<PAGE>
As filed with the Securities and Exchange Commission on December , 1995.
--
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALLEGHENY LUDLUM CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1364894
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1000 SIX PPG PLACE
PITTSBURGH, PENNSYLVANIA 15222-5479
(412) 394-2800
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JON D. WALTON
VICE PRESIDENT-GENERAL COUNSEL AND SECRETARY
1000 SIX PPG PLACE
PITTSBURGH, PENNSYLVANIA 15222-5479
(412) 394-2800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH A COPY TO:
LEONARD S. FERLEGER ROBERT E. BUCKHOLZ, JR.
KIRKPATRICK & LOCKHART LLP SULLIVAN & CROMWELL
1500 OLIVER BUILDING 125 BROAD STREET
PITTSBURGH, PA 15222 NEW YORK, NY 10004
(412) 355-6500 (212) 558-4000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement, as
determined by market conditions.
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, please check the following box. [ ]
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>
==================================================================
TITLE OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
EACH CLASS BE MAXIMUM MAXIMUM REGISTRA-
OF REGISTERED OFFERING AGGREGATE TION FEE
SECURITIES PRICE PER OFFERING
TO BE UNIT (1) PRICE (1)
REGISTERED
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debentures $150,000,000 100% $150,000,000 $51,724.14
==================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
----------------
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, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 8, 1995
[LOGO OF ALLEGHENY LUDLUM CORPORATION]
$150,000,000
ALLEGHENY LUDLUM CORPORATION
% DEBENTURES DUE , 2025
Interest on the Debentures is payable on and of each year,
commencing , 1996. No sinking fund is provided for the Debentures, and the
Debentures are not subject to redemption at the option of the Company. The
Debentures initially will be represented by one or more Global Debentures
registered in the name of The Depository Trust Company or its nominee.
Beneficial interests in the Global Debentures will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. Except as described herein, Debentures in definitive form will
not be issued. The Debentures will be issued only in registered form in
denominations of $1,000 and integral multiples thereof. The Debentures will
trade in DTC's Same-Day Funds Settlement System, and secondary market trading
activity in the Debentures will therefore settle in immediately available
funds. All payments of principal and interest will be made by the Company in
immediately available funds so long as the Debentures are represented by Global
Debentures. See "Description of Debentures".
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT (2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Debenture...................... % % %
Total.............................. $ $ $
</TABLE>
- -----
(1) Plus accrued interest, if any, from 199 .
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $400,000 payable by the Company.
-----------
The Debentures are offered severally by the Underwriters, as specified
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that the Debentures will
be ready for delivery in book-entry form only through the facilities of DTC in
New York, New York, on or about , 199 against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
SALOMON BROTHERS INC
-----------
The date of this Prospectus is December , 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
AVAILABLE INFORMATION
Allegheny Ludlum Corporation, a Pennsylvania corporation (the "Company"), is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "1934 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 Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at two of its Regional Offices located at: Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661; and Seven
World Trade Center, 13th Floor, New York, NY 10048. Copies of such material
can be obtained upon written request from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington D.C. 20549, upon payment of
prescribed rates. Such material can also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, NY 10005, on which
exchange the Common Stock of the Company is listed.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act of 1933, as amended (the "1933 Act"), with respect to
the Debentures. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is
hereby made to the Registration Statement for further information with respect
to the Company and the Debentures. The Registration Statement may be inspected
without charge at the public reference facilities maintained by the Commission
at Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, and copies
thereof may be obtained from the Commission upon payment of prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus its Annual
Report on Form 10-K for the fiscal year ended January 1, 1995 (the "1994 Form
10-K") and its Quarterly Reports on Form 10-Q for the fiscal periods ended
April 2, 1995, July 2, 1995, and October 1, 1995 (the last being the "1995 3rd
Quarter Form 10-Q").
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the Debentures shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
dates of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any person to whom this Prospectus is delivered may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated
herein by reference, except the exhibits to such documents (unless such
exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests for such copies should
be directed to Jon D. Walton, Vice President-General Counsel and Secretary,
Allegheny Ludlum Corporation, 1000 Six PPG Place, Pittsburgh, PA 15222-5479
(telephone (412) 394-2800).
2
<PAGE>
THE COMPANY
Allegheny Ludlum Corporation is one of the world's leading manufacturers of
specialty materials and one of the largest domestic producers of stainless
steel. The Company manufactures stainless steel sheet, strip, plate, foil,
welded tubing and stampings; silicon electrical steel sheet and strip; and
other specialty steel and specialty metals alloys, including tool steels,
magnetic, thermostatic and electronic sheet and strip, and high-temperature
alloys.
The Company is a Pennsylvania corporation formed in 1979. The Company's
principal executive offices are located at 1000 Six PPG Place, Pittsburgh, PA
15222-5479, telephone (412) 394-2800.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Debentures offered hereby, after deducting the underwriting discount and
offering expenses, are estimated to be $ . Of this amount, up to
$104,110,000 will be used to redeem the Company's currently outstanding 5 7/8%
Convertible Subordinated Debentures due March 15, 2002 (the "Convertible
Debentures") and the balance will be used for general corporate purposes.
Those general corporate purposes may include the funding of working capital
and capital spending.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
October 1, 1995, and as adjusted to reflect the issuance of the Debentures and
the application of a portion of the proceeds thereof to redeem the Convertible
Debentures (assuming that no Convertible Debentures are converted).
<TABLE>
<CAPTION>
AS OF OCTOBER 1, 1995
-------------------------
ACTUAL AS ADJUSTED
---------- -------------
(IN THOUSANDS)
<S> <C> <C>
Short-Term Debt and Current Portion of Long-Term
Debt................................................ $ 1,973 $ 1,973
========== ==========
Long-Term Debt
Outstanding Senior Long-Term Debt................. 31,598 31,598
Debentures Offered Hereby......................... -- 150,000
Convertible Debentures............................ 100,000 --
---------- ----------
Total Long-Term Debt Less Current Portion....... $ 131,598 $ 181,598
Shareholders' Equity
Preferred Stock, Par Value $1:
Authorized--50,000,000; Issued--none............ -- --
Common Stock, Par Value $0.10:
Authorized--250,000,000; Issued--72,878,242..... 7,288 7,288
Additional Capital.............................. 271,430 271,430
Retained Earnings............................... 204,484 201,539(1)
Equity adjustment related to minimum liability
for pension plans................................... (20,682) (20,682)
Common Stock in Treasury at Cost--4,440,670
shares.............................................. (78,382) (78,382)
---------- ----------
Total Shareholders' Equity.................... 384,138 381,193
---------- ----------
Total Capitalization........................ $ 517,709 $ 564,764
========== ==========
</TABLE>
- --------
(1) As adjusted, retained earnings includes the after-tax cost of the call
premium for the Convertible Debentures and the associated write-off of
deferred bond issue costs.
3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth certain summary selected consolidated
financial data for each of the five fiscal years in the period ended January
1, 1995 and for the nine-month periods ended October 2, 1994 and October 1,
1995, respectively. The data for the five full fiscal years has been derived
from the consolidated financial statements of the Company audited by Ernst &
Young LLP as set forth in their report appearing elsewhere herein and the data
for the nine-month periods has been derived from the Company's unaudited
consolidated financial statements. See "Experts". The results of operations
for any interim period are not necessarily indicative of the results of
operations to be reported for the full year. This data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" below and the consolidated financial statements and
notes thereto incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
FISCAL NINE
MONTHS ENDED FISCAL YEAR ENDED
----------------- ------------------------------------------------
OCT. 1, OCT. 2, JAN. 1, JAN. 2, JAN. 3, DEC. 29, DEC. 30,
1995(1) 1994(2) 1995(2) 1994(3) 1993 1991 1990
-------- ------- -------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Income statement data:
Net sales ............. $1,159.4 $ 748.4 $1,076.9 $1,100.2 $1,036.0 $1,004.6 $1,084.9
Operating income....... 157.8 7.2 41.4 103.9 76.4 73.7 111.0
Income (loss) before
cumulative effect of
accounting change .... 93.4 (0.7) 18.2 70.8 46.9 41.1 68.9
Net income (loss)...... 93.4 (0.7) 18.2 70.8 (78.3) 41.1 68.9
Earnings before
interest, taxes,
depreciation and
amortization.......... 193.8 35.6 79.6 158.3 114.4 104.0 138.8
Depreciation and
amortization.......... 30.0 28.5 38.2 30.7 27.6 26.2 22.7
Capital expenditures... 19.5 37.6 52.7 50.4 26.0 36.5 57.0
Ratio of earnings to
fixed charges
(unaudited) (4)....... 25.7x -- 4.7x 14.1x 10.2x 12.8x 16.7x
Pro forma ratio of
earnings to
fixed charges
(unaudited) (5)....... 22.7x -- 4.2x -- -- -- --
Balance sheet data (at
period end):
Working capital........ 243.1 199.2 225.4 258.9 299.4 192.9 198.2
Total assets........... 1,116.1 1,087.6 1,094.7 1,174.0 871.2 764.5 793.2
Long-term debt due
after one year........ 131.6 133.6 133.1 138.9 138.1 48.5 52.8
Shareholders' equity... 384.1 372.7 361.7 403.4 256.9 364.5 352.3
</TABLE>
- --------
(1) Income statement amounts include assets held for sale beginning January 2,
1995.
(2) The USWA called a strike in the second quarter which lasted 10 weeks.
(3) Beginning November 10, 1993, results include acquisition of Jessop Steel
Company.
(4) For purposes of determining the consolidated ratios, earnings consist of
consolidated income before income taxes plus fixed charges other than
capitalized interest. Fixed charges consist of interest, both capitalized
and expensed, and interest related to rental expenses. No ratio was
calculated for the nine months ended October 2, 1994.
(5) For purposes of determining the pro forma consolidated ratios, only the
net increase in interest expense resulting from the proposed issuance of
the Debentures and the corresponding retirement of the Convertible
Debentures was considered. The pro forma ratios were computed only for the
periods indicated using an interest rate of 7% and an aggregate principal
amount for the Debentures of $100,000,000, in accordance with the
applicable rules of the Commission. (If the pro forma ratios were computed
based on $150,000,000 of Debentures, they would be 16.7x and 3.1x,
respectively.)
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information
in the consolidated financial statements and notes to the consolidated
financial statements included in the 1995 3rd Quarter Form 10-Q.
The 1994 fiscal nine months and, to a lesser extent, the 1994 third quarter
include the effects of a 10-week labor strike that began April 1, 1994.
RESULTS OF OPERATIONS
Net sales by product line were as follows:
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED FISCAL NINE MONTHS ENDED
------------------------------- -------------------------------
OCTOBER 1, 1995 OCTOBER 2, 1994 OCTOBER 1, 1995 OCTOBER 2, 1994
--------------- --------------- --------------- ---------------
(MILLIONS) (MILLIONS)
<S> <C> <C> <C> <C>
Stainless steel......... $314.7 $199.7 $ 961.3 $581.9
Silicon electrical
steel.................. 33.7 34.9 102.1 95.8
Other specialty alloy... 25.2 27.7 96.0 70.7
------ ------ -------- ------
Total net sales......... $373.6 $262.3 $1,159.4 $748.4
====== ====== ======== ======
</TABLE>
Net sales and shipments in the 1995 periods were considerably higher than
the 1994 periods primarily due to strong market demand, higher prices and
selling price surcharges in 1995. In addition, net sales and shipments in the
first nine months of 1994 and, to a lesser extent, in the third quarter of
1994, were adversely affected by the labor strike. Shipments were 133,596 tons
and 444,155 tons in the 1995 third quarter and nine months, respectively,
compared to 117,412 tons and 334,588 tons in the 1994 periods.
Stainless steel market demand was at relatively high levels in the 1995
third quarter. Both 1995 periods benefited from price increases, selling price
surcharges and improved product mix, especially reduced shipments of lower-
priced commodity stainless steel for exhaust systems. Selling price surcharges
based on nickel, molybdenum and chromium costs are expected to continue, at
lesser rates, into the 1995 fourth quarter.
Silicon electrical steel sales in the 1995 periods benefited from higher
prices for most products. The sales decrease in the 1995 third quarter
compared to the 1994 third quarter resulted from lower demand for certain
domestic products and lower shipments of exported products. Although silicon
electrical steel sales in the 1995 nine months are higher than the 1994 nine
months, they did not return to pre-strike levels.
Other specialty alloy sales decreased in the 1995 third quarter compared to
the 1994 third quarter as a result of lower shipments, especially of tool
steels, which were only partially offset by higher selling prices and higher
shipments of some plate products.
Cost of products sold as a percentage of net sales were 3.4 and 8.7
percentage points more favorable in the 1995 third quarter and nine months,
respectively, as compared to the 1994 periods. The improvements in the 1995
periods reflect higher sales levels and continued efforts to contain costs.
Also, the 1994 nine-month period was adversely affected by the strike which
resulted in lower sales without a corresponding reduction in fixed costs and
the further negative cost effect of the hourly signing bonus under the new
labor agreement and the related bonus for salaried employees.
Research, development and technology costs increased in the third quarter
and first nine months of 1995 compared to the 1994 periods primarily due to
higher expense for profit-related compensation plans and higher technical
support of manufacturing processes due to increased production levels.
5
<PAGE>
Commercial and administrative costs increased in the 1995 periods compared
to the 1994 periods primarily due to higher expense for profit-related
compensation plans, which was partially offset by lower expense for the
Washington, Pennsylvania plant due to realized synergies.
Earnings from assets held for sale are attributable primarily to two non-
specialty steel companies which were acquired in 1993. The results of these
businesses continue to reflect the Company's successful efforts to improve the
productivity and reduce the costs of these businesses as well as favorable
market conditions. See "Financial Condition and Liquidity".
The effective tax rate of 40.5% in the 1995 third quarter compares favorably
with the effective tax rate of 47.1% in the 1994 period. The lower 1995 rate
reflects a reduction in Pennsylvania's effective tax rate. Also, the 1994 rate
temporarily increased as a result of low earnings caused by the continued
effect of the strike coupled with the fixed amortization of cost in excess of
net assets acquired which is not tax deductible. The effective tax rate in the
1995 nine months was 40.8% compared to the 1994 period in which taxes exceeded
income before income taxes as a result of the strike.
FINANCIAL CONDITION AND LIQUIDITY
Working capital increased to $243.1 million at the end of the third quarter
of 1995 compared to $225.4 million at the end of 1994. The current ratio
remains at 2.3 for both periods. The increase in working capital is primarily
reflected in higher trade receivables, due to higher sales, as well as lower
balances in accounts payable and taxes. These changes were partially offset by
lower inventories and increased liabilities for compensation and benefits.
Cash and cash equivalents at the end of the 1995 nine months had grown to
$59.4 million from a beginning balance of $11.2 million. This net increase
resulted from cash generated from operations which was partially used to
repurchase $50.5 million in common stock, invest $19.5 million in capital
equipment, pay dividends of $16.9 million and pay down $1.5 million in debt
during the period.
The Company continues to anticipate that the two non-specialty steel
companies that are held for sale will be sold by the end of the 1995 fiscal
year.
The Company continues to estimate that capital expenditures for 1995 will be
approximately $30 million.
On November 9, 1995, the Company's Board of Directors increased the regular
quarterly cash dividend from $.12 to $.13 per share of common stock and
expanded the Company's share repurchase program from 8 million shares to a new
total authorization of 12 million shares. Through December 7, 1995, the
Company has repurchased approximately 6.7 million shares.
6
<PAGE>
DESCRIPTION OF DEBENTURES
The % Debentures due , 2025 (the "Debentures") will be issued under an
Indenture, dated as of December , 1995 (the "Indenture"), to be entered into
by the Company and The Chase Manhattan Bank (National Association), as trustee
(the "Trustee"). The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to the detailed
provisions of the Indenture, a copy of the form of which is filed as an
exhibit to the Registration Statement and to which reference is hereby made
for a full description of such provisions and for other information regarding
the Debentures. Section references below are to the Indenture. Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Indenture. Whenever particular provisions of the Indenture are referred to,
such provisions are incorporated by reference as part of the statements made
and the statements are qualified in their entirety by such reference.
GENERAL
The Debentures will be unsecured obligations of the Company, ranking equally
with all other unsecured and unsubordinated indebtedness of the Company, will
be limited to an aggregate principal amount of $150,000,000 and will mature on
, 2025. The Indenture does not limit the amount of additional unsecured
indebtedness that the Company may incur.
Interest will be payable semi-annually on and of each year
commencing , 1996, to the registered Holders of Debentures on the
preceding and , respectively. The Debentures will bear interest
from , 199 at the rate per annum set forth on the cover page of this
Prospectus. (Section 301)
Initially, the Debentures will be issued in the form of one or more Global
Debentures registered in the name of The Depository Trust Company ("DTC" or
the "Depositary") or its nominee. In certain circumstances, Debentures will be
issued in fully registered form without coupons in denominations of $1,000 and
integral multiples thereof. See "Book-Entry System" below. (Sections 302, 303
and 305)
The principal of and interest on the Debentures will be payable, the
transfer of Debentures will be registrable and the Debentures may be presented
for exchange, at the office of the Trustee in the Borough of Manhattan, The
City of New York. If the Debentures are no longer represented by Global
Debentures, payment of interest may, at the option of the Company, be made by
check mailed to the address of the Person entitled thereto. No service charge
will be made for any transfer or exchange of Debentures, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Sections 301, 305 and 1002)
No sinking fund is provided for the Debentures, and the Debentures are not
subject to redemption at the option of the Company.
RESTRICTIVE COVENANTS
Limitation on Liens. The Indenture provides that the Company will not, and
will not permit any Restricted Subsidiary (as defined below) to, issue, assume
or guarantee any Debt (as defined below) secured by a Lien (as defined below)
upon any Principal Property (as defined below) of the Company or of any
Restricted Subsidiary or upon any shares of stock or Debt issued by any
Restricted Subsidiary (whether now owned or hereafter acquired), without
effectively providing concurrently that the Debentures (together with, if the
Company so determines, any other indebtedness of or guaranty by the Company or
such Restricted Subsidiary then existing or thereafter created which is not
subordinated to the Debentures) will be secured equally and ratably with (or,
at the option of the Company, prior to) such Debt, so long as such Debt is so
secured. The foregoing restrictions do not apply to Debt secured by: (i)
certain types of Liens on property of, or shares of stock or Debt issued by,
any Subsidiary existing at the time it becomes a Restricted Subsidiary; (ii)
Liens on any asset existing at the time of acquisition thereof (including
acquisition through merger or consolidation) or
7
<PAGE>
securing the payment of all or any part of the purchase price or construction
cost thereof (including Debt incurred for such purpose prior to, at the time
of, or within 180 days thereafter); (iii) Liens to secure all or any part of
the cost of development, construction, alteration, repair or improvement of
all or any part of any property (including Debt incurred for such purpose
prior to, at the time of, or within 180 days thereafter); (iv) Liens which
secure Debt owing by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary or by the Company to a Restricted Subsidiary so long as
the Debt is held by the Company or a Restricted Subsidiary; (v) Liens securing
indebtedness of a Person which becomes a successor of the Company that are
permissible under the provisions described under "Consolidation, Merger and
Sale of Assets"; (vi) Liens in favor of the United States of America or any
state thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any state thereof, or in favor
of any other country or any political subdivision thereof, to secure partial,
progress, advance or other payments (including but not limited to Liens
incurred in connection with pollution control, industrial revenue or similar
financing); (vii) Liens existing at , 1995 including Liens to the extent
such Liens attach to property acquired after such date pursuant to the terms
of the instrument creating such Liens as in effect on such date; and (viii)
any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
clauses (i) to (vii), inclusive, or of any Debt secured thereby; provided,
that such extension, renewal or replacement Lien is limited to all or any part
of the same property that secured the Lien extended, renewed or replaced (plus
any improvements and construction on such property) and secures no larger
amount of Debt than that which had been so secured at the time of such
extension, renewal or replacement and, in the case of clause (iv), that the
Debt being secured thereby is being secured for the same type of creditor as
the Debt being replaced (if that is what is occurring). In addition, the
Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by a Lien which would otherwise be subject to the
restrictions described in the first sentence of this paragraph if at the time
it does so the aggregate amount of such Debt plus all other Debt of the
Company and its Restricted Subsidiaries secured by Liens which would otherwise
be subject to those restrictions after giving effect to the retirement of any
Debt which is currently being retired (not including Debt permitted to be
secured under clauses (i) through (viii) described above), plus the aggregate
Attributable Debt (as defined below) of Sale and Leaseback Transactions (as
defined below) not permitted by the covenant described in the succeeding
paragraph entered into after , 1995 and in existence at that time (less
the aggregate amount of proceeds of such Sale and Leaseback Transactions which
have been applied as described in that paragraph), does not exceed 10% of
Consolidated Net Tangible Assets (as defined below). (Section 1004)
Limitation on Sale and Leaseback Transactions. The Company will not itself,
and will not permit any Restricted Subsidiary to, enter into any arrangements
after , 1995 with any Person (other than the Company or another
Restricted Subsidiary) providing for the leasing as lessee by the Company or
by any such Restricted Subsidiary of any Principal Property (except a lease
for a temporary period not to exceed three years by the end of which it is
intended the use of such Principal Property by the lessee will be discontinued
and a lease which secures or relates to industrial revenue or pollution
control bonds or similar financing), which was or is owned by the Company or a
Restricted Subsidiary and which has been or is to be sold or transferred by
the Company or a Restricted Subsidiary, more than 180 days after the
completion of construction and commencement of full operation thereof by the
Company or such Restricted Subsidiary, to such Person on the security of such
Principal Property (a "Sale and Leaseback Transaction") unless: (i) the
Company or such Restricted Subsidiary would (at the time of entering into such
arrangement) be entitled as described in clauses (i) through (viii) of the
second sentence of the preceding paragraph, without equally and ratably
securing the Debentures, to issue, assume or guarantee Debt secured by a Lien
on such Principal Property in the amount of the Attributable Debt arising from
such Sale and Leaseback Transaction; or (ii) the Attributable Debt of the
Company and its Restricted Subsidiaries in respect of such Sale and Leaseback
Transaction and all other Sale and Leaseback Transactions entered into after
,
8
<PAGE>
1995 (other than any such Sale and Leaseback Transactions as would be
permitted as described in clause (i) and in the next succeeding sentence),
plus the aggregate principal amount of Debt secured by Liens on Principal
Properties then outstanding (not including any such Debt secured by Liens
described in clauses (i) through (viii) of the second sentence of the
preceding paragraph) which do not equally and ratably secure the Debentures,
would not exceed 10% of Consolidated Net Tangible Assets. Notwithstanding the
foregoing, the Company may engage in a Sale and Leaseback Transaction if,
within 180 days after the sale or transfer, it applies or causes a Restricted
Subsidiary to apply an amount equal to the greater of the net proceeds of such
sale or transfer or the fair value, as determined by the Board of Directors of
the Company, of the Principal Property so sold and leased back at the time of
entering into such Sale and Leaseback Transaction to the retirement of
Debentures or other Debt of the Company (other than Debt subordinated to the
Debentures), or Debt of any Restricted Subsidiary (other than Debt owed to the
Company or any Restricted Subsidiary), having a stated maturity (i) more than
12 months from the date of such application or (ii) which is extendable at the
option of the obligor thereon to a date more than 12 months from the date of
such application (other than any payment at Maturity); provided, that the
amount to be so applied may be reduced by (x) the principal amount of
Debentures delivered to the Trustee for retirement and cancellation within 180
days after such sale or transfer, and (y) the principal amount of any such
Debt of the Company or a Restricted Subsidiary other than Debentures
voluntarily retired by the Company or a Restricted Subsidiary within 180 days
after such sale or transfer. (Section 1005)
Certain Definitions. "Attributable Debt" in respect of a Sale and Leaseback
Transaction means, as of any particular time, the present value (discounted at
the rate of interest implicit in the terms of the lease involved in such Sale
and Leaseback Transaction, as determined in good faith by the Company) of the
obligation of the lessee thereunder for net rental payments (excluding,
however, any amounts required to be paid by such lessee, whether or not
designated as rent or additional rent, on account of maintenance and repairs,
services, insurance, taxes, assessments, water rates or similar charges and
any amounts required to be paid by such lessee thereunder contingent upon
monetary inflation or the amount of sales, maintenance and repairs, insurance,
taxes, assessments, water rates or similar charges) during the remaining term
of such lease (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Consolidated Net Tangible Assets" means the aggregate amount of assets of
the Company and its consolidated subsidiaries (less applicable reserves) after
deducting therefrom (a) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles and (b) all
current liabilities except for current maturities of long-term debt and
current maturities of capitalized lease obligations, indebtedness for borrowed
money having a maturity of less than 12 months from the date of the most
recent audited consolidated balance sheet of the Company, but which by its
terms is renewable or extendable beyond 12 months from such date at the option
of the borrower, and deferred taxes which are classified as current
liabilities, all as reflected in the audited consolidated balance sheet
contained in the Company's most recent annual report to its shareholders under
Rule 14a-3 of the 1934 Act, prior to the time as of which "Consolidated Net
Tangible Assets" is being determined.
"Debt" means indebtedness for borrowed money.
"Lien" means any mortgage, pledge, security interest or lien.
"Principal Property" means any manufacturing plant or other similar facility
located within the United States of America (other than its territories and
possessions) and owned by, or leased to, the Company or any Restricted
Subsidiary, the book value of the real property, plant and equipment of which
(as shown, without deduction of any depreciation reserves, on the books of the
owner or owners) is not less than 2% of Consolidated Net Tangible Assets as of
the date on which such plant or other facility is acquired or a leasehold
interest therein is acquired except (a) any such plant or facility which
9
<PAGE>
the Board of Directors determines by Board Resolution in good faith is not of
material importance to the total business conducted, or assets owned, by the
Company and its Restricted Subsidiaries as an entirety, or (b) any portion of
any such plant or facility which the Board of Directors determines by Board
Resolution in good faith not to be of material importance to the use or
operation thereof.
"Restricted Subsidiary" means any Subsidiary substantially all the property
of which is located, or substantially all the business of which is carried on,
within the United States of America (other than its territories and
possessions) which shall at the time, directly or indirectly, through one or
more Subsidiaries or in combination with one or more other Subsidiaries or the
Company, own or be a lessee of a Principal Property. (Section 101)
EVENTS OF DEFAULT AND NOTICE
An Event of Default is defined in the Indenture to be a (i) default for 30
days in the payment of any interest upon any of the Debentures when due; (ii)
default in the payment of the principal of any of the Debentures when due;
(iii) default by the Company in the performance, or breach, of any of its
other covenants in the Indenture which has not been remedied by the end of a
period of 60 days after written notice to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Debentures; (iv) the occurrence of an event of default under
any indenture or instrument under which the Company or any Restricted
Subsidiary shall have outstanding at least $10,000,000 aggregate principal
amount of indebtedness for money borrowed whose maturity has been accelerated
and such acceleration has not been annulled within 30 days after written
notice as provided in the Indenture; and (v) certain events of bankruptcy,
insolvency or reorganization of the Company. (Section 501)
The Indenture provides that, if an Event of Default shall have happened and
is continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Debentures may declare the principal amount of and
all accrued interest on all Debentures to be immediately due and payable. Such
declaration may be rescinded if certain conditions are satisfied. (Section
502)
The Indenture also provides that the Holders of not less than a majority in
principal amount of the Outstanding Debentures may direct the time, method and
place of conducting any proceedings for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee; provided, that such
direction is not in conflict with any rule of law or with the Indenture. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and the Trustee will have the right to
decline to follow any such direction if the Trustee in good faith determines
that the action so directed would involve the Trustee in personal liability
for which it has not been adequately indemnified or would be unduly
prejudicial to Holders not joining in such direction. (Section 512)
The Indenture contains provisions entitling the Trustee, subject to the duty
of the Trustee during the continuance of an Event of Default to act with the
required standard of care, to be indemnified by the Holders of Debentures
before proceeding to exercise any right or power under the Indenture at the
request of the Holders of Debentures. (Sections 601 and 603)
The Indenture also provides that the Trustee will, within 90 days after the
occurrence of a default in respect of the Debentures known to it, give to the
Holders of the Debentures notice of such default; provided, however, that,
except in the case of a default in the payment of the principal of or interest
on any Debentures, the Trustee will be protected in withholding such notice if
it in good faith determines that the withholding of such notice is in the
interest of the Holders of the Debentures; and, provided, further, that such
notice shall not be given until at least 30 days after the occurrence of an
Event of Default in connection with the failure to perform or breach of any
covenant of the Company under the Indenture. The term default for the
foregoing purpose means an event which is, or after notice or lapse of time or
both would become, an Event of Default. (Section 602)
10
<PAGE>
The Indenture requires the Company to file annually with the Trustee a
certificate, executed by a designated officer of the Company, stating to the
best of the officer's knowledge that the Company is not in default under
certain covenants under the Indenture or, if the officer has knowledge that
the Company is in such default, specifying such default. (Section 1007)
MODIFICATION AND WAIVER
The Indenture provides that the Company and the Trustee may, without the
consent of any Holders of the Debentures, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
adding additional Events of Default, or curing ambiguities or inconsistencies
in the Indenture if such action will not adversely affect the interests of the
Holders of the Outstanding Debentures in any material respect. (Section 901)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debentures, to enter into one or more
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or modifying in any manner
the rights of the Holders of the Debentures, except that no such modification
or amendment may, without the consent of the Holders of each of the
Outstanding Debentures affected thereby, among other things, (i) change the
Stated Maturity of the principal of or interest on any Debenture; (ii) reduce
the principal amount thereof or the rate of interest thereon; (iii) change the
Place of Payment where, or the coin or currency in which, the principal of any
Debenture or any interest thereon is payable; (iv) impair the right to
institute suit for the enforcement of any such payment on or with respect to
any Debenture on or after the Stated Maturity thereof; (v) reduce the
percentage in principal amount of the Outstanding Debentures, the consent of
whose Holders is required for any such modification or amendment of the
Indenture or for any waiver of compliance with certain provisions of, or of
certain defaults under, the Indenture; or (vi) modify the foregoing
requirements. (Section 902)
The Holders of a majority in principal amount of the Outstanding Debentures
may on behalf of the Holders of all Debentures waive compliance by the Company
with certain restrictive provisions of the Indenture. (Section 1008) The
Holders of a majority in principal amount of the Outstanding Debentures may on
behalf of the Holders of all Debentures waive any past default under the
Indenture and its consequences, except a default in the payment of the
principal of or any interest on any Debenture or in respect of a provision
which under the Indenture cannot be modified or amended without the consent of
the Holder of each Outstanding Debenture affected. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company, without the consent of the Holders
of any of the Outstanding Debentures, may consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person or may permit any Person to
consolidate with or merge into the Company; provided, that (i) the successor,
transferee or lessee is organized under the laws of any United States
jurisdiction; (ii) the successor, transferee or lessee, if other than the
Company, expressly assumes the Company's obligations under the Indenture and
the Debentures; (iii) after giving effect to the transaction, no Event of
Default and no event which after notice or lapse of time or both would become
an Event of Default shall have occurred and be continuing; and (iv) certain
other conditions are met. (Section 801)
Upon any consolidation by the Company with, or merger by the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with the
preceding paragraph, the successor formed by such consolidation or into which
the Company is merged or the transferee or lessee to which such conveyance,
transfer or lease is made will succeed to, and be substituted for, and may
exercise every right and power of, the
11
<PAGE>
Company under the Indenture, and thereafter, except in the case of a lease,
the predecessor (if still in existence) will be relieved of all obligations
and covenants under the Indenture and the Debentures. (Section 802)
DEFEASANCE
The Company (i) will be discharged from any and all obligations in respect
of the Debentures (except for certain obligations to register the transfer of
Debentures or the exchange of Debentures to replace destroyed, stolen, lost or
mutilated Debentures, and to maintain Paying Agents and hold moneys for
payment in trust) ("legal defeasance") or (ii) will be released from its
obligations with respect to the Debentures under the covenants described under
"Restrictive Covenants" and "Consolidation, Merger and Sale of Assets", and
the occurrence of an event described in clause (iii) under "Events of Default
and Notice" above with respect to any defeased covenant shall no longer be an
Event of Default if, in either case, the Company deposits with the Trustee, in
trust, money or U.S. Government Obligations that through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of and interest
on the Debentures on the dates such payments are due in accordance with the
terms of the Debentures. Such a trust may only be established if, among other
things, (a) no Event of Default or event which with notice or lapse of time or
both would become an Event of Default shall have occurred and be continuing on
the date of such deposit, (b) no Event of Default described under clause (v)
under "Events of Default and Notice" above or event which with the giving of
notice or lapse of time or both would become an Event of Default described
under such clause (v) shall have occurred and be continuing at any time during
the period ending on the 123rd day following such date of deposit, and (c) the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit or defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as if such defeasance had not occurred. Such opinion, in the
case of a legal defeasance, must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the Indenture. In the event the Company omits to
comply with its remaining obligations under the Indenture after a defeasance
of the Indenture as described under clause (ii) above and the Debentures are
declared due and payable because of the occurrence of any undefeased Event of
Default, the amount of money and U.S. Government Obligations on deposit with
the Trustee may be insufficient to pay amounts due on the Debentures at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments. (Section 403)
BOOK-ENTRY SYSTEM
The Debentures will be issued in the form of one or more registered
securities (each a "Global Debenture") which will be deposited with, or on
behalf of, the Depositary and registered in the name of the Depositary or the
Depositary's nominee. Except as set forth below, the Global Debenture may be
transferred, in whole and not in part, only to the Depositary, a nominee of
the Depositary, a successor to the Depositary or a nominee of that successor.
(Sections 303, 305)
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the laws of the State of New
York, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. The
Depositary was created to hold securities of institutions that have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need
12
<PAGE>
for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a participant, either directly or indirectly.
Upon the issuance of the Global Debenture, the Depositary will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Debentures represented by such Global Debenture to the accounts
of participants. The accounts to be credited will be designated by the
Underwriters of the Debentures. Ownership of beneficial interests in the
Global Debenture will be limited to participants or persons that may hold
beneficial interests through participants. Ownership of beneficial interests
in the Global Debenture will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or such participants (with respect
to the owners of beneficial interests in the Global Debenture). The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the
ability to transfer beneficial interests in the Global Debenture.
So long as the Depositary, or its nominee, is the registered holder and
owner of the Global Debenture, the Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the related Debentures for
all purposes of such Debentures and for all purposes under the Indenture.
Except as set forth below, owners of beneficial interests in the Global
Debenture will not be entitled to have the Debentures represented by such
Global Debenture registered in their names, will not receive or be entitled to
receive physical delivery of certificated Debentures in definitive form and
will not be considered to be the owners or holders of any Debentures under the
Indenture or the Global Debenture. Accordingly, each person owning a
beneficial interest in the Global Debenture must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant through which such person owns its beneficial interest, to
exercise any rights of a holder of Debentures under the Indenture or the
Global Debenture. The Company understands that under existing industry
practice in the event the Company requests any action of holders of Debentures
or an owner of a beneficial interest in the Global Debenture desires to take
any action that the Depositary, as the holder of the Global Debenture, is
entitled to take, the Depositary would authorize the participants to take such
action, and the participants would authorize beneficial owners owning through
such participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal of and interest on Debentures represented by the Global
Debenture registered in the name of or held by the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner and holder of the Global Debenture.
The Company expects that the Depositary, upon receipt of any payment of
principal or interest in respect of the Global Debenture, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global
Debenture as shown on the records of the Depositary. The Company also expects
that payments by participants to owners of beneficial interests in the Global
Debenture held through such participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participants. Neither the Company nor the
Trustee will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Debenture or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests or for any other
aspect of the relationship between the Depositary and its participants or the
relationships between such participants and the owners of beneficial interests
in the Global Debenture owning through such participants.
13
<PAGE>
The Debentures represented by the Global Debenture may be exchanged for
individual certificated Debentures in definitive form in denominations of
$1,000 and any integral multiple thereof if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as depositary for the
Global Debenture or if at any time the Depositary ceases to be a clearing
agency registered under the 1934 Act, (ii) the Company in its sole discretion
at any time determines not to have all of the Debentures represented by the
Global Debenture and notifies the Trustee thereof, or (iii) an Event of
Default has occurred and is continuing with respect to the Debentures. Any
Debenture that is exchangeable pursuant to the preceding sentence will be
exchanged for certificated Debentures issued in authorized denominations and
registered in such names as the Depositors shall direct. (Section 305)
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made in immediately available funds.
All payments of principal and interest will be made by the Company in
immediately available funds so long as the Debentures are represented by
Global Debentures.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the
Debentures will trade in the Depositary's Same-Day Funds Settlement System,
and secondary market trading in the Debentures will therefore be required by
the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds
on trading in the Debentures.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank (National Association) will act as Trustee under
the Indenture and is a member of the syndicate for the Company's revolving
credit agreement. The Trustee maintains an office at 4 Chase MetroTech Center,
3rd Floor, Brooklyn, New York for the transfer and exchange of and the payment
of principal of and interest on the Debentures.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and
each of the Underwriters has severally agreed to purchase, the respective
principal amount of Debentures set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT OF DEBENTURES
----------- --------------------
<S> <C>
Goldman, Sachs & Co..................................... $
CS First Boston Corporation.............................
Salomon Brothers Inc....................................
------------
Total................................................. $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and to pay for all of the Debentures, if
any are taken.
The Underwriters propose to offer the Debentures in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Debentures. The Underwriters
may allow, and such dealers may reallow, a concession not to exceed % of the
principal amount of the Debentures to certain brokers and dealers. After the
Debentures are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriters.
14
<PAGE>
Settlement for the Debentures will be made in immediately available funds
and secondary trading in the Debentures will settle in immediately available
funds. See "Description of Debentures--Same-Day Settlement and Payment".
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the 1933 Act.
VALIDITY OF SECURITIES
The valid issuance of the Debentures will be passed upon for the Company by
Jon D. Walton, Vice President-General Counsel and Secretary of the Company.
The validity of the Debentures will be passed upon for the Underwriters by
Sullivan & Cromwell, New York, New York. Certain legal matters with respect to
the Debentures will be passed upon for the Company by Kirkpatrick & Lockhart
LLP, Pittsburgh, Pennsylvania. Mr. Walton beneficially owns 37,817 shares of
Common Stock of the Company and presently exercisable options to purchase
27,500 shares of Common Stock of the Company. Mr. Charles J. Queenan, Jr., a
partner of Kirkpatrick & Lockhart LLP, owns 693,057 shares of Common Stock of
the Company and is a director of the Company.
EXPERTS
The consolidated financial statements of the Company for the year ended
January 1, 1995 incorporated by reference in this Prospectus from the 1994
Form 10-K have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference therein and
incorporated herein by reference. The information under the caption "Selected
Consolidated Financial Data" for each of the five years in the period ended
January 1, 1995, included elsewhere herein, has been derived from consolidated
financial statements audited by Ernst & Young LLP, as set forth in their
report appearing elsewhere herein. Such financial statements and selected
consolidated financial data have been incorporated herein by reference and
included herein, respectively, in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
REPORT OF INDEPENDENT AUDITORS ON SELECTED CONSOLIDATED FINANCIAL DATA
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Allegheny Ludlum Corporation for each
of the five years in the period ended January 1, 1995 (none of which are
presented herein). We expressed unqualified opinions on the aforementioned
consolidated financial statements. In our opinion, the information set forth
in the selected consolidated financial data for each of the five years in the
period ended January 1, 1995, appearing on page 4, is fairly stated in all
material respects in relation to the consolidated financial statements from
which it has been derived.
Ernst & Young LLP
Pittsburgh, Pennsylvania
January 30, 1995
15
<PAGE>
===============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DE-
SCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITA-
TION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents
by Reference.............................................................. 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Capitalization............................................................. 3
Selected Consolidated Financial Data....................................... 4
Management's Discussion and Analysis
of Financial Condition and Results
of Operations............................................................. 5
Description of Debentures.................................................. 7
Underwriting............................................................... 14
Validity of Securities..................................................... 15
Experts.................................................................... 15
Report of Independent Auditors on Selected Consolidated Financial Data..... 15
</TABLE>
===============================================================================
===============================================================================
$150,000,000
ALLEGHENY LUDLUM CORPORATION
% DEBENTURES DUE , 2025
------------
[LOGO OF ALLEGHENY LUDLUM CORPORATION]
------------
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
SALOMON BROTHERS INC
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be incurred in connection with the issuance and
distribution of the securities being registered, other than underwriting
discounts and commissions, are estimated (other than the filing fee for the
registration statement) as follows:
<TABLE>
<S> <C>
Filing Fee........................................... $ 51,724.14
Accounting Fees and Expenses......................... 30,000.00
Trustee's Fees and Expenses.......................... 6,000.00
Blue Sky Fees and Expenses........................... 10,000.00
Printing Costs....................................... 75,000.00
Rating Agency Fees................................... 90,000.00
Legal Fees and Expenses.............................. 100,000.00
Miscellaneous........................................ 37,275.86
-----------
Total................................................ $400,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of
1988, as amended (the "BCL"), provide that a business corporation shall have the
power to indemnify any person who was or is a party, or is threatened to be made
a party, to any threatened, pending or completed action or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that such person is or was
a representative (as defined below) of that corporation, or is or was serving at
the request of that corporation as a representative of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action
or proceeding, if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of that corporation
and, with respect to any criminal proceeding, had no reasonable cause to believe
his conduct was unlawful. In the case of an action by or in the right of a
business corporation, such indemnification is limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
has been adjudged to be liable to that corporation unless and only to the extent
that a court determines upon application that, despite the adjudication of
liability but in view of all the circumstances of
II-1
<PAGE>
the case, such person is fairly and reasonably entitled to indemnity for the
expenses that the court deems proper. A representative means a person occupying
the position or discharging the functions of a director, officer, employee or
agent of any enterprise, regardless of the name or title by which that person
may be designated.
BCL Section 1744 provides that, unless ordered by a court, any
indemnification referred to above shall be made by a business corporation only
as authorized in the specific case upon a determination that indemnification is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct. Such determination shall be made
(1) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the action or proceeding;
or
(2) if such a quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or
(3) by the shareholders.
Notwithstanding the above, BCL Section 1743 provides that to the extent
that a representative of a business corporation is successful on the merits or
otherwise in defense of any action or proceeding referred to above, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
BCL Section 1745 provides that expenses (including attorneys' fees)
incurred in defending any such action or proceeding may be paid by a business
corporation in advance of the final disposition of that action or proceeding
upon receipt of an undertaking by or on behalf of a representative to repay the
amount advanced if it is ultimately determined that the indemnitee is not
entitled to be indemnified by that corporation.
BCL Section 1746 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, the foregoing provisions is not
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding that
office, and that indemnification may be granted under any bylaw, agreement, vote
of shareholders or directors or otherwise for any action taken and may be made
whether or not that corporation would have the power to indemnify the person
II-2
<PAGE>
under any other provision of law and whether or not the indemnified liability
arises or arose from any threatened, pending or completed action by or in the
right of that corporation; provided, however, that no indemnification may be
made in any case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
Section 1 of Article VIA of the registrant's By-laws, as amended, provides
that the registrant shall indemnify, to the fullest extent now or hereafter
permitted by law, each director or officer (including each former director or
officer) of the registrant who was or is made a party to or a witness in or is
threatened to be made a party to or a witness in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was an authorized
representative of the registrant, against all expenses (including attorneys'
fees and disbursements), judgments, fines (including excise taxes and penalties)
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding.
Section 2 of Article VIA of the registrant's By-laws, as amended, further
provides that the registrant shall pay expenses (including attorneys' fees and
disbursements) incurred by a director or officer of the registrant referred to
in Section 1 of such Article in defending or appearing as a witness in any civil
or criminal action, suit or proceeding described in Section 1 of such Article in
advance of the final disposition of such action, suit or proceeding. The
expenses incurred by such director or officer shall be paid by the registrant in
advance of the final disposition of such action, suit or proceeding only upon
receipt of an undertaking by or on behalf of such director or officer to repay
all amounts advanced if it shall ultimately be determined that he is not
entitled to be indemnified by the registrant.
Section 7 of Article VIA of the registrant's By-Laws provide that the
rights of indemnification and advancement of expenses provided for therein shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may otherwise be entitled.
The registrant has entered into indemnification agreements with each of its
directors in which the registrant agrees to indemnify each of its directors to
the fullest extent permitted by law both as to action in his official capacity
and as to action in another capacity and agrees to purchase and maintain
insurance on the terms and conditions described therein.
BCL Section 1747 permits a Pennsylvania business corporation to purchase
and maintain insurance on behalf of any person who is
II-3
<PAGE>
or was a representative of that corporation, or is or was serving at the request
of that corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
such person and incurred by him in any such capacity, or arising out of his
status as such, whether or not that corporation would have the power to
indemnify that person against such liability under the provisions described
above.
Section 5 of Article VIA of the registrant's By-Laws, as amended, provides
that, except in the circumstances set forth in such Section 5, the registrant
shall purchase and maintain insurance on behalf of each director and officer
against any liability asserted against or incurred by such officer or director
in any capacity, or arising out of such director's or officer's status as such,
whether or not the registrant would have the power to indemnify such person
against such liability under the provisions of that Article VIA.
The registrant maintains directors' and officers' liability insurance
covering its directors and officers with respect to liabilities, including
liabilities under the Securities Act of 1933, as amended, which they may incur
in connection with their serving as such. Such insurance provides coverage for
the directors and officers against certain liabilities even though such
liabilities may not be covered by the foregoing By-Law indemnification
provisions.
As permitted by BCL Section 1713, the registrant's By-Laws, as amended,
provide that no director shall be personally liable for monetary damages for any
action taken, or failure to take any action, except to the extent that such
elimination or limitation of liability is expressly prohibited by the act of
November 28, 1986 (P.L. No. 145) as in effect at the time of the alleged action
or failure to take action by the director. The BCL states that this exculpation
from liability does not apply where the director has breached or failed to
perform the duties of his office and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness, and does not apply
to the responsibility or liability of a director pursuant to any criminal
statute or the liability of a director for payment of taxes pursuant to Federal,
state or local law. It may also not apply to liabilities imposed upon directors
by the Federal securities laws.
ITEM 16. EXHIBITS.
See Exhibit Index.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
The registrant hereby undertakes:
(1) 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 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) 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 of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(3) 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.
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 provisions described under Item 15 above (other than
pursuant to policies of insurance), 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 such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on the 8th
day of December, 1995.
ALLEGHENY LUDLUM CORPORATION
(Registrant)
By /s/ James L. Murdy
---------------------------------
James L. Murdy
Senior Vice President-Finance
and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints J. L. Murdy, J. D. Walton, and M. W. Snyder and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their or his or her
substitute, may lawfully do or cause to be done by virtue hereof.
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 the 8th day of December, 1995.
SIGNATURE TITLE
--------- -----
/s/ Arthur H. Aronson President and Chief Executive
- --------------------------- Officer and Director
Arthur H. Aronson
II-6
<PAGE>
/s/ James L. Murdy Senior Vice President-Finance
- --------------------------- and Chief Financial Officer and
James L. Murdy Director
/s/ Richard R. Roeser Vice President - Controller
- ---------------------------
Richard R. Roeser
/s/ Robert S. Park Vice President - Treasurer
- ---------------------------
Robert S. Park
/s/ Richard P. Simmons Chairman of the Board and Director
- ---------------------------
Richard P. Simmons
/s/ Robert P. Bozzone Vice Chairman of the Board
- --------------------------- and Director
Robert P. Bozzone
/s/ Paul S. Brentlinger Director
- ---------------------------
Paul S. Brentlinger
/s/ C. Fred Fetterolf Director
- ---------------------------
C. Fred Fetterolf
/s/ Thomas Marshall Director
- ---------------------------
Thomas Marshall
/s/ W. Craig McClelland Director
- ---------------------------
W. Craig McClelland
/s/ Richard K. Pitler Director
- ---------------------------
Richard K. Pitler
/s/ Anne Pol Director
- ---------------------------
Anne Pol
/s/ Charles J. Queenan, Jr. Director
- ---------------------------
Charles J. Queenan, Jr.
/s/ James E. Rohr Director
- ---------------------------
James E. Rohr
/s/ George W. Tippins Director
- ---------------------------
George W. Tippins
/s/ Steven C. Wheelright Director
- ---------------------------
Steven C. Wheelright
II-7
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NO. PAGE NO.
------- ----------
1 Form of Underwriting Agreement.
4.1 Form of Indenture.
4.2 Form of Debentures (included in Exhibit 4.1).
5 Opinion of Jon D. Walton, Vice President-General
Counsel and Secretary of the registrant.
12 Computation of Consolidated Ratio of Earnings
to Fixed Charges.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Jon D. Walton, Vice President-General
Counsel and Secretary of the registrant (included
in Exhibit 5).
24 Power of Attorney (is set forth on page II-6 of the
Registration Statement).
25 Form T-1 Statement of Eligibility and Qualification
Under the Trust Indenture Act of 1939 of
The Chase Manhattan Bank (National Association),
as Trustee.
<PAGE>
Exhibit 1
Allegheny Ludlum Corporation
% Debentures due , 2025
-- ------------
Underwriting Agreement
----------------------
December , 1995
---
Goldman, Sachs & Co.,
CS First Boston Corporation,
Salomon Brothers Inc,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Allegheny Ludlum Corporation, a Pennsylvania corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of $150,000,000 principal amount of the Debentures
specified above (the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-....), including
any pre-effective amendment thereto, (the "Initial Registration Statement")
in respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement" ) filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus
<PAGE>
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of the
Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act,
is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and
2
<PAGE>
none of such documents, as of such effective or filing date, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto , when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree that is material on a
consolidated basis, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares, upon conversion of convertible debentures or under the
stock acquisition and retention plan, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus, and acquisitions of capital stock pursuant to
the Company's stock repurchase program) or any increase in long-term debt
of the Company or any of its subsidiaries or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and
its subsidiaries on a consolidated basis, otherwise than as set forth or
contemplated in the Prospectus;
3
<PAGE>
(f) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company that is a "significant
subsidiary" as defined in Regulation S-X of the Commission (each a
"Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and (except for directors'
qualifying shares and except as described in the Registration Statement)
are owned directly or indirectly by the Company, free and clear of any
perfected security interest;
(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated as of December , 1995 (the "Indenture") between
---
the Company and The Chase Manhattan Bank (National Association), as
Trustee (the "Trustee"), under which they are to be issued, which will be
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, when executed and delivered by the Company
and the Trustee, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform to
the descriptions thereof in the Prospectus;
4
<PAGE>
(j) The issue and sale of the Securities and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Articles of Incorporation or By-
laws of the Company or any statute or order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties and currently in
effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except the registration under the Act of the Securities, such as
have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(k) The statements set forth in the Prospectus under the caption
"Description of Debentures", insofar as they purport to constitute a
summary of the terms of the Securities are accurate and complete in all
material respects;
(l) Other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened by governmental authorities or by others;
(m) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(n) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes; and
5
<PAGE>
(o) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of .....% of the principal amount thereof, plus accrued
interest, if any, from , 1995 to the Time of Delivery hereunder, the
-------- --
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities which will be
deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian. The Company will deliver the Securities to
Goldman, Sachs & Co., for the account of each Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same day) funds to the account specified by the Company or by certified
or official bank checks, payable to the order of the Company in Federal (same
day) funds, by causing DTC to credit the Securities to the account of Goldman,
Sachs & Co. at DTC. The Company will cause the certificates representing the
Securities to be made available to Goldman, Sachs & Co. for checking at least
twenty-four hours prior to the Time of Delivery (as defined below) at the office
of DTC or its designated custodian (the "Designated Office"). The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on
, 1995 or such other time and date as Goldman, Sachs & Co. and the
- -------- --
Company may agree upon in writing. Such time and date are herein called the
"Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of Kirkpatrick & Lockhart LLP, 1500 Oliver Building, Pittsburgh, Pennsylvania
15222 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at ......... p.m., Pittsburgh time, on the Pittsburgh Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"Pittsburgh Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in Pittsburgh are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
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(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the Time of Delivery if it has been disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions within the United States as you may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities, provided that
in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Securities and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the
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Act, the Exchange Act or the Trust Indenture Act, to notify you and upon
your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Securities
at any time nine months or more after the time of issue of the Prospectus,
upon your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)),
an earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the earlier of the Time of Delivery and such earlier time as
you may notify the Company, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Securities;
(f) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally or to the Commission); and
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(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
and Legal Investment Memoranda, closing documents and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional
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information on the part of the Commission shall have been complied with to
your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to the incorporation of the Company, the validity of the
Indenture, the Securities being issued at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(c) Jon D. Walton, General Counsel of the Company, shall have furnished
to you his written opinion (a draft of such opinion is attached as Annex II(a)
hereto), dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is subsisting under
the laws of the Commonwealth of Pennsylvania, with corporate power
and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and upon certificates of public officials
and in respect of matters of fact upon certificates of officers of the
Company and upon certificates of public officials, provided that such
counsel shall state, in the case of any such opinions and certificates
of officers of the Company, that he believes that both you and he are
justified in relying upon such opinions and certificates);
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the
issued shares of capital stock of each such Significant Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and
except as described in the Registration Statement) are owned directly
or indirectly by the Company, free and clear of all perfected security
interests (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of the Company or its
subsidiaries and upon certificates of public officials, provided that
such counsel shall state, in the case of any such opinions and
certificates of officers of the Company, that he believes that both
you and he are justified in relying upon such opinions and
certificates);
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(iv) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus;
(v) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(vi) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened by governmental
authorities or by others; and
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(d) Kirkpatrick & Lockhart LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached
as Annex II(b) hereto), dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is subsisting
under the laws of the Commonwealth of Pennsylvania, with corporate
power and authority to own its properties and conduct its business
as described in the Prospectus;
(ii) This Agreement has been duly authorized, executed and
delivered by the Company;
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(iii) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided
by the Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Prospectus;
(iv) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(v) The issue and sale of the Securities and the consummation of
the transactions herein contemplated will not result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the Articles of Incorporation or By-laws of the
Company or any statute or order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties and currently in
effect;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except such as have been obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
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[(vii) 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;]
(viii) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior
to the Time of Delivery (other than the financial statements and
related schedules and other financial data therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(ix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related
schedules and other financial data therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data therein,
as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and related
schedules and other financial data therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not
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misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and they do not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement
or the Prospectus which are not filed or incorporated by reference or
described as required;
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at the Time of Delivery, Ernst &
Young LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory
to you, to the effect set forth in Annex I hereto (the executed copy of
the letter delivered prior to the execution of this Agreement is attached
as Annex I(a) hereto and a draft of the form of letter to be delivered on
the effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been
any change in the capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares, upon conversion of convertible debentures or under the
stock acquisition and retention plan, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus, and acquisitions of capital stock pursuant to
the Company's stock repurchase program) or any increase in long-term debt
of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
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(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this Clause
(iii) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and
in the manner contemplated in the Prospectus;
(i) On or after the date hereof there shall not have occurred a
suspension or material limitation in trading in securities of the Company
on the New York Stock Exchange, if the effect thereof in your judgment
makes it impracticable or inadvisable to proceed with the public offering
or delivery of the Securities being issued at such Time of Delivery on the
terms and in the manner contemplated by the Prospectus;
(j) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as
you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
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statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. [No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder
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(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.]
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative 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 subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent
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misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or
18
<PAGE>
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you in care of Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004, Attention: Registration Department; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Corporate Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by
19
<PAGE>
virtue of this Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
20
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
ALLEGHENY LUDLUM CORPORATION
By:
----------------------------------------------
Name:
Title:
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
By:
-------------------------------
(Goldman, Sachs & Co.)
21
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount of
Securities
to be
Underwriter Purchased
----------- ----------
<S> <C>
Goldman, Sachs & Co. .................................... $
CS First Boston Corporation.............................. $
Salomon Brothers Inc..................................... $
Total............................................... $
</TABLE>
22
<PAGE>
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the representatives
of the Underwriters (the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statement of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in the related in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their attention
that caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or
<PAGE>
incorporated by reference in Item 6 of the Company's Annual Report on Form
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial
2
<PAGE>
statements included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares, upon conversions of convertible securities or under the stock
acquisition and retention plan, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus, and acquisitions of capital stock
pursuant to the Company's stock repurchase program) or any increase in
the consolidated long-term debt of the Company and its subsidiaries,
or any decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which
3
<PAGE>
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
4
<PAGE>
Exhibit 4
---------------------------------------------------
ALLEGHENY LUDLUM CORPORATION
To
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Trustee
----------------
INDENTURE
Dated as of December , 1995
--
----------------
$150,000,000
% Debentures Due , 2025
-- -------------------
---------------------------------------------------
<PAGE>
TABLE OF CONTENTS/1/
----------
PAGE
Parties.................................................... 1
Recitals of the Company.................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions................................ 1
Act........................................ 2
Affiliate; control......................... 2
Attributable Debt.......................... 2
Authenticating Agent....................... 2
Authorized Newspaper....................... 2
Board of Directors......................... 3
Board Resolution........................... 3
Business Day............................... 3
Commission................................. 3
Company.................................... 3
Company Request or Company Order........... 3
Consolidated Net Tangible Assets........... 3
Corporate Trust Office..................... 4
corporation................................ 4
Debt....................................... 4
Defaulted Interest......................... 4
Depositary................................. 4
Event of Default........................... 4
Global Security............................ 4
Government Obligations..................... 4
Holder..................................... 5
Indenture.................................. 5
Interest Payment Date...................... 5
Lien....................................... 5
Maturity................................... 5
Officers' Certificate...................... 5
Opinion of Counsel......................... 5
Outstanding................................ 5
Paying Agent............................... 6
Person..................................... 6
Place of Payment........................... 6
Predecessor Security....................... 6
Principal Property......................... 7
Regular Record Date........................ 7
/1/ This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
PAGE
Responsible Officer........................ 7
Restricted Subsidiary...................... 7
Sale and Leaseback Transaction............. 8
Securities................................. 8
Security Register and Security Registrar... 8
Special Record Date........................ 8
Stated Maturity............................ 8
Subsidiary................................. 8
Trust Indenture Act........................ 8
Trustee.................................... 8
Vice President............................. 8
SECTION 102. Compliance Certificates and Opinions....... 8
SECTION 103. Form of Documents Delivered to Trustee..... 9
SECTION 104. Acts of Holders; Record Dates.............. 10
SECTION 105. Notices, Etc., to Trustee and Company...... 11
SECTION 106. Notice to Holders; Waiver.................. 11
SECTION 107. Conflict With Trust Indenture Act.......... 12
SECTION 108. Effect of Headings and Table of Contents... 12
SECTION 109. Successors and Assigns..................... 12
SECTION 110. Separability Clause........................ 12
SECTION 111. Benefits of Indenture...................... 12
SECTION 112. Governing Law.............................. 13
SECTION 113. Legal Holidays............................. 13
SECTION 114. No Security Interest Created............... 13
SECTION 115. Limitation on Individual Liability......... 13
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally............................ 14
SECTION 202. Form of Face of Security................... 14
SECTION 203. Form of Reverse of Security................ 16
SECTION 204. Form of Trustee's Certificate of
Authentication............................ 17
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms........................... 18
SECTION 302. Denominations............................. 18
SECTION 303. Execution, Authentication, Delivery
and Dating............................... 19
SECTION 304. Temporary Securities...................... 20
SECTION 305. Registration; Registration of Transfer
and Exchange............................. 21
- ii -
<PAGE>
PAGE
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities............................... 23
SECTION 307. Payment of Interest; Interest Rights
Preserved................................ 24
SECTION 308. Persons Deemed Owners..................... 25
SECTION 309. Cancellation.............................. 25
SECTION 310. Computation of Interest................... 26
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of
Indenture................................ 26
SECTION 402. Application of Trust Money................ 27
SECTION 403. Defeasance Upon Deposit of Moneys or
Government Obligations................... 27
SECTION 404. Repayment To Company...................... 29
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default......................... 29
SECTION 502. Acceleration of Maturity; Rescission
and Annulment............................ 31
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee............... 32
SECTION 504. Trustee May File Proofs of Claim.......... 33
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities................. 33
SECTION 506. Application of Money Collected............ 33
SECTION 507. Limitation on Suits....................... 34
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest........... 35
SECTION 509. Restoration of Rights and Remedies........ 35
SECTION 510. Rights and Remedies Cumulative............ 35
SECTION 511. Delay or Omission Not Waiver.............. 35
SECTION 512. Control by Holders........................ 36
SECTION 513. Waiver of Defaults........................ 36
SECTION 514. Undertaking for Costs..................... 36
SECTION 515. Waiver of Stay or Extension Laws.......... 37
- iii -
<PAGE>
PAGE
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities........ 37
SECTION 602. Notice of Defaults......................... 37
SECTION 603. Certain Rights of Trustee.................. 37
SECTION 604. Not Responsible for Recitals or
Issuance of Securities.................... 39
SECTION 605. May Hold Securities........................ 39
SECTION 606. Money Held in Trust........................ 39
SECTION 607. Compensation and Reimbursement............. 39
SECTION 608. Disqualification; Conflicting Interests.... 40
SECTION 609. Corporate Trustee Required; Eligibility.... 40
SECTION 610. Resignation and Removal; Appointment
of Successor.............................. 40
SECTION 611. Acceptance of Appointment by Successor..... 42
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.................... 42
SECTION 613. Preferential Collection of Claims
Against Company........................... 42
SECTION 614. Authenticating Agents...................... 43
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders.................. 45
SECTION 702. Preservation of Information;
Communications to Holders................. 45
SECTION 703. Reports by Trustee......................... 46
SECTION 704. Reports by Company......................... 46
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only
on Certain Terms........................... 46
SECTION 802. Successor Substituted....................... 48
- iv -
<PAGE>
PAGE
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without
Consent of Holders........................ 48
SECTION 902. Supplemental Indentures With Consent
of Holders................................ 49
SECTION 903. Execution of Supplemental Indentures....... 50
SECTION 904. Effect of Supplemental Indentures.......... 50
SECTION 905. Conformity With Trust Indenture Act........ 50
SECTION 906. Reference in Securities to Supplemental
Indentures................................ 50
SECTION 907. Notice of Supplemental Indenture........... 50
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.......... 51
SECTION 1002. Maintenance of Office or Agency............ 51
SECTION 1003. Money for Securities Payments to be
Held in Trust............................. 51
SECTION 1004. Limitation on Liens........................ 53
SECTION 1005. Limitation on Sale and Leaseback
Transactions.............................. 55
SECTION 1006. Existence.................................. 57
SECTION 1007. Statement as to Compliance................. 57
SECTION 1008. Waiver of Certain Covenants................ 57
TESTIMONIUM................................................ 58
SIGNATURES AND SEALS....................................... 58
ACKNOWLEDGMENTS............................................ 59
- v -
<PAGE>
INDENTURE, dated as of December , 1995, between ALLEGHENY LUDLUM
--
CORPORATION, a corporation duly organized and existing under the laws of the
Commonwealth of Pennsylvania (herein called the "Company"), having its principal
executive offices at 1000 Six PPG Place, Pittsburgh, Pennsylvania 15222, and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its %
----
Debentures Due , 2025 (herein called the "Securities") of
-----------------
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
- 1 -
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of this Indenture; and
(4) the words, "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Four or Article Six, are
defined in those Articles.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, as of any particular time, the present value (discounted at the rate of
interest implicit in the terms of the lease involved in such Sale and Leaseback
Transaction, as determined in good faith by the Company) of the obligation of
the lessee thereunder for net rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, services, insurance,
taxes, assessments, water rates or similar charges and any amounts required to
be paid by such lessee thereunder contingent upon monetary inflation or the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges) during the remaining term of such lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper of general circulation in The
City of New York, Borough of Manhattan,
- 2 -
<PAGE>
printed in the English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays. Whenever successive
weekly publications in an Authorized Newspaper are authorized or required
hereunder, they may be made (unless otherwise expressly provided herein) on the
same or different days of the week and in the same or in different Authorized
Newspapers.
"Board of Directors" means the board of directors of the Company or
the executive committee or any other committee appointed by that board to act in
respect hereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of Payment
are authorized or obligated to close by law or executive order.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, if any, its President or any Vice President, and by its
Treasurer, any Assistant Treasurer, its Secretary or any Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets of the Company and its consolidated subsidiaries (less applicable
reserves) after deducting therefrom (a) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles and
(b) all current liabilities except for current maturities of long-term debt and
current maturities of capitalized lease obligations, indebtedness for borrowed
money having a maturity of less than 12 months from the date of the most recent
audited consolidated balance sheet of the Company, but which by its terms is
renewable or extendable beyond 12 months from such date at the option of the
borrower, and deferred taxes which are classified as current liabilities, all
- 3 -
<PAGE>
as reflected in the audited consolidated balance sheet contained in the
Company's most recent annual report to its shareholders under Rule 14a-3 of the
Securities Exchange Act of 1934, as amended, prior to the time as of which
"Consolidated Net Tangible Assets" is being determined.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 4 Chase MetroTech Center, 3rd floor, Brooklyn, New York 11245.
"corporation" means a corporation, association, company, joint stock
company, limited liability company or business trust.
"Debt" means indebtedness for borrowed money.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security evidencing all or part of the
Securities and issued to the Depositary in accordance with Section 303 and
bearing the legend prescribed in the sixth paragraph of Section 303.
"Government Obligations" means securities that are
(i) direct obligations of the United States of America or any government of a
foreign sovereign state for the payment of which its full faith and credit is
pledged or (ii) obligations of an entity controlled or supervised by and acting
as an agency or instrumentality of the United States of America or such foreign
government the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such foreign
government, as the case may be, which in either case under clauses (i) or (ii)
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such obligation held by such custodian for the account of
the holder of a depository receipt; provided, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the
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<PAGE>
holder of such depository receipt from any amount received by the custodian in
respect of the obligation or the specific payment of interest on or principal of
the obligation evidenced by such depository receipt.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Lien" means any mortgage, pledge, security interest or lien.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, if any, the President or any Vice
President, and by the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1007 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, and who shall be reasonably
acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities or portions thereof for the payment of which money in
the necessary amount has been theretofore
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<PAGE>
deposited with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Securities or
from its obligations with respect to which the Company shall have been
discharged; and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given or been given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any interest on any Securities on behalf of the Company.
"Person" means, except as provided in Article Six, any individual,
corporation, partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of
and any interest on the Securities are payable as specified in Section 202.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
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<PAGE>
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any manufacturing plant or other similar
facility located within the United States of America (other than its territories
and possessions) and owned by, or leased to, the Company or any Restricted
Subsidiary, the book value of the real property, plant and equipment of which
(as shown, without deduction of any depreciation reserves, on the books of the
owner or owners) is not less than 2% of Consolidated Net Tangible Assets as of
the date on which such plant or other facility is acquired or a leasehold
interest therein is acquired except (a) any such plant or facility which the
Board of Directors determines by Board Resolution in good faith is not of
material importance to the total business conducted, or assets owned, by the
Company and its Restricted Subsidiaries as an entirety, or (b) any portion of
any such plant or facility which the Board of Directors determines by Board
Resolution in good faith not to be of material importance to the use or
operation thereof.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the or (whether or not
---------------------------- -----------------
a Business Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Subsidiary" means any Subsidiary substantially all the
property of which is located, or substantially all the business of which is
carried on, within the United States of America (other than its territories and
possessions) which shall at the time, directly or indirectly, through one or
more Subsidiaries or in combination with one or more other Subsidiaries or the
Company, own or be a lessee of a Principal Property.
- 7 -
<PAGE>
"Sale and Leaseback Transaction" has the meaning specified in Section
1005.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or interest
thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such interest is due and payable.
"Subsidiary" means, with respect to the Company, a corporation of
which more than 50% of the total voting power of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
its directors is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries or by the Company and one or more other Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an
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<PAGE>
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
- 9 -
<PAGE>
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 3Oth day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the
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<PAGE>
case may be. With regard to any record date for action to be taken by the
Holders, only the Holders on such date (or their duly designated proxies) shall
be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
any such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, attention:
Institutional Trust Group, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first class postage prepaid, to the Company
addressed to it, Attention: Corporate Secretary, at the address of its
principal executive offices specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail any 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
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<PAGE>
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 regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict With Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind or inure to the benefit of its successors and assigns, whether so expressed
or not.
SECTION 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Security Registrar, any Paying Agent, any Authenticating Agent
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
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<PAGE>
SECTION 112. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania, without regard
to the conflicts of law rules of said Commonwealth.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date or Stated Maturity of any
Security shall not be a Business Day at any Place of Payment for such Security,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or at the Stated Maturity; provided, that no interest shall accrue
for the period from and after such Interest Payment Date or Stated Maturity, as
the case may be, to such Business Day if such payment is made or duly provided
for on such Business Day.
SECTION 114. No Security Interest Created.
----------------------------
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
SECTION 115. Limitation on Individual Liability.
----------------------------------
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder,
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<PAGE>
officer or director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any Security or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Security.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
---------------
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with the rules of any securities exchange on
which the Securities are listed or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
------------------------
ALLEGHENY LUDLUM CORPORATION
__% Debentures Due _____________, 2025
No. $
------- --------------
Allegheny Ludlum Corporation, a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
- ----------------------------------
Dollars on , and to pay interest
- ----------------------- -------------------------
thereon from or from the most recent Interest Payment Date to
-------------
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<PAGE>
which interest has been paid or duly provided for, semi-annually on
and in each year, commencing , at
- --------------- ------------- -------------
the rate of % per annum, until the principal hereof is paid or made
--------
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the or
----------- -----------
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof having been given to Holders of Securities not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and any such interest on this Security
will be made at the office or agency of the Company maintained for that purpose
pursuant to Section 1002 of the Indenture in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register if this
Security is not a Global Security.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
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<PAGE>
Dated:
ALLEGHENY LUDLUM CORPORATION
By
---------------------------
Attest:
- --------------------------------
SECTION 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of securities of the
Company designated as its % Debentures Due 2025, (herein
---- -------------------
called the "Securities"), limited in aggregate principal amount to $150,000,000,
issued and to be issued under an Indenture, dated as of December , 1995
--
(herein called the "Indenture"), between the Company and The Chase Manhattan
Bank (National Association), as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
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<PAGE>
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
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<PAGE>
The Chase Manhattan Bank
(National Association),
as Trustee
By
------------------------------
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $150,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306 or 906.
The Securities shall be known and designated as the " %
------
Debentures Due , 2025" of the Company. Their Stated Maturity shall
----------
be , 2025, and they shall bear interest at the rate of % per
---------- -----
annum, from or from the most recent Interest Payment Date to
------------------
which interest has been paid or duly provided for, as the case may be, payable
semi-annually on and , commencing
--------------- --------------------
, until the principal thereof is paid or made available for
- -------------------
payment.
The principal of and interest on the Securities shall be payable at
the office or agency of the Company maintained for such purpose pursuant to
Section 1002; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register so long as the
Securities are not represented by one or more Global Securities.
SECTION 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Securities shall be numbered, lettered or otherwise distinguished in such manner
or in accordance with such plan as the officers of the Company executing the
same may determine with the approval of the Trustee.
- 18 -
<PAGE>
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, if any, its President or
one of its Vice Presidents, under its corporate seal or a facsimile thereof
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall either at one time or from time to time pursuant to
such instructions as may be described therein authenticate and deliver such
Securities as is in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
If the Securities are to be issued in whole or in part in the form of
one or more Global Securities, then the Company shall execute and the Trustee
shall authenticate and deliver one or more Global Securities that (i) shall
represent an aggregate amount equal to the aggregate principal amount of the
Outstanding Securities to be represented by one or more Global Securities, (ii)
shall be registered in the name of the Depositary for such
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<PAGE>
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."
Each Depositary for a Global Security must, at all times while it
serves as such Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and any other applicable statute or
regulation.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities. Any such temporary Security may be in global
form, representing all or a portion of the Outstanding Securities of such
series. Every such temporary Security shall be executed by the Company and
shall be authenticated and delivered by the Trustee upon the same conditions and
in substantially the same manner, and with the same effect, as the definitive
Security or Securities in lieu of which it is issued.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company in a Place of Payment, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Securities of a like aggregate principal amount
in authorized denominations. Until so exchanged the temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual
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<PAGE>
Securities represented thereby pursuant to this Section 304 or Section 305, the
temporary Global Security shall be endorsed by the Trustee to reflect the
reduction of the principal amount evidenced thereby, whereupon the principal
amount of such temporary Global Security shall be reduced for all purposes by
the amount so exchanged and endorsed.
SECTION 305. Registration; Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers and exchanges of Securities as herein
provided. At all reasonable times, upon reasonable notice, the Security
Register shall be open for inspection by the Company.
Upon surrender for registration of transfer of any Security at the
office or agency maintained for that purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denominations and
of a like aggregate principal amount.
Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for the individual Securities represented
thereby, a Global Security representing all or a portion of the Securities may
not be transferred except as a whole by the Depositary 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 Depositary or a nominee of such successor Depositary.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at the office or agency
maintained for that purpose. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
(b) If at any time the Depositary for the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities or if at any time the Depositary
- 21 -
<PAGE>
for the Securities shall no longer be eligible under Section 303, the Company
shall appoint a successor Depositary. If a successor Depositary for the
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of individual Securities, will authenticate and deliver, individual
Securities in an aggregate principal amount equal to the principal amount of the
Global Security or Securities in exchange for such Global Security or
Securities.
The Company may at any time and in its sole discretion determine that
individual Securities issued in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities. In such event
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securities, will authenticate and
deliver, individual Securities in an aggregate principal amount equal to the
principal amount of the Global Security or Securities in exchange for such
Global Security or Securities.
The Depositary for the Securities may surrender a Global Security in
exchange in whole or in part for individual Securities on such terms as are
acceptable to the Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by the Depositary a new individual
Security or Securities of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and
(ii) to the Depositary a new Global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of individual Securities
delivered to Holders thereof.
Upon the exchange of a Global Security for individual Securities, such
Global Security shall be canceled by the Trustee. Individual Securities issued
in exchange for a Global Security pursuant to this Section shall be registered
in such names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Securities to the Persons in whose names such Securities are so
registered.
(c) All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations
- 22 -
<PAGE>
of the Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities except as provided in Section 306. The Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 304 or 906
not involving any transfer.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including, without limitation, the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute
- 23 -
<PAGE>
an original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest, Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest. At the
option of the Company, interest on the Securities may be paid by mailing checks
to the addresses of the Holders thereof as such addresses shall appear in the
Securities Register if such Securities are not represented by a Global Security.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing as
to the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The
- 24 -
<PAGE>
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 309. Cancellation.
------------
All Securities surrendered for payment or registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for
- 25 -
<PAGE>
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360 day
year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year,
and the Company, in the case of (i) or (ii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire indebtedness on such
Securities
- 26 -
<PAGE>
not theretofore delivered to the Trustee for cancellation for principal and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 or 403 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
SECTION 403. Defeasance Upon Deposit of Moneys or Government Obligations.
-----------------------------------------------------------
At the Company's option, either (a) the Company shall be deemed to
have been Discharged (as defined below) from its obligations in respect of the
Securities on the 123rd day after the applicable conditions set forth below have
been satisfied or (b) the Company shall cease to be under any obligation to
comply with any term, provision or condition set forth in Sections 801, 802,
1004 and 1005 and noncompliance with any such Section shall not result in a
default in the performance, or breach, of any covenant of the Company under
this Indenture at any time after the applicable conditions set forth below have
been satisfied:
(1) the Company shall have deposited or caused to be deposited with
the Trustee or its agent as trust funds in trust, specifically pledged as
security for, and dedicated
- 27 -
<PAGE>
solely to, the benefit of the Holders: (i) money in an amount, or (ii)
U.S. Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide,
not later than the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion (with respect to
(ii) and (iii)) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal of, and
interest on, the Outstanding Securities on the dates such installments of
interest or principal are due;
(2) if the Securities are then listed on the New York Stock Exchange,
the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the exercise of the option under this Section 403 would not
cause the Securities to be delisted;
(3) no Event of Default or event which with notice or lapse of time or
both would become an Event of Default shall have occurred and be continuing
on the date of such deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel, which opinion and counsel are reasonably satisfactory to the
Trustee and its counsel, to the effect that Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of the
exercise of the option under this Section 403 and will be subject to
Federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such option had not been
exercised, and, in the case of Securities being Discharged, either a
private letter ruling to that effect received from the United States
Internal Revenue Service or a revenue ruling pertaining to a comparable
form of transaction to that effect published by the United States Internal
Revenue Service or evidence of a change in applicable federal income tax
law occurring after the date of this Indenture; and
(5) if the Company is to be Discharged, no Event of Default or event
which with notice or lapse of time or both would become an Event of Default
under Section 501(5) or (6) with respect to the Securities of such series
shall have occurred and be continuing at any time during the period ending
on the 123rd day after the date of such deposit.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights
of Holders of Securities to receive, from the trust fund
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<PAGE>
described in subparagraph (1) above, payment of the principal of and interest on
the Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 305, 306, 1002 and 1003; and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
Section 404. Repayment to Company.
--------------------
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any moneys or U.S. Government Obligations held by
them at any time that are not required for the payment of the principal of and
interest on the Securities for which money or U.S. Government Obligations have
been deposited pursuant to Section 403.
The provisions of the last paragraph of Section 1003 shall apply to
any money held by the Trustee or any Paying Agent under this Article that
remains unclaimed for two years after the Maturity of the Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
403.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of any Security at its
Maturity; or
(3) default in the performance, or breach, of any covenant of the
Company in this Indenture (other than a default in performance or breach of
a covenant 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 Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice specifying
such default or breach and requiring it to be
- 29 -
<PAGE>
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(4) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Restricted Subsidiary
in an aggregate principal amount of at least $10,000,000 or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any Restricted Subsidiary in an aggregate principal
amount of at least $10,000,000, whether such indebtedness now exists or
shall hereafter be created, which default shall constitute a failure to pay
any portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace period with respect thereto or
shall have resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 30 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder;
provided, however, that, subject to the provisions of Sections 601 and 602,
the Trustee shall not be deemed to have knowledge of such default unless
either (A) a Responsible Officer of the Trustee shall have actual knowledge
of such default or (B) the Trustee shall have received written notice
thereof from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such mortgage, indenture or
other instrument; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or
- 30 -
<PAGE>
any such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal amount of (and all accrued and
unpaid interest on) all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount and interest shall become
immediately due and payable. Upon payment of all such amounts (including
interest accruing through the date of payment), all obligations of the Company
in respect of the Securities shall terminate.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
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<PAGE>
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate prescribed therefor in the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal
of and interest on the Securities which has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of any Security at
the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal at the
rate prescribed therefor in the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
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exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee shall be entitled and empowered,
by intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have the claims of the
Trustee and the Holders allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name,
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of
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such money on account of principal or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture (including without limitation the provisions of Section 512) to
affect, disturb or prejudice the rights of any other Holders or to obtain or to
seek to obtain priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all of the Holders.
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<PAGE>
SECTION 508. Unconditional Right of Holders to Receive Principal and
-------------------------------------------------------
Interest.
--------
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 307) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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<PAGE>
SECTION 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by Responsible Officer or Officers of the Trustee, determine
that the action so directed would involve the Trustee in personal liability
for which it has not been adequately indemnified or would be unduly
prejudicial to Holders not joining in such direction.
SECTION 513. Waiver of Defaults.
------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the
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<PAGE>
Trust Indenture Act; provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company, the Trustee or
the Holders of 10% or more in principal amount of the Outstanding Securities.
SECTION 515. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
------------------
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; provided, however, that
in the case of any default of the character specified in Section 501(3), no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
SECTION 603. Certain Rights of Trustee.
-------------------------
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<PAGE>
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the
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<PAGE>
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
-------------------------------------------- ---------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
-------------------
Money held by the Trustee or any Paying Agent (except the Company) in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee or any Paying Agent shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed
with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder as may be mutually agreed upon in
writing by the Company and the Trustee (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and
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<PAGE>
disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence or
bad faith; and
(3) to indemnify the 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 trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such,
having a combined capital and surplus of at least $100,000,000. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a Federal or state supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
shall not have been delivered to the resigning Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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<PAGE>
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
such successor Trustee shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
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<PAGE>
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. All moneys due and owing to a retiring Trustee
shall be paid by the Company upon the resignation or removal of the retiring
Trustee. Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts. No successor
Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under t his Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder; provided, that
such corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
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<PAGE>
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Authenticating Agents.
---------------------
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or pursuant to
Section 306, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Any such Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal, state or District of Columbia
authority. If such Authenticating Agent publishes reports of its condition at
least annually, pursuant to law or the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible to
act as such in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of any Authenticating Agent, shall continue to be
Authenticating Agent hereunder; provided, that such successor corporation shall
be otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
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<PAGE>
An Authenticating Agent may resign at any time by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible to act as such in accordance
with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
notice of such appointment by first-class mail, postage prepaid, to all Holders
as their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment under this Section shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if initially named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible to act as such in accordance with the provisions of this
Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with exchanges, registrations of
transfer thereof or pursuant to Section 306; it will keep and maintain, and
furnish to the Trustee from time to time as requested by the Trustee,
appropriate records of all transactions carried out by it as Authenticating
Agent and will furnish the Trustee such other information and reports as the
Trustee may reasonably require; and it will notify the Trustee promptly if it
shall cease to be eligible to act as Authenticating Agent in accordance with the
provisions of this Section. Any Authenticating Agent by the acceptance of its
appointment shall be deemed to have agreed with the Trustee to indemnify the
Trustee against any loss, liability or expense incurred by the Trustee and to
defend any claim asserted against the Trustee by reason of any acts or failures
to act of such Authenticating Agent, but such Authenticating Agent shall have no
liability for any action taken by it in accordance with the specific written
direction of the Trustee.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation and expenses for its services under this Section,
and the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
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<PAGE>
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities designated in the within-mentioned
Indenture.
The Chase Manhattan Bank
(National Association)
As Trustee
By
----------------------------------
As Authenticating Agent
By
----------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than and in each
----------- ----------
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of the immediately preceding or
----------
, and
- -----------
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content, such list to be dated as of a date not more than 15 days prior
to the time such list is furnished;
notwithstanding the foregoing, so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as
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<PAGE>
provided in Section 701 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided, that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
- 46 -
<PAGE>
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all the Securities and
the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which is an obligation of the successor Person or becomes
an obligation of the Company or a Subsidiary as a result of such
transaction as having been incurred by the Company or such Subsidiary at
the time of such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a Lien which would not be permitted by this Indenture,
the Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with the transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
- 47 -
<PAGE>
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger by the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person (if still in existence) shall be relieved of
all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
---------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Event of Default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to secure the Securities pursuant to the requirements of Section
1004 or 1005 or otherwise; or
- 48 -
<PAGE>
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided, that such action pursuant
to this clause (7) shall not adversely affect the interests of the Holders
of Outstanding Securities in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or interest on,
any Security, or reduce the principal amount thereof or the rate of
interest thereon, or change any Place of Payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof; or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
or
(3) modify any of the provisions of this Section or Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1008, or the
deletion of
- 49 -
<PAGE>
this proviso, in accordance with the requirements of Section 901(6).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which adversely affects in a material way the Trustee's own rights,
duties, immunities or liabilities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
--------------------------------
- 50 -
<PAGE>
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
---------------------------------
The Company covenants and agrees that it will duly and punctually pay
the principal of and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and of any change in the location, of such office or
agency. If at any time the Company shall fail to maintain such required office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
Section 1003. Money for Securities Payments to be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of and interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and interest so becoming due until
such sums shall be paid to such Persons or otherwise
- 51 -
<PAGE>
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with any such Paying Agent a sum sufficient to pay the principal or
interest so becoming due, such sum to be held as provided by the Trust Indenture
Act and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and hold all sums held by it for the payment of
principal of or interest on the Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided; and
(2) at any time during the continuance of any default by the Company
(or any other obligor upon the Securities) in the making of any payment in
respect of the Securities, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent
for payment in respect of the Securities.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon
- 52 -
<PAGE>
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1004. Limitation on Liens.
-------------------
(a) Except as otherwise provided in clauses (1) through (8) below or
in subsection (b) of this Section, the Company shall not, and shall not permit
any Restricted Subsidiary to, issue, assume or guarantee any Debt secured by a
Lien upon any Principal Property of the Company or of any Restricted Subsidiary
or upon any shares of stock or Debt issued by any Restricted Subsidiary (whether
such Principal Property, shares of stock or Debt are now owned or hereafter
acquired) without in any such case effectively providing concurrently with the
issuance, assumption or guaranty of any such Debt that the Securities (together
with, if the Company shall so determine, any other indebtedness of or guaranty
by the Company or such Restricted Subsidiary then existing or thereafter created
which is not subordinated to the Securities) shall be secured equally and
ratably with (or, at the option of the Company, prior to) such Debt, so long as
such Debt shall be so secured; provided, however, that nothing in this Section
1004 shall prevent, restrict or apply to (and there shall be excluded from
secured Debt in any computation under this Section 1004) Debt secured by:
(1) Liens on property of, or shares of stock or Debt issued by, any
Subsidiary existing at the time it becomes a Restricted Subsidiary;
provided, that such Lien shall not have been incurred in connection with
the transfer by the Company or a Restricted Subsidiary of a Principal
Property to such Subsidiary unless the Company, within 180 days of the
effective date of such transfer, applies or causes a Restricted Subsidiary
to apply an amount equal to the fair value, as determined by the Board of
Directors, of such Principal Property at the time of such transfer, to the
retirement of Securities or other Debt of the Company (other than Debt
subordinated to the Securities), or Debt of any Restricted Subsidiary
(other than Debt owed to the Company or any Restricted Subsidiary), having
a stated maturity (i) more than 12 months from the date of such application
or (ii) which is extendable at the option of the obligor thereon to a date
more than 12 months from the date of such application;
(2) Liens on any property, shares of stock or Debt existing at the
time of acquisition thereof (including
- 53 -
<PAGE>
acquisition through merger or consolidation) or securing the payment of all
or any part of the purchase price or construction cost thereof or securing
any Debt incurred prior to, at the time of, or within 180 days after, the
acquisition of such property, shares of stock or Debt or the completion of
any such construction, whichever is later, for the purpose of financing all
or any part of the purchase price or construction cost thereof;
(3) Liens on any property to secure all or any part of the cost of
development, construction, alteration, repair or improvement of all or any
part of such property, or to secure Debt incurred prior to, at the time of,
or within 180 days after, the completion of such development, construction,
alteration, repair or improvement, whichever is later, for the purpose of
financing all or any part of such cost;
(4) Liens which secure Debt owing by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary or by the Company to a
Restricted Subsidiary so long as the Debt is held by the Company or a
Restricted Subsidiary;
(5) Liens securing indebtedness of a corporation or other Person which
becomes a successor of the Company in accordance with the provisions of
Article Eight other than Debt incurred by such corporation or other Person
in connection with a consolidation, merger or sale of assets in accordance
with such Article;
(6) Liens on property of the Company or a Restricted Subsidiary in
favor of the United States of America or any state thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any state thereof, or in favor of any other
country or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or to secure
any indebtedness incurred or guaranteed for the purpose of financing all or
any part of the purchase price or the cost of construction, alteration,
repair or improvement of the property subject to such Liens (including but
not limited to Liens incurred in connection with pollution control,
industrial revenue or similar financing), or in favor of any trustee or
mortgagee for the benefit of holders of indebtedness of any such entity
incurred for any such purpose;
(7) Liens existing at , 1995 including Liens to the extent
----------
such Liens attach to property acquired after such date pursuant to the
terms of the instrument creating such Liens as in effect on such date; and
- 54 -
<PAGE>
(8) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in
the foregoing clauses (1) to (7), inclusive, or of any Debt secured
thereby; provided, that such extension, renewal or replacement Lien shall
be limited to all or any part of the same property that secured the Lien
extended, renewed or replaced (plus any improvements and construction on
such property) and shall secure no larger amount of Debt than that which
had been so secured at the time of such extension, renewal or replacement
and, in the case of clause (iv), that the Debt being secured thereby is
being secured for the same type of Person as the Debt being replaced.
(b) Notwithstanding the foregoing provisions of this Section 1004, the
Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by a Lien which would otherwise be subject to the
foregoing restrictions if at the time it does so (the "Incurrence Time") the
aggregate amount of such Debt plus all other Debt of the Company and its
Restricted Subsidiaries secured by Liens which would otherwise be subject to the
foregoing restrictions after giving effect to the retirement of any Debt which
is currently being retired (not including Debt permitted to be secured under
clauses (1) through (8) above), plus the aggregate Attributable Debt (determined
as of the Incurrence Time) of Sale and Leaseback Transactions (other than Sale
and Leaseback Transactions permitted by Subsections (a) and (b) of Section 1005)
entered into after , 1995 and in existence at the Incurrence Time
----------
(less the aggregate amount of proceeds of such Sale and Leaseback Transactions
which shall have been applied in accordance with Subsection (c) of Section
1005), does not exceed 10% of Consolidated Net Tangible Assets.
SECTION 1005. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company shall not itself, and shall not permit any Restricted
Subsidiary to, enter into any arrangements after , 1995 with any bank,
----------
insurance company or other lender or investor (other than the Company or another
Restricted Subsidiary) providing for the leasing as lessee by the Company or by
any such Restricted Subsidiary of any Principal Property (except a lease for a
temporary period not to exceed three years by the end of which it is intended
the use of such Principal Property by the lessee will be discontinued and a
lease which secures or relates to industrial revenue or pollution control bonds
or similar financing), which was or is owned by the Company or a Restricted
Subsidiary and which has been or is to be sold or transferred by the Company or
a Restricted Subsidiary, more than 180 days after the completion of construction
and commencement of full operation thereof by the Company or such Restricted
Subsidiary, to such lender or investor or to any Person to whom funds have been
or are to be advanced by such lender or investor on the security of such
Principal Property (herein called a "Sale and Leaseback Transaction") unless:
- 55 -
<PAGE>
(a) the Company or such Restricted Subsidiary would (at the time of
entering into such arrangement) be entitled pursuant to clauses (1) through
(8) of Subsection (a) of Section 1004, without equally and ratably securing
the Securities, to issue, assume or guarantee Debt secured by a Lien on
such Principal Property in the amount of Attributable Debt arising from
such Sale and Leaseback Transaction; or
(b) the Attributable Debt of the Company and its Restricted
Subsidiaries in respect of such Sale and Leaseback Transaction and all
other Sale and Leaseback Transactions entered into after , 1995
----------
(other than such Sale and Leaseback Transactions as are permitted by
subsection (a) or (c) of this Section 1005), plus the aggregate principal
amount of Debt secured by Liens on Principal Properties then outstanding
(not including any such Debt secured by Liens described in clauses (1)
through (8) of subsection (a) of Section 1004) which do not equally and
ratably secure the Securities, would not exceed 10% of Consolidated Net
Tangible Assets; or
(c) the Company, within 180 days after the sale or transfer, applies
or causes a Restricted Subsidiary to apply an amount equal to the greater
of the net proceeds of such sale or transfer or the fair value, as
determined by the Board of Directors, of the Principal Property so sold and
leased back at the time of entering into such Sale and Leaseback
Transaction to the retirement of the Securities or other Debt of the
Company (other than Debt subordinated to the Securities), or Debt of any
Restricted Subsidiary (other than Debt owed to the Company or any
Restricted Subsidiary), having a stated maturity (i) more than 12 months
from the date of such application or (ii) which is extendable at the option
of the obligor thereon to a date more than 12 months from the date of such
application; provided, that the amount to be so applied shall be reduced by
(x) the principal amount of Securities delivered to the Trustee for
retirement and cancellation within 180 days after such sale or transfer,
and (y) the principal amount of any such Debt of the Company or a
Restricted Subsidiary other than Securities voluntarily retired by the
Company or a Restricted Subsidiary within 180 days after such sale or
transfer. Notwithstanding the foregoing, no retirement referred to in this
subdivision (c) may be effected by payment at Maturity.
Notwithstanding the foregoing, where the Company or any Restricted Subsidiary is
the lessee in any Sale and Leaseback Transaction, Attributable Debt shall not
include any Debt resulting from the guarantee by the Company or any other
Restricted Subsidiary of the lessee's obligation thereunder.
- 56 -
<PAGE>
SECTION 1006. Existence.
---------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board or Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1007. Statement as to Compliance.
--------------------------
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
SECTION 1008. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
provision or condition set forth in Sections 1004 and 1005, if before the time
for such compliance the Holders of at least a majority in principal amount of
the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such provision or
condition, but no such waiver shall extend to or affect such provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such provision or condition shall remain in full force and
effect.
- 57 -
<PAGE>
* * *
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
- ------------------------------ ----------------------------
Title: Title:
(Corporate Seal)
ATTEST: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as Trustee
By
- ------------------------------ --------------------------
Title: Title:
(Corporate Seal)
- 58 -
<PAGE>
ACKNOWLEDGMENTS
THE COMMONWEALTH OF )
--------------- )
COUNTY OF )
-------------------------
BEFORE ME, the undersigned authority, on this day personally appeared,
, the of ALLEGHENY LUDLUM
- ---------------------------------- --------------------
CORPORATION, known to me to be the person whose name is subscribed to the above
and foregoing instrument of writing, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed, in the capacity
therein stated, and as the act and deed of said corporation; and, being by me
duly sworn, did depose and say that he resides at ,
----------------------------
that he is the of said corporation, that he knows the
----------------------
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.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of 1995.
------ ----------
-----------------------------
Notary Public in and for
My commission expires on:
THE STATE OF )
---------------------- )
COUNTY OF )
-------------------------
BEFORE ME, the undersigned authority, on this day personally appeared
, the of THE CHASE MANHATTAN BANK
- -------------------------- ------------------
(NATIONAL ASSOCIATION), known to me to be the person whose name is subscribed to
the above and foregoing instrument of writing, and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in the
capacity therein stated, and as the act and deed of said corporation; and, being
by me duly sworn, did depose and say that he resides at ,
----------------------
that he is a of said corporation, that he knows
-----------------------------
the seal of said corporation, that the seal affixed to said instrument is such
corporate seal, that it was so affixed by
- 59 -
<PAGE>
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
------ ----------
1995.
-----------------------------
Notary Public in and for
My commission expires on:
- 60 -
<PAGE>
Exhibit 5
[ALLEGHENY LUDLUM CORPORATION]
Jon D. Walton
Vice President - General Counsel and Secretary
412/394-2836 Facsimile: 412/394-3010
December 8, 1995
Allegheny Ludlum Corporation
1000 Six PPG Place
Pittsburgh, PA 15222-5479
Ladies and Gentlemen:
I am Vice President-General Counsel and Secretary of Allegheny Ludlum
Corporation, a Pennsylvania corporation (the "Company"), and in such capacity, I
have acted as counsel to the Company in connection with the Registration
Statement on Form S-3 (the "Registration Statement") to be filed by the Company
with the Securities and Exchange Commission on December 4, 1995 in connection
with the registration statement pursuant to the Securities Act of 1933, as
amended (the "Act"), of Debentures (the "Debentures"), with an aggregate initial
public offering price of up to $150,000,000. I have examined the proposed form
of Indenture (the "Indenture") between the Company and The Chase Manhattan Bank
(National Association), as Trustee, under which the Debentures may be issued,
the Registration Statement and the corporate documents of the Company. I am
familiar with the proceedings taken and proposed to be taken by the Company in
connection with the issuance and sale of the Debentures.
Based on the foregoing, I am of the opinion that subject to (i) the
proposed additional proceedings being taken as now contemplated prior to the
issuance of the Debentures, (ii) the due execution and delivery of the Indenture
by the Trustee, (iii) the effectiveness of the Registration Statement under the
Act and the qualification of the Indenture under the Trust Indenture Act of
1939, and (iv) the due execution, authentication and delivery of the Debentures,
the Debentures will, upon issuance and sale thereof, be legally issued and
binding obligations of the Company, except as the same may be limited by
bankruptcy, insolvency or other laws relating to or affecting
<PAGE>
enforcement of creditors' rights or by general principles of equity.
I consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to the undersigned in the Prospectus which is
part of the Registration Statement.
Very truly yours,
Jon D. Walton
JDW:pt
<PAGE>
Exhibit 12
Computation of Ratio of Earnings to Fixed Charges (Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Nine months Fiscal Years
ended
October 1,
1995 1994 1993 1992 1991 1990
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated pre-tax income
from continuing operations $157,799 $32,942 $118,966 $78,799 $72,391 $109,844
Share of less than majority
owned subsidiary not
distributed - (gain) loss (201) 132 1,067 383 746 214
Interest 6,018 8,514 8,668 8,000 5,424 6,214
Interest portion of
rental expense 363 481 526 619 768 811
Minority interest 61 0 209 176 167 440
------------------------------------------------------------------
Earnings $164,040 $42,069 $129,436 $87,977 $79,496 $117,523
==================================================================
Interest $ 6,018 $ 8,514 $ 8,668 $ 8,000 $ 5,424 $ 6,214
Interest portion of
rental expense 363 481 526 619 768 811
------------------------------------------------------------------
Fixed charges $ 6,381 $ 8,995 $ 9,194 $ 8,619 $ 6,192 $ 7,025
==================================================================
Ratio of earnings to
fixed charges 25.7x 4.7x 14.1x 10.2x 12.8x 16.7x
==================================================================
</TABLE>
<PAGE>
Pro Forma Computation of Ratio of Earnings to Fixed Charges (Unaudited)*
(dollars in thousands)
<TABLE>
<CAPTION>
Nine months ended Fiscal Year
October 1, 1995 1994
------------------ -----------
<S> <C> <C>
Consolidated pre-tax income
from continuing operations $157,799 $32,942
Share of less than
majority owned subsidiary
not distributed - (gain) loss (201) 132
Interest 6,018 8,514
Interest portion of
rental expense 363 481
Minority interest 61 0
-------- -------
Earnings $164,040 $42,069
======== =======
Interest $ 6,018 $ 8,514
Incremental increase based
solely on interest
rate change 844 1,125
-------- -------
6,862 9,639
Interest portion of
rental expense 363 481
-------- -------
Fixed Charges $ 7,225 $10,120
======== =======
Ratio 22.7x 4.2x
========= =======
</TABLE>
*Computed based on a 7% coupon and $100,000,000 of Debentures, in accordance
with the applicable rules of the Securities and Exchange Commission. (If the pro
forma ratios were computed based on $150,000,000 of Debentures, they would be
16.7x and 3.1x, respectively.) Earnings have not been adjusted to reflect the
premium paid to redeem the Convertible Debentures. A decrease of 1/8 of 1% in
the assumed interest rate would increase the pro forma ratio from 22.7x to 23.0x
for the nine months ended October 1, 1995.
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the references to our firm under the captions "Experts" and
"Selected Consolidated Financial Data" in the Registration Statement on Form S-3
and related Prospectus of Allegheny Ludlum Corporation relating to up to
$150,000,000 in debt securities and to the incorporation by reference therein of
our reports dated January 30, 1995, with respect to the consolidated financial
statements of Allegheny Ludlum Corporation incorporated by reference in its
Annual Report on Form 10-K for the year ended January 1, 1995, the related
financial statement schedule included therein, and the selected consolidated
financial data included in that Registration Statement and Prospectus, all filed
with the Securities and Exchange Commission.
Ernst & Young LLP
Pittsburgh, Pennsylvania
December 7, 1995
<PAGE>
Exhibit 25
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
--------------------
------------------
THE CHASE MANHATTAN BANK
(National Association)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 Chase Manhattan Plaza, New York, New York
(Address of principal executive offices)
10081
(Zip Code)
------------------
Allegheny Ludlum Corporation
(Exact name of obligor as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or organization)
25-1364894
(I.R.S. Employer Identification No.)
1000 Six PPG Place
Pittsburgh, Pennsylvania
(Address of principal executive offices)
15222-5479
(Zip Code)
----------------------------------
Debentures
(Title of the indenture securities)
==============================================================================
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System, Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control
with the obligor.
(See Note on Page 2.)
Item 16. List of Exhibits.
List below all exhibits filed as a part of this statement of eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect. (See Exhibit T-1 (Item 12), Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan Bank
(National Association) and The Chase Bank of New York (National
Association) to commence business and a copy of approval of
merger of said corporations, all of which documents are still
in effect. (See Exhibit T-1 (Item 12), Registration No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank (National
Association) to exercise corporate trust powers, both of which
documents are still in effect. (See Exhibit T-1 (Item 12),
Registration No. 2-67437.)
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 16) (25.1), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor is
in default. (Not applicable.)
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
- -------------------
*The Exhibits thus designated are incorporated herein by reference.
Following the description of such Exhibits is a reference to the copy of the
Exhibit heretofore filed with the Securities and Exchange Commission, to which
there have been no amendments or changes.
-------------------
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and the
State of New York, on the 30th day of November, 1995.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
/s/ James D. Heaney
---------------------------------
By: James D. Heaney, Vice President
<PAGE>
Exhibit 7
---------
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
The Chase Manhattan Bank, N.A.
of New York in the State of New York, at the close of business on September 30,
1995, published in response to call made by Comptroller of the Currency, under
title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
Charter Number 2370 Comptroller of the Currency Northeastern District
Statement of Resources and Liabilities
Thousands
ASSETS of Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...................................... $ 5,081,000
Interest-bearing balances............................................................... 5,957,000
Held to maturity securities............................................................... 1,678,000
Available-for-sale securities............................................................. 5,303,000
Federal funds sold and securities purchased under agreements to resell in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
Federal funds sold...................................................................... 1,806,000
Securities purchased under agreements to resell......................................... 23,000
Loans and lease financing receivable:
Loans and leases, net of unearned income.............................. $55,682,000
LESS: Allowance for loan and lease losses............................. 1,112,000
LESS: Allocated transfer risk reserve ............................... 0
-----------
Loans and leases, net of unearned income, allowance, and reserve........................ 54,570,000
Assets held in trading accounts........................................................... 12,551,000
Premises and fixed assets (including capitalized leases).................................. 1,755,000
Other real estate owned................................................................... 400,000
Investments in unconsolidated subsidiaries and associated companies...................... 30,000
Customers' liability to this bank on acceptances outstanding.............................. 1,091,000
Intangible assets......................................................................... 1,344,000
Other assets.............................................................................. 6,322,000
-----------
TOTAL ASSETS.............................................................................. $97,911,000
LIABILITIES
In domestic offices..................................................................... $31,007,000
Noninterest-bearing................................................. $12,166,000
Interest-bearing.................................................... 18,841,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs........................... 36,015,000
Noninterest-bearing................................................. $ 3,258,000
Interest-bearing.................................................... 32,757,000
-----------
Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased.................................................................. 1,673,000
Securities sold under agreements to repurchase........................................... 233,000
Demand notes issued to the U.S. Treasury................................................... 25,000
Trading liabilities........................................................................ 9,105,000
Other borrowed money:
With original maturity of one year or less............................................... 2,783,000
With original maturity of more than one year............................................. 395,000
Mortgage indebtedness and obligations under capitalized leases............................. 40,000
Bank's liability on acceptances executed and outstanding................................... 1,100,000
Subordinated notes and debentures.......................................................... 1,960,000
Other liabilities.......................................................................... 5,747,000
-----------
TOTAL LIABILITIES.......................................................................... 90,083,000
===========
Limited-life preferred stock and related surplus........................................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................................ 0
Common stock.............................................................................. 921,000
Surplus................................................................................... 5,244,000
Undivided profits and capital reserves.................................................... 1,695,000
Net unrealized holding gains (losses) on available-for-sale securities.................... (43,000)
Cumulative foreign currency translation adjustments...................................... 11,000
-----------
TOTAL EQUITY CAPITAL...................................................................... 7,828,000
-----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL....................... $97,911,000
===========
</TABLE>
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
(Signed) Lester J. Stephens, Jr.
We the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
(Signed) Thomas G. Labrecque
(Signed) Donald Trautlein Directors
(Signed) Richard J. Boyle
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of New York,
and the State of New York, on the 30th day of November, 1995.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
James D. Heaney
-------------------------------
By: James D. Heaney, Vice President
2.
