so filed; and (ii) in the case of holders of Unregistered
Securities who have not filed their names and addresses with the Trustee, by
publication in accordance with the requirements of the provision hereof
requiring such notice. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice. In any case where notice
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to Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
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the same are erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Issuer, upon the certificate, statement or
opinion of or representations by an officer or officers of the Issuer, unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest shall accrue
for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.
SECTION 11.8 New York Law to Govern. This Indenture and each
Security and Coupon shall be deemed to be a contract under the laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of such State, except as may otherwise be required by mandatory
provisions of law.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original;
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<PAGE> 62
but such counterparts shall together constitute but one and the same
instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 Securities in Foreign Currencies. Whenever this
Indenture provides for any action by, or the determination of any of the rights
of, or any distribution to, holders of Securities denominated in United States
dollars and in any other currency or currency unit, in the absence of any
provision to the contrary in the form of Security of any particular series, any
amount in respect of any Security denominated in a currency or currency unit
other than United States dollars shall be treated for any such action or
distribution as that amount of United States dollars that could be obtained for
such amount on such reasonable basis of exchange and as of such date as the
Issuer may reasonably specify in a written notice to the Trustee or in the
absence of such written notice, as the Trustee shall so determine.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid at least 30 days
and not more than 60 days prior to the date fixed for redemption to such
holders of Securities of such series at their last addresses as they shall
appear upon the Security Register. Notice of redemption to the holders of
Unregistered Securities to be redeemed as a whole or in part, who have filed
their names and addresses with the Trustee pursuant to Section 4.4(c)(ii),
shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least thirty and not more than sixty days prior to the date
fixed for redemption, to such Holders at such addresses as were so furnished to
the Trustee (and, in the case of any such notice given by the Issuer, the
Trustee shall make such information available to the Issuer for such purpose).
Notice of redemption to all other holders of Unregistered Securities shall be
published in an Authorized Newspaper once in each of two successive calendar
weeks, the first publication to
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<PAGE> 63
be not less than thirty nor more than sixty days prior to the date fixed for
redemption. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the holder of any Security of a series designated for redemption, as
a whole or in part, shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities, and, in the case of Securities with Coupons attached thereto,
of all coupons appertaining thereto maturing after the date fixed for
redemption, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On the redemption date specified in the notice of redemption given as
provided in this Section, the Issuer will deposit with the Trustee or with one
or more paying agents (or, if the Issuer is acting as its own paying agent, set
aside, segregate and hold in trust as provided in Section 3.4) an amount of
money sufficient to redeem on the redemption date all the Securities of such
series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If any or all of the
outstanding Securities of a series are to be redeemed, the Issuer will deliver
to the Trustee at least 70 days prior to the date fixed for redemption an
Officers' Certificate stating the date of redemption and the aggregate
principal amount of Securities to be redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed in whole or in part. Securities may
be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any integral multiple thereof. The
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<PAGE> 64
Trustee shall promptly notify the Issuer in writing of the Securities of such
series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities of any series
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and the unmatured Coupons, if any,
appertaining thereto shall be void and, except as provided in Sections 6.5 and
10.4, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities, together with
all Coupons appertaining thereto maturing after the date fixed for redemption,
at a place of payment specified in said notice, said Securities and Coupons or
the specified portions thereof shall be paid and redeemed by the Issuer at the
applicable redemption price, together with interest accrued thereon to the date
fixed for redemption; provided that any semiannual payment of interest becoming
due on the date fixed for redemption shall be payable in the case of Securities
with Coupons attached thereto, to the bearers of the Coupons for such interest
upon surrender thereof, and in the case of Registered Securities, to the
holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by the Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all such Coupons maturing after the date
fixed for redemption, the surrender of such missing Coupon or Coupons may be
waived by the Issuer and the Trustee, if
-57-
<PAGE> 65
there be furnished to each of them such security or indemnity as they may
require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, together with all Coupons, if any, appertaining
thereto, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which
notice of redemption may be given as being owned of record and beneficially by,
and not pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such written statement directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.7,(b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or
(c) receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee a written statement
(which need not contain the statements required by Section 11.5) signed by an
authorized officer of the
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<PAGE> 66
Issuer (a) specifying the portion of the mandatory sinking fund payment to be
satisfied by payment of cash and the portion to be satisfied by credit of
Securities of such series, (b) stating that none of the Securities of such
series has theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be delivered to the
Trustee in order for the Issuer to be entitled to credit therefor as aforesaid
which have not theretofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.10 to the Trustee with such written
statement (or reasonably promptly thereafter if acceptable to the Trustee).
Such written statement shall be irrevocable and upon its receipt by the Trustee
the Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such
sixtieth day, to deliver such written statement and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that
the Issuer will make no optional sinking fund payment with respect to such
series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the Issuer shall so request) with respect to
the Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
Issuer makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform
the Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. Except as aforesaid, any moneys in the sinking fund for
such series at the time when any such default or Event of Default shall occur,
and any moneys thereafter paid into
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<PAGE> 67
the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Section 5.10 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of September 15, 1993.
<TABLE>
<S> <C>
THE PROGRESSIVE CORPORATION
[Corporate Seal]
By ____________________
Treasurer
Attest:
By __________________
Secretary
THE FIRST NATIONAL BANK OF BOSTON
[Corporate Seal]
By __________________________
Authorized Officer
Attest:
By ___________________________
Assistant Cashier
</TABLE>
-60-
<PAGE> 68
STATE OF OHIO )
) ss.:
COUNTY OF CUYAHOGA )
On this __ day of ________, before me personally came _____________ to
me personally known, who, being by me duly sworn, did depose and say that he
resides at
Cleveland, Ohio; that he is an officer of THE PROGRESSIVE CORPORATION, one of
the corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto
by like authority.
______________________
Notary Public
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this __ day of __________ before me personally came ___________ to
me personally known, who, being by me duly sworn, did depose and say that he
resides at ___________, __________ ; that he is an authorized officer of THE
FIRST NATIONAL BANK OF BOSTON, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
______________________
Notary Public
[Notarial Seal]
-61-
<PAGE> 1
EXHIBIT NO. 4.3
---------------
Proposed Form of Debt Security
<PAGE> 2
(Face of Security)
REGISTERED REGISTERED
No._______ $___________
CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PROGRESSIVE CORPORATION
% [NOTE] [DEBENTURE] DUE
THE PROGRESSIVE CORPORATION, an Ohio corporation (the "Issuer"), for value
received, hereby promises to pay to
or registered assigns, at the office or agency of the Issuer at the office of
the Trustee in Boston, Massachusetts, the principal sum of
dollars on , , in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest semiannually on and
of each year, commencing on , , on said principal sum at
said office or agency, in like coin or currency, at the rate per annum
specified in the title of this , from the or the
, as the case may be, next preceding the date of this to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case from the date of this , or unless no
interest has been paid on the , in which case from
, , until payment of said principal sum has been made or duly provided
for; provided, that payment of interest may be made at the option of the Issuer
by check mailed to the address of the person entitled thereto as such address
shall appear on the Security Register. Notwithstanding the foregoing, if the
date hereof is after the day of or , as the case may be,
and before the following or , this shall bear interest from such
or ; provided, that if the Issuer shall default in the payment of
interest due on such then this shall bear interest from the next
preceding or to which interest has been paid or, if no interest
has been paid on this , from , . The interest so payable
on any or will, subject to certain exceptions provided in the
indenture referred to on the reverse hereof, be paid to the person in whose
name this is registered at the close of business on the
or , as the case may be, next preceding such or .
Reference is made to the further provisions of this set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
<PAGE> 3
This shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, The Progressive Corporation has caused this
instrument to be signed by facsimile by its duly authorized officers and has
caused a facsimile of its corporate seal to be affixed hereto or imprinted
hereon.
THE PROGRESSIVE CORPORATION
(CORPORATE SEAL) By:
President and Chief Executive Officer
Attest:
Secretary
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
Authorized Signatory
-2-
<PAGE> 4
(Back of Security)
THE PROGRESSIVE CORPORATION
% DUE
This is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of September 15, 1993, as heretofore
supplemented and amended (herein called the "Indenture"), between the Issuer and
State Street Bank and Trust Company, as Trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Issuer and the Holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This is one of a series designated as the %
Due of the issuer, limited in aggregate principal amount to $ .
In case an Event of Default, as defined in the Indenture, with respect to
the % Due shall have occurred and be continuing, the principal
hereof may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than 66 2/3 % in aggregate
principal amount of the Securities at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Securities of each such series; provided, however, that no
such supplemental indenture shall (i) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of any interest thereon, or impair or affect the rights of any Holder to
institute suit for the payment thereof, without the consent of the Holder of
each Security so affected or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holder of each security so affected. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Securities of any series, prior to any declaration
accelerating the maturity of such Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Securities of such series may on
behalf of the Holders of all the Securities of such series waive any such past
default or Event of Default and its consequences. The preceding sentence shall
not, however, apply to a default in the payment of the principal of or premium,
if any, or interest on any of the Securities. Any such consent or waiver by the
Holder of this (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this
and any
<PAGE> 5
which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this or such other .
No reference herein to the Indenture and no provision of this or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this in the
manner, at the respective times, at the rate and in the coin or currency herein
prescribed.
The are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000 at the office or
agency of the Issuer at the office of the Trustee in Boston, Massachusetts, and
in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge. may be exchanged for a like
aggregate principal amount of of other authorized denominations.
[The are not subject to redemption at the option of
the Issuer or through the operation of a sinking fund.]
Upon due presentment for registration of transfer of this at
the office or agency of the Issuer at the office of the Trustee in Boston,
Massachusetts, a new or of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this (whether or not this shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon, and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any ,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, shareholder, officer or director, as such, of the
Issuer or of any successor corporation, either directly or through the Issuer or
any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
-2-
<PAGE> 6
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties CUST - Custodian
JT TEN - as joint tenants with right of
survivorship and not as tenants UNIF GIFT MIN ACT - Uniform Gifts
in common to Minors Act
------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
---------------------
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________
________/________________________________/_____________________________________
_______________________________________________________________________________
Please print or typewrite name and address including
postal zip code of assignee
________________________________________________________________________________
the within and all rights thereunder, hereby irrevocably constituting
and appointing__________________________________________________________________
___________________________ attorney to transfer said on the
books of the Issuer, with full power of substitution in the premises.
Dated:______________________
________________________________
NOTICE: The signature to
this assignment must
correspond with the name as
written upon the face of
the within instrument in
every particular, without
alteration or enlargement
or any change whatever.
<PAGE> 1
EXHIBIT NO. 5
-------------
Opinion of Baker & Hostetler LLP
<PAGE> 2
BAKER & HOSTETLER LLP
1900 E. NINTH STREET
CLEVELAND, OH 44114-3485
March 31, 1998
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Re: Registration Statement on Form S-3 with respect to
$300,000,000 aggregate principal amount of Debt
Securities of The Progressive Corporation
-----------------------------------------
Dear Sirs:
We have acted as counsel to The Progressive Corporation, an
Ohio corporation (the "Company"), in connection with its Registration Statement
on Form S-3 (the "Registration Statement") filed under the Securities Act of
1933, as amended (the "Act"), relating to the proposed public offering of up to
$300,000,000 aggregate principal amount of the Company's Debt Securities (the
"Securities") to be issued under an Indenture dated as of September 15, 1993,
as supplemented and amended (the "Indenture"), between the Company and State
Street Bank and Trust Company, as trustee. This opinion is being delivered
pursuant to your request.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents as we have deemed necessary
for the purposes of rendering this opinion including, without limitation,
copies of resolutions adopted by the Board of Directors of the Company, the
Amended Articles of Incorporation, as amended, and Code of Regulations, as
amended, of the Company, the Indenture, the proposed form of the underwriting
agreement filed as Exhibit 1 to the Registration Statement (the "Underwriting
Agreement") and the form of the debt security filed as Exhibit 4.3 to the
Registration Statement. In our examination, we have assumed that the Indenture
has been duly executed and delivered.
Based upon the foregoing, we are of the opinion that:
When (a) the Securities in substantially the form filed as
Exhibit 4.3 to the Registration Statement are duly executed and delivered by the
Company and authenticated in accordance with the terms of the Indenture, (b) the
Indenture is qualified under the Trust Indenture Act of 1939 and (c) the
Securities are issued and sold as described in the Registration Statement, and
if the Securities are sold in an underwritten offering that complies
<PAGE> 3
The Progressive Corporation
March 31, 1998
Page 2
with the terms and conditions of the Underwriting Agreement substantially in the
form of Exhibit 1 to the Registration Statement with the blanks appropriately
filled in, and in a manner contemplated in the Registration Statement, including
the prospectus supplement relating to any Securities, the Securities will be
duly authorized and will be legal and binding obligations of the Company, except
as may be limited by bankruptcy, insolvency, reorganization or other federal and
state laws and judicial decisions of general application relating to the rights
of creditors or by general principles of equity.
We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement and the reference to us under the caption "Legal
Matters" in the prospectus that is a part of the Registration Statement. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Baker & Hostetler LLP
Baker & Hostetler LLP
<PAGE> 1
EXHIBIT NO. 12
--------------
Computation of Ratio of Earnings to Fixed Charges
<PAGE> 2
<TABLE>
<CAPTION>
THE PROGRESSIVE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
--------------------------------------------------------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Income before income
taxes $578.5 $441.7 $345.9 $379.8 $373.1
------ ------ ------ ------ ------
Fixed charges:
Interest and
amortization
on indebtedness 64.6 61.5 57.1 56.9 42.4
Portion of rents
representative
of the
interest
factor 5.6 4.5 4.2 3.1 3.0
------ ------ ------ ------ ------
Total fixed charges 70.2 66.0 61.3 60.0 45.4
------ ------ ------ ------ ------
Total income
available for
fixed charges (1) $648.7 $507.7 $407.2 $438.2 $415.8
====== ====== ====== ====== ======
Ratio of earnings
to fixed charges 9.2 7.7 6.6 7.3 9.2
====== ====== ====== ====== ======
<FN>
(1) Excludes interest capitalized of $1.6 million and $2.7 million for the
years ended December 31, 1994, and 1993, respectively. No interest was
capitalized in 1997, 1996 or 1995.
</FN>
</TABLE>
<PAGE> 1
EXHIBIT NO. 23.1
----------------
Consent of Coopers & Lybrand L.L.P.
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders,
The Progressive Corporation:
We consent to the incorporation by reference in the Registration Statement of
The Progressive Corporation on Form S-3 of our reports dated January 27, 1998,
on our audits of the consolidated financial statements and financial statement
schedules of The Progressive Corporation and subsidiaries (the "Company") as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, which reports are included in the Company's Annual Report on
Form 10-K, as amended by Form 10-K/A - No. 1. We also consent to the reference
to our firm under the caption of "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
March 31, 1998
<PAGE> 1
EXHIBIT NO. 24.1
----------------
Powers of Attorney
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed by
the undersigned, in the capacities and on the date set forth below.
Date: January 16, 1998 /s/ Milton N. Allen
--------------------
Milton N. Allen
Director
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 15, 1998 /s/ B. Charles Ames
--------------------
B. Charles Ames
Director
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 15, 1998 /s/ Charles A. Davis
---------------------
Charles A. Davis
Director
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 20, 1998 /s/ Stephen R. Hardis
----------------------
Stephen R. Hardis
Director
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for her and in her name, place and stead, in any and
all capacities, as attorney-in-fact and agent, her signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as she
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 15, 1998 /s/ Janet Hill
---------------
Janet Hill
Director
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 15, 1998 /s/ Norman S. Matthews
-----------------------
Norman S. Matthews
Director
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 16, 1998 /s/ Donald B. Shackelford
--------------------------
Donald B. Shackelford
Director
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 15, 1998 /s/ Paul B. Sigler
------------------
Paul B. Sigler
Director
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $300 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to each such attorney-in-fact and agent full power and authority to do
and perform any and all acts and things whatsoever necessary or appropriate to
be done in and about the premises, as fully for all intents and purposes as he
might or could do if personally present, and hereby ratifying and confirming all
that each such attorney-in-fact and agent, or any such substitute or
substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 19, 1998 /s/ Peter B. Lewis
-------------------
Peter B. Lewis
Chairman, President, Chief Executive Officer
and Director
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner and Dane A. Shrallow, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $300 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
each such attorney-in-fact and agent full power and authority to do and perform
any and all acts and things whatsoever necessary or appropriate to be done in
and about the premises, as fully for all intents and purposes as he might or
could do if personally present, and hereby ratifying and confirming all that
each such attorney-in-fact and agent, or any such substitute or substitutes,
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 14, 1998 /s/ David M. Schneider
-----------------------
David M. Schneider
Secretary
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Jeffrey W. Basch, R. Steven Kestner, David M.
Schneider and Dane A. Shrallow, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $300 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
each such attorney-in-fact and agent full power and authority to do and perform
any and all acts and things whatsoever necessary or appropriate to be done in
and about the premises, as fully for all intents and purposes as he might or
could do if personally present, and hereby ratifying and confirming all that
each such attorney-in-fact and agent, or any such substitute or substitutes,
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 19, 1998 /s/ Charles B. Chokel
----------------------
Charles B. Chokel
Treasurer and Chief Financial Officer
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT: The undersigned officer
and/or director of The Progressive Corporation, an Ohio corporation (the
"Company") has made, constituted and appointed, and by this instrument does
make, constitute and appoint, Charles B. Chokel, R. Steven Kestner, David M.
Schneider and Dane A. Shrallow, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $300 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
each such attorney-in-fact and agent full power and authority to do and perform
any and all acts and things whatsoever necessary or appropriate to be done in
and about the premises, as fully for all intents and purposes as he might or
could do if personally present, and hereby ratifying and confirming all that
each such attorney-in-fact and agent, or any such substitute or substitutes,
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been executed
by the undersigned, in the capacities and on the date set forth below.
Date: January 14, 1998 /s/ Jeffrey W. Basch
---------------------
Jeffrey W. Basch
Chief Accounting Officer
<PAGE> 1
EXHIBIT NO. 24.2
----------------
Certified resolution of the Company's Board of Directors authorizing the signing
on behalf of the Company pursuant to a power of attorney
<PAGE> 2
THE PROGRESSIVE CORPORATION
CERTIFIED COPY OF RESOLUTIONS
I. Debt Securities
---------------
RESOLVED: that the Company is hereby authorized to create,
issue and sell in one or more underwritten public
offerings or otherwise one or more series of notes,
debentures or other form of debt securities, pursuant to
one or more indentures as described below (the "Debt
Securities"), such Debt Securities to be designated, to be
issued and sold at such times, to be in such forms and in
such principal amounts, to be for such terms, to be
payable on such dates, to bear interest at such rates per
annum and be payable at such times, and to have such other
terms, provisions and conditions as may be determined and
approved by the Executive Committee of the Board of
Directors as provided below; provided, however, that the
aggregate principal amount of all Debt Securities issued
pursuant to these resolutions shall not exceed Three
Hundred Million Dollars ($300,000,000); and
RESOLVED: that, subject to the foregoing limitation and
notwithstanding anything to the contrary contained in the
succeeding resolutions, the Executive Committee shall have
all requisite authority, for and on behalf of the Company,
to establish the following terms, provisions and
conditions with respect to the Debt Securities of any
series and the issuance and sale thereof:
(i) the types of Debt Securities to be issued
and the titles and designations of the same;
(ii) the time or times as of which each series of
Debt Securities shall be issued;
(iii) the aggregate principal amount of each
series of Debt Securities to be issued,
subject to the aggregate limit set forth
above;
(iv) the identity of the managing or lead
underwriter or underwriters, if any, in
connection with any such sale of Debt
Securities and the identity of the
trustee(s) of one or more indentures under
which any such Debt Securities may be
issued, as described below;
(v) the prices at which the Debt Securities of
each series are to be sold, the amount of
any discounts to be given and/or
commissions, fees or other sums to be paid
to underwriters, trustees or others by the
Company in conjunction therewith and the
amount of fees to be paid by the Company in
conjunction with any delayed delivery
contracts;
(vi) the maturity or maturities of each series of
Debt Securities;
(vii) the rate or rates of interest to be borne by
each series of Debt Securities to be issued,
which rate or rates may vary from time to
time in accordance with a method or formula
approved by the Executive Committee;
(viii) the date or dates on which such interest
shall begin to accrue, the period or periods
for which interest shall accrue, the date or
dates on which such interest shall be
<PAGE> 3
payable, and the record date for the
interest payable on any interest payment
date;
(ix) the period or periods within which, the
price or prices at which, and the terms and
conditions upon which each series of Debt
Securities may be redeemed, in whole or in
part, at the option of the Company;
(x) the obligation, if any, of the Company to
redeem or purchase any series of Debt
Securities pursuant to any sinking fund or
analogous provisions or at the option of a
holder thereof, and the period or periods
within which, the price or prices at which
and terms and conditions upon which any
series of Debt Securities shall be redeemed
or purchased, in whole or in part, pursuant
to such obligation;
(xi) the denominations in which each series of
Debt Securities shall be issuable;
(xii) if other than the principal amount thereof,
the portion of the principal amount of each
series of Debt Securities which shall be
payable upon a declaration of acceleration
of the maturity thereof;
(xiii) the affirmative and negative covenants, if
any, to be observed by the Company in
conjunction with each series of Debt
Securities;
(xiv) the form of each series of Debt Securities;
(xv) the authenticating or paying agents,
transfer agents or registrars with respect
to any series of Debt Securities; and
(xvi) such other terms, conditions and provisions
relating to any series of Debt Securities as
the Executive Committee shall deem
appropriate; and
RESOLVED: that the terms, provisions and conditions
applicable to the Debt Securities of any series, and the
sale thereof, shall be established by the Executive
Committee by and set forth in resolutions of such
Committee and, if the Executive Committee in its sole
discretion shall direct, may be set forth in any indenture
or supplemental indenture authorized hereinbelow; and
RESOLVED: that, in conjunction with the creation, issuance
and sale of any series of Debt Securities, the President
and Treasurer of the Company be, and each of them with
full power to act without the other is, hereby authorized
and empowered to execute the Debt Securities (and, in
addition, Debt Securities to replace lost, stolen,
mutilated or destroyed Debt Securities and Debt
Securities, if any, required for exchange, all as provided
in the applicable Indenture), such execution to be in the
name and on behalf of the Company and under its corporate
seal attested by the Secretary or an Assistant Secretary
of the Company, with each series of such Debt Securities
to be in such form and to contain such terms, provisions
and conditions as may be approved by the Executive
Committee, to deliver such Debt Securities to the Trustee
for authentication and delivery pursuant to the applicable
Indenture and to otherwise cause the issuance, sale,
authentication and delivery of the Debt Securities; and
<PAGE> 4
RESOLVED: that the signatures of the officers of the
Company so authorized to execute the Debt Securities may,
but need not be, the facsimile signatures of such
authorized officers imprinted or otherwise reproduced
thereon, the Company for such purpose hereby adopting each
such facsimile signature as binding upon it,
notwithstanding the fact that at the time any Debt
Security shall be authenticated and delivered or disposed
of the officer so signing shall have ceased to be such
authorized officer; and
II. Registration Statements
-----------------------
RESOLVED: that the President, Treasurer and Secretary of
the Company be, and each of them with full power to act
without the others is, hereby authorized and empowered,
for and on behalf of the Company, to prepare or cause to
be prepared, and to execute and file or cause to be
executed and filed with the Securities and Exchange
Commission (the "Commission"), under the Securities Act of
1933, as amended (the "Act"), one or more Registration
Statements on Form S-3, or such other available form or
forms as may be approved by any of such officers,
(including one or more prospectuses, prospectus
supplements, pricing supplements, all exhibits and other
documents relating thereto), (collectively, the
"Registration Statement") with respect to the Debt
Securities to be sold in one or more series by the Company
to or through such underwriter(s) or other purchasers as
the Executive Committee may select, on a delayed or
continuous basis pursuant to Rule 415 under the Act or
otherwise; and
RESOLVED: that the President, Treasurer and Secretary of
the Company be, and each of them with full power to act
without the others is, hereby authorized and empowered,
for and on behalf of the Company, to prepare or cause to
be prepared and to execute or cause to be executed such
amendments (including post-effective amendments) and
supplements to the Registration Statement as they, or any
of them, may deem necessary or desirable, or as may be
required by the Commission; to cause such amendments and
supplements, when duly executed (if required), to be filed
with the Commission; to qualify the Indentures, as
hereinafter defined, including any and all amendments and
supplements thereto, under the Trust Indenture Act of
1939, as amended; and to do all such other acts and things
and to execute and deliver all such other documents as
they, or any of them, may deem necessary or desirable in
order to cause the Registration Statement to comply with
the Act and the rules and regulations promulgated by the
Commission thereunder (the "Rules and Regulations"), and
to become effective under the Act and the Rules and
Regulations; and
RESOLVED: that when the registration of the Debt
Securities pursuant to the Registration Statement has
become effective with the Commission, the President,
Treasurer and Secretary of the Company be, and each of
them with full power to act without the others is, hereby
authorized and directed, for and on behalf of the Company,
to execute, deliver and file any and all documents, and to
do any and all acts and things, as may be necessary or
proper in connection with the issuance and/or sale of the
Debt Securities as hereinabove authorized; and
RESOLVED: that David M. Schneider, or such other
individual as shall hereafter be named by the Executive
Committee and designated to the Commission in his stead,
is hereby named as the person authorized to receive
service of all notices, orders, communications and other
documents which may be issued or sent by the Commission in
connection
<PAGE> 5
with the Registration Statement and any and all amendments
and supplements thereto, with all the powers consequent
upon such designation under the Rules and Regulations; and
RESOLVED: that any director or officer of the Company
required by law or authorized herein to affix his or her
signature to the Registration Statement, and any and all
amendments and supplements thereto, may affix his or her
signature personally, or by any attorney-in-fact duly
constituted in writing by said director or officer to sign
his or her name thereto; and
RESOLVED: that Jeffrey W. Basch, Charles B. Chokel, R.
Steven Kestner, Peter B. Lewis, David M. Schneider and
Dane A. Shrallow be, and each of them hereby is, appointed
as the attorney-in-fact and agent of the Company, with
full power of substitution and resubstitution, for and in
the name, place and stead of the Company to sign, attest
and file the Registration Statement, and any and all
amendments or supplements thereto and any and all
applications or other documents to be filed with the
Commission in connection therewith and any and all
applications or other documents to be filed with any
governmental or private agency or official relative to the
issuance and sale of Debt Securities, with full power and
authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the
premises, hereby ratifying and approving the acts of such
attorneys or any such substitute or substitutes and,
without implied limitation, including in the above the
authority to do the foregoing things on behalf of the
Company in the name of the person so acting or on behalf
and in the name of any duly authorized officer of the
Company; and the President, Treasurer and Secretary be,
and each hereby is, authorized and directed, for an on
behalf of the Company, to execute and deliver a Power of
Attorney evidencing the foregoing appointment; and
RESOLVED: that Jeffrey W. Basch, Charles B. Chokel, R.
Steven Kestner, Peter B. Lewis, David M. Schneider and
Dane A. Shrallow be, and each of them with full power to
act without the others is, hereby authorized to sign the
Registration Statement, and any and all amendments and
supplements to the Registration Statement, on behalf of
and as attorneys-in-fact for the principal executive
officer, principal accounting officer, principal financial
officer or any other officer of the Company, including,
without limitation, the President, Treasurer and
Secretary, and on behalf of and as attorneys-in-fact for
each director of the Company; and
RESOLVED: that each of the officers of the Company and its
attorneys-in-fact, Messrs. Jeffrey W. Basch, Charles B.
Chokel, R. Steven Kestner, Peter B. Lewis, David M.
Schneider and Dane A. Shrallow, be, and each of them with
full power to act without the others is, hereby authorized
to appear on behalf of the Company before the Commission
in connection with any matters relating to the
Registration Statement and all amendments or supplements
thereto; and
III. Indentures
----------
RESOLVED: that the Debt Securities of any series issued
pursuant to the authority granted hereunder shall be
issued pursuant to, and shall in all respects be subject
to all of the terms, provisions and conditions of, that
certain indenture dated as of September 15, 1993 ("1993
Indenture") between the Company and State Street Bank and
Trust Company ("SSBT"), as successor to The First National
Bank of Boston, as trustee, or, if so authorized and
directed by the
<PAGE> 6
Executive Committee, another indenture as authorized below
(the 1993 Indenture or any such other indenture is
referred to herein as the "Indenture"); and
RESOLVED: that, with respect to each series of Debt
Securities, the President, Treasurer and Secretary be, and
each of them with full power to act without the others is,
hereby authorized and empowered, for and on behalf of the
Company, to prepare or cause to be prepared, and to
execute and deliver one or more supplemental indentures to
the 1993 Indenture or any other Indenture of the Company,
or one or more new or additional Indentures, including any
and all supplements and amendments thereto, with SSBT or
such other trustee as may be designated by the Executive
Committee (the "Trustee"), such Indentures, supplemental
indentures or amendments to be in such form or forms as
any of the foregoing officers shall approve and may set
forth, among other things, the terms and conditions upon
which (i) the Debt Securities are to be authenticated,
issued and delivered; (ii) principal of, premium, if any,
and interest on the Debt Securities are to be paid; and
(iii) the Debt Securities may be called or redeemed, and
such other and further provisions as shall be authorized
or approved, as herein provided; and
RESOLVED: that the Executive Committee is hereby
authorized and empowered to (i) select and appoint the
trustee under any such new or additional Indenture, and
the person or persons who will serve as paying agent and
registrar or co-registrars of the Debt Securities of any
series under each Indenture, and (ii) select the offices
or agencies of the Company where Debt Securities of any
series may be presented for payment and where legal
process, notices and demands to or upon the Company with
respect to any Indenture or the Debt Securities may be
served, given or made, and select the offices or agencies
of the Company where the Debt Securities of any series may
be presented for registration, transfer and exchange; and
that the execution and delivery of any Indenture or other
instrument providing for the appointment of, or
appointing, any such trustee, paying agent, registrar or
co-registrar and/or specifying any such office or agency,
by any of such officer(s), shall be conclusive evidence of
all requisite approvals by the Company; and
RESOLVED: that the officers of the Company be, and each of
them with full power to act without the others is, hereby
authorized and empowered to do and perform all such acts
and things and to execute and deliver, in the name of the
Company or otherwise and on behalf of the Company, any and
all such certificates, instruments, documents, reports and
statements as may be required by or otherwise provided for
under the 1993 Indenture or any other Indenture or the
Debt Securities of any series, or as shall otherwise be
necessary or desirable, in order to ensure the Company's
continued compliance with all the provisions and
requirements of each such Indenture and the Debt
Securities, to effect the issuance and sale of the Debt
Securities and to carry out the terms and provisions of
the Debt Securities and each such Indenture; and
IV. Selling Arrangements
--------------------
RESOLVED: that the Company be, and it hereby is,
authorized to sell all or any portion of the Debt
Securities to or through one or more underwriters, as
selected by the Executive Committee, acting alone or
together or as representatives of a group of underwriters,
and/or to sell all or a portion of the Debt Securities
directly to other purchasers or through agents or dealers,
with all such sales to be
<PAGE> 7
made pursuant to one or more underwriting, purchase and/or
delayed delivery agreements (the "Selling Documents"); and
RESOLVED: that, in conjunction with each sale of Debt
Securities by the Company, the President, Treasurer and
Secretary of the Company be, and each of them with full
power to act without the others is, hereby authorized to
execute, in the name and on behalf of the Company, one or
more Selling Documents providing for the sale by the
Company of all or a portion of the Debt Securities, with
each such Selling Document to be executed at such time and
in such number of counterparts and to be in such form and
contain such terms, provisions and conditions as may be
approved by the officer(s) of the Company executing the
same, the execution of any such Selling Document by any
such officer(s) to be conclusive evidence of all requisite
approvals, and to cause the delivery of each Selling
Document to be made at such time as may be approved by the
officer(s) executing the same; and
V. New York Stock Exchange Listing; Securities
Exchange Act of 1934
-------------------------------------------
RESOLVED: that the Company is hereby authorized to make
one or more applications to the New York Stock Exchange,
Inc. for the listing of one or more series of Debt
Securities on said Exchange, upon official notice of
issuance and satisfactory evidence of distribution, and
that the officers of the Company and its
attorneys-in-fact, Messrs. Jeffrey W. Basch, Charles B.
Chokel, R. Steven Kestner, Peter B. Lewis, David M.
Schneider and Dane A. Shrallow be, and each of them with
full power to act without the others is, hereby
authorized, at such times as the Executive Committee may
direct, to make application for such listings and, in
connection therewith, to execute, in the name and on
behalf of the Company, and under its corporate seal or
otherwise, and to file or deliver all such applications,
statements, certificates, agreements and other instruments
and documents as shall be necessary or desirable to
accomplish such listings, with authority to make such
changes in any such listing application or other documents
and in any agreements that may be made in connection
therewith as, in their or his discretion, may be necessary
to comply with the requirements for or to otherwise obtain
such listing; and that such officers and attorneys be, and
each of them with full power to act without the others is,
hereby authorized to appear on behalf of the Company
before the appropriate committee or body of the New York
Stock Exchange, Inc., as such appearance may be required;
and
RESOLVED: that in consideration of the New York Stock
Exchange, Inc. not interposing any objection to the
Company's employing the facsimile signatures of any one or
more of its duly authorized officers in connection with
the execution of the Debt Securities in the name and on
behalf of the Company, the Company on behalf of itself,
its successors and assigns, covenants and agrees that
every innocent purchaser for value of any instrument which
has been prepared by such printer or engraver as shall be
approved in writing by the President, Treasurer or
Secretary, in the form authorized by the Company for the
Debt Securities and which bears the facsimile signatures
of said duly authorized officers, or facsimile signatures
resembling or purporting to be such facsimile signatures,
and which has been manually authenticated by an authorized
officer of the Trustee, may rely upon such facsimile
signatures or any such facsimile signatures resembling or
purporting to be such facsimile signatures, regardless of
by whom or by what means the same may have been imprinted
on said instrument and that any such facsimile
<PAGE> 8
signatures or any such facsimile signatures so relied on
shall be as valid, effectual, conclusive and binding for
all purposes upon the Company as if the same had in fact
been executed manually for and on behalf of the Company by
its proper officers thereunto duly authorized, and the
Company hereby covenants and agrees to indemnify and hold
harmless the New York Stock Exchange, Inc., its directors,
officers, employees and its subsidiary companies and every
such innocent purchaser for value from and against any and
all loss, liability, claim, damages or expense, including
costs, disbursements and counsel fees, arising out of any
act done in reliance upon the authenticity of any such
facsimile signatures when imprinted and authenticated as
aforesaid; and that the President, Treasurer and Secretary
of the Company be, and each of them with full power to act
without the others hereby is, authorized and directed to
execute and deliver to the New York Stock Exchange, Inc.
an Indemnity Agreement to substantially the foregoing
effect; and
RESOLVED: that the Company is hereby authorized to make
one or more applications to the Commission for the
registration of any series of Debt Securities under the
Securities Exchange Act of 1934; and that the President,
Treasurer and Secretary of the Company be, and each of
them with full power to act without the others is, hereby
authorized and empowered, at such times as to them shall
seem advisable, to execute and file or deliver any and all
such applications and other instruments and documents as
shall be necessary to effect such registration; and
RESOLVED: that the President, Treasurer and Secretary of
the Company and its attorneys-in-fact, Messrs. Jeffrey W.
Basch, Charles B. Chokel, R. Steven Kestner, Peter B.
Lewis, David M. Schneider and Dane A. Shrallow be, and
each of them with full power to act without the others is,
hereby authorized to appear on behalf of the Company
before the Commission in connection with any matter
relating to the registration of any series of the Debt
Securities under the Securities Exchange Act of 1934; and
VI. Blue Sky Qualification
----------------------
RESOLVED: that the Debt Securities be qualified or
registered for sale in various jurisdictions, if and to
the extent necessary to lawfully effect such sale; that
the President, Treasurer and Secretary of the Company be,
and each of them with full power to act without the others
is, hereby authorized to determine the jurisdictions in
which appropriate action shall be taken to qualify or
register for sale all or such part of the Debt Securities
of the Company as said officer(s) may deem advisable; that
each of said officers, with full power to act without the
others, be and hereby is authorized to perform on behalf
of the Company any and all such acts that he may deem
necessary or advisable in order to comply with the
applicable laws, regulations and other requirements of
such jurisdictions in order to obtain a permit to issue
and sell such Debt Securities, or to register or qualify
such Debt Securities for issuance therein or to secure an
appropriate exemption from such registration or
qualification or to obtain a license for the Company as a
dealer or broker under the securities laws of such
jurisdictions as any such officer or officers may deem
advisable, and, in connection therewith, to execute,
acknowledge, verify, deliver, publish and file all
requisite papers and documents, including, but not limited
to, applications, reports, surety bonds, issuer's
covenants, irrevocable consents to appointments of
attorneys for service of process, powers of attorney and
other papers and
<PAGE> 9
instruments and to take any and all further action, which
they, or any of them, may deem necessary or advisable in
order to obtain or maintain such permit, registration,
qualification, exemption or license in effect for as long
as they may deem to be in the best interests of the
Company or as required by law; and the execution by any
such officer or officers of any such papers or documents
or the doing by any of them of any act in connection with
the foregoing matters shall conclusively establish their
authority therefor from the Company and the approval and
ratification by the Company of the papers and documents so
executed and the action so taken; and
RESOLVED: that any partners or officers of any of the
underwriters licensed in California as a broker-dealer be,
and each such partner or officer hereby is, authorized for
and on behalf of the Company to execute any necessary
application for the registration or qualification of any
Debt Securities under the securities laws of the State of
California; and
RESOLVED: that the Company hereby adopts the form of any
and all resolutions required by any state authority in
connection with any such applications, reports, surety
bonds, issuer's covenants, irrevocable consents to and
appointments of attorneys for service of process, powers
of attorney and other papers and instruments, if (1) in
the opinion of the officer of the Company so acting the
adoption of such resolutions is necessary or advisable and
(2) the Secretary of the Company evidences such adoption
by filing with the minutes of the Company copies of such
resolutions, which shall thereupon be deemed to be adopted
by the Company and incorporated into this resolution with
the same force and effect as if expressly contained
herein, and that the officer(s) of the Company take any
and all further action which they or any of them may deem
necessary or advisable in order to maintain such
registration or qualification for sale in various
jurisdictions in effect for as long as they may deem to be
in the best interests of the Company; and
VII. Miscellaneous
-------------
RESOLVED: that, in addition to the authority granted by
these resolutions to certain officers and other
individuals to act on behalf of the Company, the
President, Treasurer and Secretary of the Company be, and
each of them with full power to act without the others is,
hereby authorized to fix, modify and add to such terms,
conditions and provisions of the Debt Securities, the
Indentures (including any amendments and supplemental
indentures thereto), any underwriting, sales or delayed
delivery agreements and other documents, and to authorize
the execution and delivery of such other documents and the
taking of such other actions (including filings with all
necessary governmental or regulatory agencies), as any of
such officers may deem necessary or desirable to
effectuate the issuance and sale of the Debt Securities as
contemplated in the foregoing resolutions; and
RESOLVED: that the Board of Directors of the Company
hereby adopts and incorporates by reference any form of
specific resolution to carry into effect the purpose and
intent of the foregoing resolutions, or covering authority
included in matters authorized in the foregoing
resolutions, including forms of resolutions in connection
therewith that may be required by the Commission, the
National Association of Securities Dealers, Inc., the New
York Stock Exchange, Inc. and any state, institution,
person or agency, if in the opinion of the officer of the
Company so acting the adoption of
<PAGE> 10
such resolutions is necessary or advisable, and the
Secretary of the Company is hereby directed to insert a
copy thereof in the minute book of the Company following
the minutes of this meeting and certify the same as having
been duly adopted thereby; and
RESOLVED: that any and all actions heretofore or hereafter
taken by any officer or officers of the Company within the
terms of the foregoing resolutions be and are hereby
ratified and confirmed as the acts and deeds of the
Company; and
RESOLVED: that the officers of the Company be, and each of
them with full power to act without the others is, hereby
authorized and directed to pay such fees and expenses and
to execute and deliver such agreements, instruments and
documents and to do all such other acts and things as
they, or any of them, shall deem necessary or advisable to
effectuate the transactions provided for herein in
accordance with the purposes and intent of the foregoing
resolutions.
I, David M. Schneider, do hereby certify that I am the duly elected, qualified
and acting Secretary of The Progressive Corporation, an Ohio corporation (the
"Company"); that I have custody of the official records of the Company; and that
the foregoing is a true, correct, and complete copy of the resolutions duly
adopted as of the 16th day of January, 1998, by a Written Action Taken Without a
Meeting of the Board of Directors of the Company; and that said resolutions are
valid and binding, and have not been amended, modified or rescinded, and are in
full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary and affixed
the seal of the Company on the 30th day of March, 1998.
/s/ David M. Schneider
----------------------
[SEAL] David M. Schneider
<PAGE> 1
EXHIBIT NO. 25
--------------
Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of State Street Bank and Trust Company
<PAGE> 2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM T-1
----------------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
[ ] CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
STATE STREET BANK AND TRUST COMPANY
- --------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
- ---------------------------------- ----------------------------------
(State of incorporation if (I.R.S. Employer
not a national bank Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
John R. Towers, Executive Vice President and General Counsel,
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
-------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
THE PROGRESSIVE CORPORATION
-------------------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
Ohio 34-0963169
- ---------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Debt Securities
-------------------------------------------------------------------------------
(Title of the indenture securities)
<PAGE> 3
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject:
Department of Banking and Insurance of
The Commonwealth of Massachusetts
100 Cambridge Street
Boston, Massachusetts
Board of Governors of the Federal Reserve System
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of
the trustee, describe each such affiliation.
None with respect to the trustee or its parent, State Street
Corporation.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of
this statement of eligibility and qualification.
1. A copy of the Articles of Association of the trustee as now
in effect.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1)
filed with Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
2. A copy of the Certificate of Authority of the trustee to do
Business.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities
-2-
<PAGE> 4
and Exchange Commission as Exhibit 2 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
3. A copy of the Certification of Fiduciary Powers of the
Trustee.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
4. A copy of the By-laws of the trustee as now in effect.
A copy of the By-Laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with Registration Statement of
Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. Consent of the trustee required by Section 321(b) of the
Act.
6. A copy of the latest Consolidated Reports of Condition of
the trustee, published pursuant to law or the requirements
of its supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 6 and made a part hereof.
-3-
<PAGE> 5
NOTES
Inasmuch as this Form T-1 is filed prior to the ascertainment
by the trustee of all facts on which to base its answer to Item 2, the answer to
said Item is based upon incomplete information. Said Item may, however, be
considered correct unless amended by an amendment to this Form T-1.
-4-
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, State Street Bank and Trust Company, a Massachusetts trust
company, has duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Hartford, and State of Connecticut, on the 26th day of March, 1998.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Elizabeth C. Hammer
-------------------------------
Name: Elizabeth C. Hammer
Title: Vice President
-5-
<PAGE> 7
EXHIBIT 5
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
----------------------------------
The undersigned, as Trustee under an Indenture to be entered into
between The Progressive Corporation and State Street Bank and Trust Company,
Trustee, does hereby consent that, pursuant to Section 321(b) of the Trust
Indenture Act of 1939, reports of examinations with respect to the undersigned
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Elizabeth C. Hammer
------------------------------
Name: Elizabeth C. Hammer
Title: Vice President
Dated: March 26, 1998
<PAGE> 8
EXHIBIT 6
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business December 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ............................2,220,829
Interest-bearing balances ....................................................10,076,045
Securities ............................................................................10,373,821
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ...........................................5,124,310
Loans and lease financing receivables:
Loans and leases, net of unearned income ...6,270,348
Allowance for loan and lease losses ...........82,820
Allocated transfer risk reserve ....................0
Loans and leases, net of unearned income and allowances .......................6,187,528
Assets held in trading accounts ........................................................1,241,555
Premises and fixed assets ................................................................410,029
Other real estate owned ......................................................................100
Investments in unconsolidated subsidiaries ................................................38,831
Customers' liability to this bank on acceptances outstanding ..............................44,962
Intangible assets ........................................................................224,049
Other assets ...........................................................................1,507,650
---------
Total assets ..........................................................................37,449,709
==================
LIABILITIES
Deposits:
In domestic offices ..........................................................10,115,205
Noninterest-bearing ...............7,739,136
Interest-bearing ..................2,376,069
In foreign offices and Edge subsidiary .......................................14,791,134
Noninterest-bearing ..................71,889
Interest-bearing .................14,719,245
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ...........................................7,603,920
Demand notes issued to the U.S. Treasury and Trading Liabilities .........................194,059
Trading liabilities ....................................................................1,036,905
Other borrowed money .....................................................................459,252
Subordinated notes and debentures ..............................................................0
Bank's liability on acceptances executed and outstanding ..................................44,962
Other liabilities ........................................................................972,782
Total liabilities .....................................................................35,218,219
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ..................................................0
Common stock ..............................................................................29,931
Surplus ..................................................................................444,620
Undivided profits and capital reserves/Net unrealized holding gains (losses) ...........1,763,076
Cumulative foreign currency translation adjustments ......................................(6,137)
Total equity capital ...................................................................2,231,490
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Total liabilities and equity capital ..................................................37,449,709
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I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casnern
