<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SOTHEBY'S HOLDINGS, INC.
(Exact Name Of Registrant As Specified In Its Charter)
<TABLE>
<S> <C>
MICHIGAN 38-2478409
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
--------------------------
500 NORTH WOODWARD AVENUE, SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304
(248) 646-2400
(Address, including zip code, and telephone number of registrant's principal
executive offices)
--------------------------
WILLIAM S. SHERIDAN
C/O SOTHEBY'S, INC.
1334 YORK AVENUE
NEW YORK, NEW YORK 10021
(212) 606-7000
(Name, address, including zip code, and telephone number, including area code of
agent for service.)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH H. GOLD, ESQ. WINTHROP B. CONRAD, JR., ESQ.
Miro Weiner & Kramer Davis Polk & Wardwell
500 N. Woodward Avenue 450 Lexington Avenue
Suite 100 New York, New York 10017
Bloomfield Hills, Michigan 48304 (212) 450-4000
(248) 646-2400
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as market
conditions warrant.
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. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF SHARES AMOUNT TO AGGREGATE PRICE OFFERING AMOUNT OF
TO BE REGISTERED BE REGISTERED(1) PER UNIT(2) PRICE(1)(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities............................. $200,000,000 100% $200,000,000 $59,000
</TABLE>
(1) Plus such additional principal amount as may be necessary such that, if Debt
Securities are issued with original issue discount, the aggregate initial
offering price of all Debt Securities will equal $200,000,000, or the
equivalent of $200,000,000 if some or all of the securities are denominated
in one or more foreign currencies or composite currencies.
(2) 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(SUBJECT TO COMPLETION, DATED , 1998)
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 CONSITUTE 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.
<PAGE>
$200,000,000
SOTHEBY'S HOLDINGS, INC.
DEBT SECURITIES
------------------
Sotheby's Holdings, Inc., a Michigan corporation (the "Company"), may from
time to time offer and issue in one or more series its unsecured debt securities
(the "Debt Securities"), with an aggregate initial public offering price of up
to $200 million (or (i) the equivalent of $200 million in one or more foreign
currencies or currency units, including European Currency Units, based on the
rate of exchange at the time of offering, or (ii) such greater amount, if the
Debt Securities are issued at an original issue discount, as will result in
aggregate gross proceeds to the Company of $200 million) on terms to be
determined at the time of the offering. The Debt Securities may be sold in U.S.
dollars or one or more foreign currencies or currency units, and the principal
of, and premium, if any, and any interest on the Debt Securities may likewise be
payable in U.S. dollars or one or more foreign currencies or currency units. The
Debt Securities will be general, unsecured obligations of the Company and will
rank PARI PASSU with all other unsecured, unsubordinated indebtedness of the
Company.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered are set forth in an accompanying Prospectus
Supplement (each, a "Prospectus Supplement") and include, where applicable: (i)
the specific designation, aggregate principal amount, premium, ranking,
currency, form, authorized denominations, maturity, interest rate, if any, and
method of calculation, and time of payment of interest, terms for redemption
(mandatory or at the option of the Company or a holder), terms for sinking fund
payments, the initial public offering price (including any premium or discount),
and the other terms in connection with the offering.
The Debt Securities may be sold through underwriting syndicates represented
by managing underwriters, by underwriters without a syndicate, through agents
designated from time to time, or directly by the Company to purchasers. The
names of any such managing underwriters, underwriters, or agents of the Company
involved in the sale of the Debt Securities in respect of which this Prospectus
is being delivered and any applicable commissions or discounts are set forth in
the Prospectus Supplement. The net proceeds to the Company from such sale are
also set forth in the Prospectus Supplement.
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.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
, 1998
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits, the "Registration Statement") under the Securities Act of 1933
(the "Securities Act") with respect to the Debt Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, 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. For further information with respect to the Company, reference is
hereby made to the Registration Statement. Statements made in this Prospectus as
to the contents of any contract or other document referred to are not complete,
and reference is hereby made to the copy of such contract or document filed as
an exhibit to the Registration Statement for a complete statement of its
provisions.
The company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, is
required to file quarterly and annual reports on Forms 10-Q and 10-K,
respectively. Reports and other information filed by the Company with the
Commission, as well as the Registration Statement, can be inspected and copied
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center; New York, New York 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also by obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Company is required to file electronic versions of such material with
the Commission through the Commission's Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system. The Commission maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Electronic
filings are publicly available at http://www.sec.gov within 24 hours of
acceptance. The records and other information can also be inspected at the
offices of The New York Stock Exchange, Inc. at 20 Broad Street, New York, New
York 10005. The Company will mail to each registered holder of the Debt
Securities, and will file with the indenture trustee, the annual and quarterly
reports that it files with the Commission under the Exchange Act.
INCORPORATION BY REFERENCE OF CERTAIN DOCUMENTS
The Company's report on Form 8-K dated May 20, 1998, the Company's Form 10-Q
for the fiscal quarter ended March 31, 1998 and the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, each of which have been
filed with the Commission pursuant to the Exchange Act, are incorporated by
reference into this Prospectus.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act (including any documents incorporated by reference
therein) after the date of this Prospectus and prior to the termination of the
offering of the Debt Securities shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated by reference in this
Prospectus (other than exhibits to such documents that are not specifically
incorporated by reference in such documents). Written or oral requests for
copies should be directed to Sotheby's, 1334 York Avenue, New York, New York
10021, Attention: Investor Relations (telephone: (212) 508-8070).
2
<PAGE>
THE COMPANY
Sotheby's Holdings, Inc. (together with its subsidiaries, unless the context
otherwise requires, the "Company") is one of the world's two largest auctioneers
of fine arts, antiques and collectibles, offering property in over 80 collecting
categories, among them paintings, jewelry, decorative arts, and books. The
worldwide auction business is conducted through a division known as "Sotheby's"
and consists of three principal operating units; Sotheby's North and South
America, Sotheby's Europe, and Sotheby's Asia. In addition to auctioneering, the
Company is engaged in a number of related activities, including the purchase and
resale of art and other collectibles, art-related financing activities, the
brokering of art and collectible purchases and sales, the marketing and
brokering of luxury real estate, and art education and restoration.
The Company believes it is one of the world's leaders in art-related
financing activities. The Company lends money secured by consigned art in order
to facilitate clients' bringing property to auction. In addition, a portion of
the Company's loan portfolio consists of loans to collectors, dealers, and
museums secured by collections not presently intended for sale.
The Company, through its subsidiary, Sotheby's International Realty, Inc.,
is engaged in the marketing and brokering of luxury residential real estate.
The Company was incorporated in Michigan in August 1983. In October 1983,
the Company acquired Sotheby Parke Bernet Group Limited, which was then a
publicly held company listed on the International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited (the "London Stock Exchange") and
which, through its predecessors, had been engaged in the auction business since
1744. In 1988, the Company issued shares of Class A Limited Voting Common Stock
to the public. The Class A Limited Voting Common Stock is listed on the New York
Stock Exchange (the "NYSE") and the London Stock Exchange.
USE OF PROCEEDS
Unless otherwise stated in a Prospectus Supplement, the net proceeds from
the sale of Debt Securities will be used for general corporate purposes. Any
specific allocations of the proceeds to a particular purpose that have been made
at the date of a Prospectus Supplement will be described in that Prospectus
Supplement.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below are the consolidated ratios of earnings to fixed charges for
the periods indicated.
<TABLE>
<CAPTION>
FOR THE
THREE
MONTHS
ENDED
FOR THE YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997 1997
--------- --------- --------- --------- --------- ---------
Ratio of earnings to fixed charges(1)........................ 6.19x 6.52x 7.49x 11.48x 7.98x -(2)
<CAPTION>
<S> <C>
1998
---------
Ratio of earnings to fixed charges(1)........................ -(2)
</TABLE>
- ------------------------
(1) In the ratio of earnings to fixed charges for the Company and its
subsidiaries, earnings is computed as income before taxes plus fixed
charges. Fixed charges consist of interest on all indebtedness, including
any amortization of debt discount or premium, capitalized interest and the
Company's estimate of that portion of rental expense considered to be
representative of the interest factor.
(2) Earnings did not cover fixed charges by $10.0 million and $11.1 million for
the three months ended March 31, 1998 and March 31, 1997, respectively. The
Company's business is seasonal, with peak revenues and operating income
occurring in the second and fourth quarters of each year as a result of the
traditional spring and fall art auction seasons.
3
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will be issued under an Indenture, as amended or
supplemented from time to time (the "Indenture"), between the Company and The
Chase Manhattan Bank, as trustee (the "Trustee"). The form of the Indenture has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part, and the Indenture is available for inspection at the principal
corporate trust office of the Trustee, 450 West 33rd Street, New York, New York
10001. The Indenture is subject to and governed by the Trust Indenture Act of
1939, as amended. The statements made hereunder relating to the Indenture and
the Debt Securities to be issued hereunder are summaries of certain provisions
thereof and do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all provisions of the Indenture and such Debt
Securities. All section references appearing in this section "Description of the
Debt Securities" are to sections of the Indenture, and capitalized terms used
but not defined herein shall have the respective meanings set forth in the
Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that Debt Securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Indenture does not limit the amount of other
indebtedness or securities that may be issued by the Company or its
subsidiaries.
The Debt Securities will be direct, unsecured obligations of the Company.
Creditors of the Company's subsidiaries are entitled to a claim on the assets of
such subsidiaries. Consequently, in the event of a liquidation or reorganization
of any subsidiary, creditors of the subsidiary are likely to be paid in full
before any distribution is made to the Company and holders of Debt Securities,
except to the extent that the Company is itself recognized as a creditor of such
subsidiary, in which case the claims of the Company would still be subordinate
to any security interests in the assets of such subsidiary and any indebtedness
of such subsidiary senior to that held by the Company.
Reference is made to the Prospectus Supplement for the following and other
possible terms of each series of the Debt Securities in respect of which this
Prospectus is being delivered, (i) the designation of the Debt Securities; (ii)
any limit upon the aggregate principal amount of the Debt Securities and any
limitation on the ability of the Company to increase such aggregate principal
amount after the initial issuance of the Debt Securities of that series; (iii)
the date or dates on which the principal of the Debt Securities will be payable;
(iv) the rate or rates at which the Debt Securities will bear interest, if any,
the date or dates from which any such interest will accrue and on which such
interest will be payable, and the record dates for the determination of the
holders to whom interest is payable; (v) if other than as provided therein, the
place or places where the principal of and interest, if any, on the Debt
Securities will be payable; (vi) the price or prices at which, the period or
periods within which and the terms and conditions upon which Debt Securities may
be redeemed, in whole or in part, at the option of the Company; (vii) the
obligation, if any, of the Company to redeem, purchase or repay Debt Securities,
whether pursuant to any sinking fund or analogous provisions or pursuant to
other provisions set forth therein or at the option of a Holder thereof; (viii)
if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Debt Securities shall be issuable; (ix) if other than the
principal amount thereof, the portion of the principal amount at which the Debt
Securities will be payable upon declaration of acceleration of the maturity
thereof; (x) if other than the currency of the United States of America, the
currency or currencies in which payment of the Principal and interest on the
Debt Securities of the series shall be payable and the manner in which such
amounts shall be determined; (xi) whether and under what circumstances the
Company will pay additional amounts on the Debt Securities of the series held by
a person who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Debt Securities rather than pay such additional
amounts; (xii) if the Debt Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of
4
<PAGE>
certain certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions; (xiii) any
trustees, depositaries, authenticating or paying agents, transfer agents or the
registrar or any other agents with respect to the Debt Securities of the series;
(xiv) provisions, if any, for the defeasance of the Debt Securities of the
series (including provisions permitting defeasance of less than all Debt
Securities of the series); (xv) if the Debt Securities of the series are
issuable in whole or in part as one or more Global Securities, the identity of
the Depositary for such Global Security or Securities; (xvi) any other events of
default or covenants with respect to the Debt Securities of the series; and
(xvii) any other terms or conditions not inconsistent with the provisions of the
Indenture under which the Debt Securities will be issued. (Section 2.03)
"Principal" when used herein includes, when appropriate, the premium, if any, on
the Debt Securities.
Unless otherwise provided in the Prospectus Supplement relating to any Debt
Securities, principal, and interest, if any, will be payable, and the Debt
Securities will be transferable, at the office or offices or agency maintained
by the Company for such purposes, provided that payment of interest on the Debt
Securities may, at the option of the Company, be paid at such place of payment
by check mailed to the persons entitled thereto at the addresses of such persons
appearing on the security register. Interest on the Debt Securities will be
payable on any interest payment date to the persons in whose name the Debt
Securities are registered at the close of business on the record date with
respect to such interest payment date.
Unless otherwise provided in the Prospectus Supplement relating to any Debt
Securities, the Debt Securities will be issued in fully registered form in
minimum denominations of $1,000 and any integral multiple thereof. Additionally,
the Debt Securities may be represented in whole or in part by one or more global
notes registered in the name of a depository or its nominee and, if so
represented, interests in such global note will be shown on, and transfers
thereof will be effected only through, records maintained by the designated
depository and its participants.
The Debt Securities may be exchanged for an equal aggregate principal amount
of Debt Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the Debt Securities at an
agency of the Company maintained for such purpose and upon fulfillment of all
other requirements of such agent. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 2.07)
The Indenture requires the quarterly filing by the Company with the Trustee
of a certificate as to compliance with certain covenants contained in the
Indentures. (Section 4.06)
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will vary
depending upon the currency or currencies involved and will be more fully
described in the Prospectus Supplement relating thereto.
Unless otherwise described in a Prospectus Supplement relating to any Debt
Securities, the covenants or provisions contained in the Indenture may not
afford the holders of Debt Securities protection in the event of a decline in
the Company's credit quality resulting from a highly leveraged transaction
involving the Company.
LIMITATION ON LIENS
The Indenture provides that the Company will not, and will not permit any
Significant Subsidiary to, directly or indirectly, issue, incur, assume or
guarantee any indebtedness for borrowed money secured by any Lien on or with
respect to any Property of the Company or any such Significant Subsidiary or any
interest therein or any income or profits therefrom, unless the Debt Securities
are secured equally and ratably with (or prior to) any and all other
indebtedness secured by such Lien, except for (i) indebtedness
5
<PAGE>
secured by any Lien arising in the ordinary course of business; (ii)
indebtedness secured by any Lien on Property acquired by the Company or any
Significant Subsidiary after the date of issuance of the Debt Securities,
provided that such Lien existed on the date such Property was acquired; (iii)
any Lien securing indebtedness existing on the date of the Indenture; (iv) any
Lien securing indebtedness incurred to finance the purchase price or cost of
construction of Property (or additions, substantial repairs, alterations or
substantial improvements thereto), provided that such Lien and the indebtedness
secured thereby are incurred within one year of the later of acquisition or
completion of construction (or addition, repair, alteration or improvement) and
full operation thereof; (v) indebtedness secured by any Lien arising out of
judgments or awards against the Company or any Significant Subsidiary having an
outstanding principal amount which do not exceed $10 million in the aggregate or
with respect to which the Company or such Significant Subsidiary shall in good
faith be prosecuting an appeal or proceedings for review, Liens which are
discharged within 60 days of entry of judgment or Liens incurred by the Company
or a Significant Subsidiary for the purpose of obtaining a stay or discharge in
the course of any legal proceeding to which the Company or such Significant
Subsidiary is a party; (vi) indebtedness secured by any Lien for taxes not yet
due and payable by the Company or any Significant Subsidiary or which the
Company or such Significant Subsidiary is contesting in good faith; (vii)
indebtedness secured by any Lien on or with respect to Property of a Significant
Subsidiary in favor of the Company or another Subsidiary; (viii) any Lien
securing indebtedness in respect of capital leases on the Property subject to
such capital leases; (ix) any Lien securing indebtedness the proceeds of which
are deposited, promptly upon receipt, with the Trustee solely for the purpose of
effecting a legal defeasance or covenant defeasance as set forth under
"Satisfaction and Discharge of Indenture" and "Defeasance"; (x) indebtedness
secured by any Lien on a note made in favor of, or loan advance made by, the
Company or any Subsidiary in connection with the Company's or such Subsidiary's
lending and financing activities; (xi) indebtedness secured by any Lien
extending, renewing or replacing any Lien permitted by clauses (i) through (x)
above; and (xii) any Lien (other than a Lien permitted under any of clauses (i)
through (xi) of this paragraph) securing indebtedness of the Company or of any
Significant Subsidiary, provided that the aggregate principal amount of all
Secured Debt together with all Attributable Debt of the Company and its
Significant Subsidiaries in respect of Sale and Lease-Back Transactions which
would not otherwise be permitted but for the provisions of clause (vi) described
under "Limitation on Sale and Lease-Back Transactions", does not exceed, at the
time of incurrence of such indebtedness, 15% of Consolidated Net Tangible Assets
of the Company and its Subsidiaries.
In the case of Liens permitted under clauses (ii) and (iv) above, such Liens
may not relate to any Property of the Company or a Significant Subsidiary other
than the Property so acquired, constructed, added, repaired, altered or
improved, as the case may be. In the case of Liens permitted under clause (xi),
unless such Liens are otherwise permitted under clauses (xii), such Liens (A)
may not relate to any Property of the Company or a Significant Subsidiary other
than the Property to which the Lien being extended, renewed or replaced relates,
and (B) may not secure indebtedness in excess of that secured by the Lien being
extended, renewed or replaced.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that, as of the date of the Indenture, the Company
will not, nor will it permit any Significant Subsidiary to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Lease-Back Transaction; PROVIDED, HOWEVER, that the
Company or any Significant Subsidiary may enter into (i) a Sale and Lease-Back
Transaction that, had such Sale and Lease-Back Transaction been structured as a
mortgage or other secured financing rather than as a Sale and Lease-Back
Transaction, the Company or such Significant Subsidiary would have been
permitted to enter into such transaction pursuant to the terms of the Indenture
described under "Limitation on Liens," (ii) a Sale and Lease-Back Transaction
between or among the Company and any of its Subsidiaries or between or among
Subsidiaries, (iii) a Sale and Lease-Back Transaction entered into prior to the
date of issuance of the Debt Securities, (iv) a Sale and Lease-Back Transaction,
provided that within 180 days of the effective
6
<PAGE>
date of any such Sale and Lease-Back Transaction, the Company or such
Significant Subsidiary shall apply an amount equal to the Value of such Sale and
Lease-Back Transaction to the (A) retirement (other than any mandatory
retirement and other than any prohibited retirement of securities) of
indebtedness for borrowed money incurred or assumed by the Company or any
Subsidiary (other than indebtedness for borrowed money owed to the Company or
any Subsidiary) which by its terms matures on, or is extendible or renewable at
the option of the obligor to, a date more than 12 months after the date of the
creation of such indebtedness and, in the case of such indebtedness of the
Company which ranks on a parity with, or senior in right of payment to, the Debt
Securities or (B) the purchase or construction of other Property, provided that
such Property is owned by the Company or a Subsidiary free and clear of all
Liens, (v) a Sale and Lease-Back Transaction involving the taking back of a
lease for a period of three years or less, or (vi) a Sale and Lease-Back
Transaction, provided that after giving effect to the Sale and Lease-Back
Transaction, the aggregate principal amount of all Attributable Debt of the
Company and its Significant Subsidiaries in respect of Sale and Lease-Back
Transactions which would not otherwise be permitted but for the provisions of
this clause (vi), plus all Secured Debt which would not otherwise be permitted
but for the provisions of Section (xii) described under "Limitation on Liens,"
does not exceed, at the time of such Sale and Lease-Back Transaction, 15% of the
Consolidated Net Tangible Assets of the Company and its Subsidiaries.
CERTAIN DEFINITIONS
The term "Attributable Debt" means with respect to any Sale and Lease-Back
Transaction the total net amount of rent required to be paid during the
remaining term of any lease, discounted at the weighted average rate per annum
then borne by the outstanding Debt Securities.
The term "Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities, and (b) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records of the Company and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
The term "Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien (statutory
or other), or preference, priority, or other security or similar agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any agreement to give or grant a Lien or any lease, conditional sale
or other title retention agreement having substantially the same economic effect
as any of the foregoing).
The term "Property" with respect to any person, means any interest of such
person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, capital Stock in any
other person.
The term "Real Property" means with respect to any person, any interest of
such person in any kind of realty or estate in real property.
The term "Sale and Lease-Back Transaction" means with respect to any person,
any direct or indirect arrangement pursuant to which Real Property is sold or
transferred by such person or a Subsidiary of such person and is thereafter
leased back from the purchaser or transferee thereof by such person or one of
its Subsidiaries.
"Secured Debt" means any indebtedness for borrowed money incurred under
clause (12) of Section 4.03 of the Indenture, which would not be permitted
otherwise but for such clause (12) of Section 4.03.
"Significant Subsidiary" means each Subsidiary which is a "significant
subsidiary" as defined in Rule 1-02(w) of the Commission's Regulation S-X.
7
<PAGE>
The term "Subsidiary" means (i) a corporation, a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership, joint venture or similar entity
in which the Company, a Subsidiary of the Company or the Company and one or more
Subsidiaries of the Company, directly or indirectly, holds a majority interest
in the equity capital or profits or other similar interests of such entity, or
(iii) any other person (other than a corporation) in which the Company, a
Subsidiary of the Company or the Company and one or more Subsidiaries of the
Company, directly or indirectly, at the date of determination, has (x) at least
a majority ownership interest or (y) the power to elect or direct the election
of a majority of the directors or other governing body of such person.
The term "Value" means, with respect to a Sale and Lease-Back Transaction,
as of any particular time, the amount equal to the greater of (i) the net
proceeds of the sale or transfer of the property leased pursuant to such Sale
and Lease-Back Transaction or (ii) the fair value in the opinion of the Board of
Directors (as evidenced by a Board Resolution) of such property at the time of
entering into such Sale and Lease-Back Transaction, in either case divided first
by the number of full years of the term of the lease and then multiplied by the
number of full years of such term remaining at the time of determination,
without regard to any renewal or extension options contained in the lease.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as: (i) default in the payment of interest on any of
the Debt Securities of such series as and when the same shall become due and
payable and continuance of such default for a period of 30 days; (ii) default in
the payment of the principal of any of the Debt Securities of such series when
the same becomes due and payable at maturity, upon acceleration, redemption or
mandatory repurchase, including as a sinking fund installment or otherwise;
(iii) default in the performance, or breach, of any other covenant or agreement
of the Company in the Indenture with respect to Debt Securities of such series
or in the Debt Securities of such series and continuance of such default or
breach for a period of 60 consecutive days after written notice by the Trustee
or by the holders of 25% or more in aggregate principal amount of the
outstanding securities of all series affected thereby; or (iv) certain events of
bankruptcy, insolvency or reorganization of the Company and its Significant
Subsidiaries. (Section 6.01) Additional Events of Default may be added for the
benefit of holders of certain series of Debt Securities which, if added, will be
described in the Prospectus Supplement relating to such Debt Securities. The
Indenture provides that the Trustee shall notify the holders of Debt Securities
of each series of any continuing default known to the Trustee which has occurred
with respect to that series within 90 days after the occurrence thereof. The
Indenture provides that notwithstanding the foregoing, except in the case of
default in the payment of the principal of, or interest, if any, on any of the
Debt Securities of such series, the Trustee may withhold such notice if the
Trustee in good faith determines that the withholding of such notice is in the
interests of the holders of Debt Securities of such series. (Section 7.05)
The Indenture provides that if an Event of Default with respect to any
series of Debt Securities shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
Debt Securities of that series then outstanding may declare the entire principal
amount of all Debt Securities of that series, and the interest accrued thereon,
if any, to be due and payable immediately, but upon certain conditions such
declaration may be annulled. (Section 6.02) Any existing defaults and the
consequences thereof (except a default in the payment of principal of or
interest, if any, on Debt Securities of that series) may be waived by the
holders of a majority in principal amount of the Debt Securities of that series
then outstanding. (Section 6.04) The Indenture also permits the Company to omit
compliance with certain covenants in such Indentures with respect to Debt
Securities of any series upon waiver by the holders of a majority in principal
amount of the Debt Securities of such series then outstanding. (Section 6.04)
8
<PAGE>
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default with respect to any series of Debt
Securities shall occur and be continuing, the Trustee shall not be under any
obligation to exercise any of the trusts or powers vested in it by the
Indentures at the request or direction of any of the holders of that series,
unless such holders shall have offered to such Trustee reasonable security or
indemnity. (Sections 7.01 and 7.02) The holders of at least a majority in
aggregate principal amount of the Debt Securities of each series affected and
then outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under the
Indenture or exercising any trust or power conferred on the Trustee with respect
to the Debt Securities of that series; provided that the Trustee may refuse to
follow any direction which is in conflict with any law or the Indenture and
subject to certain other limitations. (Section 6.05)
No holder of any Debt Security of any series will have any right by virtue
or by availing of any provision of the Indenture to institute any proceeding at
law or in equity or in bankruptcy or otherwise upon or under or with respect to
the Indentures or for any remedy thereunder, unless: such holder shall have
previously given the Trustee written notice of an Event of Default with respect
to Debt Securities of that series; the holders of at least 25% in aggregate
principal amount of the outstanding Debt Securities of that series shall also
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee; the Trustee shall have failed to institute
such proceeding within 60 days after its receipt of such request; and the
Trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of that series a direction
inconsistent with such request. (Section 6.06) However, the right of a holder of
any Debt Security to receive payment of the principal of or interest, if any, on
such Debt Security on or after the due dates expressed in such Debt Security, or
to institute suit for the enforcement of any such payment on or after such
dates, shall not be impaired or affected without the consent of such holder.
(Section 6.07)
MERGER
The Indenture provides that the Company may consolidate with or sell, convey
or lease all or substantially all of its assets to, or merge with or into, any
other corporation, if (i) either the Company is the continuing corporation or
the successor corporation is a domestic corporation and expressly assumes the
due and punctual payment of the principal of and interest on all the Debt
Securities outstanding under the Indenture according to their tenor and the due
and punctual performance and observance of all of the covenants of such
Indenture to be performed or observed by the Company, and (ii) the Company or
such successor corporation, as the case may be, is not, immediately after such
merger or consolidation, or such sale, conveyance or lease, in material default
in the performance or observance of any such covenant or condition. (Section
5.01)
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture with respect to any series of Debt Securities (except for
certain specified surviving obligations including, among other things, the
Company's obligation to pay the principal of and interest on the Debt Securities
of such series) will be discharged and cancelled upon the satisfaction of
certain conditions, including the payment of all the Debt Securities of such
series or the deposit with the Trustee under such Indenture of cash or
appropriate U.S. Government Obligations or a combination thereof sufficient for
such payment or redemption in accordance with the Indenture and the terms of the
Debt Securities of such series. (Section 8.01)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the holders of not less than a majority in
principal amount of the outstanding Debt Securities of each series at the time
outstanding under the Indenture, to execute supplemental indentures adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture or any
9
<PAGE>
supplemental indenture with respect to the Debt Securities of such series or
modifying in any manner the rights of the holders of the Debt Securities of such
series; provided that such supplemental indenture may not, among other things
(i) extend the final maturity of any Debt Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of any interest
thereon, or reduce any amount payable in any redemption thereof, or impair or
affect the right of any holder of Debt Securities to institute suit for payment
thereof or, if the Debt Securities provide therefor, any right of repayment at
the option of the holders of the Debt Securities, without the consent of the
holder of each Debt Security so affected or (ii) reduce the aforesaid percentage
of Debt Securities of such series, the consent of the holders of which is
required for any such supplemental indenture, without the consent of the holders
of all Debt Securities of such series so affected or (iii) reduce the amount of
principal payable upon acceleration of the maturity of any Original Issue
Discount Security. (Section 9.02) Additionally, in certain prescribed instances,
the Company and the Trustee may execute supplemental indentures without the
consent of the holders of Debt Securities. (Section 9.01)
DEFEASANCE
DEFEASANCE AND DISCHARGE. The Indenture provides that the Company may elect
to terminate (and be deemed to have satisfied) all its obligations with respect
to such Debt Securities (except for the obligations to register the transfer or
exchange of such Debt Securities, to replace mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, to compensate and indemnify the Trustee and to punctually pay or
cause to be paid the principal of and interest, if any, on all Debt Securities
of such series when due) ("defeasance") upon the deposit with the Trustee, in
trust for such purpose, of money and/or U.S. Government Obligations which
through the payment of principal and interest in accordance with their terms
will provide money in an amount sufficient (in the opinion of a nationally
recognized firm of independent public accountants) to pay the principal of and
premium and interest, if any, on the outstanding Debt Securities of such series,
and any mandatory sinking fund or analogous payments thereon, on the scheduled
due dates therefor. Such a trust may be established only if, among other things,
(a) the Company has delivered to the Trustee an opinion of counsel (as specified
in the applicable Indenture) with regard to certain matters, including an
opinion to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and discharge and will be subject to federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if such deposit and defeasance or covenant defeasance, as the case may be, had
not occurred, and which opinion of counsel must be based upon (x) a ruling of
the U.S. Internal Revenue Service to the same effect or (y) a change in
applicable U.S. federal income tax law after the date of the Indenture such that
a ruling is no longer required, (b) no Default or Event of Default shall have
occurred or be continuing, and (c) such deposit shall not result in a breach or
violation of, or constitute a default under, any other material agreement or
instrument to which the Company is a party or by which the Company is bound. The
Prospectus Supplement may further describe these or other provisions, if any,
permitting defeasance with respect to the Debt Securities of any series.
(Section 8.02)
DEFEASANCE OF CERTAIN COVENANTS. The Company at its option need not comply
with certain restrictive covenants of the Indenture ("covenant defeasance")
upon, among other things, (a) the deposit with the Trustee, in trust, of money
and/or U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
or a combination of money and U.S. Government Obligations in an amount
sufficient to pay in the currency in which such Debt Securities are payable all
the principal of, and interest on, such Debt Securities on the date such
payments are due in accordance with the terms of such Debt Securities, and (b)
the delivery by the Company to the Trustee of an Opinion of Counsel, to the
effect that, among other things, the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such deposit and defeasance of certain covenants and will be subject to U.S.
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and
10
<PAGE>
defeasance had not occurred; and provided that no Default or Event of Default
shall have occurred or be continuing, and such deposit shall not result in a
breach or violation of, or constitute a default under any other material
agreement or instrument to which the Company is a party or by which the Company
is bound. The Prospectus Supplement may further describe these or other
provisions, if any, permitting defeasance of certain covenants with respect to
the Debt Securities of any series. (Section 8.03)
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (each, a "Global Security") that will be
deposited with or on behalf of a Debt Depository identified in the applicable
Prospectus Supplement. Global Securities may be issued in other registered or
bearer form and in either temporary or permanent form. Unless otherwise provided
in such Prospectus Supplement, Debt Securities that are represented by a Global
Security will be issued in denominations of $1,000 or any integral multiple
thereof and will be issued in registered form only, without coupons. Payments of
principal of, and interest, if any, on Debt Securities represented by a Global
Security will be made by the Company to the Trustee under the applicable
Indenture, and then forwarded to the Debt Depository.
The Company anticipates that any Global Securities will be deposited with,
or on behalf of, The Depository Trust Company, New York, New York ("DTC"), and
that such Global Securities will be registered in the name of Cede & Co, DTC's
nominee. The Company further anticipates that the following provisions will
apply to the depository arrangements with respect to any such Global Securities.
Any additional or differing terms of the depository arrangements will be
described in the Prospectus Supplement relating to a particular series of Debt
Securities issued in the form of Global Securities.
One fully registered Debt Security certificate will be issued with respect
to each $200 million of principal amount of the Debt Securities of a series, and
an additional certificate will be issued with respect to any remaining principal
amount of such series. So long as DTC or its nominee is the registered owner of
a Global Security, DTC or its nominee, as the case may be, will be considered
the sole Holder of the Debt Securities represented by such Global Security for
all purposes under the applicable Indenture. Except as described below, owners
of beneficial interests in a Global Security will not be entitled to have Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities in
certificated form and will not be considered the owners or Holders thereof under
the applicable Indenture. The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
certificated form; accordingly, such laws may limit the transferability of
beneficial interests in a Global Security.
If DTC is at any time unwilling or unable to continue as depository or if at
any time DTC ceases to be a clearing agency registered under the Exchange Act if
so required by applicable law or regulation, and, in either case, a successor
Debt Depository is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities in certificated form in exchange for the Global
Securities. In addition, the Company may at any time, and in its sole
discretion, determine not to have any Debt Securities represented by one or more
Global Securities, and, in such event, will issue individual Debt Securities in
certificated form in exchange for the relevant Global Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities in certificated form
of like tenor and rank, equal in principal amount to such beneficial interest
and to have such Debt Securities in certificated form registered in its name.
Unless otherwise described in the applicable Prospectus Supplement, Debt
Securities so issued in certificated form will be issued in denominations of
$1,000 or any integral multiple thereof, and will be issued in registered form
only, without coupons.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve
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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 Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the NYSE, the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others, such as securities brokers and dealers, and banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Debt Securities on
DTC's records. The ownership interest of each actual purchaser of each Debt
Security ("Beneficial Owner") is in turn recorded on the Direct and Indirect
Participants' records. A Beneficial Owner does not receive written confirmation
from DTC of its purchase, but is expected to receive a written confirmation
providing details of the transaction as well as periodic statements of its
holdings, from the Direct or Indirect Participants through which such Beneficial
Owner entered into the transaction. Transfers of ownership interests in Debt
Securities are accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners do not receive certificates
representing their ownership interests in Debt Securities except in the event
that use of the book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of the Debt
Securities with DTC and their registration in the name of Cede & Co. will effect
no change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Debt Securities; DTC records reflect only the identity of the
Direct Participants to whose accounts Debt Securities are credited, which may or
may not be the Beneficial Owners. The Participants remain responsible for
keeping account of their holdings on behalf of their customers.
Delivery of notice and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners are governed by arrangements among
them subject to any statutory or regulatory requirements as may be in effect
from time to time.
Neither DTC nor Cede & Co. consents or votes with respect to the Debt
Securities. Under its procedures, DTC mails a proxy (an "Omnibus Proxy") to the
issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities were credited on the record date (identified on a
list attached to the Omnibus Proxy).
Principal and interest payments, if any, on the Debt Securities are made to
DTC. DTC's practice is to credit Direct Participants' accounts on the payment
date in accordance with their respective holdings as shown on DTCs records,
unless DTC has reason to believe that it will not receive payment on the payment
date. Payments by Participants to Beneficial Owners are 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 are
the responsibility of such Participant and not of DTC, the Trustee or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest, if any, to DTC is the
responsibility of the Company or the Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
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DTC may discontinue providing its services as securities depository with
respect to the Debt Securities at any time by giving reasonable notice to the
Company or the Trustee. Under such circumstances, in the event that a successor
securities depository is not appointed, Debt Security certificates will be
required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the Prospectus Supplement, the underwriters or
agents with respect to a series of Debt Securities issued as Global Securities
will be Direct Participants in DTC.
PLAN OF DISTRIBUTION
The Company may sell all or part of the Debt Securities from time to time on
terms determined at the time such Debt Securities are offered for sale. The Debt
Securities may be sold (i) directly to purchasers; (ii) through agents; (iii)
through underwriters; or (iv) through dealers. The Prospectus Supplement
relating to the particular series of the Debt Securities offered thereby, will
set forth the terms of the offering of such series of the Debt Securities,
including the name or names of any underwriters, dealers or agents, the purchase
price of such Debt Securities, the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' or agents'
compensation, any initial public offering price, any discounts or sales agent's
commissions or concessions allowed or reallowed or paid to dealers, and any
securities exchanges on which the Debt Securities of such series may be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices, related to such
prevailing market prices, or at negotiated prices.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Debt
Securities may be offered to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the relevant Prospectus Supplement or the
applicable Pricing Supplement, the obligations of the underwriters to purchase
Debt Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all the Debt Securities of a series,
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Debt Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the relevant Prospectus Supplement. Unless otherwise indicated in
the relevant Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the relevant Prospectus Supplement, the Company will
authorize agents, underwriters, or dealers to solicit offers by certain
specified entities to purchase Debt Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date. Such
contracts will be subject only to those conditions set forth in the Prospectus
Supplement. Such Prospectus Supplement will set forth the commissions payable
for solicitation of such contracts.
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Agents and underwriters may from time to time purchase and sell Debt
Securities in the secondary market, but are not obligated to do so, and there
can be no assurance that there will be a secondary market for the Debt
Securities or liquidity in the secondary market if one develops. From time to
time, agents and underwriters may make a market in the Debt Securities.
By agreement, agents and underwriters may be entitled to indemnification by
the Company against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments that the agents or
underwriters may be required to make in respect thereof. Agents and underwriters
may engage in transactions with, or perform services for, the Company or its
affiliates in the ordinary course of business.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the Company by
Miro Weiner & Kramer, 500 North Woodward Avenue, Suite 100, Bloomfield Hills,
Michigan 48304. Jeffrey H. Miro, a member of Miro Weiner & Kramer, is a director
of the Company. Certain legal matters relating to offerings of Debt Securities
will be passed upon for any underwriters or agents by Davis Polk & Wardwell, New
York, New York.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this Prospectus by reference from The Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee.................................................. $ 59,000
Legal Fees and Expenses........................................... 50,000*
Accounting Fees and Expenses...................................... 15,000*
Blue Sky Fees and Expenses........................................ 10,000*
Printing Expenses................................................. 7,000*
Rating Agency Fees................................................ 210,000*
Trustee Fees...................................................... 5,000*
Miscellaneous..................................................... 5,000*
---------
Total....................................................... $ 361,000*
</TABLE>
- ------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation require the Company to indemnify its
Directors (including directors of subsidiaries) (and give the Company authority
to indemnify its officers (including officers of subsidiaries), subject to their
satisfying certain standards of conduct) for expenses, judgments, fines, or
amounts paid in settlement of civil, criminal, administrative, and investigative
suits or proceedings, including those involving alleged violations of the
Securities Act. In addition, the Company's Articles of Incorporation limit the
liability of the Company's Directors to the Company or its shareholders for
monetary damages for breach of the Directors' fiduciary duties. In addition, the
Company maintains directors' and officers' liability insurance that, under
certain circumstances, would cover alleged violations of the Securities Act.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- ------------------------------------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement (including standard provisions and form of Delayed Delivery
Contract).
4(a) -- Form of Indenture between Sotheby's Holdings, Inc. and The Chase Manhattan Bank as Trustee.
4(b)+ -- Form of Fixed Rate Note.
5 -- Opinion of Miro Weiner & Kramer with respect to the legality of the Debt Securities being
registered.
12 -- Computation of Ratio of Earnings to Fixed Charges.
23 (a) -- Consent of Deloitte & Touche LLP.
23 (b) -- Consent of Miro Weiner & Kramer (contained in Exhibit 5).
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility of The Chase Manhattan Bank.
</TABLE>
- ------------------------
+ In the event that the Company issues a form of Security not filed as an
exhibit to this Registration Statement, the Company will file such form of
Security in a Current Report on Form 8-K.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof; and
(3) to remove from registration, by means of a post-effective amendment,
any of the securities being registered that remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the provisions described in response to Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy, as expressed
in the Securities 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 of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-2
<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 New York, State of New York, on the 3rd day of June,
1998.
SOTHEBY'S HOLDINGS, INC.
By: /s/ DIANA D. BROOKS
-----------------------------------------
Diana D. Brooks,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
* Chairman of the Board
- ------------------------------ June 3, 1998
A. Alfred Taubman
* Vice Chairman of the Board
- ------------------------------ June 3, 1998
Max M. Fisher
/s/ DIANA D. BROOKS President, Chief Executive
- ------------------------------ Officer and Director June 2, 1998
Diana D. Brooks
/s/ WILLIAM S. SHERIDAN Senior Vice President and
- ------------------------------ Chief Financial Officer June 3, 1998
William S. Sheridan
* Director
- ------------------------------ June 3, 1998
Conrad Black
* Director
- ------------------------------ June 3, 1998
Viscount Blakenham
* Director
- ------------------------------ June 3, 1998
Walter J. P. Curley
II-3
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
* Director
- ------------------------------ June 3, 1998
The Marquess of Hartington
* Director
- ------------------------------ June 3, 1998
Henry R. Kravis
* Director
- ------------------------------ June 3, 1998
Jeffrey H. Miro
* Director
- ------------------------------ June 3, 1998
Sharon Percy Rockefeller
/s/ CYNDEE GRILLO Vice President, Controller,
- ------------------------------ and Chief Accounting June 3, 1998
Cyndee Grillo Officer
*By: /s/ WILLIAM S. SHERIDAN
---------------------------
William S. Sheridan
ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- ---------------------------------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement (including standard provisions and form of Delayed Delivery
Contract).
4(a) -- Form of Indenture between Sotheby's Holdings, Inc. and The Chase Manhattan Bank as Trustee.
4(b)+ -- Form of Fixed Rate Note.
5 -- Opinion of Miro Weiner & Kramer with respect to the legality of the Debt Securities being
registered.
12 -- Computation of Ratio of Earnings to Fixed Charges.
23 (a) -- Consent of Deloitte & Touche LLP.
23 (b) -- Consent of Miro Weiner & Kramer (contained in Exhibit 5).
24 -- Powers of Attorney.
25 -- Form T-1 Statement of Eligibility of The Chase Manhattan Bank.
</TABLE>
- ------------------------
+ In the event that the Company issues a form of Security not filed as an
exhibit to this Registration Statement, the Company will file such form of
Security in a Current Report on Form 8-K.
II-5
<PAGE>
Exhibit 1
SOTHEBY'S HOLDINGS, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
, 199_
----------------
From time to time, SOTHEBY'S HOLDINGS, INC., a MICHIGAN corporation
(the "Company"), may enter into one or more underwriting agreements that provide
for the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this Agreement. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all
<PAGE>
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If the Company has filed an abbreviated registration statement
to register additional Debt Securities pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement.
The term "Contract Securities" means the Offered Securities to be
purchased pursuant to the delayed delivery contracts substantially in the form
of Schedule I hereto, with such changes therein as the Company may approve (the
"Delayed Delivery Contracts"). The term "Underwriters' Securities" means the
Offered Securities other than Contract Securities. The term "Significant
Subsidiary" means each subsidiary which is a "significant subsidiary" as defined
in Rule 1-02(w) or the Commission's Regulations S-X.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (ii) each part of the Registration Statement,
when such part became effective, did not contain, and each such
part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement
and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph
do not apply (A) to statements or omissions in the Registration
Statement or
2
<PAGE>
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Manager expressly for use therein or (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each Significant Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its Significant
Subsidiaries, taken as a whole; 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 are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
3
<PAGE>
(g) The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general
principles of equity.
(h) The Offered Securities have been duly authorized and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the case
of the Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the
case of the Contract Securities and will be entitled to the benefits
of the Indenture, and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general
principles of equity.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Offered Securities and the Delayed Delivery
Contracts will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency
is required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Offered Securities or the
Delayed Delivery Contracts, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Offered Securities.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a
party or to
4
<PAGE>
which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
2. Delayed Delivery Contracts. If the Prospectus provides for sales
of Offered Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.
5
<PAGE>
3. Terms of Public Offering. The Company is advised by the Manager
that the Underwriters propose to make a public offering of their respective
portions of the Underwriters' Securities as soon after this Agreement has been
entered into as in the Manager's judgment is advisable. The terms of the public
offering of the Underwriters' Securities are set forth in the Prospectus.
4. Payment and Delivery. Payment for the Underwriters' Securities
shall be made to the Company in Federal or other funds immediately available in
New York City at the time and place set forth in the Underwriting Agreement,
upon delivery to the Manager for the respective accounts of the several
Underwriters of the Underwriters' Securities registered in such names and in
such denominations as the Manager shall request in writing not less than one
full business day prior to the date of delivery, with any transfer taxes payable
in connection with the transfer of the Underwriters' Securities to the
Underwriters duly paid.
5. Conditions to the Underwriters' Obligations. The several
obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the
rating accorded the Company or any of the Company's securities
by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in the judgment of the Manager, is
material and adverse and that makes it, in the judgment of the
Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
6
<PAGE>
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 5(a)(i)
and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Miro Weiner & Kramer, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) each Significant Subsidiary of the Company formed in
the United States has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct \its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
7
<PAGE>
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement
of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles
of equity;
(v) the Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company and are
valid and binding agreements of the Company, enforceable in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity;
(vi) the Offered Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of the
Underwriting Agreement, in the case of Underwriters'
Securities, or by institutional investors in accordance with
the terms of the Delayed Delivery Contracts, in the case of
the Contract Securities, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and
general principles of equity;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Indenture, the Offered Securities and the
Delayed Delivery Contracts will not contravene any provision
of applicable law or the certificate of incorporation or
by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or, to the
best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, the Indenture, the Offered Securities or the
Delayed Delivery Contracts, except such as may be required by
the securities or Blue
8
<PAGE>
Sky laws of the various states in connection with the offer
and sale of the Offered Securities;
(viii) the statements (A) in the Prospectus under the
captions "Description of the Debt Securities" and "Plan of
Distribution," (B) in the Registration Statement under Item
15, (C) in "Item 3 - Legal Proceedings" of the Company's most
recent annual report on Form 10-K incorporated by reference in
the Prospectus and (D) in "Item 1 - Legal Proceedings" of Part
II of the Company's quarterly reports on Form 10-Q, if any,
filed since such annual report, in each case insofar as such
statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as
required;
(x) the Company is not and, after giving effect to the
offering and sale of the Offered Securities and the
application of proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xi) such counsel is of the opinion ascribed to it in the
Prospectus under the caption "Taxation";
(xii) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel
need not express any opinion) complied when so filed as to
form in all material respects with the Exchange Act and the
applicable rules and regulations of
9
<PAGE>
the Commission thereunder, (B) has no reason to believe that
(except for financial statements and schedules and other
financial and statistical data as to which such counsel need
not express any belief and except for that part of the
Registration Statement that constitutes the Form T-1
heretofore referred to) each part of the Registration
Statement, when such part became effective, contained and, as
of the date such opinion is delivered, contains any untrue
statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, (C) is of the
opinion that the Registration Statement and Prospectus (except
for financial statements and schedules and other financial and
statistical data included therein as to which such counsel
need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) has
no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus as of
the date such opinion is delivered contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, special counsel for the
Underwriters, dated the Closing Date, covering the matters referred
to in Sections 5(c)(iii), 5(c)(iv), 5(c)(v), 5(c)(vi) and 5(c)(viii)
(but only as to the statements in the Prospectus under "Description
of the Debt Securities" and "Plan of Distribution") and clauses
5(c)(xii)(B), 5(c)(xii)(C) and 5(c)(xii)(D) above.
With respect to Section 5(c)(xii) above, Miro Weiner & Kramer
may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified. With respect to clauses 5(c)(xii)(B), 5(c)(xii)(C)
and 5(c)(xii)(D) above, Davis Polk & Wardwell may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (but not including documents
incorporated therein by reference) and review and discussion of
10
<PAGE>
the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification, except
as specified.
The opinion of Miro Weiner & Kramer described in Section 5(c)
above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(e) The Underwriters shall have received on the Closing
Date a letter, dated the Closing Date, in form and substance
satisfactory to the Underwriters, from the Company's independent
public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into
the Prospectus; provided that such letter shall use a "cut-off date"
not earlier than the date of the Underwriting Agreement.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish the Manager, without charge, three signed
copies of the Registration Statement (including exhibits thereto)
and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to
the Manager in New York City, without charge, prior to 10:00 AM New
York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c) below, as
many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to
the Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Securities
during the period mentioned in Section 6(c) below, to furnish to the
Manager a copy of each such proposed amendment or supplement and not
to file any such proposed amendment or supplement to which the
Manager reasonably objects, and to file with the Commission within
the applicable period specified in Rule 424(b) under the Securities
Act any prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of
counsel for the Underwriters
11
<PAGE>
the Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it
is necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses the Manager will furnish to the Company) to
which Offered Securities may have been sold by the Manager on behalf of
the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions
as the Manager shall reasonably request and to maintain such
qualification for as long as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning
statement covering a twelve month period beginning on the first day
of the first full fiscal quarter after the date of this Agreement,
which earning statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the
Commission thereunder. If such fiscal quarter is the first fiscal
quarter of the Company's fiscal year, such earning statement shall
be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made
available not later than 45 days after the close of the period
covered thereby.
(f) During the period beginning on the date of the
Underwriting Agreement and continuing to and including the Closing
Date, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company or warrants to purchase or
otherwise acquire debt securities of the Company substantially
similar to the Offered Securities (other than (i) the Offered
Securities and (ii) commercial paper issued in the ordinary course
of business), without the prior written consent of the Manager.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
12
<PAGE>
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Offered Securities under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Offered Securities to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost
of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Offered Securities under
state law and all expenses in connection with the qualification of the
Offered Securities for offer and sale under state law as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Offered
Securities by the National Association of Securities Dealers, Inc., (v)
any fees charged by the rating agencies for the rating of the Offered
Securities, (vi) if applicable, all fees and expenses in connection
with the preparation and filing of the registration statement on Form
8-A relating to the Offered Securities and all costs and expenses
incident to listing the Offered Securities on any national securities
exchanges and foreign stock exchanges, (vii) the cost of printing
certificates representing the Offered Securities, (viii) the costs and
charges of any trustee, transfer agent, registrar or depositary and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 7 entitled "Indemnification and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, transfer taxes payable on resale of
any of the Securities by them and any advertising expenses connected
with any offers they may make.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses,
13
<PAGE>
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 7(a) or 7(b), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more
14
<PAGE>
than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Manager, in
the case of parties indemnified pursuant to Section 7(a) above, and by the
Company, in the case of parties indemnified pursuant to Section 7(b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Offered Securities or (ii) if the allocation
provided by clause 7(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 7(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Offered Securities shall be deemed to be
in the same respective proportions as the net proceeds from the offering of such
Offered Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the
15
<PAGE>
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective principal
amounts of Offered Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 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 that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Securities.
8. Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company, if (a) after the execution and
16
<PAGE>
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses 8(a)(i) through
8(a)(iv), such event, singly or together with any other such event, makes it, in
the judgment of the Manager, impracticable to market the Offered Securities on
the terms and in the manner contemplated in the Prospectus.
9. Defaulting Underwriters. If, on the Closing Date, any one or more
of the Underwriters shall fail or refuse to purchase Underwriters' Securities
that it has or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Underwriters' Securities
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the principal amount of Underwriters'
Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate principal amount of Underwriters' Securities
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Manager may specify, to purchase the Underwriters'
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Underwriters' Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such principal amount of Underwriters'
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Underwriters' Securities and the aggregate principal amount of Underwriters'
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Underwriters' Securities to be purchased on
such date, and arrangements satisfactory to the Manager and the Company for the
purchase of such Underwriters' Securities are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either the
Manager or the Company shall have the right to postpone the Closing Date, but in
no event for
17
<PAGE>
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
18
<PAGE>
UNDERWRITING AGREEMENT
, 199_
-----------
SOTHEBY'S HOLDINGS, INC.
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that SOTHEBY'S
HOLDINGS, INC., a MICHIGAN corporation (the "Company"), proposes to issue and
sell [Currency and Principal Amount] aggregate initial offering price of [Full
title of Debt Securities] (the "Debt Securities"). (The Debt Securities are also
referred to herein as the "Offered Securities.") The Debt Securities will be
issued pursuant to the provisions of an Indenture dated as of _______________,
199_ (the "Indenture") between the Company and THE CHASE MANHATTAN BANK, as
Trustee (the "Trustee").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of ____% of the principal amount of
Debt Securities [, plus accrued interest, if any, from [Date of Offered
Securities] to the date of payment and delivery]1:
<TABLE>
<CAPTION>
Principal Amount of
Name Debt Securities
- ------------------------------------------- --------------------
<S> <C>
Morgan Stanley & Co. Incorporated
Morgan Stanley & Co. International Limited
[Insert syndicate list]
--------------------
Total..................................
</TABLE>
- ---------------------
(1) To be added only if the transaction does not close "flat" (i.e.,
when the purchaser pays accrued interest on the debt security at closing).
Unless otherwise provided in the Debt Securities, accrued interest, if any,
will be computed on the basis of a 360-day year of twelve 30-day months.
<PAGE>
[The principal amount of Debt Securities to be purchased by the several
Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.](2)
The Underwriters will pay for the Offered Securities [(less any Offered
Securities sold pursuant to delayed delivery contracts)] upon delivery thereof
at [office] at ______ a.m. (New York City time) on ___________, 199_, or at such
other time, not later than 5:00 p.m. (New York City time) on __________, 199_,
as shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the Prospectus
dated ___________, 199_, and the Prospectus Supplement dated ____________, 199_,
including the following:
<TABLE>
<CAPTION>
<S> <C>
Terms of Debt Securities
Maturity Date: ,
----------------- ------
Interest Rate: ,
----------------- ------
Redemption Provisions: ,
----------------- ------
Interest Payment Dates: and
----------------- ------
commencing
-------------
,
--- ------
[(Interest accrues from: ,)](3)
-----------------
Form and Denomination:
-----------------
[Other Terms:]
-------------
,
----------------- ------
,
----------------- ------
,
----------------- ------
-----------------
-----------------
</TABLE>
- ------------------
(2) To be added only if delayed delivery contracts are contemplated.
(3) To be added only if the transaction does not close flat.
2
<PAGE>
-------------
[Other Terms:]
,
----------------- ------
-------------
-------------
,
----------------- ------
-----------------
[Other Terms]:
[The commission to be paid to the Underwriters in respect of the
Offered Securities purchased pursuant to delayed delivery contracts arranged by
the Underwriters shall be ___% of the principal amount of the Debt Securities so
purchased.](4)
All provisions contained in the document entitled SOTHEBY'S HOLDINGS,
INC. Underwriting Agreement Standard Provisions (Debt Securities) dated _______,
199_, a copy of which is attached hereto, are herein incorporated by reference
in their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein, except that (i)
if any term defined in such document is otherwise defined herein, the definition
set forth herein shall control, (ii) all references in such document to a type
of security that is not an Offered Security shall not be deemed to be a part of
this Agreement, (iii) if the Offered Securities do not include Debt Warrants,
then all references in such document to Debt Warrant Securities shall not be
deemed to be a part of this Agreement and (iv) all references in such document
to a type of agreement that has not been entered into in connection with the
transactions contemplated hereby shall not be deemed to be a part of this
Agreement.
- ---------
(4) To be added only if delayed delivery contracts are contemplated.
3
<PAGE>
[SIGNATURE PAGE WHERE
MORGAN STANLEY & CO. INCORPORATED
OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED
IS A CO-LEAD MANAGER]
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[MORGAN STANLEY & CO.
INCORPORATED]
[MORGAN STANLEY & CO.
INTERNATIONAL LIMITED]
[Name of Other Lead Managers]
Acting severally on behalf of themselves and the
several Underwriters named herein
By: [MORGAN STANLEY & CO.
INCORPORATED]
[MORGAN STANLEY & CO.
INTERNATIONAL LIMITED]
By:
----------------------------
Name:
Title:
Accepted:
SOTHEBY'S HOLDINGS, INC.
By:
------------------------------
Name:
Title:
4
<PAGE>
[SIGNATURE PAGE WHERE
MORGAN STANLEY & CO. INCORPORATED
OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED
IS SOLE MANAGER]
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[MORGAN STANLEY & CO.
INCORPORATED]
[MORGAN STANLEY & CO.
INTERNATIONAL LIMITED]
[Name of Other Lead Managers]
Acting severally on behalf of itself and the several
Underwriters named herein
By:
---------------------------
Name:
Title:
Accepted:
SOTHEBY'S HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
5
<PAGE>
SCHEDULE I
DELAYED DELIVERY CONTRACT
, 199
-------- -
Dear Sirs and Mesdames:
The undersigned hereby agrees to purchase from SOTHEBY'S HOLDINGS, INC,
a MICHIGAN corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated __________________,
19__ and Prospectus Supplement dated ________________, 19__, receipt of copies
of which are hereby acknowledged, at a purchase price stated in Schedule A and
on the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to purchase
on each Delivery Date shall be made to the Company in Federal or other funds
immediately available in New York City, at 10:00 a.m. (New York City time) on
the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned on the Delivery Date, in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned as its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.
<PAGE>
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This will
become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Very truly yours,
---------------------------------------
(Purchaser)
By:
------------------------------------
------------------------------------
(Title)
------------------------------------
------------------------------------
(Address)
Accepted:
SOTHEBY'S HOLDINGS, INC.
By:
-------------------------
Name:
Title:
2
<PAGE>
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
Telephone-No.
Name (Including Area Code) Department
- -------------------- -------------------- --------------------
- -------------------- -------------------- --------------------
3
<PAGE>
SCHEDULE A
Securities:
Principal Amounts or Numbers to be Purchased:
Purchase Price:
Delivery:
<PAGE>
Exhibit 4(a)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SOTHEBY'S HOLDINGS, INC.
and
THE CHASE MANHATTAN BANK
as Trustee
-------------------------
Indenture
Dated as of _______, 1998
-------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------------------
<TABLE>
<CAPTION>
Page
-----
ARTICLE 1
Definitions and Incorporation by Reference
<S> <C> <C>
Section 1.01. Definitions......................................................................1
Section 1.02. Other Definitions................................................................7
Section 1.03. Incorporation by Reference of Trust Indenture Act................................8
Section 1.04. Rules of Construction............................................................8
ARTICLE 2
The Securities
Section 2.01. Form.............................................................................9
Section 2.02. Execution and Authentication.....................................................9
Section 2.03. Amount Unlimited; Issuable in Series............................................11
Section 2.04. Denomination and Date of Securities; Payments of Interest.......................13
Section 2.05. Registrar and Paying Agent; Agents Generally....................................14
Section 2.06. Paying Agent to Hold Money in Trust.............................................15
Section 2.07. Transfer and Exchange...........................................................15
Section 2.08. Replacement Securities..........................................................18
Section 2.09. Outstanding Securities..........................................................18
Section 2.10. Temporary Securities............................................................19
Section 2.11. Cancellation....................................................................20
Section 2.12. CUSIP Numbers...................................................................20
Section 2.13. Defaulted Interest..............................................................20
Section 2.14. Series May Include Tranches.....................................................20
ARTICLE 3
Redemption
Section 3.01. Applicability of Article........................................................21
Section 3.02. Notice of Redemption; Partial Redemptions.......................................21
Section 3.03. Payment of Securities Called for Redemption.....................................23
Section 3.04. Exclusion of Certain Securities from eligibility for
Selection for Redemption..............................................................23
Section 3.05. Mandatory and Optional Sinking Funds............................................24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
-----
ARTICLE 4
Covenants
<S> <C> <C>
Section 4.01. Payment of Securities...........................................................26
Section 4.02. Maintenance of Office or Agency.................................................27
Section 4.03. Limitation on Liens.............................................................28
Section 4.04. Limitation on Sale and Lease-Back Transactions..................................29
Section 4.05. Notice of Defaults..............................................................31
Section 4.06. Compliance Certificates; Reports................................................31
Section 4.07. Waiver of Stay, Extension or Usury Laws.........................................32
ARTICLE 5
Successor Corporation
Section 5.01. When Company May Merge, Etc.....................................................32
Section 5.02. Successor Substituted...........................................................33
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default...............................................................33
Section 6.02. Acceleration....................................................................34
Section 6.03. Other Remedies..................................................................36
Section 6.04. Waiver of Past Defaults.........................................................36
Section 6.05. Control by Majority.............................................................37
Section 6.06. Limitation on Suits.............................................................37
Section 6.07. Rights of Holders to Receive Payment............................................38
Section 6.08. Collection Suit by Trustee......................................................38
Section 6.09. Trustee May File Proofs of Claim................................................38
Section 6.10. Application of Proceeds.........................................................39
Section 6.11. Restoration of Rights and Remedies..............................................40
Section 6.12. Undertaking for Costs...........................................................40
Section 6.13. Rights and Remedies Cumulative..................................................40
Section 6.14. Delay or Omission Not Waiver....................................................40
ARTICLE 7
Trustee
Section 7.01. General.........................................................................41
Section 7.02. Certain Rights of Trustee.......................................................41
Section 7.03. Individual Rights of Trustee....................................................43
Section 7.04. Trustee's Disclaimer............................................................43
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
Section 7.05. Notice of Default...............................................................43
Section 7.06. Reports by Trustee to Holders...................................................44
Section 7.07. Compensation and Indemnity......................................................44
Section 7.08. Replacement of Trustee..........................................................45
Section 7.09. Successor Trustee by Merger, Etc................................................46
Section 7.10. Eligibility.....................................................................46
Section 7.11. Money Held in Trust.............................................................47
ARTICLE 8
Discharge of Indenture
Section 8.01. Defeasance Within One Year of Payment...........................................47
Section 8.02. Defeasance......................................................................48
Section 8.03. Covenant Defeasance.............................................................49
Section 8.04. Application of Trust Money......................................................50
Section 8.05. Repayment to Company............................................................51
ARTICLE 9
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders......................................................51
Section 9.02. With Consent of Holders.........................................................52
Section 9.03. Revocation and Effect of Consent................................................54
Section 9.04. Notation on or Exchange of Securities...........................................54
Section 9.05. Trustee to Sign Amendments, Etc.................................................55
Section 9.06. Conformity with Trust Indenture Act.............................................55
ARTICLE 10
Miscellaneous
Section 10.01. Trust Indenture Act of 1939....................................................55
Section 10.02. Notices........................................................................55
Section 10.03. Certificate and Opinion as to Conditions Precedent.............................57
Section 10.04. Statements Required in Certificate or Opinion .................................57
Section 10.05. Evidence of Ownership..........................................................58
Section 10.06. Rules by Trustee, Paying Agent or Registrar....................................59
Section 10.07. Payment Date Other than a Business Day.........................................59
Section 10.08. Governing Law..................................................................59
Section 10.09. No Adverse Interpretation of Other Agreements..................................59
Section 10.10. Successors.....................................................................59
Section 10.11. Duplicate Originals............................................................59
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
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Section 10.12. Separability...................................................................59
Section 10.13. Table of Contents, Headings, Etc...............................................59
Section 10.14. Incorporators, Shareholders, Officers and Directors of
Company Exempt from Individual Liability .............................................59
Section 10.15. Judgment Currency..............................................................60
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INDENTURE, dated as of , 1998, between Sotheby's
Holdings, Inc., a Michigan corporation, as the Company, and The Chase
Manhattan Bank, a New York banking corporation, as Trustee.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the issue from time to time
of its debentures, notes or other evidences of indebtedness to be issued in
one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the holders thereof, the Company and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities or of any and all series thereof as follows:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate", as applied to any Person, means any other Person (other
than A. Alfred Taubman or Max M. Fisher or any Affiliate of either of them
other than the Company) directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities, by contract or otherwise.
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"Agent" means any Registrar, Paying Agent, transfer agent or
Authenticating Agent.
"Attributable Debt" means with respect to any Sale and Lease-Back
Transaction permitted under clause (6) of Section 4.04 the total net amount of
rent required to be paid during the remaining term of any lease, discounted at
the weighted average rate per annum then borne by the outstanding Securities.
"Authorized Newspaper" means a newspaper which, in the case of The City
of New York, will, if practicable, be The Wall Street Journal (Eastern Edition)
and in the case of London, will, if practicable, be the Financial Times (London
Edition) and published in an official language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in The City of New York or London, as
applicable. If it shall be impractical in the opinion of the Trustee to make any
publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
"Board Resolution" means one or more resolutions of the board of
directors of the Company or any authorized committee thereof, certified by the
secretary or an assistant secretary to have been duly adopted and to be in full
force and effect on the date of certification, and delivered to the Trustee.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close in The City of New York or in the city
in which the Corporate Trust Office is located, with respect to any Security the
interest on which is based on the offered quotations in the interbank Eurodollar
market for dollar deposits in London, or with respect to Securities denominated
in a specified currency other than United States dollars, in the principal
financial center of the country of the specified currency.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock or equity.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act 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.
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"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article 5 of this Indenture
and thereafter means the successor.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities, and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records of the Company and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 450 West 33rd Street, New York, New York 10001, Attention: Global
Trust Services.
"Default" means any Event of Default as defined in Section 6.01 and any
event that is, or after notice or passage of time or both would be, an Event of
Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Company pursuant to Section 2.03 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, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Global Securities of
that series.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America at the date of any computation required or permitted
hereunder.
"Global Security" means a Security evidencing all or a part of a series
of Securities, issued to the Depositary for such series in accordance with
Section 2.02, and bearing the legend prescribed in Section 2.02.
"Holder" or "Securityholder" means the registered holder of any
Security.
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"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture and shall include the forms and terms of the Securities of each series
established as contemplated pursuant to Sections 2.01 and 2.03.
"Lien" means, any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority, or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Officer" means, with respect to the Company, the chairman of the board
of directors, the president, chief executive officer, any vice president, the
chief financial officer, the treasurer or any assistant treasurer, or the
secretary or any assistant secretary.
"Officers' Certificate" means a certificate signed in the name of the
Company (i) by the chairman of the board of directors, the president or chief
executive officer or a vice president and (ii) by the chief financial officer,
the treasurer or any assistant treasurer, or the secretary or any assistant
secretary, complying with Section 10.04 and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act and include
(except as otherwise expressly provided in this Indenture) the statements
provided in Section 10.04.
"Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Company, satisfactory to the Trustee
and complying with Section 10.04. Each such opinion shall comply with Section
314 of the Trust Indenture Act and include the statements provided in Section
10.04, if and to the extent required thereby.
"Original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of authentication of such Security or (b) the date of
any Security (or portion thereof) for which such Security was issued (directly
or indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.02.
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"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon the issuance of
such Securities.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Principal" of a Security means the principal amount of, and, unless
the context indicates otherwise, includes any premium payable on, the Security.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other person.
"Real Property" means with respect to any Person, any interest of
such Person in any kind of realty or estate in real property.
"Responsible Officer" shall mean when used with respect to the Trustee
any officer within the Corporate Trust Office including any Vice President,
Managing Director, Assistant Vice President, Secretary, Assistant Secretary or
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject.
"Sale and Lease-Back Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Real Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"Secured Debt" means any indebtedness for borrowed money incurred under
clause (12) of Section 4.03, which would not be permitted otherwise but for such
clause (12) of Section 4.03.
"Securities" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
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"Significant Subsidiary" means each Subsidiary which is a "significant
subsidiary" as defined in Rule 1-02(w) of the Commission's Regulation S-X.
"Subsidiary" means, (i) a corporation, a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership, joint venture or similar entity
in which the Company, a Subsidiary of the Company or the Company and one or more
Subsidiaries of the Company, directly or indirectly, holds a majority interest
in the equity capital or profits or other similar interests of such entity, or
(iii) any other person (other than a corporation) in which the Company, a
Subsidiary of the Company or the Company and one or more Subsidiaries of the
Company, directly or indirectly, at the date of determination, has (x) at least
a majority ownership interest or (y) the power to elect or direct the election
of a majority of the directors or other governing body of such person.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article 7 and thereafter means such successor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
(15 U.S. Code Sections 77aaa-77bbbb), as it may be amended from time to time.
"UCC" means the Uniform Commercial Code, as in effect in each
applicable jurisdiction.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
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 holder of such
depository receipt from any amount received
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by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of
any particular time, the amount equal to the greater of (i) the net proceeds of
the sale or transfer of the property leased pursuant to such Sale and Lease-Back
Transaction or (ii) the fair value in the opinion of the board of directors (as
evidenced by a Board Resolution) of such property at the time of entering into
such Sale and Lease-Back Transaction, in either case divided first by the number
of full years of the term of the lease and then multiplied by the number of full
years of such term remaining at the time of determination, without regard to any
renewal or extension options contained in the lease.
"Yield to Maturity" means, as the context may require, the yield to
maturity (i) on a series of Securities or (ii) if the Securities of a series are
issuable from time to time, on a Security of such series, calculated at the time
of issuance of such series in the case of clause (i) or at the time of issuance
of such Security of such series in the case of clause (ii), or, if applicable,
at the most recent redetermination of interest on such series or on such
Security, and calculated in accordance with the constant interest method or such
other accepted financial practice as is specified in the terms of such Security.
Section 1.02. Other Definitions. Each of the following terms is defined
in the section set forth opposite such term:
<TABLE>
<CAPTION>
Term Section
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Authenticating Agent 2.02
cash transaction 7.03
Event of Default 6.01
Judgment Currency 10.15
mandatory sinking fund payment 3.05
optional sinking fund payment 3.05
Paying Agent 2.05
record date 2.04
Registrar 2.05
Required Currency 10.15
Security Register 2.05
self-liquidating paper 7.03
sinking fund payment date 3.05
tranche 2.14
</TABLE>
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Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture. The
following terms used in this Indenture that are defined by the Trust Indenture
Act have the following meanings:
"Indenture securities" means the Securities;
"Indenture security holder" means a Holder or a Securityholder;
"Indenture to be qualified" means this Indenture;
"Indenture Trustee" or "Institutional Trustee" means the Trustee; and
"Obligor" with respect to the indenture securities means the Company or
any other obligor on the Securities.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by reference in the Trust Indenture Act to another
statute or defined by a rule of the Commission and not otherwise defined herein
have the meanings assigned to them therein.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
(i) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(ii) words in the singular include the plural, and words in the
plural include the singular;
(iii) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(iv) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated; and
(v) use of masculine, feminine or neuter pronouns should not be
deemed a limitation, and the use of any such pronouns should be
construed to include, where appropriate, the other pronouns.
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ARTICLE 2
The Securities
Section 2.01. Form. The Securities of each series shall be
substantially in such form or forms (not inconsistent with this Indenture) as
shall be established by or pursuant to one or more Board Resolutions or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law, or with
any rules of any securities exchange or usage, all as may be determined by the
officers executing such Securities as evidenced by their execution of the
Securities.
Section 2.02. Execution and Authentication. Two Officers shall execute
the Securities for the Company by facsimile or manual signature in the name and
on behalf of the Company. The seal of the Company, if any, shall be reproduced
on the Securities. If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
The Trustee, at the expense of the Company, may appoint an
authenticating agent (the "Authenticating Agent") to authenticate Securities.
The Authenticating Agent may authenticate Securities whenever the Trustee may
do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such Authenticating Agent.
A Security shall not be valid until the Trustee or Authenticating Agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication together with the applicable documents
referred to below in this Section, and the Trustee shall thereupon authenticate
and deliver such Securities to or upon the written order of the Company. In
authenticating any Securities of a series, the Trustee shall be entitled to
receive prior to the first authentication of any Securities of such series, and
(subject to Article 7) shall be fully protected in relying upon, unless and
until such documents have been superseded or revoked:
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(1) any Board Resolution and/or executed supplemental indenture
referred to in Sections 2.01 and 2.03 by or pursuant to which the
forms and terms of the Securities of that series were established;
(2) an Officers' Certificate setting forth the form or forms and
terms of the Securities, stating that the form or forms and terms of
the Securities of such series have been, or will be when established in
accordance with such procedures as shall be referred to therein,
established in compliance with this Indenture, and covering such other
matters as the Trustee may reasonably request; and
(3) an Opinion of Counsel, substantially to the effect that the
forms and term of the securities of such series have been, or will be,
when established in accordance with such procedures as shall be
referred to therein, established in compliance with this Indenture and
that the Securities have been duly authorized and, if executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and duly paid for by the purchasers thereof on the date
of such opinion, would be entitled to the benefits of the Indenture
and would be valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject
to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally, general principles of equity, and such
other matters as shall be specified therein.
If the Company shall establish pursuant to Section 2.03 that the
Securities of a series or a portion thereof are to be issued 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
and shall be denominated in an amount equal to the aggregate principal amount of
all of the Securities of such series issued in such form and not yet canceled,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or its custodian or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the 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."
Section 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
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The Securities may be issued in one or more series and each such series
shall rank equally and pari passu with all other senior and unsubordinated debt
of the Company. There shall be established in or pursuant to Board Resolution or
one or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, subject to the last sentence of this Section 2.03,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all
other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture and any limitation on the ability of the Company to
increase such aggregate principal amount after the initial issuance of
the Securities of that series (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, or upon redemption of, other Securities of the series
pursuant hereto);
(3) the date or dates on which the principal of the Securities of
the series is payable (which date or dates may be fixed or
extendible);
(4) the rate or rates (which may be fixed or variable) per annum at
which the Securities of the series shall bear interest, if any, the
date or dates from which such interest shall accrue, on which such
interest shall be payable and on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method
by which such rate or rates or date or dates shall be determined and
the basis on which interest shall be calculated if other than a
360-day year consisting of 12 30-day months;
(5) if other than as provided in Section 4.02, the place or places
where the principal of and any interest on Securities of the series
shall be payable, any Securities of the series may be surrendered for
exchange, notices, demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and notice
to Holders may be published;
(6) the right, if any, of the Company to redeem Securities of the
series, in whole or in part, at its option and the period or periods
within which, the price or prices at which and any terms and
conditions upon which Securities of the series may be so redeemed,
pursuant to any sinking fund or otherwise;
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(7) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder
thereof and the price or prices at which and the period or periods
within which and any of the terms and conditions upon which Securities
of the series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the entire principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities of
the series are denominated, the coin or currency in which payment of
the Principal of or interest on the Securities of the series shall be
payable or if the amount of payments of principal of and/or interest
on the Securities of the series may be determined with reference to an
index based on a coin or currency other than that in which the
Securities of the series are denominated, the manner in which such
amounts shall be determined;
(11) if other than the currency of the United States of America,
the currency or currencies, including composite currencies, in which
payment of the Principal of and interest on the Securities of the
series shall be payable, and the manner in which any such currencies
shall be valued against other currencies in which any other Securities
shall be payable;
(12) whether and under what circumstances the Company will pay
additional amounts on the Securities of the series held by a person
who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the
Company will have the option to redeem such Securities rather than pay
such additional amounts;
(13) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
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(14) any trustees, depositaries, authenticating or paying agents,
transfer agents or the registrar or any other agents with respect to
the Securities of the series;
(15) provisions, if any, for the defeasance of the Securities of
the series (including provisions permitting defeasance of less than
all Securities of the series), which provisions may be in addition to,
in substitution for, or in modification of (or any combination of the
foregoing) the provisions of Article 8;
(16) if the Securities of the series are issuable in whole or in
part as one or more Global Securities, the identity of the Depositary
for such Global Security or Securities;
(17) any other events of default or covenants with respect to the
Securities of the series; and
(18) any other terms of the Securities of the series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical, as
to date and denomination, except in the case of any Periodic Offering and except
as may otherwise be provided by or pursuant to the Board Resolution referred to
above or as set forth in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution or in any such indenture supplemental hereto
and any forms and terms of Securities to be issued from time to time may be
completed and established from time to time prior to the issuance thereof by
procedures described in such Board Resolution or supplemental indenture.
Section 2.04. Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as registered
Securities in denominations established as contemplated by Section 2.03 or,
if not so established with respect to Securities of any series, in
denominations of $1,000 and any integral multiple thereof. The Securities of
each series 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, as evidenced by their execution thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and
such interest and shall be payable on the dates, established as contemplated
by Section 2.03.
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The person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Company shall default in the payment of the interest due on such interest
payment date for such series, in which case the provisions of Section 2.13 shall
apply. The term "record date" as used with respect to any interest payment date
(except a date for payment of defaulted interest) for the Securities of any
series shall mean the date specified as such in the terms of the Securities of
such series established as contemplated by Section 2.03, or, if no such date is
so established, the fifteenth day next preceding such interest payment date,
whether or not such record date is a Business Day.
Section 2.05. Registrar and Paying Agent; Agents Generally. The Company
shall maintain an office or agency where Securities may be presented for
registration, registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"), which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Securities and of
their registration, transfer and exchange (the "Security Register"). The Company
may have one or more additional Paying Agents or transfer agents with respect to
any series.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture and the Trust Indenture Act that relate to such
Agent. The Company shall give prompt written notice to the Trustee of the name
and address of any Agent and any change in the name or address of an Agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such. The Company may remove any Agent upon written notice to such Agent and
the Trustee; provided that no such removal shall become effective until (i) the
acceptance of an appointment by a successor Agent to such Agent as evidenced by
an appropriate agency agreement entered into by the Company and such successor
Agent and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company or any Affiliate of the
Company may act as Paying Agent or Registrar; provided that neither the Company
nor any Affiliate of the Company shall act as Paying Agent in connection with
the defeasance of the Securities or the discharge of this Indenture under
Article 8.
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The Company initially appoints the Trustee as Registrar, Paying Agent
and Authenticating Agent. If, at any time, the Trustee is not the Registrar, the
Registrar shall make available to the Trustee ten days prior to each interest
payment date and at such other times as the Trustee may reasonably request the
names and addresses of the Holders as they appear in the Security Register.
Section 2.06. Paying Agent to Hold Money in Trust. Not later than 10:00
a.m. New York City time on each due date of any Principal or interest on any
Securities, the Company shall deposit with the Paying Agent money in immediately
available funds sufficient to pay such Principal or interest. The Company shall
require each Paying Agent other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders of such
Securities or the Trustee all money held by the Paying Agent for the payment of
Principal of and interest on such Securities and shall promptly notify the
Trustee in writing of any default by the Company in making any such payment. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed, and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Company
or any Affiliate of the Company acts as Paying Agent, it will, on or before each
due date of any Principal of or interest on any Securities, segregate and hold
in a separate trust fund for the benefit of the Holders thereof a sum of money
sufficient to pay such Principal or interest so becoming due until such sum of
money shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee in writing of its action or
failure to act as required by this Section.
Section 2.07. Transfer and Exchange. At the option of the Holder
thereof, Securities of any series (other than a Global Security, except as set
forth below) may be exchanged for a Security or Securities of such series and
tenor having authorized denominations and an equal aggregate principal amount,
upon surrender of such Securities to be exchanged at the agency of the Company
that shall be maintained for such purpose in accordance with Section 2.05 and
upon payment, if the Company shall so require, of the charges hereinafter
provided. 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.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Company or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory
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to the Company and the Trustee duly executed by, the holder or his attorney duly
authorized in writing.
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 exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
Notwithstanding any other provision of this Section 2.07, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series 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 for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Global Securities of any series
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Securities or if at any time the Depositary for such Global
Securities shall no longer be eligible under applicable law, the Company shall
appoint a successor Depositary eligible under applicable law with respect to
such Global Securities. If a successor Depositary eligible under applicable law
for such Global 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 the Company's order for
the authentication and delivery of definitive Securities of such series and
tenor, will authenticate and deliver Securities of such series and tenor, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of such Global Securities, in exchange for such Global
Securities.
The Company may at any time and in its sole discretion determine that
any Global Securities of any series shall no longer be maintained in global
form. In such event the Company will execute, and the Trustee, upon receipt of
the Company's order for the authentication and delivery of definitive Securities
of such series and tenor, will authenticate and deliver, Securities of such
series and tenor in any authorized denominations, in an aggregate principal
amount equal to the principal amount of such Global Securities, in exchange for
such Global Securities.
Any time the Securities of any series are not in the form of Global
Securities pursuant to the preceding two paragraphs, the Company agrees to
supply the Trustee with a reasonable supply of certificated Securities without
the legend required by Section 2.02 and the Trustee agrees to hold such
Securities in
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safekeeping until authenticated and delivered pursuant to the terms of this
Indenture.
If established by the Company pursuant to Section 2.03 with respect to
any Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for Securities of the same
series and tenor in definitive registered form 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 the Person specified by such Depositary new Securities of
the same series and tenor, of any authorized denominations as
requested by such Person, in an aggregate principal amount equal to
and in exchange for such Person's beneficial interest in the Global
Security; and
(ii) to such 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
Securities authenticated and delivered pursuant to clause 2.07(i)
above.
Securities issued in exchange for a Global Security pursuant to this
Section 2.07 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 or an agent of the Company or the Trustee. The Trustee or
such agent shall deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
The Registrar shall not be required (i) to issue, register the transfer
of or exchange Securities of any series for a period of 15 days before a
selection of such Securities to be redeemed or (ii) to register the transfer of
or exchange any Security selected for redemption in whole or in part.
Section 2.08. Replacement Securities. If a defaced or mutilated
Security of any series is surrendered to the Trustee or if a Holder provides
evidence satisfactory to the Trustee that its Security of any series has been
lost, destroyed or wrongfully taken, the Company shall, subject to the further
provisions of this Section 2.08, issue and the Trustee shall authenticate a
replacement Security of
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such series and tenor and principal amount bearing a number not
contemporaneously outstanding. The Company may charge such Holder for any tax or
other governmental charge that may be imposed as a result of or in connection
with replacing a Security and for its expenses and the expenses of the Trustee
(including without limitation attorneys' fees and expenses) in replacing a
Security. In case any such mutilated, defaced, lost, destroyed or wrongfully
taken Security has become or is about to become due and payable, the Company in
its discretion may pay such Security instead of issuing a new Security in
replacement thereof. If required by the Trustee or the Company, (i) an indemnity
bond must be furnished that is sufficient in the judgment of both the Trustee
and the Company to protect the Company, the Trustee and any Agent from any loss
that any of them may suffer if a Security is replaced or paid as provided in
this Section 2.08 and (ii) in the case of a lost, destroyed or wrongfully taken
Security, evidence must be furnished to the satisfaction of both the Trustee and
the Company of the loss, destruction or wrongful taking of such Security.
Notwithstanding the foregoing, the Company and the Trustee shall have no
obligation to replace or pay a Security pursuant to this Section 2.08 if either
the Company or the Trustee has notice that such Security has been acquired by a
bona fide purchaser.
Every replacement Security is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
To the extent permitted by law, the foregoing provisions of this
Section are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities.
Section 2.09. Outstanding Securities. Securities outstanding at any
time are all Securities that have been authenticated and delivered by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a holder in due
course.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date or any redemption date or date for
repurchase of the Securities money sufficient to pay Securities payable or to be
redeemed or repurchased on that date, then on and after that date such
Securities cease to be outstanding and interest on them shall cease to accrue ;
provided, however, that with respect to Securities to be repurchased, interest
on them shall cease to accrue only when such Securities have been physically
tendered to the Trustee by the Company.
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A Security does not cease to be outstanding because the Company or one
of its Affiliates holds such Security, provided, however, that, in determining
whether the Holders of the requisite principal amount of the outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any Affiliate of
the Company 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 actually knows to be so
owned shall be so disregarded. Any Securities so owned which are pledged by the
Company, or by any Affiliate of the Company, as security for loans or other
obligations, otherwise than to another such Affiliate of the Company, shall be
deemed to be outstanding, if the pledgee is entitled pursuant to the terms of
its pledge agreement and is free to exercise in its or his discretion the right
to vote such securities, uncontrolled by the Company or by any such Affiliate.
Section 2.10. Temporary Securities. Until definitive Securities of any
series are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities of such series. Temporary Securities of any
series shall be substantially in the form of definitive Securities of such
series but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Securities,
as evidenced by their execution of such temporary Securities. If temporary
Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Securities of any series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series and
tenor upon surrender of such temporary Securities at the office or agency of the
Company designated for such purpose pursuant to Section 4.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of such series and tenor and authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled to
the same benefits under this Indenture as definitive Securities of such series.
Section 2.11. Cancellation. The Company at any time may 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 for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold. The Registrar, any transfer
agent and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
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and destroy all Securities surrendered for transfer, exchange, payment or
cancellation and shall dispose of them in accordance with its normal procedures
or the written instructions of the Company. The Company may not issue new
Securities to replace Securities it has paid in full or delivered to the Trustee
for cancellation.
Section 2.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall
use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption
or exchange as a convenience to Holders and no representation shall be made as
to the correctness of such numbers either as printed on the Securities or as
contained in any notice of redemption or exchange.
Section 2.13. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay, or shall deposit with the Paying
Agent money in immediately available funds sufficient to pay, the defaulted
interest plus (to the extent lawful) any interest payable on the defaulted
interest (as may be specified in the terms thereof, established pursuant to
Section 2.03) to the Persons who are Holders on a subsequent special record
date, which shall mean the 15th day next preceding the date fixed by the Company
for the payment of defaulted interest, whether or not such day is a Business
Day. At least 15 days before such special record date, the Company shall mail to
each Holder and to the Trustee a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
Section 2.14. Series May Include Tranches. A series of Securities may
include one or more tranches (each a "tranche") of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including authentication dates and public
offering prices, but all the Securities within each such tranche shall have
identical terms, including authentication date and public offering price.
Notwithstanding any other provision of this Indenture, with respect to Sections
2.02 (other than the fourth paragraph thereof) through 2.04, 2.07, 2.08, 2.10,
3.01 through 3.05, 4.02, 6.01 through 6.14, 8.01 through 8.05 and 9.02, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to Section 2.03. In particular, and without
limiting the scope of the preceding sentence, any of the provisions of such
sections which provide for or permit action to be taken with respect to a series
of Securities shall also be deemed to provide for and permit such action to be
taken instead only with respect to Securities of one or more tranches within
that series (and such provisions shall be deemed satisfied thereby),
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even if no comparable action is taken with respect to Securities in the
remaining tranches of that series.
ARTICLE 3
Redemption
Section 3.01. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
Section 3.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Company shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon the
Securities Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the CUSIP numbers of the Securities to be redeemed, (iii) the
date fixed for redemption, (iv) the redemption price, (v) the place or places of
payment, (vi) that payment will be made upon presentation and surrender of such
Securities, (vii) that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, (viii) that interest accrued to the
date fixed for redemption will be paid as specified in such notice and that on
and after said date interest thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security of a series is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series and tenor in principal amount equal to the unredeemed portion
thereof will be issued.
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The notice of redemption of Securities of any series to be redeemed at
the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Not later than 10:00 a.m. New York City time on the redemption date
specified in the notice of redemption given as provided in this Section, the
Company will deposit with the Trustee or with one or more Paying Agents (or, if
the Company is acting as its own Paying Agent, set aside, segregate and hold in
trust as provided in Section 2.05) an amount of money in immediately available
funds sufficient to redeem on the redemption date all the Securities of such
series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If less than all the
outstanding Securities of a series are to be redeemed, the Company will deliver
to the Trustee at least 15 days prior to the last date on which notice of
redemption may be given to Holders pursuant to the first paragraph of this
Section 3.02 (or such shorter period as shall be acceptable to the Trustee) an
Officers' Certificate (which need not contain the statements required by Section
10.04) stating the aggregate principal amount of such Securities to be redeemed.
In case of a redemption at the election of the Company prior to the expiration
of any restriction on such redemption, the Company shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such redemption is not prohibited
by such restriction.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, pro rata, by lot or in such manner as it shall deem
appropriate and fair, Securities of such series to be redeemed in whole or in
part. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Company in writing of the Securities of
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 3.03. Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after such
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to such date) interest on the
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Securities or portions of Securities so called for redemption shall cease to
accrue, and, except as provided in Sections 7.11 and 8.04, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
under this Indenture, and the Holders thereof shall have no right in respect of
such Securities except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption. On presentation and surrender
of such Securities at a place of payment specified in said notice said
Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that payment of interest
becoming due on or prior to the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Sections 2.04 and 2.13 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
Upon presentation of any Security of any series redeemed in part only,
the Company shall execute and the Trustee shall authenticate and deliver to or
on the order of the Holder thereof, at the expense of the Company, a new
Security or Securities of such series and tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04. Exclusion of Certain Securities from eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
Section 3.05. Mandatory and Optional Sinking Funds. The minimum amount
of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
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In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Company may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except through a mandatory sinking fund payment) by the
Company or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by
the Company and delivered to the Trustee for cancellation pursuant to Section
2.11, (b) receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive credit for Securities of
such series (not previously so credited) redeemed by the Company through any
optional sinking fund payment. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment
date for any series, or such shorter period as shall be acceptable to the
Trustee, the Company will deliver to the Trustee an Officers' Certificate (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of specified
Securities of such series and the basis for such credit, (b) stating that none
of the specified Securities of such series has theretofore been so credited, (c)
stating that no defaults in the payment of interest or Events of Default with
respect to such series have occurred (which have not been waived or cured) and
are continuing and (d) stating whether or not the Company intends to exercise
its right to make an optional sinking fund payment with respect to such series
and, if so, specifying the amount of such optional sinking fund payment which
the Company intends to pay on or before the next succeeding sinking fund payment
date. Any Securities of such series to be credited and required to be delivered
to the Trustee in order for the Company to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.11 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and upon its receipt
by the Trustee the Company shall become unconditionally obligated to make all
the cash payments or delivery of securities therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the Company, on
or before any such sixtieth day, to deliver such Officer's Certificate and
Securities specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Company (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof and
(ii) that the Company will make no optional sinking fund payment with respect to
such series as provided in this Section.
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If the sinking fund payment or payments (mandatory or optional or both)
to be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall exceed
$50,000 (or a lesser sum if the Company shall so request with respect to the
Securities of any series), such cash shall be applied on the next succeeding
sinking fund payment date to the redemption of Securities of such series at the
sinking fund redemption price thereof together with accrued interest thereon to
the date fixed for redemption. If such amount shall be $50,000 (or such lesser
sum) or less and the Company makes no such request then it shall be carried over
until a sum in excess of $50,000 (or such lesser sum) is available. The Trustee
shall select, in the manner provided in Section 3.02, for redemption on such
sinking fund payment date a sufficient principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Company) inform the Company of the serial numbers of the
Securities of such series (or portions thereof) so selected. Securities shall be
excluded from eligibility for redemption under this Section if they are
identified by registration and certificate number in an Officers' Certificate
delivered to the Trustee at least 60 days prior to the sinking fund payment date
as being owned of record and beneficially by, and not pledged or hypothecated by
either (a) the Company or (b) an entity specifically identified in such
Officers' Certificate as directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company. The Trustee, in the
name and at the expense of the Company (or the Company, if it shall so request
the Trustee in writing) shall cause notice of redemption of the Securities of
such series to be given in substantially the manner provided in Section 3.02
(and with the effect provided in Section 3.03) for the redemption of Securities
of such series in part at the option of the Company. The amount of any sinking
fund payments not so applied or allocated to the redemption of Securities of
such series shall be added to the next cash sinking fund payment for such series
and, together with such payment, shall be applied in accordance with the
provisions of this Section. Any and all sinking fund moneys held on the stated
maturity date of the Securities of any particular series (or earlier, if such
maturity is accelerated), which are not held for the payment or redemption of
particular Securities of such series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the
Principal of, and interest on, the Securities of such series at maturity.
Not later than 10:00 a.m. New York City time on each sinking fund
payment date, the Company shall pay to the Trustee in cash or shall otherwise
provide for the payment of all interest accrued to the date fixed for redemption
on Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or mail any notice of redemption of Securities
of
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such series by operation of the sinking fund during the continuance of a Default
in payment of interest on such Securities or of any Event of Default except
that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Company a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such Default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such Default or Event of Default, be deemed to have been
collected under Article 6 and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 6.04 or
the Default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE 4
Covenants
Section 4.01. Payment of Securities. The Company shall pay the
Principal of and interest on the Securities on the dates and in the manner
provided in the Securities and this Indenture. The interest on Securities
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be payable only to the Holders thereof and at the option of
the Company may be paid by mailing checks for such interest payable to or upon
the written order of such Holders at their last addresses as they appear on the
Security Register of the Company.
Notwithstanding any provisions of this Indenture and the Securities of
any series to the contrary, if the Company and a Holder of any Security so
agree, payments of interest on, and any portion of the Principal of, such
Holder's Security (other than interest payable at maturity or on any redemption
or repayment date or the final payment of Principal on such Security) shall be
made by the Paying Agent, upon receipt from the Company of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to
between the Company and the Paying Agent), directly to the Holder of such
Security (by Federal funds wire transfer or otherwise) if the Holder has
delivered written instructions to the Trustee 15 days prior to such payment date
requesting that such payment will be so made and designating the bank account to
which such payments shall be so made and in the case of payments of Principal
surrenders such Security to the Trustee in exchange for a Security or Securities
aggregating the same principal amount as the unredeemed principal amount of the
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Securities surrendered. The Trustee shall be entitled to rely on the last
instruction delivered by the Holder pursuant to this Section 4.01 unless a new
instruction is delivered 15 days prior to a payment date. The Company will
indemnify and hold each of the Trustee and any Paying Agent harmless against any
loss, liability or expense (including attorneys' fees and expenses) resulting
from any act or omission to act on the part of the Company or any such Holder in
connection with any such agreement or from making any payment in accordance with
any such agreement.
The Company shall pay interest on overdue Principal, and interest on
overdue installments of interest, to the extent lawful, at the rate per annum
specified in the Securities.
Section 4.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company hereby initially designates the Corporate Trust Office of the Trustee,
located in the Borough of Manhattan, The City of New York, as such office or
agency of the Company. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of any series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York 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 4.03. Limitation on Liens. The Company will not, and will not
permit any Significant Subsidiary to, directly or indirectly, issue, incur,
assume or guarantee any indebtedness for borrowed money secured by any Lien on
or with respect to any Property of the Company or such Significant Subsidiary or
any interest therein or any income or profits therefrom, unless the Securities
are secured equally and ratably with (or prior to) any and all other
indebtedness secured by such Lien, except for:
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(1) indebtedness secured by any Lien arising in the ordinary
course of business;
(2) indebtedness secured by any Lien on Property acquired by the
Company or any Significant Subsidiary after the date of issuance of the
Securities, provided that such Lien existed on the date such Property
was acquired;
(3) any Lien securing indebtedness existing on the date of the
Indenture;
(4) any Lien securing indebtedness incurred to finance the
purchase price or cost of construction of Property (or additions,
substantial repairs, alterations or substantial improvements thereto),
provided that such Lien and the indebtedness secured thereby are
incurred within one year of the later of acquisition or completion of
construction (or addition, repair, alteration or improvement) and full
operation thereof;
(5) indebtedness secured by any Lien arising out of judgments or
awards against the Company or any Significant Subsidiary having an
outstanding principal amount which do not exceed $10 million in the
aggregate or with respect to which the Company or such Significant
Subsidiary shall in good faith be prosecuting an appeal or proceedings
for review, Liens which are discharged within 60 days of entry of
judgment or Liens incurred by the Company or a Significant Subsidiary
for the purpose of obtaining a stay or discharge in the course of any
legal proceedings to which the Company or such Significant Subsidiary
is a party;
(6) indebtedness secured by any Lien for taxes not yet due
and payable by the Company or any Significant Subsidiary or which the
Company or such Significant Subsidiary is contesting in good faith;
(7) indebtedness secured by any Lien on or with respect to
Property of a Significant Subsidiary in favor of the Company or another
Subsidiary;
(8) any Lien securing indebtedness in respect of capital
leases, determined according to GAAP, on the Property subject to such
capital leases;
(9) any Lien securing indebtedness the proceeds of which are
deposited, promptly upon receipt, with the Trustee solely for the
purpose
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of effecting a legal defeasance or covenant defeasance as set forth
under "Satisfaction and Discharge of Indenture" and "Defeasance";
(10) indebtedness secured by any Lien on a note made in favor of,
or on a loan advance made by, the Company or any Subsidiary in
connection with the Company's or such Subsidiaries' lending and
financing activities;
(11) indebtedness secured by any Lien extending, renewing or
replacing any Lien permitted by clause (1) through (10) above; and
(12) any Lien (other than a Lien permitted under any of clauses
(1) through (11) of this paragraph) securing indebtedness of the
Company or of any Significant Subsidiary provided that the aggregate
principal amount of all Secured Debt together with all Attributable
Debt of the Company and its Significant Subsidiaries in respect of Sale
and Lease-Back Transactions which would otherwise not be permitted
but for the provisions of clause (6) of Section 4.04 does not exceed,
at the time of incurrence of such indebtedness, 15% of Consolidated Net
Tangible Assets of the Company and its Subsidiaries.
In the case of Liens permitted under clauses (2) and (4), such Liens
may not relate to any Property of the Company or a Significant Subsidiary other
than the Property so acquired, constructed, added, repaired, altered or
improved, as the case may be. In the case of Liens permitted under clause (11),
unless such Liens are otherwise permitted under clause (12), such Liens (A) may
not relate to any Property of the Company or a Significant Subsidiary other than
the Property to which the Lien being extended, renewed or replaced related to,
and (B) may not secure indebtedness in excess of that secured by the Lien being
extended, renewed or replaced.
Section 4.04. Limitation on Sale and Lease-Back Transactions. The
Company will not, nor will it permit any Significant Subsidiary to, directly or
indirectly, enter into, assume, guarantee, or otherwise become liable with
respect to any Sale and Lease-Back Transaction; provided, however, that the
Company or any Significant Subsidiary may enter into:
(1) a Sale and Lease-Back Transaction that, had such Sale and
Lease-Back Transaction been structured as a mortgage or other secured
financing rather than as a Sale and Lease-Back Transaction, the Company
or such Significant Subsidiary would have been permitted to enter into
such transaction pursuant to the terms of the Indenture set forth in
Section 4.03,
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(2) a Sale and Lease-Back Transaction between or among the
Company and any of its Subsidiaries or between or among Subsidiaries,
(3) a Sale and Lease-Back Transaction entered into prior to the
date of issuance of the Securities,
(4) a Sale and Lease-Back Transaction, provided that within 180
days of the effective date of any such Sale and Lease-Back Transaction,
the Company or such Significant Subsidiary shall apply an amount equal
to the Value of such Sale and Lease-Back Transaction to the (A)
retirement (other than any mandatory retirement and other than any
prohibited retirement of securities) of indebtedness for borrowed
money incurred or assumed by the Company or any Subsidiary (other than
indebtedness for borrowed money owed to the Company or any Subsidiary)
which by its terms matures on, or is extendible or renewable at the
option of the obligor to, a date more than 12 months after the date of
the creation of such indebtedness and, in the case of such
indebtedness of the Company which ranks on a parity with, or senior in
right of payment to, the Securities or (B) the purchase or construction
of other Property, provided that such Property is owned by the Company
or a Subsidiary free and clear of all Liens,
(5) a Sale and Lease-Back Transaction involving the taking back
of a lease for a period of three years or less, or
(6) a Sale and Lease-Back Transaction, provided that after giving
effect to the Sale and Lease-Back Transaction, the aggregate Principal
amount of all Attributable Debt of the Company and its Significant
Subsidiaries in respect of Sale and Lease-Back Transactions which would
not otherwise be permitted but for the provisions of this clause (6)
plus all Secured Debt which would not otherwise be permitted except for
the provisions of clause 12 of Section 4.03, does not exceed, at the
time of such Sale and Lease-Back Transaction, 15% of the Consolidated
Net Tangible Assets of the Company and its Subsidiaries.
Section 4.05. Notice of Defaults. In the event that the Company becomes
aware of any Default, the Company, promptly after it becomes aware thereof, will
give written notice thereof to the Trustee.
Section 4.06. Compliance Certificates; Reports. (a) The Company shall
deliver to the Trustee, within 60 days after the end of each fiscal quarter (120
days after the end of the last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default that occurred
during such fiscal
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quarter. In the case of the Officers' Certificate delivered within 120 days of
the end of the Company's fiscal year, such certificate shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer that the Company has complied with all material
conditions and covenants under this Indenture. For purposes of this Section
4.06, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. If a Default shall have
occurred and be continuing, the certificate shall describe such Default and its
status. The first certificate to be delivered pursuant to this Section 4.06(a)
shall be for the first fiscal quarter beginning after the execution of this
Indenture.
(b) The Company shall deliver to the Trustee all reports filed with the
Commission reasonably promptly following the filing thereof.
Section 4.07. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or
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advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of, or interest on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE 5
Successor Corporation
Section 5.01. When Company May Merge, Etc.. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person (other than a consolidation with or merger
with or into a Subsidiary or a sale, conveyance, transfer, lease or other
disposition to a Subsidiary) or permit any Person to merge with or into the
Company unless:
(i) either (x) the Company shall be the continuing Person or (y)
the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or that acquired or leased such
property and assets of the Company shall be a corporation organized
and validly existing under the laws of the United States of America or
any jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Securities and under this
Indenture and the Company shall have delivered to the Trustee an
Opinion of Counsel stating that such consolidation, merger or transfer
and such supplemental indenture complies with this provision and that
all conditions precedent provided for herein relating to such
transaction have been complied with and that such supplemental
indenture constitutes the legal, valid and binding obligation of the
Company or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and
(ii) an Officers' Certificate to the effect that immediately after
giving effect to such transaction, no Default shall have occurred and
be continuing shall have been delivered to the Trustee.
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Section 5.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein.
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default. An "Event of Default" shall occur with
respect to the Securities of any series if:
(a) the Company defaults in the payment of the Principal of any
Security of such series when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking fund
installment, or otherwise;
(b) the Company defaults in the payment of interest on any Security of
such series when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture with respect to any
Security of such series or in the Securities of such series and such default or
breach continues for a period of 60 consecutive days after written notice to the
Company by the Trustee or to the Company and the Trustee by the Holders of 25%
or more in aggregate principal amount of the Securities of all series affected
thereby;
(d) an involuntary case or other proceeding shall be commenced against
the Company or any Significant Subsidiary with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Company
or any Significant Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;
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(e) the Company or any Significant Subsidiary (a) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (b) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (c) effects any general assignment for the benefit of
creditors; or
(f) any other Event of Default established pursuant to Section 2.03
with respect to the Securities of such series occurs.
Section 6.02. Acceleration. (a) If an Event of Default described in
clauses 6.01(a), 6.01(b), 6.01(c) or 6.01(f) of Section 6.01 with respect to
the Securities of any series then outstanding occurs and is continuing, then,
and in each and every such case, except for any series of Securities the
principal of which shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount
(or, if the Securities of any such series are Original Issue Discount
Securities, the amount thereof accelerable under this Section) of the
Securities of any such affected series then outstanding hereunder (each such
series treated as a separate class) by notice in writing to the Company (and
to the Trustee if given by Securityholders), may declare the entire principal
(or, if the Securities of any such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series established pursuant to Section 2.03) of all Securities
of such affected series, and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable.
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(b) If an Event of Default described in clause 6.01(d) or 6.01(e) of
Section 6.01 occurs and is continuing, then the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof established pursuant to Section 2.03)
of all the Securities then outstanding and interest accrued thereon, if any,
shall be and become immediately due and payable, without any notice or other
action by any Holder or the Trustee, to the full extent permitted by applicable
law.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to Section 2.03) of the Securities of any
series (or of all the Securities, as the case may be) shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Securities of each such series (or
of all the Securities, as the case may be) and the principal of any and all
Securities of each such series (or of all the Securities, as the case may be)
which shall have become due otherwise than by acceleration (with interest upon
such principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of each such series to the date
of such payment or deposit) and such amount as shall be sufficient to cover all
amounts owing the Trustee under Section 7.07, and if any and all Events of
Default under the Indenture, other than the non-payment of the principal of
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein, then and in every such case the
Holders of a majority in aggregate principal amount of all the then outstanding
Securities of all such series that have been accelerated (voting as a single
class), by written notice to the Company and to the Trustee, may waive all
defaults with respect to all such series (or with respect to all the Securities,
as the case may be) and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and
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payable as a result of such acceleration, and payment of such portion of the
principal thereof as shall be due and payable as a result of such acceleration,
together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.
Section 6.03. Other Remedies. If a payment default or an Event of
Default with respect to the Securities of any series occurs and is continuing,
the Trustee may pursue, in its own name or as trustee of an express trust, any
available remedy by proceeding at law or in equity to collect the payment of
principal of and interest on the Securities of such series or to enforce the
performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding.
Section 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount (or, if the
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable under Section 6.02) of the outstanding Securities of all
series affected (voting as a single class), by written notice to the Trustee,
may waive, on behalf of the Holders of all the Securities of such series, an
existing Default or Event of Default with respect to the Securities of such
series and its consequences, except a Default in the payment of Principal of or
interest on any Security as specified in clauses 6.01(a) or 6.01(b) of Section
6.01 or in respect of a covenant or provision of this Indenture which 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 with respect to the Securities of such series 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
Event of Default or impair any right consequent thereto.
Section 6.05. Control by Majority. Subject to Sections 7.01 and
7.02(v), the Holders of at least a majority in aggregate principal amount (or,
if any Securities are Original Issue Discount Securities, such portion of the
principal as is then accelerable under Section 6.02) of the outstanding
Securities of all series affected (voting as a single class) may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Securities of such series by this Indenture; provided, that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders not joining in the giving of such direction; and
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provided further, that the Trustee may take any other action it deems proper
that is not inconsistent with any directions received from Holders of Securities
pursuant to this Section 6.05.
Section 6.06. Limitation on Suits. No Holder of any Security of any
series may institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities of such series, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written notice
of a continuing Event of Default with respect to the Securities of
such series;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Securities of all such series affected 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;
(iii) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against any costs, liabilities or expenses
to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities of all such
affected series have not given the Trustee a direction that is
inconsistent with such written request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of Principal of or interest, if any, on such Holder's Security
on or after the respective due dates expressed on such Security, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default with
respect to the Securities of any series in payment of Principal or interest
specified in clause 6.01(a) or 6.01(b) of Section 6.01 occurs and is continuing,
the Trustee
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may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount (or such portion thereof as specified in the
terms established pursuant to Section 2.03 of Original Issue Discount
Securities) of Principal of, and accrued interest remaining unpaid on, together
with interest on overdue Principal of, and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest on, the
Securities of such series, in each case at the rate or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in such Securities, and
such further amount as shall be sufficient to cover all amounts owing the
Trustee under Section 7.07.
Section 6.09. Trustee May File Proofs of Claim. In the case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other 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 may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for amounts due the Trustee under Section 7.07) and the Holders allowed in
any judicial proceedings relative to the Company (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any moneys, securities or other property payable or
deliverable upon conversion or exchange of the Securities or upon 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 to it
under Section 7.07. Nothing herein contained shall be deemed to empower the
Trustee to authorize or consent to, or accept or adopt on behalf of any Holder,
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of the Securities of any series
shall be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of Principal
or interest, upon presentation of the several Securities in respect of which
moneys have been collected and noting thereon the payment, or issuing Securities
of such series and tenor in reduced principal amounts in exchange for the
presented Securities of such series and tenor if only partially paid, or upon
surrender thereof if fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section
7.07 applicable to the Securities of such series in respect of which
moneys have been collected;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and
be then due and payable, to the payment of interest on the Securities
of such series in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for Principal
and interest, with interest upon the overdue Principal, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment
of such Principal and interest or Yield to Maturity, without
preference or priority of Principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over Principal, or of
any installment of interest over any other installment of interest, or
of any Security of such series over any other Security of such series,
ratably to the aggregate of such Principal and accrued and unpaid
interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
Section 6.11. 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 to their former positions
hereunder and thereafter all rights and remedies of the Company, Trustee and the
Holders shall continue as though no such proceeding had been instituted.
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Section 6.12. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, in either case in respect to the
Securities of any series, a court may require any party litigant in such suit
(other than the Trustee) to file an undertaking to pay the costs of the suit,
and the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant (other than the Trustee) in the suit having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.12 does not apply to a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
outstanding Securities of such series.
Section 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Securities in Section 2.08, 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 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder 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 an acquiescence therein. Every right and remedy given
by this Article 6 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.
ARTICLE 7
Trustee
Section 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act and as set forth herein.
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, unless it receives indemnity satisfactory to it
against any loss, liability or expense. 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 Article 7.
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Section 7.02. Certain Rights of Trustee. Subject to Trust Indenture Act
Sections 315(a) through (d):
(i) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
Officers' Certificate, Opinion of Counsel (or both), 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 person or persons. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to Section 10.04. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion. Subject to Sections 7.01 and 7.02, whenever in
the administration of the trusts of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part
of the Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon
the faith thereof;
(iii) the Trustee may act through its attorneys, agents,
custodians or nominees not regularly in its employ and shall not be
responsible for the misconduct or negligence of any agent, attorney,
custodian or nominee appointed with due care by it hereunder;
(iv) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(v) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or
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direction of any of the Holders, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction;
(vi) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers or for any action it takes or omits to take in
accordance with the direction of the Holders in accordance with Section
6.05 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture;
(vii) the Trustee may consult with counsel and the 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;
(viii) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, Officers' Certificate, Opinion
of Counsel, Board Resolution, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, 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, during normal business hours and upon prior
written notice, the books, records and premises of the Company,
personally or by agent or attorney; and
(ix) if the Trustee is acting as Paying Agent or transfer agent
and Registrar hereunder, the rights and protections afforded to the
Trustee pursuant to this Article 7 shall also be afforded to such
Paying Agent or transfer agent and Registrar.
Section 7.03. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b)
and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6), the
following terms shall mean:
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(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company for the purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 7.04. Trustee's Disclaimer. The recitals contained herein and
in the Securities (except the Trustee's certificate of authentication) shall be
taken as statements of the Company and not of the Trustee and the Trustee
assumes no responsibility for the correctness of the same. Neither the Trustee
nor any of its agents (i) makes any representation as to the validity or
adequacy of this Indenture or the Securities and (ii) shall be accountable for
the Company's use or application of the proceeds from the Securities.
Section 7.05. Notice of Default. If any Default with respect to the
Securities of any series occurs and is continuing and if such Default is known
to the actual knowledge of a Responsible Officer with the Corporate Trust Office
of the Trustee, the Trustee shall give to each Holder of Securities of such
series notice of such Default within 90 days after it occurs in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act, unless such
Default shall have been cured or waived before the mailing or publication of
such notice; provided, however, that, except in the case of a Default in the
payment of the Principal of or interest on any Security, the Trustee shall be
protected in withholding such notice if the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
Section 7.06. Reports by Trustee to Holders. Within 60 days after each
May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder as
and to the extent provided in Trust Indenture Act Section 313(c) a brief report
dated as of such May 15, if required by Trust Indenture Act Section 313(a).
Section 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing from time to
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time for its services. The compensation of the Trustee shall not be limited by
any law on compensation of a Trustee of an express trust. The Company agrees to
pay or reimburse the Trustee and each predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture and the
Securities or the issuance of the Securities or any series thereof (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ) except to the
extent any such expense, disbursement or advance may arise from its negligence
or bad faith. The Company shall indemnify the Trustee and each predecessor
Trustee and their respective officers, directors, employees and agents for, and
hold each of them harmless against, any and all loss, liability, damage or
expense arising out of or in connection with the acceptance or administration of
this Indenture and the Securities or the issuance of the Securities or any
series thereof or the trusts hereunder and the performance of its duties
hereunder (including the costs and expenses of defending itself against any
claim or liability and of complying with any process served upon it or any of
its officers, directors, employees or agents in connection with the exercise or
performance of any of its powers or duties under this Indenture and the
Securities) except to the extent any such loss, liability, damage or expense may
arise from the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay Principal of, and interest on particular
Securities.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the rejection or termination of
this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are hereby subordinated
to such senior claim. If the Trustee renders services and incurs expenses
following an Event of Default under Section 6.01(d) or Section 6.01(e) hereof,
the parties hereto and the holders by their acceptance of the Securities hereby
agree that such expenses are intended to constitute expenses of administration
under any bankruptcy law. The provisions of this Section 7.07 shall survive the
termination of this Indenture or the earlier resignation or removal of the
Trustee.
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Section 7.08. Replacement of Trustee. A resignation or removal of the
Trustee as Trustee with respect to the Securities of any series and appointment
of a successor Trustee as Trustee with respect to the Securities of any series
shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign as Trustee with respect to the Securities of any
one or more series at any time by so notifying the Company in writing. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the 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. The Holders of a majority in principal
amount of the outstanding Securities of any series may remove the Trustee as
Trustee with respect to the Securities of such series by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee with
respect thereto with the consent of the Company. The Company may remove the
Trustee as Trustee with respect to the Securities of any series if: (i) the
Trustee is no longer eligible under Section 7.10 of this Indenture; (ii)the
Trustee is adjudged a bankrupt or insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed as Trustee with respect to the
Securities of any series, or if a vacancy exists in the office of Trustee with
respect to the Securities of any series for any reason, the Company shall
promptly appoint a successor Trustee with respect thereto. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the outstanding Securities of such series may appoint a successor
Trustee in respect of such Securities to replace the successor Trustee appointed
by the Company. If the successor Trustee with respect to the Securities of any
series does not deliver its written acceptance required by the next succeeding
paragraph of this Section 7.08 within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect thereto.
A successor Trustee with respect to the Securities of any series shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after the delivery of such written acceptance, subject
to the lien provided for in Section 7.07, (i) the retiring Trustee shall
transfer all property held by it as Trustee in respect of the Securities of such
series to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee in respect of the Securities of such series shall become effective and
(iii) the successor Trustee shall have all the rights, powers and duties of the
Trustee in respect of the
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Securities of such series under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder of Securities of such series.
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 referred to in the
preceding paragraph.
The Company shall give notice of any resignation and any removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee in respect of the Securities of such series to all Holders of
Securities of such series. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee with respect to the
Securities of any series pursuant to this Section 7.08, the Company's
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.
Section 7.09. Successor Trustee by Merger, Etc.. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
Section 7.10. Eligibility. This Indenture shall always have a Trustee
who satisfies the requirements of Trust Indenture Act Section 310(a). The
Trustee shall have a combined capital and surplus of at least $10,000,000 as set
forth in its most recent published annual report of condition, if any. The
Trustee shall comply with Trust Indenture Act Section 310(b). If at any time the
Trustee with respect to the Securities of any series shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Article.
Section 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article 8 of this Indenture.
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ARTICLE 8
Discharge of Indenture
Section 8.01. Defeasance Within One Year of Payment. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Securities of any series and this Indenture with respect
to Securities of such series if:
(i) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or wrongfully taken Securities of
such series that have been replaced or Securities of such series that
are paid pursuant to Section 4.01 or Securities of such series for
whose payment money or securities have theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.05) have
been delivered to the Trustee for cancellation and the Company has paid
all sums payable by it hereunder; or
(ii) (A) the Securities of such series mature within one year or
all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of
redemption, (B) the Company irrevocably deposits in trust with the
Trustee, as trust funds solely for the benefit of the Holders of such
Securities for that purpose, money or U.S. Government Obligations or a
combination thereof sufficient (unless such funds consist solely of
money, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee), without consideration of any reinvestment,
to pay Principal of and interest on the Securities of such series to
maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder, (C) no default with respect to the Securities
of such series has occurred and is continuing on the date of such
deposit, (D) such deposit does not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement
or instrument to which the Company is a party or by which it is bound
and (E) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the satisfaction and
discharge of this Indenture with respect to the Securities of such
series have been complied with.
With respect to the foregoing clause 8.01(a)(i), only the Company's
obligations under Sections 7.07 and 8.05 in respect of the Securities of such
series shall survive. With respect to the foregoing clause 8.01(a)(ii), only the
Company's obligations in Sections 2.02 through 2.12, 4.02, 7.07, 7.08 and 8.05
in respect of the Securities of such series shall survive until such Securities
of such series are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.07 and 8.05 in
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respect of the Securities of such series shall survive. After any such
irrevocable deposit, the Trustee shall acknowledge in writing the discharge of
the Company's obligations under the Securities of such series and this Indenture
with respect to the Securities of such series except for those surviving
obligations specified above.
Section 8.02. Defeasance. Except as provided below, the Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Securities of any series and the provisions of this Indenture
will no longer be in effect with respect to the Securities of such series (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same); provided that the following conditions shall have been
satisfied:
(i) the Company has irrevocably deposited in trust with the
Trustee as trust funds solely for the benefit of the Holders of the
Securities of such series, for payment of the Principal of and interest
on the Securities of such series, money or U.S. Government Obligations
or a combination thereof sufficient (unless such funds consist solely
of money, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and
after payment of all federal, state and local taxes or other charges
and assessments in respect thereof payable by the Trustee, to pay and
discharge the Principal of and accrued interest on the outstanding
Securities of such series to maturity or earlier redemption
(irrevocably provided for under arrangements satisfactory to the
Trustee), as the case may be;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) no Default with respect to the Securities of such series
shall have occurred and be continuing on the date of such deposit;
(iv) the Company shall have delivered to the Trustee (1) either
(x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of the Securities of such series
will not recognize income, gain or loss for federal income tax purposes
as a result of the Company's exercise of its option under this Section
8.02 and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and
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defeasance had not occurred or (y) an Opinion of Counsel to the same
effect as the ruling described in clause (x) above and based upon a
change in law and (2) an Opinion of Counsel to the effect that the
Holders of the Securities of such series have a valid security
interest in the trust funds subject to no prior liens under the UCC;
(v) if the Securities of such series are then listed on a national
securities exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the defeasance contemplated by
this Section 8.02 of the Securities of such series will not cause the
Securities of such series to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 of the Securities of such series have
been complied with.
The Company's obligations in Sections 2.02 through 2.12, 4.02, 7.07,
7.08 and 8.05 with respect to the Securities of such series shall survive until
such Securities are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.07 and 8.05 shall survive.
Section 8.03. Covenant Defeasance. The Company may omit to comply with
any term, provision or condition set forth in Sections 4.03 or 4.04 (or any
other specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture pursuant to Section 2.03 which may by its
terms be defeased pursuant to this Section 8.03), and such omission shall be
deemed not to be an Event of Default under clauses 6.01(c) or 6.01(f) of Section
6.01, with respect to the outstanding Securities of a series if:
(i) the Company has irrevocably deposited in trust with the
Trustee as trust funds solely for the benefit of the Holders of the
Securities of such series, for payment of the Principal of and
interest, if any, on the Securities of such series, money or U.S.
Government Obligations or a combination thereof in an amount
sufficient (unless such funds consist solely of money, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee)
without consideration of any reinvestment and after payment of all
federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, to pay and discharge the
Principal of and interest on the outstanding Securities of such series
to
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maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the Trustee), as the case may be;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) no Default with respect to the Securities of such series
shall have occurred and be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the Holders of the Securities of such
series have a valid security interest in the trust funds subject to no
prior liens under the UCC and (B) such Holders will not recognize
income, gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and defeasance had
not occurred; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the covenant
defeasance contemplated by this Section 8.03 of the Securities of such
series have been complied with.
Section 8.04. Application of Trust Money. Subject to Section 8.05, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be, in
respect of the Securities of any series and shall apply the deposited money and
the proceeds from deposited U.S. Government Obligations in accordance with the
Securities of such series and this Indenture to the payment of Principal of and
interest on the Securities of such series; but such money need not be segregated
from other funds except to the extent required by law. The Company shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
8.01, 8.02 or 8.03, as the case may be, or the principal and interest received
in respect thereof, other than any such tax, fee or other charge that by law is
for the account of the Holders.
Section 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, and
8.03, the Trustee and the Paying Agent shall promptly pay to the Company upon
request set forth in an Officers' Certificate any money held by them at any time
and not required to make payments hereunder and thereupon shall be
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relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them and required to make payments hereunder under this Indenture that remains
unclaimed for two years; provided that the Trustee or such Paying Agent before
being required to make any payment may cause to be published at the expense of
the Company once in an Authorized Newspaper in The City of New York or with
respect to any Security the interest on which is based on the offered quotations
in the interbank Eurodollar market for dollar deposits in an Authorized
Newspaper in London or mail to each Holder entitled to such money at such
Holder's address (as set forth in the Security Register) notice that such money
remains unclaimed and that after a date specified therein (which shall be at
least 30 days from the date of such publication or mailing) any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Holders entitled to such money must look to the Company
for payment as general creditors unless an applicable law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
ARTICLE 9
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Securities of any series without
notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not
materially and adversely affect the interests of the Holders;
(2) to comply with Article 5;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the Trust
Indenture Act;
(4) to evidence and provide for the acceptance of appointment
hereunder with respect to the Securities of any or all series by a
successor Trustee;
(5) to establish the form or forms or terms of Securities of any
series as permitted by Section 2.03;
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(6) to provide for uncertificated or unregistered Securities and
to make all appropriate changes for such purpose;
(7) to change or eliminate any provisions of the Indenture with
respect to all or any series of the Securities not then outstanding
(and, if such change is applicable to fewer than all such series of the
Securities, specifying the series to which such change is applicable),
and to specify the rights and remedies of the Trustee and the holders
of such Securities in connection therewith; and
(8) to make any change that does not materially and adversely
affect the rights of any Holder.
Section 9.02. With Consent of Holders. Subject to Sections 6.04 and
6.07, without prior notice to any Holders, the Company and the Trustee may amend
this Indenture and the Securities of any series with the written consent of the
Holders of a majority in principal amount of the outstanding Securities of all
series affected by such supplemental indenture (all such series voting as one
class), and the Holders of a majority in principal amount of the outstanding
Securities of all series affected thereby (all such series voting as one class)
by written notice to the Trustee may waive future compliance by the Company with
any provision of this Indenture or the Securities of such series.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 6.04, may not:
(i) extend the stated maturity of the Principal of, or any sinking
fund obligation or any installment of interest on, such Holder's
Security, or reduce the Principal amount thereof or the rate of
interest thereon (including any amount in respect of original issue
discount), or any premium payable with respect thereto, or adversely
affect the rights of such Holder under any mandatory redemption or
repurchase provision or any right of redemption or repurchase at the
option of such Holder, or reduce the amount of the Principal of an
Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 6.02 or the
amount thereof provable in bankruptcy, or change any place of payment
where, or the currency in which, any Security or any premium or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the due date therefor;
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(ii) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is
required for any such supplemental indenture, for any waiver of
compliance with certain provisions of this Indenture or certain
Defaults and their consequences provided for in this Indenture;
(iii) waive a Default in the payment of Principal of or interest
on any Security of such Holder; or
(iv) modify any of the provisions of this Section 9.02, 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.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series with respect to such covenant
or provision, shall be deemed not to affect the rights under this Indenture of
the Holders of Securities of any other series.
It shall not be necessary for the consent of any Holder under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company or, at the Company's written request, the Trustee
shall give to the Holders affected thereby a notice briefly describing the
amendment, supplement or waiver. The Company or, at the Company's written
request, the Trustee will mail supplemental indentures to Holders upon request.
Any failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Section 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
53
<PAGE>
The Company may, but shall not be obligated to, fix a record date
(which may be not less than 10 nor more than 60 days prior to the solicitation
of consents) for the purpose of determining the Holders of the Securities of any
series affected entitled to consent to any amendment, supplement or waiver. If a
record date is fixed, then, notwithstanding the immediately preceding paragraph,
those Persons who were such Holders at such record date (or their duly
designated proxies) and only those Persons shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be such Holders after such record date.
No such consent shall be valid or effective for more than 90 days after such
record date.
After an amendment, supplement or waiver becomes effective with respect
to the Securities of any series affected thereby, it shall bind every Holder of
such Securities theretofore or thereafter authenticated and delivered hereunder
unless it is of the type described in any of clauses 9.02(i) through 9.02(iv) of
Section 9.02. In case of an amendment or waiver of the type described in clauses
9.02(i) through 9.02(iv) of Section 9.02, the amendment or waiver shall bind
each such Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
Section 9.04. Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of any Security, the Trustee may require
the Holder thereof to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and return it to
the Holder and the Trustee may place an appropriate notation on any Security of
such series thereafter authenticated. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security of the same series and tenor that
reflects the changed terms.
Section 9.05. Trustee to Sign Amendments, Etc.. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article 9 is authorized or permitted by this
Indenture, stating that all requisite consents have been obtained or that no
consents are required and stating that such supplemental indenture constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to customary exceptions. Subject
to the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights of the Trustee. The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver that affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
54
<PAGE>
Section 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article 9 shall conform to the requirements
of the Trust Indenture Act as then in effect.
ARTICLE 10
Miscellaneous
Section 10.01. Trust Indenture Act of 1939. This Indenture shall
incorporate and be governed by the provisions of the Trust Indenture Act that
are required to be part of and to govern indentures qualified under the Trust
Indenture Act. If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by operation of Section 318(c) of the Trust Indenture
Act, the imposed duties shall control.
Section 10.02. Notices. Any notice or communication shall be
sufficiently given if written and (a) if delivered in person when received or
(b) if mailed by first class mail 5 days after mailing, or (c) as between the
Company and the Trustee if sent by facsimile transmission, when transmission is
confirmed, in each case addressed as follows:
if to the Company:
Sotheby's Holdings, Inc.
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
Telecopy: (248) 646-2681
Attention: Jeffrey H. Miro
and
Sotheby's
1334 York Avenue
New York, NY 10021
Attention: Donaldson Pillsbury, Esq.
if to the Trustee:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Telecopy: 212-946-8161
Attention: Global Trust Services
55
<PAGE>
The Company or the Trustee by written notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication shall be sufficiently given to Holders of
Securities by mailing to such Holders at their addresses as they shall appear on
the Security Register. Notice mailed shall be sufficiently given if so mailed
within the time prescribed. Copies of any such communication or notice to a
Holder shall also be mailed to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 10.02, it is duly given, whether or not the
addressee receives it.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case it shall be impracticable to give notice as herein
contemplated, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 10.03. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied
with.
Section 10.04. Statements Required in Certificate or Opinion . Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
56
<PAGE>
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
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, statement 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 that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information that is in the possession of the Company, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Company, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants unless
57
<PAGE>
such officer or counsel, as the case may be, knows that the certificate or
opinion or representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate or opinion of any independent firm of public accountants filed with
the Trustee shall contain a statement that such firm is independent.
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 10.05. Evidence of Ownership. The Company, the Trustee and any
agent of the Company or the Trustee may deem and treat the person in whose name
any Security shall be registered upon the Security Register for such series as
the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the Principal of and,
subject to the provisions of this Indenture, interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice to the contrary.
Section 10.06. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
Section 10.07. Payment Date Other than a Business Day. If any date for
payment of Principal or interest on any Security shall not be a Business Day at
any place of payment, then payment of Principal of or interest on such Security,
as the case may be, need not be made on such date, but may be made on the next
succeeding Business Day at any place of payment with the same force and effect
as if made on such date and no interest shall accrue in respect of such payment
for the period from and after such date.
Section 10.08. Governing Law. The laws of the State of New York shall
govern this Indenture and the Securities.
Section 10.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture or
agreement may not be used to interpret this Indenture.
58
<PAGE>
Section 10.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 10.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 10.12. Separability. 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 10.13. Table of Contents, Headings, Etc.. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms and provisions hereof.
Section 10.14. Incorporators, Shareholders, Officers and Directors of
Company Exempt from Individual Liability . No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or any indenture
supplemental hereto, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such or against any
past, present or future shareholder, officer, director or employee, as such, of
the Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the holders thereof and as part of the
consideration for the issue of the Securities.
Section 10.15. Judgment Currency. The Company agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the Principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final
59
<PAGE>
unappealable judgment is entered, unless such day is not a Business
Day, then, to the extent permitted by applicable law, the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Business Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection 10.15), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture.
60
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
SOTHEBY'S HOLDINGS, INC.
as the Company
By:
-------------------------------
Name:
Title:
(SEAL)
Attest:
- --------------------------------
Name:
Title: Secretary
THE CHASE MANHATTAN BANK
as Trustee
By:
-------------------------------
Name:
Title:
<PAGE>
STATE OF )
-----------------
)
COUNTY OF )
-----------------
BEFORE ME, the undersigned authority, on this ___ day of _______,
1998, personally appeared ___________________, ______________________ of
Sotheby's Holdings, Inc., a Michigan corporation, known to me (or proved to me
by introduction upon the oath of a person known to me) to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he/she executed the same as the act of such corporation for the
purposes and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ___ DAY OF
__________, 1998.
(SEAL) ------------------------------
NOTARY PUBLIC, STATE OF
Print Name:
Commission Expires:
<PAGE>
Exhibit 4(b)
REGISTERED REGISTERED No. __
U.S.$____________ CUSIP: _________
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
SOTHEBY'S HOLDINGS, INC.
___% NOTE DUE ____
Sotheby's Holdings, Inc., a Michigan corporation (together with its
successors and assigns, the "Issuer"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of
(U.S.$ ), on __________, ____ (the "Maturity Date"), and to pay
interest thereon at the rate of ___% per annum from _______, 1998, until the
principal hereof is paid or duly made available for payment, semiannually in
arrears on the 1st day of ________ and ________ in each year (each such date
an "Interest Payment Date") commencing on __________,1998, and on the
Maturity Date.
Reference is hereby made to the further provisions of this certificate set
forth on the succeeding pages hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, Sotheby's Holdings, Inc. has caused this Registered
Global Security to be duly executed under its corporate seal.
DATED: _______, 1998 SOTHEBY'S HOLDINGS, INC.
[SEAL] By:
---------------------------------
Name:
Title:
Attest:
------------------------------------
Title: Assistant Secretary
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------------------------
Authorized Officer
2
<PAGE>
Reverse of Security
Interest on this Registered Global Security (as described below) will
accrue from the most recent Interest Payment Date to which interest has been
paid or duly provided for, or, if no interest has been paid or duly provided
for, from _______, 1998, until the principal hereof has been paid or duly made
available for payment. The interest so payable on any Interest Payment Date will
be paid to the person in whose name this Registered Global Security (or one or
more predecessor Registered Global Securities) is registered at the close of
business on the fifteenth day of the month preceding the month in which such
Interest Payment Date occurs (whether or not a Business Day) (each such date a
"Record Date"). Interest payments on this Registered Global Security will
include interest accrued to but excluding the Interest Payment Dates or the
Maturity Date, as the case may be.
Payment of the principal of this Registered Global Security and the
interest due on the Maturity Date will be made upon surrender of this Registered
Global Security at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
interest on this Registered Global Security will be made 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 Issuer, interest may be paid by wire transfer or by mailing checks
for such interest payable to or upon the written order of such Holder at its
last address as it appears on the registry books of the Issuer.
This Registered Global Security is one of the duly authorized debt
securities of the Issuer (the "Securities" and, individually, a "Security")
issued or to be issued under and pursuant to an Indenture dated as of ________,
1998, between the Issuer and The Chase Manhattan Bank, as Trustee (the
"Trustee," which term includes any successor Trustee under the Indenture) and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities of the
Issuer, the Trustee and Holders of the Securities and the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Indenture are hereby incorporated by reference herein. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption or repayment
provisions (if any), may be subject to different sinking, purchase or analogous
funds (if any) and may otherwise vary as provided in the Indenture. This
security is a Registered Global Security of a series of Securities designated as
the __% Notes Due ___ of the Issuer (the "Notes"), limited in aggregate
principal amount to U.S.$___________.
[The Notes will not be subject to any sinking fund and will not be
redeemable at the option of the Issuer or repayable at the option of the Holder
prior to maturity.]
[The notes may be redeemed at the option of the Issuer as a whole, or from
time to time in part, on any date after _____________ and prior to maturity,
upon mailing a notice of such redemption not less that 30 nor more than 60 days
prior to the date fixed for redemption to the Holders of Notes at their last
registered addresses, all as further provided in the Indenture, at the
3
<PAGE>
following redemption prices (expressed in percentage of the principal amount)
together in each case with accrued interest to the date fixed for redemption:
If redeemed during the twelve-month period beginning ____________,
Year Percentage Year Percentage
- ---- ---------- ---- ----------
]
The Issuer will appoint a registrar for the Notes, and the registrar will
maintain at its office in the Borough of Manhattan, The City of New York, a
register for the registration and transfer of Notes. Subject to the limitations,
terms and conditions set forth herein and in the Indenture, this Registered
Global Security may be transferred at the aforesaid office of the Trustee by
surrendering this Registered Global Security for cancellation and thereupon the
Issuer shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees, in exchange herefor, a new Registered Global
Security or Registered Global Securities having identical terms and provisions
and having a like aggregate principal amount in authorized denominations. Upon
the occurrence of certain events specified in Section 2.07 of the Indenture,
this Registered Global Security is exchangeable at the office of the Trustee for
definitive registered Notes without coupons of authorized denominations in an
equal aggregate principal amount and having identical terms and provisions as
the surrendered Registered Global Security.
All Registered Global Securities surrendered for transfer or exchange shall
be duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to, the Issuer and the Trustee and executed by the
registered Holder or by the Holder's attorney duly authorized in writing. The
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer.
In case an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series issued under such Indenture
then outstanding and affected, voting as one class, to add any provisions to, or
change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the Holders of the Securities of each series
so affected; provided that the Issuer and the Trustee may not, without the
consent of the Holder of each outstanding Security affected thereby, (i) extend
the final maturity of the principal of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or change the
currency in which the principal thereof (including any amount in respect of
original issue discount) or interest thereon is payable, or reduce the amount of
any original issue discount security payable upon acceleration or provable in
bankruptcy, or impair
4
<PAGE>
the right to institute suit for the enforcement of any payment on any Security
when due or (ii) reduce the aforesaid percentage in principal amount of
Securities of any series issued under such Indenture, the consent of the Holders
of which is required for any such modification. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Securities of any series, prior to any declaration accelerating the maturity
of such Securities, the Holders of a majority in aggregate principal amount
outstanding of the Securities of all series with respect to which an Event of
Default shall have occurred and continuing (voting as a single class) may, on
behalf of the Holders of all such Securities, waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to any default in the payment of the principal of or interest on
any of the Securities. Any such consent or waiver by the Holder of this
Registered Global Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future Holders and
owners of this Registered Global Security and any Securities which may be issued
in exchange or substitution herefor or on registration of transfer hereof,
irrespective of whether or not any notation thereof is made upon this Registered
Global Security or such other Securities.
No provision of this Registered Global Security or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Registered Global Security at the time, place and rate, and in the coin or
currency, herein prescribed unless otherwise agreed between the Issuer and the
registered Holder of this Registered Global Security.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem
and treat the registered Holder hereof as the absolute owner of this Registered
Global Security (whether or not this Registered Global Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon, and for all other
purposes, and none of the Issuer, the Trustee or any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Issuer or of any successor corporation, either directly or through
the Issuer or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly waived and
released by the acceptance hereof and as part of the consideration for the issue
hereof.
This Registered Global Security shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in this Registered Global Security, which are defined in the
Indenture and not otherwise defined herein, shall have the meanings assigned to
them in the Indenture.
5
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Registered Global Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
6
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
- ---------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Registered Global Security, and all rights thereunder, hereby
irrevocably constituting and appointing
- -------------------------------------------------------------------------------
attorney to transfer such security on the books of the Issuer, with full power
of substitution in the premises.
Dated: Signature:
----------------------- -----------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Registered Global Security in
every particular without alteration or enlargement or any change
whatsoever.
7
<PAGE>
Exhibit 5
[MIRO WEINER & KRAMER LETTERHEAD]
June 3, 1998
Sotheby's Holdings, Inc.
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
Re: Registration Statement on Form S-3 with respect to
$200 Million Principal Amount of Debt Securities
(the "Registration Statement")
Gentlemen:
This opinion is furnished to you (the "Company") in connection with the
filing of the Company's Registration Statement with the Securities and Exchange
Commission. Terms used in this opinion letter that are defined in the
Registration Statement and that are not otherwise defined in this opinion letter
shall have the meanings ascribed to them in the Registration Statement.
You have supplied us with, and we have examined in our capacity as counsel
to the Company, such documents and other information as we deem necessary and
relevant as a basis for the opinion herein expressed. In all such examinations,
we have assumed the genuineness of all signatures and all original and certified
documents and the conformity to original and certified documents of all copies
submitted to us as conformed or photostatic copies. As to various questions of
fact material to such opinions, we have relied upon statements or certificates
of officers and representatives of the Company and others.
Based upon the foregoing, it is our opinion that the Debt Securities
registered under the Registration Statement will, when issued, be duly and
validly issued, fully paid and nonassessable, and will, when issued be binding
obligations of the Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement, and we further consent to the reference to our firm under the caption
"Legal Matters" in the Prospectus that constitutes a part of the Registration
Statement.
Very truly yours,
/s/ Miro Weiner & Kramer
<PAGE>
Exhibit 12
Sotheby's Holdings, Inc.
Computation of Ratio of Earnings to Fixed Charges
(in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31, Fiscal Year Ended December 31,
1998 1997 1997 1996 1995 1994 1993
--------- ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Income (Loss) before taxes.............$ (9,972) $ (11,120) $ 64,457 $ 68,244 $ 54,303 $ 33,765 $ 32,157
Fixed Charges
Interest Expense.................. 2,774 614 6,018 3,643 5,850 4,013 4,281
Portion of rent expense
representing interest expense... 959 805 3,219 2,870 2,517 2,105 1,914
--------- ---------- --------- --------- --------- --------- ---------
Total fixed charges excluding
capitalized interest.............. 3,733 1,419 9,237 6,513 8,367 6,118 6,195
Capitalized interest................ 75 -- -- -- -- -- --
--------- ---------- --------- --------- --------- --------- ---------
Total fixed charges(1).............. 3,808 1,419 9,237 6,513 8,367 6,118 6,195
--------- ---------- --------- --------- --------- --------- ---------
Income (Loss) before taxes and
fixed charges..................... (6,164) (9,701) 73,694 74,757 62,670 39,883 38,352
Ratio of earnings to fixed
charges........................... -- -- 7.98 11.48 7.49 6.52 6.19
Deficiency of earnings to fixed
charges(2)........................ (9,972) (11,120)
</TABLE>
- ------------------------
(1) In the ratio of earnings to fixed charges for the Company and its
subsidiaries, earnings is computed as income before taxes plus fixed
charges. Fixed charges consist of interest on all indebtedness, including
any amortization of debt discount or premium, capitalized interest and the
Company's estimate of that portion of rental expense considered to be
representative of the interest factor.
(2) Earnings are inadequate to cover fixed charges; therefore, the disclosure
above represents the deficiency of earnings to fixed charges. The Company's
business is seasonal, with peak revenues and operating income occurring in
the second and fourth quarters of each year as a result of the traditional
spring and fall art auction seasons.
<PAGE>
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Sotheby's Holdings, Inc. and subsidiaries on Form S-3 of our report dated
February 27, 1998, appearing in and incorporated by reference in the Annual
Report on Form 10-K of Sotheby's Holdings, Inc. and subsidiaries for the year
ended December 31, 1997 and to the reference to us under the headings
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
June 3, 1998
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 9th day of February, 1998.
/s/ A. ALFRED TAUBMAN
---------------------------------------
A. ALFRED TABUMAN
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 10th day of February, 1998.
/s/ THE MARQUESS OF HARTINGTON
---------------------------------------
THE MARQUESS OF HARTINGTON
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 30th day of January, 1998.
/s/ CONRAD BLACK
---------------------------------------
CONRAD BLACK
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 29th day of January, 1998.
/s/ HENRY R. KRAVIS
---------------------------------------
HENRY R. KRAVIS
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 2nd day of February, 1998.
/s/ WALTER J. P. CURLEY
---------------------------------------
WALTER J. P. CURLEY
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 30th day of January, 1998.
/s/ MAX M. FISHER
---------------------------------------
MAX M. FISHER
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 5th day of February, 1998.
/s/ VISCOUNT BLAKENHAM
---------------------------------------
VISCOUNT BLAKENHAM
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 12th day of May, 1998.
/s/ JEFFREY H. MIRO
---------------------------------------
JEFFREY H. MIRO
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a Director of Sotheby's Holdings, Inc., a Michigan
corporation (the "Company"), does hereby constitute and appoint each of Diana
D. Brooks and William S. Sheridan, with full power of substitution, as his
true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company, the Company's Registration Statement on Form
S-3 and any and all amendments (including, but not limited to, post-effective
amendments) thereto to be filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all instruments that such attorneys and agents, or either
of them, may deem necessary or advisable to enable the Company to comply with
the Act, the rules, regulations, and requirements of the Commission in
respect thereof, and the securities or "Blue Sky" laws of any State or other
governmental subdivision; and the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys and agents, and each of them
shall do or cause to be done by virtue hereof. Each such attorney or agent
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his
signature this 13th day of May, 1998.
/s/ SHARON P. ROCKEFELLER
---------------------------------------
SHARON PERCY ROCKEFELLER
<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
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
SOTHEBY'S HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
MICHIGAN 38-2478409
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
500 NORTH WOODWARD AVENUE
BLOOMFIELD HILLS, MICHIGAN 48304
(Address of principal executive offices) (Zip Code)
---------------------------------------------------------
DEBT SECURITIES
---------------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(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.
None.
- 2 -
<PAGE>
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,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, 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 State of New York, on the 3RD day of JUNE, 1998.
THE CHASE MANHATTAN BANK
By /s/ Sheik Wiltshire
---------------------------------------
/s/ Sheik Wiltshire, Second Vice President
------------------------------------------
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 12,037
Interest-bearing balances ................................ 4,054
Securities: ..................................................
Held to maturity securities.................................... 2,340
Available for sale securities.................................. 50,134
Federal funds sold and securities purchased under
agreements to resell ..................................... 24,982
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,958
Less: Allowance for loan and lease losses 2,797
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ................................... 125,161
Trading Assets ................................................ 61,820
Premises and fixed assets (including capitalized leases)....... 2,961
Other real estate owned ....................................... 347
Investments in unconsolidated subsidiaries and
associated companies...................................... 242
Customers' liability to this bank on acceptances outstanding... 1,380
Intangible assets ............................................. 1,549
Other assets................................................... 11,727
TOTAL ASSETS .................................................. $ 298,734
=========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ...................................... $ 96,682
Noninterest-bearing ......................... $ 38,074
Interest-bearing ............................ 58,608
In foreign offices, Edge and Agreement,
subsidiaries and IBF's.................................... 72,630
Noninterest-bearing ......................... $ 3,289
Interest-bearing ............................ 69,341
Federal funds purchased and securities sold under agree-
ments to repurchase............................................ 42,735
Demand notes issued to the U.S. Treasury....................... 872
Trading liabilities ........................................... 45,545
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ............ 4,454
With a remaining maturity of more than one year
through three years................................ 231
With a remaining maturity of more than three years....... 106
Bank's liability on acceptances executed and outstanding....... 1,380
Subordinated notes and debentures ............................. 5,708
Other liabilities ............................................. 11,295
TOTAL LIABILITIES ............................................. 281,638
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.................. 0
Common stock .................................................. 1,211
Surplus (exclude all surplus related to preferred stock)...... 10,291
Undivided profits and capital reserves ........................ 5,579
Net unrealized holding gains (losses) on available-for-sale
securities .............................................. (1)
Cumulative foreign currency translation adjustments ........... 16
TOTAL EQUITY CAPITAL .......................................... 17,096
---------
TOTAL LIABILITIES AND EQUITY CAPITAL........................... $ 298,734
=========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
-5-
