<TABLE>
Registration No. 333-
==================================================================================================================================
<S> <C> <C>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
AVON PRODUCTS, INC.
(Exact Name of Registrant as Specified in Its Charter)
New York 2844 13-0544597
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Number) Identification Number)
1345 Avenue of the Americas
New York, New York 10105-0196
(212) 282-5000
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices)
-----------------------
Ward M. Miller, Jr., Esq.
General Counsel
1345 Avenue of the Americas
New York, New York 10105-0196
(212) 282-5000
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)
-----------------------
Copy to:
Sarah Beshar, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
================================================================================================================
Proposed
Maximum Proposed Maximum
Title of Each Class Amount to be Offering Price Per Aggregate Amount of
of Securities to be Registered Registered Unit (1) Offering Price (1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.90% Notes due 2004................. $200,000,000 99.010% $198,020,000 $ 52,277.28
7.15% Notes due 2009................. $300,000,000 98.199% $294,597,000 $ 77,773.61
- ----------------------------------------------------------------------------------------------------------------
Total $500,000,000 - $492,617,000 $130,050.89
================================================================================================================
(1) Determined pursuant to Rule 457(f), solely for the purpose of calculating
the registration fee, on the basis of the average of the bid and asked
price for the securities on December 2, 1999.
</TABLE>
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 or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, dated December 8, 1999
Prospectus
[o], 1999
[LOGO]
AVON PRODUCTS, INC.
Offer to Exchange
$200,000,000 6.90% Notes due 2004 and
$300,000,000 7.15% Notes due 2009
for
$200,000,000 6.90% New Notes due 2004 and
$300,000,000 7.15% New Notes due 2009
-----------------------
We are offering to exchange up to $200,000,000 of our 6.90% notes due 2004
and up to $300,000,000 of our 7.15% notes due 2009 (the New Notes), which will
be registered under the Securities Act of 1933, as amended, for up to
$200,000,000 of our existing 6.90% notes due 2004 and up to $300,000,000 of our
existing 7.15% notes due 2009 (the Old Notes). We are offering to issue the New
Notes to satisfy our obligations contained in the registration rights agreement
entered into when the Old Notes were sold in transactions permitted by Rule
144A and Regulation S under the Securities Act.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that the transfer restrictions, registration
rights and additional interest provisions relating to the Old Notes do not
apply to the New Notes.
The exchange offer and withdrawal rights will expire at 5:00 p.m. New York
City time, on January [o], 2000 unless extended.
-----------------------
To exchange your Old Notes for New Notes:
o You must complete and send the letter of transmittal that accompanies
this prospectus to the exchange agent by 5:00 p.m., New York time, on
January [o], 2000.
o If your Old Notes are held in book-entry form at The Depository Trust
Company, you must instruct DTC, through your signed letter of
transmittal, that you wish to exchange your Old Notes for New Notes.
When the exchange offer closes, your DTC account will be changed to
reflect your exchange of Old Notes for New Notes.
o You should read the section called "The Exchange Offer" for
additional information on how to exchange your Old Notes for New
Notes.
-----------------------
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
<PAGE>
-----------------------
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. We are not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
----------------------
TABLE OF CONTENTS
Page
----
Where You can Find More Information..........................................3
Special Note Regarding Forward-Looking
Information...............................................................4
Summary......................................................................5
Selected Financial Data......................................................8
The Company.................................................................10
Recent Developments.........................................................11
No Cash Proceeds to the Company.............................................12
Consolidated Ratio of Earnings to Fixed
Charges..................................................................12
Capitalization..............................................................13
Description of the New Notes................................................14
The Exchange Offer..........................................................23
Certain United States Income Tax
Considerations...........................................................32
Plan of Distribution........................................................33
Notice to Investors.........................................................34
Validity of the New Notes...................................................35
Independent Accountants.....................................................35
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Avon is subject to the informational requirements of the Securities
Exchange Act and we file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
Our SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the
SEC at its public reference facilities:
<TABLE>
<S> <C> <C>
Public Reference Room Office New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of the documents at prescribed rates by writing
to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further
information on the operations of the public reference facilities. Our SEC
filings are also available at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
We incorporate by reference in this prospectus the following documents
filed by us with the SEC:
(i) Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed with the SEC on February 25, 1999;
(ii) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed with the SEC on May 14, 1999;
(iii) Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, filed with the SEC on August 12, 1999;
(iv) Our Quarterly Report on From 10-Q for the quarter ended September
30, 1999, filed with the SEC on November 15, 1999; and
(v) Our Definitive Proxy Statement, dated March 25, 1999, filed with
the on March 25, 1999.
Any statement made in a document incorporated by reference or deemed
incorporated herein by reference is deemed to be modified or superseded for
purposes of this prospectus if a statement contained in this prospectus or in
any other subsequently filed document which also is incorporated or deemed
incorporated by reference herein modifies or supersedes that statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus. We also incorporate by
reference all documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act after the date of this exchange offer and prior to
the termination of this exchange offer.
Statements made in this prospectus or in any document incorporated by
reference in this prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in
each instance reference is made to the copy of the contract or other document
filed as an exhibit to the documents incorporated by reference, each statement
being qualified in all material respects by that reference.
We will promptly provide without charge to you, upon oral or written
request, a copy of any or all of the documents incorporated by reference in
this prospectus. To obtain timely delivery, you must request the information no
later than January [o], 2000, or five business days before the expiration date,
if the exchange offer is extended. Requests should be directed to Avon, 1345
Avenue of the Americas, New York, New York 10105-0196, Attention: Ward M.
Miller, Jr., Esq., telephone (212) 282-5000.
3
<PAGE>
We have filed with the SEC under the Securities Act and the rules and
regulations thereunder a registration statement on Form S-4 with respect to the
New Notes issuable pursuant to the exchange offer. This prospectus does not
contain all of the information contained in the registration statement, certain
portions of which have been omitted pursuant to the rules and regulations of
the SEC and to which reference is hereby made.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Some of the statements included or incorporated by reference in this
prospectus constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. These statements involve known and unknown risks, uncertainties and other
factors which may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. These factors include, among
others, the following:
o general economic and business conditions in our markets;
o our ability to implement our business strategy;
o our ability to achieve anticipated cost savings and profitability
targets;
o our ability to attract and retain key executives;
o our access to financing and management of foreign currency risks;
o the impact of substantial currency exchange devaluations in our
principal foreign markets;
o our ability to successfully identify new business opportunities;
o the effect of legal and regulatory proceedings and restrictions
imposed on us or our operations by foreign governments;
o changes in the industry; and
o competition.
As a result of the foregoing and other factors, no assurance can be given
as to the future results and achievements of Avon. Neither Avon nor any other
person assumes responsibility for the accuracy and completeness of these
statements.
4
<PAGE>
SUMMARY
The following summary contains basic information about this exchange
offer. It may not contain all the information that is important to you in
making your investment decision. More detailed information appears elsewhere in
this prospectus and in our consolidated financial statements and accompanying
notes that we incorporate by reference. "The Exchange Offer" and the
"Description of New Notes" sections of this prospectus contain more detailed
information regarding the terms and conditions of the exchange offer and the
New Notes. Certain capitalized terms used in this prospectus summary are
defined elsewhere in this prospectus. Unless the context clearly implies
otherwise, the words "company," "we," "our," "ours," "us" and "Avon" refer to
Avon Products, Inc., a New York corporation.
<TABLE>
THE EXCHANGE OFFER
<S> <C>
New Notes............................................ $200,000,000 in principal amount of our new 6.90%
notes due 2004 and $300,000,000 in principal amount of
our new 7.15% notes due 2009.
The Exchange Offer................................... We are offering to issue the New Notes in exchange for a
like principal amount of outstanding Old Notes that we
issued on November 9, 1999. We are offering to issue the
New Notes to satisfy our obligations contained in the
registration rights agreement we entered into when we
sold the Old Notes in transactions pursuant to Rule 144A,
Rule 501 and Regulation S under the Securities Act. The
Old Notes were subject to transfer restrictions that will
not apply to the New Notes so long as you are acquiring
the New Notes in the ordinary course of your business,
you are not participating in a distribution of the New
Notes and you are not an affiliate of ours.
Maturity Dates....................................... November 15, 2004 and November 15, 2009.
Interest Payment Dates............................... May 15 and November 15 of each year, commencing
May 15, 2000.
Ranking.............................................. The New Notes are unsecured senior obligations of ours
and will rank equally with all of our other senior
unsecured indebtedness.
Optional Redemption.................................. We may redeem some or all of the New Notes at any time
or from time to time at the redemption price described
under the heading "Description of the New Notes--
Optional Redemption" plus accrued interest, if any, to the
date of redemption.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
Certain Covenants.................................... The indenture governing the New Notes contains
covenants that, among other things, limit our ability to:
o create liens;
o engage in certain sale/leaseback transactions;
o merge or consolidate with another company; or
o transfer substantially all of our assets.
For more details, see the section under the heading
"Description of the New Notes--Covenants" in the prospectus.
Use of Proceeds...................................... We will not receive any proceeds from the issuance of the
New Notes.
Denominations and Issuance of New Notes.............. The New Notes will be issued only in registered form
without coupons, in minimum denominations of $1,000
and multiples of $1,000.
Tenders, Expiration Date, Withdrawal................. The exchange offer will expire at 5:00 p.m., New York
City time, on January [o], 2000, unless it is extended.
To tender your Old Notes you must follow the detailed
procedures described under the heading "The Exchange
Offer--Process for Tendering" including special
procedures for certain beneficial owners and broker-
dealers. If you decide to exchange your Old Notes for
New Notes, you must acknowledge that you do not intend
to engage in and have no arrangement with any person to
participate in a distribution of the New Notes. If you
decide to tender your Old Notes pursuant to the exchange
offer, you may withdraw them at any time prior to 5:00
p.m., New York City time, on the expiration date.
Federal Income Tax Consequences...................... Your exchange of Old Notes for New Notes pursuant to
the exchange offer will not result in a gain or loss to you.
Exchange Agent....................................... The Chase Manhattan Bank is the exchange agent for the
exchange offer.
Failure to Exchange Your Old Notes................... If you fail to exchange your Old Notes for New Notes in
the exchange offer, your Old Notes will continue to be
subject to transfer restrictions and you will not have any
further rights under the registration rights agreement,
including any right to require us to register your Old
Notes or to pay any additional interest.
Trading Market....................................... To the extent that Old Notes are tendered and accepted in
the exchange offer, your ability to sell untendered, and
tendered but unaccepted, Old Notes could be adversely
6
<PAGE>
affected. There may be no trading market for the Old
Notes.
There can be no assurance that an active public market for
the New Notes will develop or as to the liquidity of any
market that may develop for the New Notes, the ability of
holders to sell the New Notes, or the price at which holders
would be able to sell the New Notes. For more details, see
the section under the heading "Notice to Investors."
</TABLE>
7
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data is derived from our audited
consolidated financial statements, except for the financial data for the nine
months ended September 30 that is derived from our unaudited consolidated
financial statements. You should read the financial data presented below in
conjunction with our consolidated financial statements, accompanying notes and
management's discussion and analysis of our results of operations and financial
condition, which are incorporated by reference into this prospectus.
<TABLE>
Nine Months Ended
September 30, Year Ended December 31,
---------------------- ------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------ ------
($ in millions, except ratios and per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Data:
Net Sales.................. $ 3,723 $ 3,664 $ 5,213 $ 5,079 $ 4,814 $ 4,492 $ 4,267
Income from continuing
operations before
income taxes, minority
interest and accounting
changes................. 285 (1) 224 (2) 456 (2) 535 510 465 434
Net income................. 161 (1) 122 (2) 270 (2) 339 318 257 196
Balance Sheet data (at
period end):
Total assets............... $ 2,527 $ 2,465 $ 2,434 $ 2,273 $ 2,222 $ 2,053 $ 1,978
Total debt................. 600 496 256 234 202 162 178
Other financing(3)......... 108 56 112 59 - - -
Total stockholders' equity. 61 204 285 285 242 193 186
Other Data:
EBITDA(4).................. 379.3 (1) 305.1 (2) 568.9 (2) 648.8 614.9 564.6 540.3
Capital expenditures....... 123.3 110.9 189.5 169.4 103.6 72.7 99.9
Ratio of total debt and
other financing to
EBITDA.................. 1.9x(1) 1.8x(2) 0.6x(2) 0.5x 0.3x 0.3x 0.3x
Ratio of EBITDA to
interest expense........ 11.5x(1) 10.0x(2) 13.9x(2) 15.5x 15.4x 13.7x 10.6x
Ratio of earnings to
fixed charges(5)........ 6.3x 5.3x 7.5x 8.5x 8.3x 7.9x 6.3x
Cash dividends per share... $ 0.54 $ 0.51 $ 0.68 $ 0.63 $ 0.58 $ 0.53 $ 0.48
Diluted EPS from
continuing operations... $ 0.61 (1) $ 0.46 (2) $ 1.02 (2) $ 1.27 $ 1.18 $ 1.05 $ 0.93
Cash Flows provided
(used) by Operating
Activities.............. $ 109.7 $ (13.6) $ 324.4 $ 315.5 $ 386.9 $ 279.0 $ 292.3
Cash Flows provided
(used) by Investing
Activities.............. $(133.5) $(104.3) $(182.3) $(175.1) $(106.6) $ (73.3) $ 54.6
Cash Flows provided
(used) by Financing
Activities.............. $ 39.7 $ 69.6 $(183.1) $(163.8) $(236.2) $(272.0) $(345.4)
- -------------------
(1) Includes a one-time charge of $151.2 million pre-tax ($121.9 million
after tax) or $0.46 per diluted share, related to our Business
Process Redesign (BPR) program. Excluding the charge, income from
continuing operations before income taxes, minority interest and
accounting changes, net income, EBITDA, ratio of total debt and other
financing to EBITDA, ratio of EBITDA to interest expense, and diluted
earnings per share were $437 million, $283 million, $531 million,
1.3x, 16.0x and $1.07, respectively, for the nine months ended
September 30, 1999.
8
<PAGE>
(2) Includes one-time charges of $154.4 million pre-tax ($122.8 million
after tax) or $0.46 per diluted share related to our BPR program.
Excluding the charges, income from continuing operations before
income taxes, minority interest and accounting changes, net income,
EBITDA, ratio of total debt and other financing to EBITDA, ratio of
EBITDA to interest expense, and diluted earnings per share were $378
million, $245 million, $460 million, 1.2x, 15.1x and $0.92,
respectively, for the nine months ended September 30, 1998, and $610
million, $393 million, $723 million, 0.5x, 17.6x and $1.48,
respectively, for the year ended December 31, 1998.
(3) "Other financing" is included in other non-current liabilities on our
Consolidated Balance Sheet at September 30, 1999 and 1998 and
December 31, 1998 and 1997.
(4) EBITDA represents income from continuing operations before income
taxes, minority interest, interest expense, depreciation and
amortization. EBITDA is a widely accepted financial indicator of a
company's ability to service and/or incur debt. However, EBITDA should
not be construed as an alternative to operating income (as determined
in accordance with generally accepted accounting principles) or to
cash flows from operating activities (as determined in accordance with
generally accepted accounting principles) and should not be construed
as an indication of our operating performance or as a measure of our
liquidity. EBITDA is not a measurement under generally accepted
accounting principles and may not be comparable with similarly titled
measures of other companies that do not compute EBITDA in the same
manner.
(5) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of earnings before income taxes and minority
interest, plus fixed charges and the amortization of capitalized
interest. "Fixed charges" consist of interest incurred on
indebtedness, amortization of debt discount, fees and expenses plus
one-third of the rental expense from operating leases, which
management believes is a reasonable approximation of the interest
component of rental expense. The ratios of earnings to fixed charges
are calculated as follows:
(Income before income taxes and minority interest) + (fixed charges) + (amortization of capitalized interest)
-------------------------------------------------------------------------------------------------------------
(fixed charges)
For the nine months ended September 30, 1999 and 1998, excluding the
one-time charges discussed above, the ratio of earnings to fixed
charges was 9.0 and 8.3, respectively. For the year ended December
31, 1998, excluding the one-time charges discussed above, the ratio
of earnings to fixed charges was 9.7.
</TABLE>
9
<PAGE>
THE COMPANY
General
We are one of the world's leading manufacturers and marketers of beauty
and related products, which include cosmetics, fragrance and toiletries (CFT);
fashion jewelry and accessories; apparel; and gift and decorative products.
Approximately 2.8 million independent sales Representatives market our products
to consumers globally. We commenced operations in 1886 and were incorporated in
the State of New York on January 27, 1916. Our business is comprised of one
industry segment, direct selling, with worldwide operations.
Global Business Strategy
In 1999, we adopted a new strategic plan to drive revenue growth and
expand our customer base around the world by building on our strengths as a
beauty marketer and a leading home direct seller. The new strategy includes,
but is not limited to, plans to upgrade our beauty image; build a global
portfolio of jewelry and accessories; and develop innovative programs to train,
motivate and retain Representatives as well as enhance their earnings
opportunities. We expect that our Business Process Redesign (BPR) programs will
continue to free resources to fund these strategic growth initiatives and
contribute to earnings growth. Spending for product innovation and advertising
are also key components in building a global beauty image and allocating our
investments towards reaching the end consumer.
Our global strategies include the following key growth initiatives:
International Expansion
Avon is one of the most widely recognized brand names in the world. We are
particularly well positioned to capitalize on growth in new international
markets due to high demand for quality products, underdeveloped retail
infrastructures and relatively attractive earnings opportunity for women. We
presently have operations in 45 countries outside the U.S. and our products are
distributed in 89 more, for coverage in 135 markets, and we continue to expand
into new markets. We have entered 21 new markets since 1990, including Russia
and China and rapidly emerging nations throughout Central Europe, and are
currently evaluating several other markets in Eastern Europe and the Pacific
region.
Direct Selling Contemporization
We continue to revolutionize our direct selling channel and Representative
experience, enabling us to reach women quickly and efficiently by offering
Representatives training, support and earnings opportunities. In addition to
new commission, sales training and communication programs, we are planning to
leverage new technology such as the Internet to improve customer service, offer
electronic ordering and communicate more effectively with Representatives.
Additionally, we annually produce more than 600 million brochures in a dozen
languages, utilizing common imagery and layouts from a single global database
to enhance our global beauty image.
Complementary Access and Image Enhancement
To accelerate growth in established industrial nations such as the U.S.,
Western Europe and Japan, we have developed new channels to reach more
customers and improve access to our products through Avon Beauty Centers and
Express Centers in the U.S., toll-free telephone numbers, direct mail and
"on-line" shopping via the Internet on our web site, Avon.com. We intend to
implement an integrated Internet strategy to focus on improving access and
accelerating growth. These complementary access programs will further increase
Avon's brand awareness and drive our global beauty image.
Strategies to increase the number of "fixed locations" that sell our
products also help reach new customers in the Pacific region. For example, the
Philippines, India and Indonesia use decentralized branches and satellite
stores to serve Representatives and customers. The branches also create
visibility for us with consumers and help build our
10
<PAGE>
beauty image. Additionally, in Malaysia, we have 145 franchised beauty
boutiques, which are staffed by franchise Representatives and located in areas
with high concentrations of Representatives. The boutiques provide more direct
and personal service to Representatives and their customers.
We continue to update the image of our core beauty products and our
portfolio of global beauty brands. In the past four years, CFT products have
all undergone extensive upgrades in packaging, imaging and formulations,
consistent with the global brands strategy. These contemporary products project
a consistent, high quality image in all markets and include brands such as
Anew, Skin-So-Soft, Avon Color, Far Away, Rare Gold, Millennia, Starring, Avon
Skin Care and Women of Earth. Global brands are growing rapidly as a percentage
of our worldwide CFT business and in 1998 and 1997, they accounted for 47% and
39%, respectively, of our core beauty sales. The development of global brands
has also enabled us to deliver a consistent beauty image around the world, as
well as improve margins through pricing and supply chain efficiencies. We are
also marketing a more vibrant beauty image through increased advertising and
research and development spending and image-building programs focused on the
consumer. In early 2000, we intend to launch our first-ever global advertising
campaign, designed to further build our worldwide beauty image.
In 1998, an important image enhancement came with the opening of the Avon
Centre, a spa, salon and retail store located in Trump Tower, New York City.
The Avon Centre emphasizes health and beauty and offers a selection of our
beauty products created exclusively for use at the Avon Centre.
Through these strategic initiatives designed to focus on high-quality,
affordable products, as well as convenience for the customer, we are not only
positioned for continued growth but also strengthening our image.
Distribution
Our products are sold worldwide by approximately 2.8 million
Representatives, approximately 445,000 of whom are in the United States. Almost
all Representatives are women who sell on a part-time basis. Representatives
are independent contractors or independent dealers, and are not agents or
employees of ours. Representatives purchase products directly from us and sell
them directly to their customers.
RECENT DEVELOPMENTS
On December 7, 1999, we announced that we estimate our dollar-denominated
sales growth in 1999 will be approximately 1% over our sales in 1998 and that we
are targeting dollar-denominated sales growth in 2000 to be in the mid-single
digits over our sales in 1999. We also announced that we expect our earnings per
share for the fourth quarter of 1999 to be approximately $0.56 per share, which
would be equal to that for the same period last year, and that we are targeting
earnings per share growth in 2000 to be in the low-to-mid teens over our
earnings per share in 1999.
These forward-looking statements are subject to all of the known and
unknown risks, uncertainties and other factors set forth in the section entitled
"Special Note Regarding Forward-Looking Information."
11
<PAGE>
NO CASH PROCEEDS TO THE COMPANY
This exchange offer is intended to satisfy certain of our obligations
under the registration rights agreement. We will not receive any proceeds from
the issuance of the New Notes and have agreed to pay the expenses of the
exchange offer. In consideration for issuing the New Notes as contemplated in
the registration statement, of which this prospectus is a part, we will
receive, in exchange, Old Notes in like principal amount. The form and terms of
the New Notes are identical in all material respects to the form and terms of
the Old Notes, except as otherwise described herein under "The Exchange Offer
- -- Terms of the Exchange Offer." The Old Notes surrendered in exchange for the
New Notes will be retired and canceled and cannot be reissued. Accordingly,
issuance of the New Notes will not result in any increase in our outstanding
debt.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to
fixed charges for the years and periods indicated:
<TABLE>
Nine Months
Ended
September 30, Year Ended December 31,
---------------- -----------------------------------
1999 1998 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Ratio of Earnings to Fixed Charges................... 6.3 (1) 5.3 (2) 7.5 (2) 8.5 8.3 7.9 6.3
- -------------------
(1) Includes a one-time charge of $151.2 million pre-tax ($121.9 million after
tax) or $0.46 per diluted share, related to our Business Process Redesign
(BPR) program. Excluding the one-time charge, the ratio of earnings to
fixed charges for the nine months ended September 30, 1999 was 9.0.
(2) Includes one-time charges of $154.4 million pre-tax ($122.8 million after
tax) or $0.46 per diluted share, related to our BPR program. Excluding the
one-time charges, the ratio of earnings to fixed charges for the nine
months ended September 30, 1998 was 8.3 and for the year ended December
31, 1998, the ratio was 9.7.
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of earnings before income taxes and minority interest, plus
fixed charges and the amortization of capitalized interest. "Fixed charges"
consist of interest incurred on indebtedness, amortization of debt discount,
fees and expenses plus one-third of the rental expense from operating leases,
which management believes is a reasonable approximation of the interest
component of rental expense. The ratios of earnings to fixed charges are
calculated as follows:
<TABLE>
<S> <C>
(Income before income taxes and minority interest) + (fixed charges) + (amortization of capitalized interest)
-------------------------------------------------------------------------------------------------------------
(fixed charges)
</TABLE>
12
<PAGE>
CAPITALIZATION
The following table shows our capitalization as of September 30, 1999 and
as adjusted to reflect the sale of the Old Notes offered on November 9, 1999.
The table does not reflect our short-term borrowings incurred after September
30, 1999 to finance our seasonal needs and the previously announced share
repurchase program, some of which borrowings were repaid with the proceeds of
the Old Notes, or adjustments to our shareholders' equity to reflect the impact
on treasury stock and total stockholders' equity of shares repurchased after
September 30, 1999. You should read this table in conjunction with our
consolidated financial statements and their accompanying notes, which are
incorporated by reference in the registration statement, of which this
prospectus is a part.
<TABLE>
September 30, 1999
--------------------------------------------
Actual Adjustment As Adjusted
----------- ---------- -----------
($ in millions)
<S> <C> <C> <C>
Short-term borrowing........................................... $ 395.7 $ -- $ 395.7
Long-term debt 204.7 (1) -- 204.7 (1)
Notes due 2004........................................... -- 200.0 200.0
Notes due 2009........................................... -- 300.0 300.0
--------- ------ ---------
Total debt.................................................. 600.4 500.0 1,100.4
Common stock................................................... 88.1 -- 88.1
Additional paid-in capital..................................... 809.3 -- 809.3
Retained earnings.............................................. 738.8 -- 738.8
Accumulated other comprehensive income......................... (346.3) -- (346.3)
Treasury stock, at cost........................................ (1,228.7)(2) -- (1,228.7)(2)
--------- ------ ---------
Total stockholders' equity.................................. 61.2 (2) -- 61.2 (2)
--------- ------ ---------
Total capitalization................................... $ 661.6 $500.0 $ 1,161.6
========= ====== =========
- -------------------
(1) Long-term debt of $204.7 million is comprised of $100.0 million of 6.55%
Notes due 2007, $100.0 million of 6.25% Notes due 2018 (putable/callable in
2003) and $4.7 million of other long-term debt.
(2) Does not reflect the changes to treasury stock and total stockholders'
equity relating to the shares repurchased after September 30, 1999.
</TABLE>
13
<PAGE>
DESCRIPTION OF THE NEW NOTES
The following summaries of certain provisions of the indenture do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all the provisions of the indenture, including the definitions
therein of certain terms. Because the following is only a summary, it does not
contain all information that you may find useful. For further information you
should read the New Notes and the indenture.
General
The Old Notes were, and the New Notes will be, issued under an indenture
dated as of November 9, 1999 (as supplemented from time to time) between us and
The Chase Manhattan Bank, as trustee ("Trustee"). The terms of the New Notes
are identical in all material respects to the terms of the Old Notes, except
that the transfer restrictions, registration rights and additional interest
provisions relating to the Old Notes do not apply to the New Notes.
The Old Notes and the New Notes will be considered collectively to be a
single class for all purposes under the indenture, including, without
limitation, waivers and amendments.
The New Notes are unsecured senior obligations of the Company and will
rank pari passu with all other unsecured and unsubordinated indebtedness of the
Company.
The New Notes are limited to $200,000,000 aggregate principal amount for
the notes due 2004 and $300,000,000 aggregate principal amount for the notes
due 2009. Each series of New Notes will mature on November 15 of its respective
year of maturity.
The New Notes bear interest at the rates per annum shown on the front
cover of this prospectus from November 9, 1999 or from the most recent interest
payment date to which interest has been paid or provided for, payable
semi-annually on May 15 and November 15 of each year, commencing May 15, 2000,
to the person in whose name the New Note (or any predecessor Note) is
registered at the close of business on the preceding May 1 or November 1, as
the case may be.
The New Notes are not redeemable prior to maturity, except as described
below under "--Optional Redemption," and do not have the benefit of a sinking
fund. Principal of and interest on the New Notes will be payable, and the
transfer of New Notes will be registrable, at the office of the Trustee at 450
W. 33rd St., 15th Floor, New York, New York. In addition, payment of interest
may, at the option of the Company, be made by check mailed to the address of
the person entitled thereto as it appears in the Security Register.
The New Notes will be issued only in registered form without coupons in
minimum denominations of $1,000 and integral multiples of $1,000. No service
charge will be made for any registration of transfer or exchange of New Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. Each of the notes
due 2004 and the notes due 2009 will be represented by one or more Global Notes
registered in the name of a nominee of The Depository Trust Company, New York,
New York. Except as set forth under "Book-Entry; Delivery and Form" below, New
Notes will not be issuable in certificated form.
Optional Redemption
The New Notes will be redeemable, as a whole or in part, at our option, at
any time or from time to time, by mailing notice to the registered address of
each holder of New Notes at least 30 days but not more than 60 days prior to
the redemption. The redemption price will be equal to the greater of (1) 100%
of the principal amount of the New Notes to be redeemed or (2) the sum of the
present values of the Remaining Scheduled Payments (as defined below) on those
New Notes discounted, on a semiannual basis (assuming a 360-day year consisting
of twelve 30- day months), at a rate equal to the sum of the applicable
Treasury Rate (as defined below) plus (i) 20 basis points
14
<PAGE>
with respect to the notes due 2004 or (ii) 25 basis points with respect to the
notes due 2009, as the case may be. Accrued interest, if any, will be paid to
the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the New Notes that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of the New Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee at the direction of the
Company.
"Comparable Treasury Price'" means, with respect to any Redemption Date,
as determined by the Trustee (i) the average of the Reference Treasury Dealer
Quotations (as defined below) for such Redemption Date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.
"Redemption Date" when used with respect to any New Note to be redeemed,
means the date which is a Business Day fixed for such redemption by the Company
pursuant to the indenture.
"Reference Treasury Dealers" means Salomon Smith Barney Inc., J.P. Morgan
Securities Inc., Banc of America Securities LLC, Chase Securities Inc.,
Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated and Warburg
Dillon Read LLC and their respective successors. If any Reference Treasury
Dealer shall cease to be a primary U.S. Government securities dealer, we will
substitute another nationally recognized investment banking firm that is a
primary U.S. Government securities dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer, at 5:00 p.m., New
York City time, on the third business day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to the New Notes to be
redeemed, the remaining scheduled payments of principal of and interest on
those New Notes that would be due after the related Redemption Date but for
that redemption; provided, however, that if such Redemption Date is not an
interest payment date with respect to the New Notes to be redeemed, the amount
of the next succeeding scheduled interest payment on those New Notes will be
reduced by the amount of interest accrued on such New Notes to such Redemption
Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding that Redemption Date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that Redemption Date.
On or after the Redemption Date, interest will cease to accrue on the New
Notes or any portion of the New Notes called for redemption (unless we default
in the payment of the redemption price and accrued interest). On or before the
Redemption Date, we will deposit with a paying agent (or the Trustee) money
sufficient to pay the redemption price of and accrued interest on the New Notes
to be redeemed on that date. If less than all of the New Notes are to be
redeemed, the New Notes to be redeemed shall be selected by the Trustee, pro
rata, by lot or by a method the Trustee deems to be fair and appropriate.
15
<PAGE>
Covenants
Negative Pledge
The Company has agreed that if the Company or any subsidiary shall issue,
assume, incur or guarantee any indebtedness secured by a lien on any Principal
Property (as defined below) or on any shares of capital stock of any subsidiary
("Secured Debt"), the Company will secure, or cause such subsidiary to secure,
the New Notes equally and ratably with such Secured Debt, unless after giving
effect thereto the aggregate amount of all such Secured Debt, together with all
Attributable Debt (as defined below) of the Company and its subsidiaries in
respect of sale and leaseback transactions to which the restriction referred to
below applies, would not exceed 20% of the Consolidated Net Tangible Assets (as
defined below) of the Company and its consolidated subsidiaries.
Secured Debt does not include indebtedness secured by:
(a) liens on any Principal Property acquired by the Company or a
subsidiary after the date of the indenture to secure or provide for
the payment or financing of all or any part of the purchase price
thereof or construction of fixed improvements thereon (prior to, at
the time of or within 180 days after the latest of the acquisition,
completion of construction or commencement of commercial operation
thereof);
(b) liens on any shares of stock or Principal Property acquired by the
Company or a subsidiary after the date of the indenture existing at
the time of such acquisition;
(c) liens on any shares of stock or Principal Property of a corporation
which is merged into or consolidated with the Company or a
subsidiary or substantially all of the assets of which are acquired
by the Company or a subsidiary;
(d) liens securing indebtedness of a subsidiary owing to the Company or
another subsidiary;
(e) liens existing at the date of the indenture;
(f) liens on any Principal Property being constructed or improved
securing loans to finance such construction or improvements;
(g) liens in favor of governmental bodies of the United States or any
state thereof or any other country or political subdivision thereof
to secure partial, progress or advance payments pursuant to any
contract or statute, or to secure any indebtedness incurred or
guaranteed for the purpose of financing all or any part of the cost
of acquiring, constructing or improving the property subject to such
liens;
(h) liens securing taxes, assessments or governmental charges or levies
not yet delinquent, or already delinquent but the validity of which
is being contested in good faith;
(i) liens arising by reason of deposits necessary to qualify the Company
or any subsidiary to conduct business, maintain self-insurance, or
obtain the benefit of, or comply with, any law; or
(j) extensions, renewals or replacement of liens referred to in the
foregoing clauses provided that the indebtedness secured is not
increased or the lien extended to any additional assets.
Restriction on Sale and Leaseback Transactions
The Company has also agreed that neither the Company nor any subsidiary
will enter into, assume, guarantee, or otherwise become liable with respect to
any sale and leaseback transaction involving any Principal Property, unless
immediately after giving effect thereto the sum, without duplication, of:
16
<PAGE>
(i) the aggregate principal amount of all Secured Debt; and
(ii) the aggregate amount of all Attributable Debt in respect of sale and
leaseback transactions to which this restriction applies
would not exceed 20% of the Consolidated Net Tangible Assets of the Company and
its consolidated subsidiaries.
This restriction will not apply to the extent that, during the period
commencing 60 days prior to and ending 120 days after a sale and leaseback
transaction, the Company or a subsidiary applies an amount equal to the
Attributable Debt with respect to such sale and leaseback transaction:
(i) to the acquisition, directly or indirectly and in whole or in part,
of Principal Properties, or
(ii) to the retirement of long-term indebtedness (other than mandatory
prepayment or retirement) of the Company or any subsidiary.
This restriction will also not apply to any sale and leaseback
transaction:
(i) between the Company and a subsidiary or between subsidiaries, or
(ii) involving the taking back of a lease for a period of three years or
less.
"Attributable Debt" means, as of the time of determination, the present
value (discounted at the rate per annum equal to the rate of interest implicit
in the lease involved in such sale and leaseback transaction, as determined in
good faith by the Company) of the obligation of the lessee under a sale and
leaseback transaction for rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges or any amounts required to be paid
by such lessee thereunder contingent upon the amount of sales or similar
contingent awards) during the remaining term of such lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such rental payments shall also include
the amount of such penalty, but no rental payments shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.
"Consolidated Net Tangible Assets" means the total assets shown on the
most recent audited annual consolidated balance sheet of the Company and its
consolidated subsidiaries, after deducting the amount of all current
liabilities and intangible assets.
"Principal Property" means any manufacturing plant, testing or research
and development facility, distribution facility, processing plant or warehouse
(including, without limitation, land, fixtures and equipment), owned or leased
by the Company or any subsidiary (including any of the foregoing acquired or
leased after the date of the indenture) and located within the United States of
America, its territories and possessions, unless the Board of Directors of the
Company determines in good faith that such plant or facility is not of material
importance to the total business conducted by the Company and its consolidated
subsidiaries.
The indenture does not otherwise restrict the incurrence of debt by the
Company or its subsidiaries.
Consolidation, Merger and Sale of Assets
The Company has also agreed that it will not consolidate with or merge
into, or convey, transfer or lease its properties and assets substantially as
an entity to, any Person (a "successor Person"), and may not permit any Person
to merge into, or convey, transfer or lease its properties and assets
substantially as an entirety to, the Company, unless:
17
<PAGE>
(i) the successor Person (if not the Company) is a corporation,
partnership or trust organized and validly existing under the laws of any
domestic jurisdiction and assumes the Company's obligations on the New Notes
and under the indenture;
(ii) immediately after giving effect to the transaction, and treating any
indebtedness which becomes an obligation of the Company as a result of the
transaction as having been incurred by it at the time of the transaction, no
Event of Default and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing; and
(iii) certain other conditions are met.
Events of Default
Each of the following will constitute an Event of Default under the
indenture:
(a) failure to pay principal of any New Note at its maturity;
(b) failure to pay any interest on any New Note when due, continued for 30
days;
(c) failure to perform any covenant of the Company in the indenture,
continued for 60 days after written notice of such failure is given as provided
in the indenture;
(d) failure by the Company to pay when due (subject to any applicable
grace period) the principal of, or acceleration of, any indebtedness for money
borrowed by the Company having an aggregate principal amount outstanding of at
least $50,000,000, if, in the case of any such failure, such indebtedness has
not been discharged or, in the case of any such acceleration, such indebtedness
has not been discharged or such acceleration has not been rescinded or
annulled, in each case within 30 days after written notice has been given by
the Trustee, or the holders of at least 25% in principal amount of the New
Notes, as provided in the indenture; and
(e) certain events in bankruptcy, insolvency or reorganization.
If an Event of Default (other than an Event of Default described in clause
(e) above) shall occur and be continuing, either the Trustee or the holders of
at least 25% in aggregate principal amount of the outstanding New Notes and Old
Notes, if any, by notice as provided in the indenture may declare the principal
amount of the New Notes to be due and payable immediately. If an Event of
Default described in clause (e) above shall occur, the principal amount of all
the outstanding New Notes and Old Notes, if any, will automatically, and
without any action by the Trustee or any holder, become immediately due and
payable. After any such acceleration, but before a judgment or decree for
payment of the money due, the holders of a majority in aggregate principal
amount of the New Notes and Old Notes, if any, may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal, have been cured or waived
as provided in the indenture. For information as to waiver of defaults, see
"--Modification and Waiver."
Subject to the provisions of the indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders, unless such
holders shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, the holders of a majority in
aggregate principal amount of the New Notes and Old Notes, if any, will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the New Notes and Old Notes, if any.
No holder of a New Note will have any right to institute any proceeding
with respect to the indenture, or for the appointment of a receiver or a
Trustee, or for any other remedy thereunder, unless:
18
<PAGE>
(i) such holder has previously given to the Trustee written notice of a
continuing Event of Default with respect to the New Notes;
(ii) the holders of at least 25% in aggregate principal amount of the New
Notes and Old Notes, if any, have made written request, and such holder or
holders have offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee; and
(iii) the Trustee has failed to institute such proceeding, and has not
received from the holders of a majority in aggregate principal amount of the
outstanding New Notes and Old Notes, if any, a direction inconsistent with such
request, within 60 days after such notice, request and offer. However, such
limitations do not apply to a suit instituted by a holder of a New Note for the
enforcement of payment of the principal of or interest on such New Note on or
after the applicable due date specified in such New Note.
The Company will be required to furnish to the Trustee annually a
statement by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the indenture and, if so, specifying all such
known defaults.
Modification and Waiver
Modifications and amendments of the indenture may be made by the Company
and the Trustee with the consent of the holders of at least a majority in
aggregate principal amount of New Notes and Old Notes, if any, affected by such
modification or amendment.
No such modification or amendment may, without the consent of the holder
of each outstanding New Note affected thereby,
(a) change the stated maturity of the principal of, or any
installment of interest on, any New Note;
(b) reduce the principal amount of or interest on, any New Note;
(c) change the place or currency of payment of principal of or
interest on, any New Note;
(d) impair the right to institute suit for the enforcement of any
payment on any New Note;
(e) reduce the percentage in principal amount of outstanding New
Notes, the consent of whose holders is required for modification or
amendment of the indenture;
(f) reduce the percentage in principal amount of outstanding New
Notes necessary for waiver of compliance with certain provisions of the
indenture or for waiver of certain defaults; or
(g) modify such provisions with respect to modification and waiver.
The holders of at least a majority in principal amount of the outstanding
New Notes and Old Notes, if any, may waive compliance by the Company with
certain restrictive provisions of the indenture. The holders of a majority in
principal amount of the outstanding New Notes and Old Notes, if any, may waive
any past default under the indenture, except a default in the payment of
principal or interest and certain covenants and provisions of the indenture
which cannot be amended without the consent of the holder of each New Note.
Defeasance and Discharge; Covenant Defeasance
The Company may elect, at its option at any time, to have the indenture
provisions relating to defeasance and discharge of indebtedness, or relating to
defeasance of certain restrictive covenants in the indenture, applied to the
outstanding New Notes.
19
<PAGE>
Defeasance and Discharge
The indenture provides that upon the Company's exercise of its option to
have the provisions relating to defeasance and discharge applied to the New
Notes, the Company will be discharged from all its obligations with respect to
the New Notes (except for certain obligations to replace stolen, lost or
mutilated New Notes, to maintain paying agencies and to hold moneys for payment
in trust) upon the deposit in trust for the benefit of the holders of the New
Notes of money or U.S. Government Obligations, or both, which, through the
payment of principal and interest in respect thereof in accordance with their
terms, will provide money in an amount sufficient to pay the principal of and
interest on the New Notes at maturity in accordance with the terms of the
indenture and the New Notes. Such defeasance or discharge may occur only if,
among other things, the Company has delivered to the Trustee an opinion of
counsel to the effect that the Company has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that holders of the New
Notes will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge were not to
occur.
Defeasance of Certain Covenants
The indenture provides that, upon the Company's exercise of its option to
have the provisions relating to defeasance of certain restrictive covenants
applied to the New Notes, the Company may omit to comply with certain
restrictive covenants, including those described under " -- Covenants--Negative
Pledge," "--Covenants --Restriction on Sale and Leaseback Transactions" and
"--Covenants--Consolidation, Merger and Sale of Assets," and the occurrence of
certain Events of Default, which are described above in clause (c) (with
respect to such restrictive covenants) and clause (d) under "--Events of
Default," will be deemed not to be or result in an Event of Default, in each
case with respect to the New Notes.
The Company, in order to exercise such option, will be required, among
other things:
(1) to deposit, in trust for the benefit of the holders of the New
Notes, money or U.S. Government Obligations, or both, which, through
the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount
sufficient to pay the principal of and interest on the New Notes at
maturity in accordance with the terms of the indenture and the New
Notes, and
(2) to deliver to the Trustee an opinion of counsel to the effect
that holders of the New Notes will not recognize gain or loss for
federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal
income tax on the same amount, in the same manner and at the same
times as would have been the case if such deposit and defeasance were
not to occur.
In the event the Company exercises this option and the New Notes are
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited in trust would be
sufficient to pay amounts due on the New Notes at maturity but may not be
sufficient to pay amounts due on the New Notes upon any acceleration resulting
from such Event of Default. In such case, the Company would remain liable for
such payments.
Regarding the Trustee
The indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set
forth in the indenture. During the existence of an Event of Default, the
Trustee will exercise such rights and powers vested in it under the indenture
and use the same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs.
20
<PAGE>
The indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases
or to realize on certain property received by it in respect of any such claim
as security or otherwise. The Trustee is permitted to engage in other
transactions with the Company or any affiliate of the Company; provided,
however, that if it acquires any conflicting interest (as defined in the
indenture or in the Trust Indenture Act), it must eliminate such conflict or
resign.
The Trustee under the indenture is also the Administrative Agent and a
lender under the Company's $600,000,000 Revolving Credit and Competitive
Advance Facility Agreement dated as of August 8, 1996, the Trustee with respect
to the Company's pension assets and the Issuing and Paying Agent with respect
to the Company's commercial paper program.
Book-Entry; Delivery and Form
The New Notes will be issued in fully registered form.
The New Notes will be represented by one or more fully registered global
notes and will be deposited on behalf of DTC and registered in the name of Cede
& Co., as DTC's nominee.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for persons who have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions, such as
transfers and pledges, among participants in deposited securities through
electronic book-entry charges to accounts of its participants, thereby
eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Indirect access to DTC's
system is also available to other entities such as banks, brokers, dealers, and
trust companies (the "indirect participants") that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Certain of such participants (or other representatives), together with other
entities, own DTC. The rules applicable to DTC and its participants are on file
with the SEC.
Purchases of New Notes under the DTC system must be made by or through
participants, which will receive a credit for the New Notes on DTC's records.
The ownership interest of each beneficial owner is in turn to be recorded on
the participants' and indirect participants' records. Beneficial owners will
not receive written confirmation from DTC of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
participant or indirect participant through which the beneficial owner entered
into the transaction. Transfers of ownership interests in the New Notes are to
be accomplished by entries made on the books of participants acting on behalf
of beneficial owners. Beneficial owners will not receive certificates
representing their ownership interests in New Notes, except in the event that
use of the book-entry system for the New Notes is discontinued.
The deposit of New Notes with a custodian for DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the New Notes; DTC's records
reflect only the identity of the participants to whose accounts such New Notes
are credited, which may or may not be the beneficial owners. The participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in any Global Security.
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<PAGE>
Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants and by participants and indirect
participants to beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Principal and interest payments on the New Notes will be made to DTC by
wire transfer of immediately available funds. DTC's practice is to credit
participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by participants to beneficial
owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibilities of such
participant and not of DTC or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Company,
disbursement of such payments to participants shall be the responsibility of
DTC, and disbursement of such payments to the beneficial owners shall be the
responsibility of participants and indirect participants. Neither the Company
nor the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
DTC may discontinue providing its services as securities depositary with
respect to the New Notes at any time by giving reasonable notice to the
Company. In the event that DTC notifies the Company that it is unwilling or
unable to continue as depositary for any Global Security or if at any time DTC
ceases to be a clearing agency registered as such under the Exchange Act when
DTC is required to be so registered to act as such depositary and no successor
depositary shall have been appointed within 90 days of such notification or of
the Company becoming aware of DTC's ceasing to be registered, as the case may
be, certificates for the relevant New Notes will be printed and delivered in
exchange for interests in such Global Security. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
relevant New Notes registered in such names as DTC shall direct. It is expected
that such instructions will be based upon directions received by DTC from its
participants with respect to ownership of beneficial interests in such Global
Security.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
certificates representing the New Notes will be printed and delivered.
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THE EXCHANGE OFFER
Purpose of the Exchange Offer
The Old Notes were sold by us on November 9, 1999 to the initial
purchasers pursuant to a purchase agreement, dated November 4, 1999, between us
and the initial purchasers. The initial purchasers subsequently sold the Old
Notes to "qualified institutional buyers," as defined in Rule 144A under the
Securities Act in reliance on Rule 144A, to a limited number of institutional
"accredited investors," as defined in Rule 501 under the Securities Act, and
outside the United States in accordance with Regulation S under the Securities
Act. As a condition to the initial sale of the Old Notes, Avon and the initial
purchasers entered into the registration rights agreement. Pursuant to the
registration rights agreement, we agreed that we would:
o use our reasonable best efforts to file with the SEC within 150 days
after the closing date, which is the date we delivered the Old Notes
to the initial purchasers, a registration statement under the
Securities Act with respect to the New Notes; and
o cause such registration statement to become effective under the
Securities Act within 180 days after the Closing Date.
We agreed to issue and exchange New Notes for all Old Notes validly
tendered and not withdrawn before the expiration of the exchange offer. A copy
of the registration rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part. The registration
statement is intended to satisfy certain of our obligations under the
registration rights agreement and the purchase agreement. In the event that due
to a change in current interpretations by the SEC, we are not permitted to
effect such exchange offer, it is contemplated that we will instead file a
shelf registration statement covering resales by the holders of the Old Notes
and will use our reasonable best efforts to cause such shelf registration
statement to become effective and to keep such shelf registration statement
effective for a maximum of two years from the closing date.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all Old Notes validly
tendered and not withdrawn prior to the expiration date.
We will issue $1,000 principal amount of New Notes in exchange for each
respective $1,000 principal amount of outstanding Old Notes validly tendered
and not withdrawn pursuant to the exchange offer. Old Notes may be tendered in
the principal amount of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if fewer than all of the Old Notes of a holder are
tendered for exchange, the untendered principal amount of the holder's
remaining Old Notes must be $100,000 or any integral multiple of $1,000 in
excess thereof.
The form and terms of the New Notes are the same as the form and terms of
the Old Notes except that:
o the exchange will be registered under the Securities Act and,
therefore, the New Notes will not bear legends restricting the
transfer thereof;
o holders of the New Notes will not be entitled to any of the
registration rights of holders of Old Notes under the registration
rights agreement, which rights will terminate upon the consummation
of the exchange offer; and
o the New Notes will be issued in minimum denominations of $1,000 and
integral multiples of $1,000 above that amount, while the Old Notes
were issued in minimum denominations of $100,000 and integral
multiples of $1,000 above that amount.
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The New Notes will evidence the same indebtedness as the Old Notes (which they
replace) and will be issued under, and be entitled to the benefits of, the
indenture, which also authorized the issuance of the Old Notes, such that the
New Notes and the Old Notes will be treated as a single class of securities
under the indenture.
As of the date of this prospectus, $200,000,000 of notes due 2004 and
$300,000,000 of notes due 2009 are outstanding, all of which are registered in
the name of Cede & Co., as nominee for DTC. Solely for reasons of
administration, we have fixed the close of business on December [o], 1999 as the
record date for the exchange offer for purposes of determining the persons to
whom this prospectus and the letter of transmittal will be mailed initially.
There will be no fixed record date for determining holders of the Old Notes
entitled to participate in the exchange offer.
Holders of the Old Notes do not have any appraisal or dissenters' rights
under the Business Corporation Law of the State of New York or the indenture in
connection with the exchange offer. We intend to conduct the exchange offer in
accordance with the provisions of the registration rights agreement and the
applicable requirements of the Securities Act and the rules and regulations of
the SEC thereunder.
We shall be deemed to have accepted validly tendered Old Notes when, and
if, we have given oral or written notice thereof to The Chase Manhattan Bank,
the exchange agent. The exchange agent will act as agent for the tendering
holders of Old Notes for the purpose of receiving the New Notes from the
Company.
Holders who tender Old Notes in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the exchange offer. We will pay all charges and expenses, other
than certain applicable taxes described below, in connection with the exchange
offer. See "The Exchange Offer--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "expiration date" shall mean 5:00 p.m., New York City time, on
January [o], 2000, unless we, in our sole discretion, extend the exchange offer,
in which case the term "expiration date" shall mean the latest date and time to
which the exchange offer is extended.
If we determine to extend the exchange offer, we will, prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date:
o notify the exchange agent of any extension by oral or written notice;
and
o issue a press release or other public announcement which shall
include disclosure of the approximate number of Old Notes deposited
to date.
We reserve the right, in our sole discretion:
o to delay accepting any Old Notes;
o to extend the exchange offer; or
o if, in the opinion of our counsel, the consummation of the exchange
offer would violate any applicable law, rule or regulation or any
applicable interpretation of the staff of the Commission, to
terminate or amend the exchange offer by giving oral or written
notice of such delay, extension, termination or amendment to the
exchange agent. Any such delay in acceptance, extension, termination
or amendment will be followed as promptly as practicable by a press
release or other public announcement thereof.
If the exchange offer is amended in a manner determined by us to
constitute a material change, we will promptly disclose such amendment by means
of a prospectus supplement that will be distributed to the registered
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holders of the Old Notes, and we will extend the exchange offer for a period of
five to ten business days, depending upon the significance of the amendment and
the manner of disclosure to the holders, if the exchange offer would otherwise
expire during such five to ten business day period.
Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, amendment or termination of the exchange
offer, we shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
Interest on the New Notes
The New Notes will accrue interest at the rate of 6.90% per annum for the
notes due 2004 and 7.15% per annum for the notes due 2009 from the most recent
date to which interest has been paid on the Old Notes or, if no interest has
been paid, from November 9, 1999, payable semi-annually in arrears on May 15
and November 15 of each year beginning on May 15, 2000.
Resale of the New Notes
With respect to the New Notes, based upon interpretations by the staff of
the SEC set forth in certain no-action letters issued to third parties, we
believe that a holder who exchanges Old Notes for New Notes in the ordinary
course of business, who is not participating, does not intend to participate,
and has no arrangement or understanding with any person to participate in a
distribution of the New Notes, and who is not an "affiliate" of ours within the
meaning of Rule 405 of the Securities Act, will be allowed to resell New Notes
to the public without further registration under the Securities Act and without
delivering to the purchasers of the New Notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act.
If any holder acquires New Notes in the exchange offer for the purpose of
distributing or participating in the distribution of the New Notes, such
holder:
o cannot rely on the position of the staff of the SEC enumerated in such
no-action letters issued to third parties; and
o must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction, unless an exemption from registration is otherwise
available.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes acquired by such broker-dealer as a result of market-making or
other trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The letter of transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of any New
Notes received in exchange for Old Notes acquired by such broker-dealer as a
result of market-making or other trading activities. We will make this
prospectus, as it may be amended or supplemented from time to time, available
to any such broker-dealer that requests copies of such prospectus in the letter
of transmittal for use in connection with any such resale for a period of up to
90 days after the expiration date. See "Plan of Distribution."
Procedures for Tendering
To tender in the exchange offer, a holder of Old Notes must either:
o complete, sign and date the letter of transmittal or facsimile
thereof, have the signatures thereon guaranteed if required by the
letter of transmittal, and mail or otherwise deliver such letter of
transmittal or such facsimile to the exchange agent; or
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o if such Old Notes are tendered pursuant to the procedures for
book-entry transfer set forth below, a holder tendering Old Notes may
transmit an agent's message (as defined below) to the exchange agent
in lieu of the letter of transmittal,
in either case for receipt on or prior to the expiration date.
In addition, either:
o certificates for such Old Notes must be received by the exchange agent
along with the letter of transmittal;
o a timely confirmation of a book-entry transfer (a "book-entry
confirmation") of such Old Notes into the exchange agent's account at
DTC pursuant to the procedure for book-entry transfer described
below, along with the letter of transmittal or an agent's message, as
the case may be, must be received by the exchange agent prior to the
expiration date; or
o the holder must comply with the guaranteed delivery procedures
described below.
The term "agent's message" means a message, transmitted to the exchange
agent's account at DTC and received by the exchange agent and forming a part of
the book-entry confirmation, which states that such account has received an
express acknowledgment from the tendering participant that such participant has
received and agrees to be bound by the letter of transmittal and that the
Company may enforce the letter of transmittal against such participant. To be
tendered effectively, the letter of transmittal and other required documents,
or an agent's message in lieu thereof, must be received by the exchange agent
at the address set forth below under "--Exchange Agent" prior to 5:00 p.m., New
York City time, on the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date
will constitute an agreement between such holder and us in accordance with the
terms and subject to the conditions set forth herein and in the letter of
transmittal.
The method of delivery of Old Notes, the letter of transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holder. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service, properly insured. In all cases, sufficient
time should be allowed to assure delivery to the exchange agent before the
expiration date. Do not send the letter of transmittal or any Old Notes to us.
Holders may request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect the above transactions for such holders.
Any beneficial owner(s) of the Old Notes whose Old Notes are held through
a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact such intermediary promptly and instruct such
intermediary to tender on such beneficial owner's behalf. If such beneficial
owner wishes to tender on its own behalf, such owner must, prior to completing
and executing the letter of transmittal and delivering such owner's Old Notes:
o make appropriate arrangements to register ownership of the Old Notes
in such owner's name; or
o obtain a properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal described
below (see "--Withdrawal of Tenders"), as the case may be, must be guaranteed
by an eligible institution unless the Old Notes tendered pursuant thereto are
tendered:
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o by a registered holder who has not completed the box titled "Special
Delivery Instruction" on the letter of transmittal; or
o for the account of an eligible institution.
In the event that signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantee
must be made by an eligible institution, which is a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an "eligible guarantor institution"
(within the meaning of Rule 17Ad-15 under the Exchange Act) which is a member
of one of the recognized signature guarantee programs identified in the letter
of transmittal.
If the letter of transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder exactly as such registered holder's name appears on such Old
Notes.
In connection with any tender of Old Notes in definitive certified form,
if the letter of transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with the
letter of transmittal.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may utilize DTC's Automated Tender Offer
Program to tender Old Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Notes will be determined by
us in our sole discretion, which determination will be final and binding.
We reserve the absolute right:
o to reject any and all Old Notes not properly tendered and any Old
Notes our acceptance of which would, in the opinion of our counsel,
be unlawful; and
o to waive any defects, irregularities or conditions of tender as to
particular Old Notes.
Our interpretation of the terms and conditions of the exchange offer
(including the instructions in the letter of transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as we shall
determine. Although we intend to notify holders of defects or irregularities in
connection with tenders of Old Notes, neither we, the exchange agent nor any
other person shall incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived.
While we have no present plan to acquire any Old Notes that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any Old Notes that are not tendered pursuant to the exchange offer,
we reserve the right in our sole discretion to purchase or make offers for any
Old Notes that remain outstanding subsequent to the expiration date and, to the
extent permitted by applicable law, purchase Old Notes in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the exchange offer.
By tendering Old Notes pursuant to the exchange offer, each holder of Old
Notes will represent to us that, among other things:,
o the New Notes to be acquired by such holder of Old Notes in
connection with the exchange offer are being acquired by such holder
in the ordinary course of business of such holder;
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o such holder is not participating, does not intend to participate, and
has no arrangement or understanding with any person to participate in
the distribution (within the meaning of the Securities Act) of the
New Notes;
o such holder acknowledges and agrees that any person who is
participating in the exchange offer for the purpose of distributing
the New Notes must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a
secondary resale of the New Notes acquired by such person and cannot
rely on the position of the staff of the Commission set forth in
certain no-action letters;
o such holder understands that a secondary resale transaction,
described above, and any resales of New Notes obtained by such holder
in exchange for Old Notes acquired by such holder directly from us
should be covered by an effective registration statement containing
the selling security holder information required by Item 507 or Item
508, as applicable, of Regulation S-K of the Commission; and
o such holder is not an "affiliate", as defined in Rule 405 under the
Securities Act, of ours.
If the holder is a broker-dealer that will receive New Notes for such
holder's own account in exchange for Old Notes that were acquired as a result
of market-making activities or other trading activities, such holder will be
required to acknowledge in the letter of transmittal that such holder will
deliver a prospectus in connection with any resale of such New Notes; however,
by so acknowledging and by delivering a prospectus, such holder will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Return of Old Notes
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the exchange offer will be made only after timely receipt
by the exchange agent of:
o Old Notes or a timely book-entry confirmation of such Old Notes into
the exchange agent's account at DTC; and
o a properly completed and duly executed letter of transmittal and all
other required documents, or an agent's message in lieu thereof.
If any tendered Old Notes are not accepted for any reason set forth in
the terms and conditions of the exchange offer or if Old Notes are withdrawn or
are submitted for a greater principal amount than the holders desire to
exchange, such unaccepted, withdrawn or otherwise non-exchanged Old Notes will
be returned without expense to the tendering holder thereof (or, in the case of
Old Notes tendered by book-entry transfer into the exchange agent's account at
DTC pursuant to the book-entry transfer procedures described below, such Old
Notes will be credited to an account maintained with DTC) as promptly as
practicable.
Book-Entry Transfer
The exchange agent will make a request to establish an account with
respect to the Old Notes at DTC for purposes of the exchange offer within two
business days after the date of this prospectus, and any financial institution
that is a participant in DTC's systems may make book-entry delivery of Old
Notes by causing DTC to transfer such Old Notes into the exchange agent's
account at DTC in accordance with DTC's procedures for transfer. However,
although delivery of Old Notes may be effected through book-entry transfer at
DTC, the letter of transmittal or facsimile thereof, with any required
signature guarantees and any other required documents, or an agent's message in
lieu of a letter of transmittal, must, in any case, be transmitted to and
received by the exchange agent at the address set forth below under "--Exchange
Agent" on or prior to the expiration date or pursuant to the guaranteed
delivery procedures described below.
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Guaranteed Delivery Procedures
If a holder of the Old Notes desires to tender such Old Notes and the Old
Notes are not immediately available or the holder cannot deliver its Old Notes
(or complete the procedures for book-entry transfer), the letter of transmittal
or any other required documents to the exchange agent prior to the expiration
date, a holder may effect a tender if:
o the tender is made through an eligible institution;
o prior to the expiration date, the exchange agent receives from such
eligible institution (by facsimile transmission, mail or hand
delivery) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by us setting forth the
name and address of the holder, the certificate number(s) of such Old
Notes (if applicable) and the principal amount of Old Notes tendered,
stating that the tender is being made thereby and guaranteeing that,
within three New York Stock Exchange trading days after the
expiration date:
(i) the letter of transmittal (or a facsimile thereof), or an
agent's message in lieu thereof,
(ii) the certificate(s) representing the Old Notes in proper
form for transfer or a book-entry confirmation, as the
case may be, and
(iii) any other documents required by the letter of transmittal,
will be deposited by the eligible institution with the exchange agent;
and
o such properly executed letter of transmittal (or facsimile thereof),
or an agent's message in lieu thereof, as well as the certificate(s)
representing all tendered Old Notes in proper form for transfer or a
book-entry confirmation, as the case may be, and all other documents
required by the letter of transmittal, are received by the exchange
agent within three New York Stock Exchange trading days after the
expiration date.
Upon request to the exchange agent, a form of Notice of Guaranteed
Delivery will be sent to holders who wish to tender their Old Notes according
to the guaranteed delivery procedures set forth above.
Withdrawal of Tenders
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date.
To withdraw a tender of Old Notes in the exchange offer, a written or
facsimile transmission notice of withdrawal must be received by the exchange
agent at its address set forth herein prior to the expiration date. Any such
notice of withdrawal must:
o specify the name of the person having deposited the Old Notes to be
withdrawn;
o identify the Old Notes to be withdrawn (including the certificate
number or numbers, if applicable, and principal amount of such Old
Notes); and
o be signed by the holder in the same manner as the original signature
on the letter of transmittal by which such Old Notes were tendered
(including any required signature guarantees).
If Old Notes have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn Old
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Notes and otherwise comply with the procedures of DTC. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by us, in our sole discretion, which determination shall be final
and binding on all parties.
Any Old Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the exchange offer, and no New Notes will be issued
with respect thereto, unless the Old Notes so withdrawn are validly re-
tendered. Properly withdrawn Old Notes may be re-tendered by following one of
the procedures described above under "--Procedures for Tendering" at any time
prior to the expiration date.
Termination of Certain Rights
All registration rights under the registration rights agreement accorded
to holders of the Old Notes (and all rights to receive additional interest in
the event of a Registration Default as defined therein) will terminate upon
consummation of the exchange offer. However, for a period of up to 90 days
after the registration statement is declared effective, we will keep the
registration statement effective and provide copies of the latest version of
the prospectus to any broker-dealer that requests copies of such prospectus in
the letter of transmittal for use in connection with any resale by such
broker-dealer of New Notes received for its own account pursuant to the
exchange offer in exchange for Old Notes acquired for its own account as a
result of market-making or other trading activities.
Exchange Agent
The Chase Manhattan Bank has been appointed as exchange agent for the
exchange offer. Questions and requests for assistance, requests for additional
copies of this prospectus or the letter of transmittal and requests for a copy
of the Notice of Guaranteed Delivery should be directed to the exchange agent
addressed as follows:
By Mail or Hand/Overnight Delivery: By Facsimile:
The Chase Manhattan Bank (212) 638-7380/81
55 Water Street
Room 234, North Building Confirm by Telephone:
New York, NY 10041
Attn.: Carlos Esteves (212) 638-0828
The Chase Manhattan Bank also serves as Trustee under the indenture.
Fees and Expenses
The expenses of soliciting tenders will be borne by us. The principal
solicitation is being made by mail; however, additional solicitation may be
made by telegraph, facsimile transmission, telephone or in person by our
officers and regular employees or those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We, however, will pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith.
The expenses to be incurred in connection with the exchange offer,
including registration fees, fees and expenses of the exchange agent and the
Trustee, accounting and legal fees, and printing costs, will be paid by us.
We will pay all transfer taxes, if any, applicable to the exchange of Old
Notes pursuant to the exchange offer. If, however, a transfer tax is imposed
for any reason other than the exchange of the Old Notes pursuant to the
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exchange offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
Consequence of Failure to Exchange
Participation in the exchange offer is voluntary. Holders of the Old Notes
are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
Old Notes that are not exchanged for the New Notes pursuant to the
exchange offer will remain "restricted securities" within the meaning of Rule
144(a)(3)(iv) under the Securities Act. Accordingly, such Old Notes may not be
offered, sold, pledged or otherwise transferred except:
o to a person whom the seller reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for
its own account or for the account of a qualified institutional buyer
in a transaction meeting the requirements of Rule 144A;
o in an offshore transaction complying with Rule 903 or Rule 904 of
Regulation S under the Securities Act;
o pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available)
o pursuant to an effective registration statement under the Securities
Act; or
o pursuant to another available exemption from the registration
requirements of the Securities Act, and, in each case, in accordance
with all other applicable securities laws.
Accounting Treatment
For accounting purposes, we will recognize no gain or loss as a result of
the exchange offer. The expenses of the exchange offer will be amortized over
the term of the New Notes.
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CERTAIN UNITED STATES INCOME TAX CONSIDERATIONS
The exchange of Old Notes for New Notes should not be treated as a taxable
transaction for U.S. Federal income tax purposes because the New Notes will not
be considered to differ materially in kind or in extent from the Old Notes.
Rather, the New Notes you receive should be treated as a continuation of your
investment in the Old Notes. As a result, there should be no material U.S.
Federal income tax consequences to you resulting from the exchange of Old Notes
for New Notes.
You should consult your own tax advisors concerning the tax consequences
arising under state, local, or foreign laws of the exchange of Old Notes for
New Notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes acquired by the broker-dealer as a result of market-making or
other trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of those New Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a participating
broker-dealer in connection with resales of New Notes received in exchange for
such Old Notes. For a period of up to 90 days after the expiration date, we will
make this prospectus, as amended or supplemented, available to any such
broker-dealer that requests copies of this prospectus in the letter of
transmittal for use in connection with any such resale.
We will not receive any proceeds from any sale of New Notes by
broker-dealers or any other persons. New Notes received by participating
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market,
in negotiated transactions or through the writing of options on the New Notes,
or a combination of these methods of resale, at market prices prevailing at the
time of resale or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such participating
broker-dealer that resells the New Notes that were received by it for its own
account pursuant to the exchange offer. Any broker or dealer that participates
in a distribution of New Notes may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit on any such resale of New Notes
and any commissions or concessions received by these persons may be deemed to
be underwriting compensation under the Securities Act. The letter of
transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
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NOTICE TO INVESTORS
Based on interpretations of the staff of the SEC set forth in no-action
letters issued to third parties, we believe that New Notes issued pursuant to
the exchange offer in exchange for Old Notes may be offered for resale, resold,
and otherwise transferred by a holder (other than broker-dealers, as set forth
below, and any holder that is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without further registration under the
Securities Act and without delivery to prospective purchasers of a prospectus
pursuant to the provisions of the Securities Act, provided that the holder is
acquiring the New Notes in the ordinary course of its business, is not
participating and has no arrangement or understanding with any person to
participate in the distribution of the New Notes. Eligible holders wishing to
accept the exchange offer must represent to us in the letter of transmittal
that these conditions have been met. See "The Exchange Offer--Procedures for
Tendering."
Each broker-dealer who holds Old Notes acquired for its own account as a
result of market-making or other trading activities and who receives New Notes
for its own account pursuant to the exchange offer must acknowledge that it
will deliver a prospectus in connection with any resale of New Notes. The
letter of transmittal states that by acknowledging and delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with the resales of New Notes received for the broker-dealer's own account in
exchange for Old Notes where Old Notes were acquired by the broker-dealer as a
result of market-making activities or other trading activities. For a period of
up to 90 days after the expiration date, we will make this prospectus available
to those broker-dealers (if they so request in the letter of transmittal) for
use in connection with those resales. See "Plan of Distribution."
The Old Notes and the New Notes constitute new issues of securities with
no established public trading market. We do not intend to apply for listing of
the New Notes on any securities exchange or for inclusion of the New Notes in
any automated quotation system. There can be no assurance that an active public
market for the New Notes will develop or as to the liquidity of any market that
may develop for the New Notes, the ability of holders to sell the New Notes, or
the price at which holders would be able to sell the New Notes. We have been
advised by the initial purchasers that they intend to make a market in the New
Notes; however, these entities are under no obligation to do so and any market
making activities with respect to the New Notes may be discontinued at any
time. Future trading prices of the New Notes will depend on many factors,
including among other things, prevailing interest rates our operating results
and the market for similar securities.
Any Old Notes not tendered or accepted in the exchange offer will remain
outstanding. To the extent that Old Notes are tendered and accepted in the
exchange offer, your ability to sell untendered, and tendered but unaccepted,
Old Notes could be adversely affected. Following consummation of the exchange
offer, the holders of Old Notes will continue to be subject to the existing
restrictions on transfer thereof and we will have no further obligation to
those holders, under the registration rights agreement, to provide for the
registration under the Securities Act of the Old Notes. There may be no trading
market for the Old Notes.
We will not receive any proceeds from, and have agreed to bear the
expenses of, the exchange offer. No underwriter is being used in connection
with the exchange offer.
The exchange offer is not being made to, nor will we accept surrenders for
exchange from, holders of Old Notes in any jurisdiction in which the exchange
offer or the acceptance thereof would not be in compliance with the securities
or blue sky laws of those jurisdictions.
34
<PAGE>
VALIDITY OF THE NEW NOTES
The validity of the New Notes will be passed upon for the Company by Davis
Polk & Wardwell, New York, New York.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements incorporated in this registration
statement by reference to the Annual Report on Form 10-K for the year ended
December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
35
<PAGE>
================================================================================
Avon Products, Inc.
[LOGO]
$200,000,000 6.90% New Notes due 2004
$300,000,000 7.15% New Notes due 2009
-----------------------
Prospectus
-----------------------
December [o], 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XII of the By-Laws of Avon Products, Inc. provides as follows:
Section 1. Indemnification--Third Party and Derivative Actions. (a) The
corporation shall indemnify any person made, or threatened to be made, a party
to an action or proceeding, whether civil or criminal (other than one by or in
the right of the corporation to procure a judgment in its favor), including an
action by or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any director, officer or employee of the
corporation served in any capacity at the request of the corporation, by reason
of the fact that he is or was a director or officer of the corporation, or is
or was serving such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, including excise taxes, amounts paid in settlement and expenses,
including attorney's fees, incurred in connection with any such action or
proceeding, or any appeal therein, provided that no indemnification may be made
to or on behalf of such person if a judgment or other final adjudication
adverse to such person establishes that (i) his acts were committed in bad
faith or were the result of his active or deliberate dishonesty and were
material to such action or proceeding or (ii) he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
(b) The corporation shall indemnify any person made, or threatened to be
made, a party to an action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, or of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against amounts paid in settlement
and expenses, including attorneys' fees, incurred in connection with such
action, or any appeal therein, provided that no indemnification may be made to
or on behalf of such person if (i) his acts were committed in bad faith or were
the result of his active and deliberate dishonesty and were material to such
action or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
(c) The termination of any civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such person has
not met the standard of conduct set forth in this Section 1.
Section 2. Payment of Indemnification; Repayment. (a) A person who has
been successful, on the merits or otherwise, in the defense of a civil or
criminal action or proceeding of the character described in Section 1 of this
Article shall be entitled to indemnification as authorized in such Section.
(b) Any indemnification under Section 1 of this Article, unless ordered by
a court, shall be made by the corporation in such manner as provided by law.
(c) Expenses incurred by a person referred to in Section 1 of this Article
in defending a civil or criminal action or proceeding shall be paid by the
corporation in advance of the final disposition of such action or proceeding
upon receipt of an undertaking by or on behalf of such person to repay such
amount in case he is ultimately found, in accordance with this Article, not to
be entitled to indemnification or, where indemnity is granted, to the extent
the expenses so paid exceed the indemnification to which he is entitled.
(d) Any indemnification of a person under Section 1 of this Article, or
advancement of expenses under Section 2(c) of this Article, shall be made
promptly, and in any event within 60 days, upon the written request of such
person.
II-1
<PAGE>
Section 3. Enforcement; Defenses. The right to indemnification or
advancement of expenses granted by this Article shall be enforceable by the
person in question in any court of competent jurisdiction if the corporation
denies such request, in whole or in part, or if no disposition thereof is made
within 60 days. Such person's expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the
advancement of expenses under Section 2(c) of this Article where the required
undertaking has been received by the corporation) that the claimant has not met
the standard of conduct set forth in Section 1 of this Article, but the burden
of proving such defense shall be on the corporation. Neither the failure of the
corporation to have made a determination that indemnification of the claimant
is proper, nor the fact that there has been an actual determination by the
corporation that indemnification of the claimant is not proper, shall be a
defense to the action or create a presumption that the claimant is not entitled
to indemnification.
Section 4. Survival; Savings Clause; Preservation of Other Rights. (a) The
foregoing indemnification provisions shall be deemed to be a contract between
the corporation and each person who serves in such capacity at any time while
these provisions as well as the relevant provisions of the New York Business
Corporation Law are in effect and any repeal or modification thereof shall not
affect any right or obligation then existing with respect to any state of facts
then or previously existing or any action or proceeding previously or
thereafter brought or threatened based in whole or in part upon any such state
of facts. Such a contract right may not be modified retroactively without the
consent of such person.
(b) If this Article or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the corporation shall
nevertheless indemnify each such person against judgments, fines, amounts paid
in settlement and expenses, including attorneys' fees, incurred in connection
with any actual or threatened action by or in the right of the corporation, or
any appeal therein, to the full extent permitted by any applicable portion of
this Article that shall not have been invalidated and to the full extent
permitted by applicable law.
(c) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of shareholders or directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer or employee of the corporation and shall inure to the benefit
of the heirs, executors and administrators of such a person. The corporation is
hereby authorized to provide further indemnification if it deems it advisable
by resolution of shareholders or directors, by amendment of these by-laws or by
agreement.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
1.1 Purchase Agreement, dated November 4, 1999, between
Avon Products, Inc. and Salomon Smith Barney Inc.,
J.P. Morgan Securities Inc., Banc of America
Securities LLC, Chase Securities Inc., Deutsche Bank
Securities Inc., Morgan Stanley & Co. Incorporated and
Warburg Dillon Read LLC, as initial purchasers.
4.1 Form of New Note due 2004 (included in Exhibit 4.2).
4.1 Form of New Note due 2009 (included in Exhibit 4.2).
4.2 Indenture, dated as of November 9, 1999, between Avon
Products, Inc., as Issuer, and The Chase Manhattan
Bank, as Trustee.
4.3 First Supplemental Indenture, dated as of December [o],
1999, between Avon Products, Inc., as Issuer, and The
Chase Manhattan Bank, as Trustee.
II-2
<PAGE>
4.4 Registration Rights Agreement, dated as of November 9,
1999, between Avon Products, Inc. and Salomon Smith
Barney Inc., J.P. Morgan Securities Inc., Banc of
America Securities LLC, Chase Securities Inc.,
Deutsche Bank Securities Inc., Morgan Stanley & Co.
Incorporated and Warburg Dillon Read LLC.
5.1 Opinion of Davis Polk & Wardwell regarding the validity
of the New Notes.
23.1 Consent of Davis Polk & Wardwell (included in Exhibit
5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature pages of
this registration statement).
25.1 Statement of Eligibility under the Trust Indenture Act
of 1939 on Form T-1 of The Chase Manhattan Bank, as
Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
(b) Not Applicable.
(c) Not Applicable.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in 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.
(b) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 20, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement on Form S-4 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on this 8th day of December, 1999.
AVON PRODUCTS, INC.
By: /s/ Ward M. Miller, Jr.
-------------------------------------
Ward M. Miller, Jr.
Senior Vice President,
General Counsel and Secretary
POWER OF ATTORNEY
Each person whose signature appears below on this registration statement
hereby constitutes and appoints Ward M. Miller, Jr. with full power to act
without the other, his/her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, and for him/her and in his/her
name, place and stead, in any and all capacities (unless revoked in writing) to
sign any and all amendments (including post-effective amendments thereto) to
this registration statement to which this power of attorney is attached, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting to such
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he/she might or could do in person,
hereby notifying and confirming all that such attorney-in-fact and agent or
his/her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stanley C. Gault Non-Executive Chairman of the December 8, 1999
- ------------------------------------- Board and Director
Stanley C. Gault
/s/ Andrea Jung President and Chief Executive Officer December 8, 1999
- ------------------------------------- (principal executive officer)
Andrea Jung
/s/ Robert J. Corti Executive Vice President and December 8, 1999
- ------------------------------------- Chief Financial Officer
Robert J. Corti (principal financial officer)
/s/ Janice Marolda Vice President and Controller December 8, 1999
- ------------------------------------- (principal accounting officer)
Janice Marolda
/s/ Brenda C. Barnes Director December 8, 1999
- ------------------------------------
Brenda C. Barnes
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Richard S. Barton Director December 8, 1999
- ------------------------------------
Richard S. Barton
Director
- ------------------------------------
Jose Ferreira, Jr.
/s/ Edward T. Fogarty Director December 8, 1999
- ------------------------------------
Edward T. Fogarty
/s/ Fred Hassan Director December 8, 1999
- ------------------------------------
Fred Hassan
/s/ Susan J. Kropf Director December 8, 1999
- ------------------------------------
Susan J. Kropf
/s/ Ann S. Moore Director December 2, 1999
- ------------------------------------
Ann S. Moore
/s/ Paula Stern Director December 8, 1999
- ------------------------------------
Paula Stern
/s/ Lawrence A. Weinbach Director December 8, 1999
- ------------------------------------
Lawrence A. Weinbach
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Purchase Agreement, dated November 4, 1999, between Avon
Products, Inc. and Salomon Smith Barney Inc., J.P. Morgan
Securities Inc., Banc of America Securities LLC, Chase Securities
Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co.
Incorporated and Warburg Dillon Read LLC, as initial purchasers.
4.1 Form of New Note due 2004 (included in Exhibit 4.2).
4.1 Form of New Note due 2009 (included in Exhibit 4.2).
4.2 Indenture, dated as of November 9, 1999, between Avon Products,
Inc., as Issuer, and The Chase Manhattan Bank, as Trustee.
4.3 First Supplemental Indenture, dated as of December [o], 1999,
between Avon Products, Inc., as Issuer, and The Chase Manhattan
Bank, as Trustee.
4.4 Registration Rights Agreement, dated as of November 9, 1999,
between Avon Products, Inc. and Salomon Smith Barney Inc., J.P.
Morgan Securities Inc., Banc of America Securities LLC, Chase
Securities Inc., Deutsche Bank Securities Inc., Morgan Stanley &
Co. Incorporated and Warburg Dillon Read LLC.
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the
New Notes.
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on the signature pages of this
registration statement).
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 on
Form T-1 of The Chase Manhattan Bank, as Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
E-1
Exhibit 1.1
AVON PRODUCTS, INC.
$200,000,000 6.90% NOTES DUE 2004
$300,000,000 7.15% NOTES DUE 2009
PURCHASE AGREEMENT
November 4, 1999
<PAGE>
November 4, 1999
Salomon Smith Barney Inc.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Chase Securities Inc.
Deutsche Bank Securities Inc.
Morgan Stanley & Co. Incorporated
Warburg Dillon Read LLC
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Avon Products, Inc.
6.90% Notes due 2004
7.15% Notes due 2009
--------------------
Ladies and Gentlemen:
AVON PRODUCTS, INC., a New York corporation (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Initial Purchasers") (i) $200,000,000 principal amount of its 6.90% Notes due
2004 (the "Notes due 2004") and (ii) $300,000,000 principal amount of its 7.15%
Notes due 2009 (the "Notes due 2009" and, together with the Notes due 2004, the
"Securities" ), each to be issued pursuant to the provisions of an Indenture to
be dated as of November 9, 1999 (the "Indenture") between the Company and The
Chase Manhattan Bank, as Trustee (the "Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to qualified
institutional buyers in compliance with the exemption from registration
provided by Rule 144A under the Securities Act, in offshore transactions in
reliance on Regulation S under the Securities Act ("Regulation S") and to
institutional accredited investors (as defined in Rule 501(a)(1),(2),(3) or (7)
under the Securities Act) that deliver a letter in the form annexed to the
Final Memorandum (as defined below).
The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the Closing
Date (as defined in Section 4) between the Company and the Initial Purchasers,
substantially in the form attached hereto as Exhibit D (the "Registration
Rights Agreement") pursuant to which the Company has agreed,
<PAGE>
2
among other things, to use its reasonable best efforts to file a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Securities or the Exchange
Securities (as defined in the Registration Rights Agreement).
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will prepare
a final offering memorandum (the "Final Memorandum" and, with the Preliminary
Memorandum, each a "Memorandum") including or incorporating by reference a
description of the terms of the Securities, the terms of the offering and a
description of the Company. As used herein and, unless otherwise stated, the
term "Memorandum" shall include in each case the documents incorporated by
reference therein. The terms "supplement," "amendment" and "amend" as used
herein with respect to a Memorandum shall include all documents deemed to be
incorporated by reference in the Preliminary Memorandum or Final Memorandum
that are filed subsequent to the date of such Memorandum with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum 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
and (ii) the Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Initial Purchasers to confirm sales
and on the Closing Date, 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 to statements or omissions in
either Memorandum based upon information furnished to the Company in
writing by or on behalf of any Initial Purchaser expressly for use
therein.
(b) 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 each Memorandum 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.
(c) Each significant subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under
<PAGE>
3
the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business in all
material respects as described in each Memorandum 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; all of the
issued shares of capital stock of each significant subsidiary of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and, except for Avon Products Company Limited (Avon's
Japanese subsidiary), are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims. For purposes of this Purchase
Agreement, a "significant subsidiary" is any subsidiary of the Company
that generates 5% or more of the Company's revenue or income or that holds
5% or more of the Company's assets.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
(e) The Securities have been duly authorized and, when executed and
authenticated and delivered in accordance with the provisions of the
Indenture and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer or
similar laws affecting creditors' rights generally and general principles
of equity, and the holders thereof will be entitled to the benefits of the
Indenture, pursuant to which such Securities are to be issued, and the
Registration Rights Agreement.
(f) Each of the Indenture and the Registration Rights Agreement has
been duly authorized and, when executed and delivered by the Company and
assuming due authorization, execution and delivery by the Trustee (in the
case of the Indenture) and by the Initial Purchasers (in the case of the
Registration Rights Agreement), will be a valid and binding agreement of
the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent
transfer or similar laws affecting creditors' rights generally and general
principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited under
applicable law.
(g) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture and
the Registration Rights Agreement will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or, except to the extent that any such contravention would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole, any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
<PAGE>
4
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 and the Registration Rights Agreement, 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 Securities and by Federal and
state securities laws with respect to the Company's obligations under the
Registration Rights Agreement.
(h) 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 Final Memorandum.
(i) Each of the Company and its subsidiaries owns or possesses all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, and trade names, in each case to the extent
disclosed in the Preliminary Memorandum and the Final Memorandum as being
material to the business of the Company and its subsidiaries, taken as a
whole (collectively, the "Intellectual Property"), to the extent required
by it for the employment thereof in connection with their respective
businesses as currently operated by them, and neither the Company nor, to
the Company's knowledge, any of its subsidiaries has received any written
notice of infringement of asserted rights of others with respect to any of
the Intellectual Property that if taken to a final judgment could have a
material adverse effect on the Company and its subsidiaries, taken as a
whole. To the knowledge of the Company, the use of such Intellectual
Property in connection with the business and operations of the Company or
its subsidiaries does not infringe on the rights of any person.
(j) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, 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 other than proceedings accurately
described in all material respects in each Memorandum and proceedings that
are not reasonably expected by the Company to have a material adverse
effect on the Company and its subsidiaries, taken as a whole, or on the
power or ability of the Company to perform its obligations under this
Agreement, the Indenture or the Registration Rights Agreement or to
consummate the transactions contemplated by the Final Memorandum.
(k) To the knowledge of the Company, the Company and its subsidiaries
(i) are in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health
<PAGE>
5
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(l) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(m) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(n) Neither the Company nor, to the Company's knowledge, any
affiliate (as defined in Rule 501(b) of Regulation D under the Securities
Act, an "Affiliate") of the Company has directly, or through any agent,
(i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act)
which is or will be integrated with the sale of the Securities in a manner
that would require the registration under the Securities Act of the
Securities or (ii) solicited an offer to buy, offered or sold the
Securities by means of any form of general solicitation or general
advertising in connection with the offering of the Securities (as those
terms are used in Regulation D under the Securities Act), or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(o) Neither the Company nor, to the Company's knowledge, its
Affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts (within the meaning of Regulation
S) with respect to the Securities, and the Company and its Affiliates and
any person acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S, except that no
representation, warranty or agreement is made by the Company in this
paragraph with respect to the Initial Purchasers.
(p) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers in the manner
<PAGE>
6
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended.
(q) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, and each Initial Purchaser, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Securities set forth in
Schedule I hereto opposite its name at a purchase price of 99.260% of the
principal amount thereof in the case of the Notes due 2004 and at a purchase
price of 99.016% of the principal amount thereof in the case of the Notes due
2009 in each case plus accrued interest, if any, to the Closing Date (as
defined below) (such purchase prices together referred to as the "Purchase
Price").
The Company hereby agrees that, without the prior written consent of
Salomon Smith Barney Inc. on behalf of the Initial Purchasers, it will not,
during the period beginning on the date hereof and continuing to and including
the Closing Date, offer, sell, contract to sell or otherwise dispose of, any
debt of the Company or warrants to purchase debt of the Company substantially
similar to the Notes due 2004 or the Notes due 2009 (other than the sale of the
Securities under this Agreement).
3. Terms of Offering. The Initial Purchasers have advised the Company that
they will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in their judgment
is advisable.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City
against delivery of such Securities for the respective accounts of the several
Initial Purchasers at 10:00 a.m., New York City time, on November 9, 1999, at
the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York,
or at such other time on the same or such other date, as shall be mutually
agreed upon in writing. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Initial Purchasers, with any transfer taxes payable in connection with
the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the
date of payment and delivery.
<PAGE>
7
5. Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this 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 Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that,
in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and in
the manner contemplated in the Final Memorandum.
(b) The Initial Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an officer of the
Company reasonably satisfactory to the Initial Purchasers, 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 (as if made on 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 Initial Purchasers shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, outside counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit A. Such opinion shall
be rendered to the Initial Purchasers at the request of the Company and
shall so state therein.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion from the General Counsel of the Company, dated the Closing Date,
<PAGE>
8
to the effect set forth in Exhibit B. Such opinion shall be rendered to
the Initial Purchasers at the request of the Company and shall so state
therein.
(e) The Initial Purchasers shall have received on the Closing Date an
opinion and letter of Shearman & Sterling, counsel for the Initial
Purchasers, dated the Closing Date, to the effect set forth in Exhibit C.
(f) The Initial Purchasers shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, from PricewaterhouseCoopers LLP,
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 each
Memorandum; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(g) The Company and the Initial Purchasers shall have entered into
the Registration Rights Agreement.
6. Covenants of the Company. In further consideration of the agreements of
the Initial Purchasers contained in this Agreement, the Company covenants with
each Initial Purchaser as follows:
(a) To furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding the date
of this Agreement and during the period mentioned in Section 6(c), as many
copies of the Final Memorandum, any documents incorporated by reference
therein (excluding the Exhibits thereto) and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing (other than through the filing
of periodic reports under the Exchange Act that are to be incorporated by
reference in such Memorandum) either Memorandum, to furnish to you a copy
of each such proposed amendment or supplement and not to use any such
proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Initial
Purchasers, any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Final Memorandum in order to
make the statements therein, in the light of the circumstances when the
Final Memorandum is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Initial Purchasers, it is necessary to
amend or supplement the Final Memorandum to comply with applicable law,
forthwith to prepare and furnish, at its own expense, to the Initial
<PAGE>
9
Purchasers, either amendments or supplements to the Final Memorandum so
that the statements in the Final Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, be misleading or so that the Final Memorandum,
as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or 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
issuance and sale of the Securities and all other fees or expenses
(excluding fees or expenses of the Initial Purchasers' counsel) in
connection with the preparation of each Memorandum and all amendments and
supplements thereto, including all printing costs associated therewith,
and the delivering of copies thereof to the Initial Purchasers, in the
quantities herein above specified, (ii) all costs and expenses related to
the transfer and delivery of the Securities to the Initial Purchasers,
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 Securities under state
securities laws and all expenses in connection with the qualification of
the Securities for offer and sale under state securities laws as provided
in Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Initial Purchasers in connection with
such qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) all document production charges and expenses of counsel to
the Initial Purchasers (but not including their fees for professional
services) in connection with the preparation of this Agreement, (vi) the
costs and charges of the Trustee and any transfer agent, registrar or
depositary, (vii) the cost of the preparation, issuance and delivery of
the Securities, (viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Securities, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company,
travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, and (ix) all other cost 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 8,
and the last paragraph of Section 10, the Initial Purchasers 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.
<PAGE>
10
(f) Except as contemplated by the Registration Rights Agreement, not
to sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) reasonably
likely to be integrated with the sale of the Securities under the rules
and interpretations of the Commission in a manner which would require the
registration under the Securities Act of the Securities.
(g) Except as contemplated by the Registration Rights Agreement, not
to solicit any offer to buy or offer or sell the Securities by means of
any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(h) While any of the Securities remain "restricted securities" within
the meaning of the Securities Act, to make available, upon request, to any
seller of such Securities the information specified in Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(i) Not to engage and not to permit its Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers) to
engage in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Securities, and the Company and its
Affiliates and each person acting on its or their behalf (other than the
Initial Purchasers) will comply with the offering restrictions requirement
of Regulation S.
(j) During the period of two years after the Closing Date, not to
resell and not to permit any of its affiliates (as defined in Rule 144A
under the Securities Act), to resell any of the Securities which
constitute "restricted securities" under Rule 144A that have been
reacquired by any of them.
7. Offering of Securities; Restrictions on Transfer. (a) Each Initial
Purchaser, severally and not jointly, represents, warrants, and agrees that
such Initial Purchaser is a qualified institutional buyer as defined in Rule
144A under the Securities Act (a "QIB"). Each Initial Purchaser, severally and
not jointly, agrees with the Company that (i) it will not solicit offers for,
or offer or sell, such Securities by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (ii) it will solicit offers for such
Securities only from, and will offer such Securities only to, persons that it
reasonably believes to be (A) in the case of offers inside the United States,
(1) QIBs or (2) other institutional accredited investors (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) ("institutional accredited
investors") that, prior to their purchase of the Securities, deliver to such
Initial Purchaser a letter containing the representations and agreements set
forth in Annex A to the Memorandum and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers," which
term shall include dealers or other professional fiduciaries in the United
<PAGE>
11
States acting on a discretionary basis for foreign beneficial owners (other
than an estate or trust)) in reliance upon Regulation S under the Securities
Act that, in each case, in purchasing such Securities are deemed to have
represented and agreed as provided in the Final Memorandum under the caption
"Notice to Investors".
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United States
that:
(i) such Initial Purchaser understands that no action has been or
will be taken in any jurisdiction by the Company that would permit a
public offering of the Securities, or possession or distribution of either
Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose
is required;
(ii) such Initial Purchaser will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Securities or has in its possession or distributes either
Memorandum or any such other material, in all cases at its own expense;
(iii) the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Rule
144A or Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act;
(iv) such Initial Purchaser has offered the Securities and will offer
and sell the Securities (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of
Regulation S or as otherwise permitted in Section 7(a) hereof;
accordingly, neither such Initial Purchaser, its Affiliates nor any
persons acting on its or their behalf have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect
to the Securities, and any such Initial Purchaser, its Affiliates and any
such persons have complied and will comply with the offering restrictions
requirement of Regulation S;
(v) such Initial Purchaser has (A) not offered or sold, and will not
offer or sell in the United Kingdom, by means of any document, any
Securities other than to persons whose ordinary business is to buy and
sell shares or debentures, whether as a principal or agent, or in
circumstances which do not constitute an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995 (the "Regulations"), (B) complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom and
the Regulations with respect to anything done by them in relation to the
Securities in, from, or otherwise involving the United Kingdom, and (C)
only issued or passed on and will only issue and pass on to any persons in
the United Kingdom any document received by it in connection with the
<PAGE>
12
issue of the Securities if that person is of a kind described in Article
9(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1988; and
(vi) such Initial Purchaser agrees that, at or prior to confirmation
of sales of the Securities, it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation
or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in this Section 7(b) have the meanings given to them by Regulation
S.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser 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, 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 either Memorandum (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 necessary to make the statements therein in the light of the
circumstances under which they were made 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
furnished to the Company in writing by or on behalf of any Initial Purchaser
expressly for use therein.
(b) Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers 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 Initial Purchaser, but only with
reference to information furnished to the Company in writing by or on behalf of
any Initial Purchaser expressly for use in either Memorandum 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 Section 8(a) or 8(b), such person (the "indemnified party")
<PAGE>
13
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 conflicting 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 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 Salomon Smith Barney
Inc., in the case of parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to Section 8(b). 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 8(a) or 8(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 Initial Purchasers on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
<PAGE>
14
to in clause 8(d)(i) above but also the relative fault of the Company on the
one hand and of the Initial Purchasers 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 Initial
Purchasers on the other hand in connection with the offering of the Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Securities (before deducting expenses, but after
deduction of the discounts and commissions received by the Initial Purchasers)
received by the Company and the total discounts and commissions received by the
Initial Purchasers, in each case as set forth in the Final Memorandum, bear to
the aggregate offering price of the Securities. The relative fault of the
Company on the one hand and of the Initial Purchasers 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 Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Initial Purchasers' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Initial Purchasers agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Initial Purchasers 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 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) 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 8, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors
exceeds the amount of any damages that such Initial Purchaser 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 8 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 8
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 Initial Purchaser or any person controlling any
Initial Purchaser or by or on behalf of the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and payment for
any of the Securities.
<PAGE>
15
9. Termination. This Agreement shall be subject to termination by notice
given by Salomon Smith Barney Inc. on behalf of the Initial Purchasers to the
Company, if (a) after the execution and delivery of this 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.,
(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 your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv) of this
Section 9, such event, singly or together with any other such event, makes it,
in your judgment, impracticable to market the Securities on the terms and in
the manner contemplated in the Final Memorandum.
10. Effectiveness; Defaulting Initial Purchasers. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, the other Initial Purchasers
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Initial Purchaser has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Initial
Purchaser or of the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Final Memorandum
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Initial Purchaser from
liability in respect of any default of such Initial Purchaser under this
Agreement.
<PAGE>
16
If this Agreement shall be terminated by the Initial Purchasers, 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 Initial Purchasers or such Initial
Purchasers 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 Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
17
13. 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.
Very truly yours,
AVON PRODUCTS, INC.
By: /s/ Dennis Ling
-------------------------------------
Name: Dennis Ling
Title: Group Vice President,
Finance and Treasurer
Accepted as of the date hereof:
Salomon Smith Barney Inc.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Chase Securities Inc.
Deutsche Bank Securities Inc.
Morgan Stanley & Co. Incorporated
Warburg Dillon Read LLC
Acting severally on behalf of themselves
and the several Initial Purchasers
named in Schedule I hereto.
By: Salomon Smith Barney Inc.
By: /s/ Kenneth J. Steinberg
------------------------------------
Name: Kenneth J. Steinberg
Title: Vice President
<PAGE>
A-1
SCHEDULE I
Notes due 2004 Notes due 2009
Initial Purchaser to be Purchased to be Purchased
- ----------------- --------------- ---------------
Salomon Smith Barney Inc. $ 76,000,000 $ 114,000,000
J.P. Morgan Securities Inc. 76,000,000 114,000,000
Banc of America Securities LLC 9,600,000 14,400,000
Chase Securities Inc. 9,600,000 14,400,000
Deutsche Bank Securities LLC 9,600,000 14,400,000
Morgan Stanley & Co. Incorporated 9,600,000 14,400,000
Warburg Dillon Read LLC 9,600,000 14,400,000
------------- -------------
Total.......................... $ 200,000,000 $ 300,000,000
<PAGE>
A-1
EXHIBIT A
Opinion of Davis Polk & Wardwell
The opinion of Davis Polk & Wardwell, outside counsel for the Company, to
be delivered pursuant to Section 5(c) of the Purchase Agreement, shall be to
the effect that:
(1) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of New York, and
has the corporate power and authority to own its property and to conduct
its business as described in the Final Memorandum.
(2) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(3) The Securities have been duly authorized and executed by the
Company and, when authenticated in accordance with the provisions of the
Indentures and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, the Securities will
be entitled to the benefits of the Indentures and the Registration Rights
Agreement and will be valid and legally binding obligations of the
Company, enforceable in accordance with their terms, except (i) as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights and remedies
generally and (ii) as such enforcement may be limited by general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.
(4) Each of the Indentures and the Registration Rights Agreement has
been duly authorized, executed and delivered by, and assuming, in the case
of the Indentures, the due authorization, execution and delivery thereof
by the Trustee and, in the case of the Registration Rights Agreement, the
due authorization, execution and delivery thereof by the Initial
Purchasers, each of the Indentures and the Registration Rights Agreement
constitute valid and legally binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights and
remedies generally, (ii) as such enforcement may be limited by general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity and (iii) as rights to indemnity and
contribution under the Registration Rights Agreement may be limited by
applicable law.
(5) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Purchase Agreement, the
Indentures and the Registration Rights Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws
<PAGE>
A-2
of the Company 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 the Purchase
Agreement, the Indentures or the Registration Rights Agreement.
(6) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(7) The statements under the captions "Description of the Notes,"
"Exchange Offer; Registration Rights" and "Notice to Investors" in the
Final Memorandum, insofar as such statements constitute a summary of the
documents or proceedings referred to therein, fairly summarize the matters
referred to therein.
(8) The statements under the caption "Certain United States Federal
Income Tax Considerations" in the Final Memorandum insofar as such
statements constitute a summary of the United States federal tax laws
referred to therein, are accurate and fairly summarize in all material
respects the United States federal tax laws referred to therein.
(9) Based upon the representations, warranties and agreements of the
Company in Sections 1(m), 1(n), 1(o), 1(q), 6(f), 6(g), 6(h), 6(i) and
6(j) of the Purchase Agreement and of the Initial Purchasers in Section 7
of the Purchase Agreement, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchasers under
the Purchase Agreement or in connection with the initial resale of such
Securities by the Initial Purchasers in accordance with Section 7 of the
Purchase Agreement to register the Securities under the Securities Act of
1933 or to qualify the Indentures under the Trust Indenture Act of 1939,
it being understood that no opinion is expressed as to any subsequent
resale of any Security.
(10) Such counsel 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 Final Memorandum when
issued contained, or 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 necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
With respect to paragraph (10) above, Davis Polk & Wardwell may state that
its belief is based upon its participation in the preparation of the Final
Memorandum (and any amendments or supplements thereto) and review and
discussion of the contents thereof and review of the documents incorporated by
reference therein, but is without independent check or verification except as
specified.
<PAGE>
B-1
EXHIBIT B
Opinion of General Counsel
The opinion of the General Counsel of the Company, to be delivered
pursuant to Section 5(d) of the Purchase Agreement, shall be to the effect
that:
(1) The Company 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 in good standing would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(2) Each significant subsidiary(1) 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 in all
material respects as described in the Final Memorandum (which term
includes for purposes of such opinion, all documents incorporated by
reference therein), 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; all of the issued shares of capital stock
of each significant subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, and, except for
Avon Products Company Limited (Avon's Japanese subsidiary), are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(3) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Purchase Agreement, the
Indentures and the Registration Rights Agreement 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 (except to the extent that any such
contravention would not have a material adverse effect (i) on the Company
and its subsidiaries, taken as a whole or (ii) on the power or ability of
the Company to perform its obligations under the Purchase Agreement, the
Indentures or the Registration Rights Agreement or to consummate the
- -----------
(1) A "significant subsidiary" is any subsidiary of the Company that generates
5% or more of the Company's revenue or income or that holds 5% or more of
the Company's assets.
<PAGE>
B-2
transactions contemplated by the Final Memorandum), or, any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary.
(4) The statements under the caption "Item 3 - Legal Proceedings" of
the Company's most recent annual report on Form 10-K, insofar as such
statements constitute a summary of the documents or proceedings referred
to therein, fairly summarize the matters referred to therein.
(5) Each of the Company and its subsidiaries owns or possesses all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, and trade names, in each case to the extent
disclosed in the Preliminary Memorandum and the Final Memorandum as being
material to the business of the Company or its subsidiaries, taken as a
whole, (collectively, the "Intellectual Property") to the extent required
by it for the employment thereof in connection with their respective
businesses as currently operated by them, and neither the Company nor, to
the knowledge of such counsel, any of its subsidiaries has received any
written notice of infringement of asserted rights of others with respect
to any of the Intellectual Property that if taken to a final judgment
could have a material adverse effect on the Company and its subsidiaries,
taken as a whole. To the knowledge of such counsel, the use of such
Intellectual Property in connection with the business and operations of
the Company or its subsidiaries does not infringe on the rights of any
person.
(6) 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 other than proceedings
fairly summarized in all material respects in the Final Memorandum and
proceedings which such counsel believes are not likely to have a material
adverse effect (i) on the Company and its subsidiaries, taken as a whole,
or (ii) on the power or ability of the Company to perform its obligations
under the Purchase Agreement, the Indentures, or the Registration Rights
Agreement or to consummate the transactions contemplated by the Final
Memorandum.
(7) Each document incorporated by reference in the Final Memorandum
(except for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need express no
opinion), complied as to form when filed with the Commission in all
material respects with the Exchange Act and the rules and regulations of
the Commission thereunder.
<PAGE>
C-1
EXHIBIT C
Opinion of Shearman & Sterling
The opinion of Shearman & Sterling, counsel for the Initial Purchasers, to
be delivered pursuant to Section 5(e) of the Purchase Agreement, shall be to
the effect that:
(1) the Company is duly incorporated and validly existing as a
corporation in good standing under the laws of the State of New York, with
corporate power and authority under such laws to own its properties and
conduct its business as described in the Final Memorandum;
(2) the Purchase Agreement has been duly authorized, executed and
delivered by the Company;
(3) the Notes have been duly authorized by the Company and, when
executed and delivered by the Company and paid for by the Initial
Purchasers in accordance with the provisions of the Purchase Agreement and
authenticated by the Trustee in accordance with the provisions of the
Indenture (which facts such counsel need not determine by an inspection of
the Notes), the Notes will constitute legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(4) the Indenture has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(5) the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as (i) enforcement thereof may be
limited by bankruptcy, insolvency (including, without slimitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws affecting enforcement of creditors' rights generally,
<PAGE>
C-2
(ii) enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and (iii) any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations;
(6) assuming (a) the accuracy of the representations and warranties
and performance of the covenants of the Company contained in Sections
1(m), 1(n), 1(o), 1(q), 6(f), 6(g), 6(h), 6(i) and 6(j) of the Purchase
Agreement, (b) the accuracy of the Initial Purchasers' representations and
warranties and the performance of the Initial Purchasers' covenants
contained in Section 7 of the Purchase Agreement, (c) the accuracy of the
representations and warranties and performance of the covenants of each of
the purchasers to whom the Initial Purchasers initially resell the Notes
as contemplated by the Final Memorandum, (d) compliance with the offering
and transfer procedures and restrictions described in the Final Memorandum
and (e) receipt by the purchasers to whom the Initial Purchasers initially
resell the Notes of a copy of the Final Memorandum prior to such sale, no
registration of the Notes under the Securities Act of 1933, as amended, or
qualification of the Notes under the Trust Indenture Act of 1939, as
amended, is required for the offer, sale and delivery of the Notes to the
Initial Purchasers or the initial resale of the Notes by the Initial
Purchasers, in each case in the manner contemplated by the Purchase
Agreement and the Final Memorandum, it being understood that no opinion is
expressed as to any subsequent sale of any of the Notes; and
(7) the statements in the Offering Memorandum under the captions
"Description of the Notes," "Exchange Offer; Registration Rights" and
"Notice to Investors," insofar as such statements constitute summaries of
legal matters, documents or proceedings referred to therein, fairly
summarize the matters referred to therein.
Such counsel shall also state, in a separate letter to the Initial
Purchasers dated the Closing Date, that no facts have come to their attention
which gave such counsel reason to believe that the Final Memorandum (other than
the financial statements and other financial and statistical data contained
therein or omitted therefrom, as to which such counsel need express no
comment), as of its date and as of the date of such counsel's opinion,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
<PAGE>
D-1
EXHIBIT D
Registration Rights Agreement
Exhibit 4.2
---------------------------------------------------------------------------
AVON PRODUCTS, INC.
as Issuer
AND
THE CHASE MANHATTAN BANK
as Trustee
-----------------------
Indenture
Dated as of November 9, 1999
-----------------------
$500,000,000
$200,000,000 6.90% Notes due 2004
$300,000,000 7.15% Notes due 2009
---------------------------------------------------------------------------
<PAGE>
..............................
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- ------------------- ------------
ss.310(a)(1) ............................................ 6.09
(a)(2) ............................................ 6.09
(a)(3) ............................................ Not Applicable
(a)(4) ............................................ Not Applicable
(b) ............................................ 6.08
6.10
ss.311(a) ............................................ 6.13
(b) ............................................ 6.13
ss.312(a) ............................................ 7.01
7.02(a)
(b) ............................................ 7.02(b)
(c) ............................................ 7.02(c)
ss.313(a) ............................................ 7.03(a)
(b) ............................................ 7.03(a)
(c) ............................................ 7.03(a)
(d) ............................................ 7.03(b)
ss.314(a) ............................................ 7.04
(b) ............................................ Not Applicable
(c)(1) ............................................ 1.02
(c)(2) ............................................ 1.02
(c)(3) ............................................ Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 1.02
ss.315(a) ............................................ 6.01
(b) ............................................ 6.02
(c) ............................................ 6.01
(d) ............................................ 6.01
(e) ............................................ 5.14
ss.316(a)(1)(A) ............................................ 5.12
- -----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
i
<PAGE>
Trust Indenture Indenture
Act Section Section
- ------------------- ------------
(a)(1)(B) ............................................. 5.13
(a)(2) ............................................. Not Applicable
(b) ............................................. 5.08
(c) ............................................. 1.04(c)
ss.317(a)(1) ............................................. 5.03
(a)(2) ............................................. 5.04
(b) ............................................. 10.03
ss.318(a) ............................................. 1.07
- -----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
-----------------------
PAGE
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.................................................. 2
SECTION 1.02. Compliance Certificates and Opinions......................... 14
SECTION 1.03. Form of Documents Delivered to Trustee....................... 14
SECTION 1.04. Acts of Holders; Record Dates................................ 15
SECTION 1.05. Notices, Etc., to Trustee and Company........................ 16
SECTION 1.06. Notice to Holders; Waiver.................................... 16
SECTION 1.07. Conflict with Trust Indenture Act............................ 17
SECTION 1.08. Effect of Headings and Table of Contents..................... 17
SECTION 1.09. Successors and Assigns....................................... 17
SECTION 1.10. Separability Clause.......................................... 17
SECTION 1.11. Benefits of Indenture........................................ 17
SECTION 1.12. Governing Law................................................ 17
SECTION 1.13. Legal Holidays............................................... 18
ARTICLE 2
SECURITY FORMS
SECTION 2.01. Forms Generally.............................................. 18
SECTION 2.02. Form of Face of Security..................................... 19
SECTION 2.03. Form of Reverse of Security.................................. 23
SECTION 2.04. Form of Trustee's Certificate of Authentication.............. 28
SECTION 2.05. Legend on Restricted Securities.............................. 28
ARTICLE 3
THE SECURITIES
SECTION 3.01. Title and Terms.............................................. 29
SECTION 3.02. Denominations................................................ 29
SECTION 3.03. Execution, Authentication, Delivery and Dating............... 30
SECTION 3.04. Temporary Securities......................................... 30
<PAGE>
SECTION 3.05. Registration; Registration of Transfer and Exchange;
Restrictions on Transfer..................................... 31
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities............. 33
SECTION 3.07. Payment of Interest; Interest Rights Preserved............... 34
SECTION 3.08. Persons Deemed Owners........................................ 35
SECTION 3.09. Book-entry Provisions for Global Securities.................. 35
SECTION 3.10. Cancellation................................................. 37
SECTION 3.11. Computation of Interest...................................... 37
SECTION 3.12. Special Transfer Provisions.................................. 37
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture....................... 40
SECTION 4.02. Application of Trust Money................................... 41
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default............................................ 41
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment........... 43
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................... 44
SECTION 5.04. Trustee May File Proofs of Claim............................. 45
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.. 45
SECTION 5.06. Application of Money Collected............................... 46
SECTION 5.07. Limitation on Suits.......................................... 46
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest..................................................... 47
SECTION 5.09. Restoration of Rights and Remedies........................... 47
SECTION 5.10. Rights and Remedies Cumulative............................... 47
SECTION 5.11. Delay or Omission Not Waiver................................. 47
SECTION 5.12. Control by Holders........................................... 47
SECTION 5.13. Waiver of Past Defaults...................................... 48
SECTION 5.14. Undertaking for Costs........................................ 48
SECTION 5.15. Waiver of Stay or Extension Laws............................. 49
ii
<PAGE>
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities.......................... 49
SECTION 6.02. Notice of Defaults........................................... 49
SECTION 6.03. Certain Rights of Trustee.................................... 49
SECTION 6.04. Not Responsible for Recitals................................. 51
SECTION 6.05. May Hold Securities.......................................... 51
SECTION 6.06. Money Held in Trust.......................................... 51
SECTION 6.07. Compensation and Reimbursement............................... 51
SECTION 6.08. Disqualification; Conflicting Interests...................... 52
SECTION 6.09. Corporate Trustee Required; Eligibility...................... 52
SECTION 6.10. Resignation and Removal; Appointment of Successor............ 52
SECTION 6.11. Acceptance of Appointment by Successor....................... 54
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business..................................................... 54
SECTION 6.13. Preferential Collection of Claims Against.................... 54
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.... 55
SECTION 7.02. Preservation of Information; Communications to Holders....... 55
SECTION 7.03. Reports by Trustee........................................... 55
SECTION 7.04. Reports by Company........................................... 56
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms......... 56
SECTION 8.02. Successor Substituted........................................ 57
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders........... 57
SECTION 9.02. Supplemental Indentures with Consent of Holders.............. 58
SECTION 9.03. Execution of Supplemental Indentures......................... 59
iii
<PAGE>
SECTION 9.04. Effect of Supplemental Indentures............................ 59
SECTION 9.05. Conformity with Trust Indenture Act.......................... 59
SECTION 9.06. Reference in Securities to Supplemental Indentures........... 59
ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal and Interest........................... 60
SECTION 10.02. Maintenance of Office or Agency............................. 60
SECTION 10.03. Money for Security Payments to Be Held in Trust............. 60
SECTION 10.04. Statement by Officers as to Default......................... 61
SECTION 10.05. Existence................................................... 62
SECTION 10.06. Liens....................................................... 62
SECTION 10.07. Limitation on Restricted Sale/Leaseback Transactions........ 62
SECTION 10.08. Reports and Delivery of Certain Information................. 62
SECTION 10.09. Resale of Certain Securities................................ 63
SECTION 10.10. Book-Entry System........................................... 63
SECTION 10.11. Waiver of Certain Covenants................................. 63
ARTICLE 11
OPTIONAL REDEMPTION OF SECURITIES
SECTION 11.01. Right of Optional Redemption; Redemption Price.............. 64
SECTION 11.02. Notice of Redemption; Deposit of Redemption Price with
Trustee; Partial Redemptions................................ 64
SECTION 11.03. Payment to Holders of Securities Called for Redemption...... 65
ARTICLE 12
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.01. Company's Option to Effect Defeasance or Covenant
Defeasance.................................................. 66
SECTION 12.02. Defeasance and Discharge.................................... 66
SECTION 12.03. Covenant Defeasance......................................... 66
SECTION 12.04. Conditions to Defeasance or Covenant Defeasance............. 67
SECTION 12.05. Deposited Money and U.S. Government Obligations to be Held
in Trust; Miscellaneous Provisions.......................... 69
SECTION 12.06. Reinstatement............................................... 70
iv
<PAGE>
Exhibit A - Form of Certificate to Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
Exhibit B - Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulations
<PAGE>
INDENTURE, dated as of November 9, 1999, between AVON PRODUCTS, INC., a
corporation duly organized and existing under the laws of the State of New
York, as Issuer (herein called the "Company"), having its principal office at
1345 Avenue of the Americas, New York, New York 10105- 0196, and THE CHASE
MANHATTAN BANK, a banking corporation duly organized under the laws of the
State of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 6.90%
Notes due 2004 (the "Notes due 2004") and its 7.15% Notes due 2009 (the "Notes
due 2009", and with the Notes due 2004, collectively herein called the
"Securities," which term includes Exchange Securities as defined in Section
1.01) of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchases of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(ii) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
2
<PAGE>
(iii) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
(iv) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt," in respect to any Sale/Leaseback Transaction, means,
as of any time of determination, the present value (discounted at the rate per
annum equal to the rate of interest implicit in the lease involved in such
Sale/Leaseback Transaction, as determined in good faith by the Company) of the
obligation of the lessee thereunder for rental payments (excluding, however,
any amounts required to be paid by such lessee, whether or not designated as
rent or additional rent, on account of maintenance and repairs, insurance,
taxes, assessments, water rates or similar charges or any amounts required to
be paid by such lessee thereunder contingent upon the amount of sales or
similar contingent awards) during the remaining term of such lease (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended). In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such rental payments shall also include
the amount of such penalty, but no rental payments shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.
"Board of Directors" means, with respect to any Person, either the board
of directors of such Person or any duly authorized committee of that board.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
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"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in The City of New York are authorized or obligated
by law, or executive order or governmental decree to be closed.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, with respect to partnerships, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership.
"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.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or any Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of the Securities. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee at the direction of the
Company.
"Comparable Treasury Price" means, with respect to any Redemption Date, as
determined by the Trustee (i) the average of the Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
quotations.
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"Consolidated Net Tangible Assets" means (a) the total amount of assets
(less applicable reserves and other properly deductible items) which under GAAP
would be included on the most recent audited annual consolidated balance sheet
of the Company and its consolidated Subsidiaries after deducting therefrom,
without duplication, the sum of (i) all current liabilities and (ii) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, which in each case under GAAP would be
included on such consolidated balance sheet.
"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 10001-2697, Attention:
Capital Markets Fiduciary Services.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Default" means any event that is or with the passage of time or the
giving of notice or both would become an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Defeasance" has the meaning specified in Section 12.02.
"Depositary" means The Depository Trust Company until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean such successor Depositary.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.
"Exchange Offer" means an exchange offer pursuant to a registration
statement under the Securities Act, registering securities substantially
identical to the Securities, as provided by the Registration Rights Agreement.
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"Exchange Security" means any security issued by the Company (i) pursuant
to the Exchange Offer, (ii) upon the registration of transfer of a Security
registered for resale on a Resale Registration Statement or (iii) upon the
registration of transfer of, or in exchange for, Securities which are Exchange
Securities.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, in each case, as in effect in the United States on the date hereof.
"Global Security" means a Security in global form registered in the
Security Register in the name of a Depositary or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"IAI Security" has the meaning specified in Section 2.01.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of (i) borrowed money evidenced
by bonds, notes, debentures or similar instruments, (ii) indebtedness secured
by a mortgage, pledge, lien, charge, encumbrance of any security interest
existing on property owned by such Person, (iii) the reimbursement obligations,
contingent or otherwise, in connection with any letters of credit actually
issued or amounts representing the balance that constitutes an accrued expense
or trade payable or (iv) any lease of property by such Person as lessee which
is reflected in such Person's consolidated balance sheet as a capitalized lease
in accordance with GAAP, in the case of items of Indebtedness under (i) through
(iii) above to the extent that any such items (other than letters of credit)
would appear as a liability on such Person's consolidated balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise included,
any obligation by such Person to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), Indebtedness of another Person.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including,
for all purposes of this instrument and any such supplemental
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indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means Salomon Smith Barney Inc., J.P. Morgan
Securities Inc., Banc of America Securities LLC, Chase Securities Inc.,
Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated and Warburg
Dillon Read LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Securities.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans, advances
or capital contributions, purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Issue Date" means the date the Securities are originally issued under
this Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity, on a Redemption Date or by
declaration of acceleration or otherwise.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
Regulation S.
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"Offering Memorandum" means the Offering Memorandum dated November 4,
1999, offering the Securities for sale as provided therein.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or any Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 10.04 shall be the
principal executive, financial or accounting officer of the Company.
"Offshore Global Securities" has the meaning specified in Section 2.01.
"Offshore Physical Securities" has the meaning specified in Section 2.01.
"Opinion of Counsel" means a written opinion of counsel, who may be
external or in-house counsel for the Company, and who shall be acceptable to
the Trustee.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that if such Securities are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given to the Holders as herein provided, or provision satisfactory to
a Responsible Officer of the Trustee shall have been made for giving such
notice; and
(iii) Securities which have been paid or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a protected purchaser in whose hands such Securities are valid
obligations of the Company;
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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, (i) the Holders
of the Notes due 2004 and the Holders of the Notes due 2009 shall be treated as
a single series and (ii) Securities owned by the Company or any other obligor
upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, interest on or Redemption Price of any Securities on behalf of
the Company. The Trustee shall initially be the Paying Agent.
"Permitted Liens" means any of the following: (a) Liens on any Principal
Property acquired by the Company or a Subsidiary after the date of this
Indenture to secure or provide for the payment or financing of all or any part
of the purchase price thereof or construction of fixed improvements thereon
(prior to, at the time of or within 180 days after the latest of the
acquisition, completion of construction or commencement of commercial operation
thereof); (b) Liens on any shares of stock or Principal Property acquired by
the Company or a Subsidiary after the date of this Indenture existing at the
time of such acquisition; (c) Liens on any shares of stock or Principal
Property of a corporation which is merged into or consolidated with the Company
or a Subsidiary or substantially all of the assets of which are acquired by the
Company or a Subsidiary; (d) Liens securing Indebtedness of a Subsidiary owing
to the Company or another Subsidiary; (e) Liens existing on the date of this
Indenture; (f) Liens on any Principal Property being constructed or improved
securing loans to finance such construction or improvements; (g) Liens in favor
of governmental bodies of the United States or any State thereof or any other
country or political subdivision thereof to secure partial, progress or advance
payments pursuant to any contract or statute, or to secure any Indebtedness
incurred or guaranteed for the purpose of financing all or any part of the cost
of acquiring, constructing or improving the property subject to such Liens; (h)
Liens securing taxes, assessments or governmental charges or levies not yet
delinquent, or already delinquent but the validity of which is being contested
in good faith; (i) Liens arising by reason of deposits necessary to qualify the
Company or any Subsidiary to conduct business,
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maintain self-insurance, or obtain the benefit of, or comply with, any law; and
(j) extensions, renewals or replacement of Liens referred to in the foregoing
clauses provided that the Indebtedness secured is not increased nor the Lien
extended to any additional assets.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Physical Securities" has the meaning specified in Section 2.01.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any manufacturing plant, testing or research
and development facility, distribution facility, processing plant or warehouse
(including, without limitation, land, fixtures and equipment), owned or leased
by the Company or any Subsidiary (including any of the foregoing acquired or
leased after the date of this Indenture) and located within the United States
of America, its territories and possessions, unless the Board of Directors of
the Company determines in good faith that such plant or facility is not of
material importance to the total business conducted by the Company and its
consolidated Subsidiaries.
"Purchase Agreement" means the Purchase Agreement, dated as of November 4,
1999, entered into by the Company and the Initial Purchasers in connection with
the sale of the Securities.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A.
"Redemption Date" when used with respect to any Security to be redeemed,
means any date which is a Business Day fixed for such redemption by the Company
pursuant to Section 11.02 of this Indenture.
"Redemption Price" has the meaning specified in Section 11.01.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
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(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer, at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.
"Reference Treasury Dealers" means Salomon Smith Barney Inc., J.P. Morgan
Securities Inc., Banc of America Securities LLC, Chase Securities Inc.,
Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated and Warburg
Dillon Read LLC and their respective successors; provided, however, that if any
Reference Treasury Dealer shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall substitute
another nationally recognized investment banking firm that is a Primary
Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Security to be
redeemed, the remaining scheduled payments of principal thereof and interest
thereon that would be due after the related Redemption Date but for that
redemption; provided, however, that if such Redemption Date is not an Interest
Payment Date with respect to such Security, the amount of the next succeeding
scheduled interest payment thereon shall be reduced by the amount of interest
accrued thereon to such Redemption Date.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of November 9, 1999, between the Company and the Initial Purchasers,
for the benefit of themselves and the Holders, as the same may be amended or
modified from time to time in accordance with the terms thereof.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the May 1 or November 1 (whether or not a Business Day), as the case
may be, immediately preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Resale Registration Statement" means a registration statement under the
Securities Act registering the Securities for resale pursuant to the terms of
the Registration Rights Agreement.
"Responsible Officer" means any officer of the Trustee within the
Corporate Trust Office of the Trustee with direct responsibility for the
administration of this Indenture and also, with respect to a particular matter,
any other officer of the Trustee to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject.
"Restricted Global Security" means a Global Security representing
Restricted Securities.
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"Restricted Sale/Leaseback Transaction" means any Sale/Leaseback
Transaction entered into by the Company or any Subsidiary after the date of
this Indenture, except: (i) Sale/Leaseback Transactions entered into by and
between the Company or a Subsidiary and one or more Subsidiaries of the
Company; (ii) Sale/Leaseback Transactions as to which, during the period
commencing 60 days prior to and ending 120 days after entering into such
Sale/Leaseback Transaction, the Company or a Subsidiary applies an amount equal
to the Attributable Debt with respect to such Sale/Leaseback Transaction to the
acquisition, directly or indirectly and in whole or in part, of one or more
Principal Properties or to the retirement of long-term Indebtedness (other than
mandatory prepayment or retirement) of the Company or any Subsidiary; and (iii)
Sale/Leaseback Transactions involving the taking back of a lease for a period
of three years or less.
"Restricted Securities" has the meaning specified in Section 2.05.
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.
"Sale/Leaseback Transaction" means any arrangement, directly or
indirectly, with any Person whereby the Company or any Subsidiary shall sell or
transfer any Principal Property whether now owned or hereafter acquired, and
then or thereafter rent or lease as lessee such Principal Property or any part
thereof which the Company or such Subsidiary, as the case may be, intends to
use for substantially the same purpose as the Principal Property being sold or
transferred.
"Secured Debt" has the meaning specified in Section 10.06.
"Securities" has the meaning specified in the first paragraph of the
Recitals of the Company.
"Securities Act" means the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05.
"Special Record Date" for the payment of Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
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"Stated Maturity," when used with respect to the Securities or any
instalment of interest thereon, means the date specified in the Securities as
the fixed date on which the principal thereof or such instalment of interest is
due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Treasury Rate" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second Business Day immediately preceding that Redemption Date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that Redemption Date.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Unrestricted Global Security" means a Global Security representing
Securities which are not Restricted Securities.
"U.S. Global Securities" has the meaning specified in Section 2.01.
"U.S. Government Obligation" has the meaning specified in Section 12.04.
"U.S. Physical Securities" has the meaning specified in Section 2.01.
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"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee such certificates
and opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers' Certificate,
if to be given by an officer of the Company, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include
(i) a statement that each individual 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 statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to
enable such individual 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, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representa-
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tions by, counsel, unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction,
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notice, consent, waiver or other action, or to vote on any action, authorized
or permitted to be given or taken by Holders. If not set by the Company prior
to the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursuant to Section
7.01) prior to such first solicitation or vote, as the case may be. With regard
to any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 1.05. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(i) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at 450 West 33rd Street, New York, New York 10001,
Attention: Capital Markets Fiduciary Services, or
(ii) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Treasurer.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any
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defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such Act to be a part of and govern this Indenture, the
latter provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the
parties hereto and their respective successors hereunder and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 1.12. Governing Law. This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the State of New York.
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SECTION 1.13. Legal Holidays. In any case where any Interest Payment Date
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the Interest Payment Date or at the Stated Maturity, provided that no
interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date or Stated Maturity or, as the case may be.
ARTICLE 2
SECURITY FORMS
SECTION 2.01. Forms Generally. The Securities and the Trustee's
certificates of authentication shall be in substantially the forms set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor, the Internal Revenue Code of 1986,
as amended, and regulations thereunder, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
Securities offered and sold in reliance on Rule 144A shall be issued in
the form of permanent U.S. Global Securities in registered form in
substantially the form set forth in this Article (the "U.S. Global
Securities"). Securities offered and sold in offshore transactions in reliance
on Regulation S shall be issued, subject to certain exceptions, in the form of
permanent Global Securities in registered form in substantially the form set
forth in this Article (the "Offshore Global Securities"). The aggregate
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary, as hereinafter provided.
Securities offered and sold in reliance on any other exemption from
registration under the Securities Act other than as described in the preceding
paragraph, and those securities offered and sold in offshore transactions in
reliance on Regulation S that cannot be issued in the form of Global Securities
under the laws of the relevant jurisdiction (the "Offshore Physical
Securities"), shall be issued in the form of permanent certificated Securities
in registered form, in substantially the form set forth in this Article (the
"U.S. Physical Securities"). The Offshore Physical Securities and the U.S.
Physical Securities are sometimes collectively referred to as the "Physical
Securities."
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Securities sold to Institutional Accredited Investors (the "IAI
Securities") shall be issued in definitive, fully registered form without
interest coupons, substantially in the form of Security set forth in this
Article. IAI Securities shall be delivered to such Institutional Accredited
Investor(s) only upon the execution and delivery to the Initial Purchasers, the
Company and the Trustee of an Accredited Investor Letter, substantially in the
form of the letter attached as Annex A to the Offering Memorandum. Securities
shall cease to be IAI Securities upon certain transfers as provided in Section
3.12.
SECTION 2.02. Form of Face of Security. [INCLUDE IF SECURITY IS A
RESTRICTED SECURITY -- THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT), (B) IT IS AN "INSTITUTIONAL
ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2)
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D)
OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO
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YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED
FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND
OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.]
[INCLUDE IF SECURITY IS NOT AN EXCHANGE SECURITY -- THE HOLDER OF THIS
SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, A REGISTRATION RIGHTS
AGREEMENT, DATED AS OF NOVEMBER 9, 1999, ENTERED INTO BY THE COMPANY FOR THE
BENEFIT OF CERTAIN HOLDERS FROM TIME TO TIME OF SECURITIES.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY -- THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF (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 THEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AVON PRODUCTS, INC.
[6.90% Note due 2004]
[7.15% Note due 2009]
CUSIP No. __________ $________
Avon Products, Inc., a corporation duly organized and existing under the
laws of New York (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________________, or registered assigns,
the principal sum of _____________________ Dollars [INCLUDE IF SECURITY IS A
GLOBAL SECURITY -- (which amount may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary, in accordance with the rules and procedures of the Depositary)]
on November 15, [2004] [2009], and to pay interest thereon from November 9,
1999 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on May 15 and November 15 in each year,
commencing May 15, 2000 at the rate of [6.90%] [7.15%] per annum, until the
principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 1 or November 1 (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the
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Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal of and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. If this
Security is a Global Security, then notwithstanding the foregoing, each such
payment will be made in accordance with the procedures of the Depositary as
then in effect.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
AVON PRODUCTS, INC.
By________________________________
Attest:
____________________________________
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SECTION 2.03. Form of Reverse of Security. This Security is one of a duly
authorized issue of Securities of the Company designated as its [6.90% Notes
due 2004, limited in aggregate principal amount to $200 million][7.15% Notes
due 2009, limited in aggregate principal amount to $300 million] (herein called
the "Securities"), issued and to be issued under an Indenture, dated as of
November 9, 1999 (herein called the "Indenture"), between the Company and The
Chase Manhattan Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
The Securities are redeemable in whole or in part, at the option of the
Company at any time and from time to time, on not less than 30 or more than 60
days' prior notice mailed to the Holders of the Securities, at a Redemption
Price equal to the greater of (i) 100% of the principal amount of the
Securities to be redeemed and (ii) the sum of the present values of the
Remaining Scheduled Payments thereon discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus [20 basis points with respect to the Notes due 2004]
[25 basis points with respect to the Notes due 2009], together in either case
with accrued interest on the principal amount being redeemed to the Redemption
Date.
Subject to payment by the Company of a sum sufficient to pay the amount
due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the Redemption Date of
this Security (or portion hereof if this Security is redeemed in part).
The Securities do not have the benefit of a sinking fund.
[INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit or
withdrawal of an interest in this Security, including an exchange, transfer,
repurchase or conversion of this Security in part only, the Trustee, as
custodian of the Depositary, shall make an adjustment on its records to reflect
such deposit or withdrawal in accordance with the rules and procedures of the
Depositary.]
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain
limitations in the Indenture, at any time when the Company is not subject to
Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as
amended, upon the request of a Holder of a Restricted Security, the Company
will promptly furnish or cause to be furnished Rule 144A Information
23
<PAGE>
(as defined below) to such Holder of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder, to the extent
required to permit compliance by any such Holder with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A Infor
mation" shall be such information as is specified pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto).]
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time, upon
compliance with certain conditions set forth therein, of (i) the entire
Indebtedness evidenced by this Security or (ii) certain restrictive covenants
and Events of Default with respect to this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Outstanding
Securities, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and
offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Outstanding
Securities a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
24
<PAGE>
instituted by the Holder of this Security for the enforcement of any payment of
principal hereof or interest hereon on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $100,000 and any integral multiple of $1,000 above that
amount. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
25
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ASSIGNMENT FORM
If you want to assign this Security, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Security to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax
ID number of assignee)
and irrevocably appoint _____________________________________, agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date: _____________ Signed:____________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: ________________________________
[Include if Security is not an Exchange Security -- In connection with any
transfer of this Security occurring prior to the date which is the earlier of
(i) the date of the declaration by the Commission of the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering resales of this Security (which effectiveness shall
not have been suspended or terminated at the date of the transfer) and (ii)
November 9, 2001 the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that
this Security is being transferred:
[Check One]
(1) |_| to the Company or a subsidiary thereof; or
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(2) |_| pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) |_| outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) |_| pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) |_| pursuant to an effective registration statement under the
Securities Act; or
(7) |_| pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof; provided that if box (3), (4), (5) or
(7) is checked, the Company may require, prior to registering any such transfer
of the Securities, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Company may reasonably request to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 3.12 of the Indenture
shall have been satisfied.
Date: _____________ Signed:____________________________
(Sign exactly as your name
appears on the other side of
this Security)
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Signature Guarantee: ________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date: _____________ Signed:___________________________]
NOTICE: To be executed by an executive officer.
SECTION 2.04. Form of 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
SECTION 2.05. Legend on Restricted Securities. During the period beginning
on November 9, 1999 and ending on the date two years from such date, any
Security including any Security issued in exchange therefor or in lieu thereof,
shall be deemed a "Restricted Security" and shall be subject to the
restrictions on transfer provided in the legends set forth on the face of the
form of Security in Section 2.02; provided, however, that the term "Restricted
Security" shall not include any Securities as to which restrictions have been
terminated in accordance with Section 3.05. All Securities shall bear the
applicable legends set forth on the face of the form of Security in Section
2.02. Except as provided in Section 3.05 and Section 3.12, the Trustee shall
not issue any unlegended Security until it has received an Officers'
Certificate from the Company directing it to do so.
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<PAGE>
ARTICLE 3
THE SECURITIES
SECTION 3.01. Title and Terms. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
limited to $200 million for the Notes due 2004 and $300 million for the Notes
due 2009, except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 3.04, 3.05, 3.06 or 9.06.
The Securities shall be known and designated as (i) the "Notes due 2004"
of the Company with a Stated Maturity on November 15, 2004, and bearing
interest at the rate of 6.90% per annum, from November 9, 1999 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, as the case may be, payable semiannually on May 15 and November 15,
commencing May 15, 2000 until the principal thereof is paid or made available
for payment and (ii) the "Notes due 2009" of the Company with a Stated Maturity
on November 15, 2009, and bearing interest at the rate of 7.15% per annum, from
November 9, 1999 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semiannually on May 15 and November 15, commencing May 15, 2000 until the
principal thereof is paid or made available for payment.
The principal of and interest on the Securities shall be payable at the
office or agency of the Company in The City of New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by wire transfer or by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
The Securities shall not have the benefit of a sinking fund.
The Securities shall not be superior in right of payment to, and shall
rank pari passu with, all other unsecured and unsubordinated Indebtedness of
the Company.
The Securities shall be subject to defeasance at the option of the Company
as provided in Article Twelve.
SECTION 3.02. Denominations. The Securities shall be issuable only in
registered form without coupons and in denominations of $100,000 and any
integral multiple of $1,000 above that amount.
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<PAGE>
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities. The Company Order shall specify
the amount of Securities to be authenticated, whether such Securities are Notes
Due 2004 or Notes Due 2009 and whether such Securities are to be Exchange
Securities, and shall further specify the amount of such Securities to be
issued as a Global Security, as Offshore Physical Securities or as U.S.
Physical Securities. The Trustee in accordance with such Company Order shall
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
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If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of authorized denominations. Until so exchanged the temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 3.05. Registration; Registration of Transfer and Exchange;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section
10.02 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The Trustee is hereby appointed "Security Registrar"
(the "Security Registrar") for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office
or agency of the Company designated pursuant to Section 10.02 for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Securities of any authorized denominations and of a like aggregate principal
amount and tenor each such Security bearing such restrictive legends as may be
required by this Indenture (including Sections 2.02, 2.05 and 3.12).
At the option of the Holder and subject to the other provisions of this
Section 3.05 and to Section 3.12, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Securities to be exchanged at such
office or agency. 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 issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing. As a condition to
the registration of transfer of any Restricted Securities, the Company or the
Trustee may require evidence satisfactory to them as to the compliance with the
restrictions set forth in the legend on such securities.
Except as provided in the following sentence and in Section 3.12, all
Securities originally issued hereunder and all Securities issued upon
registration of transfer or exchange or replacement thereof shall be Restricted
Securities and shall bear the legend required by Sections 2.02 and 2.05, unless
the Company shall have delivered to the Trustee (and the Security Registrar, if
other than the Trustee) a Company Order stating that the Security is not a
Restricted Security and may be issued without such legend thereon. Securities
which are issued upon registration of transfer of, or in exchange for,
Securities which are not Restricted Securities shall not be Restricted
Securities and shall not bear such legend.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04 or 9.06 not involving any transfer.
The Company shall not be required to exchange or register a transfer of
any Security (i) during the 15-day period immediately preceding the mailing of
any notice of redemption of any Security, or (ii) after any notice of
redemption has been given to Holders of Securities, except, where such notice
provides that such Security is to be redeemed only in part, the Company shall
be required to exchange or register a transfer of the portion thereof not to be
redeemed.
(b) Beneficial ownership of every Restricted Security shall be subject to
the restrictions on transfer provided in the legends required to be set forth
on the face of each Restricted Security pursuant to Sections 2.02 and 2.05,
unless such restrictions on transfer shall be terminated in accordance with
this Section 3.05(b) or Section 3.12. The Holder of each Restricted Security,
by such Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer.
The restrictions imposed by this Section 3.05 and Sections 2.02, 2.05 and
3.12 upon the transferability of any particular Restricted Security shall cease
and terminate upon delivery by the Company to the Trustee of an Officers'
Certificate stating that such Restricted Security has been sold pursuant to an
effective
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registration statement under the Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or any successor provision thereto).
Any Restricted Security as to which the Company has delivered to the Trustee an
Officers' Certificate that such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon surrender of
such Restricted Security for exchange to the Security Registrar in accordance
with the provisions of this Section 3.05, be exchanged for a new Security, of
like tenor and aggregate principal amount, which shall not bear the restrictive
legends required by Sections 2.02 and 2.05. The Company shall inform the
Trustee in writing of the effective date of any registration statement
registering the Securities under the Securities Act. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement.
As used in the preceding two paragraphs of this Section 3.05, the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
(c) Neither the Trustee nor any of its agents shall (i) have any duty to
monitor compliance with or with respect to any federal or state or other
securities or tax laws or (ii) have any duty to obtain documentation on any
transfers or exchanges other than as specifically required hereunder.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or has been called for redemption in
full, the Company in its discretion may, instead of issuing a new Security, pay
such Security.
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Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed
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payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving
payment of principal of and (subject to Section 3.07) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
SECTION 3.09. Book-entry Provisions for Global Securities. (a) The Global
Securities initially shall (i) be registered in the name of the Depositary or
the nominee of such Depositary, (ii) be delivered to the Trustee as custodian
for the Depositary and (iii) bear legends as set forth on the face of the form
of Security in Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global
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Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of any Holder.
(b) Transfers of the Global Securities shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be
transferred or exchanged, in whole or in part, for Physical Securities in
accordance with the rules and procedures of the Depositary and the provisions
of Section 3.12. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the Global
Securities if (A) such Depositary has notified the Company (or the Company
becomes aware) that the Depositary (i) is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing agency
registered under the Exchange Act when the Depositary is required to be so
registered to act as such Depositary and, in both such cases, no successor
Depositary shall have been appointed within 90 days of such notification or of
the Company becoming aware of such event, (B) there shall have occurred and be
continuing an Event of Default with respect to such Global Security and the
Outstanding Securities shall have become due and payable pursuant to Section
5.02 and the Trustee has requested that Physical Securities be issued or (C)
the Company has decided to discontinue use of book-entry transfers through the
Depositary (or a successor Depositary); provided that Holders of Securities
offered and sold in reliance on Rule 144A or Regulation S in the form of
permanent certificated Securities in registered form shall have the right,
subject to applicable law, to request that such Securities be exchanged for
interests in the applicable Global Security.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Security to beneficial owners pursuant to
paragraph (b), the Security Registrar shall (if one or more Physical Securities
are to be issued) reflect on its books and records the date and a decrease in
the principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to paragraph (b), the Global Security shall be
deemed
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to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Physical Securities
of authorized denominations and the same tenor.
(e) Any Physical Security constituting a Restricted Security delivered in
exchange for an interest in the Global Security pursuant to paragraph (c) or
(d) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 3.12, bear the legend regarding transfer restrictions applicable to the
Physical Securities set forth on the face of the form of Security in Section
2.02.
(f) The Holder of the Global Securities may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
SECTION 3.10. 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 Trustee shall cancel
and destroy all Securities surrendered for registration of transfer, exchange,
payment, redemption or cancellation and shall deliver certificates of
destruction to the Company, all in accordance with its customary practices. If
the Company shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for
cancellation. The Company may not issue new Securities to replace Securities it
has paid in full or delivered to the Trustee for cancellation.
SECTION 3.11. Computation of Interest. Interest on the Securities shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.12. Special Transfer Provisions. (a) Transfers to Non-QIB
Institutional Accredited Investors and Non-U.S. Persons. The following
provisions shall apply with respect to the registration of any proposed
transfer of a Security constituting a Restricted Security to any Institutional
Accredited Investor which is not a QIB or to any Non-U.S. Person to which
Securities in the form of Global Securities cannot be issued:
(i) the Security Registrar shall register the transfer of any
Security constituting a Restricted Security, whether or not such Security
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bears the legend required by Sections 2.02 and 2.05, if (x) the requested
transfer is after November 9, 2001 or (y) (1) in the case of a transfer to
an Institutional Accredited Investor which is not a QIB (excluding
Non-U.S. Persons), the proposed transferee has delivered to the Security
Registrar a certificate substantially in the form of Exhibit A hereto or
(2) in the case of a transfer to a Non-U.S. Person, the proposed
transferor has delivered to the Security Registrar a certificate
substantially in the form of Exhibit B hereto, together in the case of
clause (1) or clause (2) with such other certifications, legal opinions or
other information as the Company may reasonably require to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, upon receipt by the Security
Registrar of (x) the certificate, if any, required by paragraph (i) above
and (y) instructions given in accordance with the Depositary's and the
Security Registrar's procedures,
whereupon (1) the Security Registrar shall reflect on its books and records the
date and (if the transfer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of the Global Security in an
amount equal to the principal amount of the beneficial interest in the Global
Security to be transferred, and (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of like tenor
and amount.
If the Securities to be transferred consist of IAI Securities, the
following shall apply: (x) if such IAI Securities are proposed to be
transferred to an Institutional Accredited Investor which is not a QIB, upon
the registration of such transfer such Securities shall continue to be IAI
Securities, and (y) if such IAI Securities are proposed to be transferred to a
Non-U.S. Person, upon the registration of such transfer such Securities shall
cease to be IAI Securities.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Security constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Security Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating, or
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has otherwise advised the Company and the Security Registrar in writing,
that it is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it and
any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company
as it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Security, upon
receipt by the Security Registrar of instructions given in accordance with
the Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred, and the
Trustee shall cancel the Physical Securities so transferred; and
(iii) If the Securities to be transferred consist of IAI Securities,
upon the registration of such transfer according to this Section such
Securities shall cease to be IAI Securities and may be evidenced by
Physical Securities or interests in a Global Security.
(c) Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Securities not bearing the legends required by Sections 2.02
and 2.05, the Security Registrar shall deliver Securities that do not bear such
legends. Upon the registration of transfer, exchange or replacement of
Securities bearing the legends required by Sections 2.02 and 2.05, the Security
Registrar shall deliver only Securities that bear such legends unless (i) the
circumstance contemplated by paragraph (a)(i)(x) of this Section 3.12 exists or
(ii) there is delivered to the Security Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Security bearing the legends
required by Sections 2.02 and 2.05, each Holder of such a Security acknowledges
the restrictions on transfer of such Security set forth in this Indenture and
in such legends and agrees that it will transfer such Security only as provided
in this Indenture.
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The Security Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to this Section 3.12. The Company shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Security Registrar.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other
than (A) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06 and (B) Securities
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
one year, or
(C) will be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
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and the Company, in the case of (A), (B) or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness evidenced by
such Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of Clause
(a) of this Section, the obligations of the Trustee under Section 4.02 and the
last paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Trustee pursuant
to Section 4.01 shall be held in trust and applied by it, in accordance with
the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Trustee.
ARTICLE 5
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(a) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of the principal of any Security at its
Maturity; or
(c) default in the performance of any covenant, agreement or condition of
the Company in this Indenture or the Securities, and continuance of such
default for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(d) a default under any bond, debenture, note or other evidence of
Indebtedness for money borrowed by the Company, whether such Indebtedness now
exists or shall hereafter be created, which default shall constitute a failure
to pay the principal of Indebtedness having an aggregate principal amount
outstanding of at least $50 million when due and payable after the expiration
of any applicable grace period with respect thereto or shall have resulted in
such Indebtedness becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
Indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default and requiring
the Company to cause such Indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; provided, however, that, subject to the
provisions of Sections 6.01 and 6.02, the Trustee shall not be deemed to have
knowledge of such default unless either (A) a Responsible Officer of the
Trustee shall have actual knowledge of such default or (B) the Trustee shall
have received written notice thereof from the Company, from any Holder or from
the holder of or trustee in respect of any such Indebtedness; or
(e) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under
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any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. (a) If
an Event of Default (other than those specified in Sections 5.01(e) and
5.01(f)) occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities may declare the principal of all the Securities to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal shall become
immediately due and payable.
Notwithstanding the foregoing, in the case of an Event of Default
specified in Sections 5.01(e) or 5.01(f), all Outstanding Securities will ipso
facto become due and payable without any declaration or other Act on the part
of the Trustee or any Holder.
(b) At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
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(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 6.07;
and
(ii) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(i) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(ii) default is made in the payment of the principal of any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection,
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including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to the Securities occurs and is
continuing, the Trustee may in its discretion, subject to applicable law,
proceed to protect and enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.07, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal or interest, upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and interest, respectively.
SECTION 5.07. Limitation on Suits. No Holder of any Security shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(i) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(ii) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(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) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to
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obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest. Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 3.07) interest on
such Security on the respective Stated Maturities expressed in such Security
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 3.06, 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 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in principal
amount of the Outstanding Securities shall have the right to direct the time,
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method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(i) in the payment of the principal of or interest on any Security,
or
(ii) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14. 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, a court may require any party litigant in such suit to file an
undertaking to pay the costs of the suit, and the court may assess reasonable
costs, including reasonable attorney's fees, against any party litigant in the
suit having due regard to the merits and good faith of the claims or defenses
made by the party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Company, to any suit instituted by the Trustee,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security on or after the maturity of such
Security.
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SECTION 5.15. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 6
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. Whether or not
therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 6.02. Notice of Defaults. The Trustee shall give the Holders
notice of any default hereunder as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 5.01(c), no such notice to Holders shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors of the Company may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be charged with knowledge of any Default or
Event of Default (except as provided in Section 5.01(d)) with respect to the
Securities unless either (i) a Responsible Officer shall have actual knowledge
of such Default or Event of Default or (ii) written notice of such Default or
Event of Default shall have been given to the Trustee by the Company or any
other obligor on such Securities or by any Holder of such Securities; and
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(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee shall not be accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar
or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
(i) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(ii) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses
of
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defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section 6.07 shall survive the
satisfaction and discharge of this Indenture. To secure the Company's payment
obligations in this Section 6.07, the Trustee shall have a Lien prior to the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay principal and interest on the Securities. Such Lien
shall survive the satisfaction and discharge of this Indenture. When the
Trustee incurs expenses or renders services after a Default or an Event of
Default specified in Sections 5.01(e) or 5.01(f) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
U.S. Code, Title 11 or any other similar foreign, federal or state law for the
relief of debtors.
SECTION 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and
surplus of at least $50,000,000. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. 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.
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(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or
(iv) a receiver of the Trustee or of its property shall be appointed
or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company by a Company Order may remove the
Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Company Order, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.06. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
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ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar; provided, however, that no such list need be
furnished so long as the Trustee is acting as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. Reports so required to be
transmitted at stated
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intervals of not more than 12 months shall be transmitted no later than January
31, in each calendar year, commencing in January, 2000.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 7.04. Reports by Company. The Company shall file with the Trustee
and the Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. In the event the Company is not subject to
Section 13 or 15(d) of the Exchange Act, it shall file with the Trustee upon
request the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or
merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(i) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on
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all the Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of the Company as a result of
such transaction as having been incurred by the Company at the time of
such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article.
SECTION 8.02. Successor Substituted. Upon any consolidation of the Company
with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 8.01, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or
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(b) to add to the covenants of the Company for the benefit of the Holders,
or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default for the benefit of the
Holders; or
(d) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture, provided
that such action pursuant to this Clause (d) shall not adversely affect the
interests of the Holders in any material respect.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or the Redemption Price thereof,
or change the place of payment where, or the coin or currency in which,
any Security or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date); or
(ii) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(iii) modify any of the provisions of this Section, Section 5.13 or
Section 10.11, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
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without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, in addition to the
documents required by Section 1.02, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
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ARTICLE 10
COVENANTS
SECTION 10.01. Payment of Principal and Interest. The Company shall duly
and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company shall 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
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York)
where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall 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 10.03. Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it shall, on or before
each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit
with a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
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Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining shall be repaid to the Company.
SECTION 10.04. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this
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Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.
SECTION 10.05. Existence. Subject to Article Eight, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 10.06. Liens. The Company shall not, and shall not permit any
Subsidiary to issue, assume, incur or guarantee any Indebtedness secured by a
Lien, except Permitted Liens, on any Principal Property or any shares of
Capital Stock of any Subsidiary ("Secured Debt"), without at the same time
effectively providing that the Securities shall be secured equally and ratably
with (or prior to) the Indebtedness so secured for so long as such Indebtedness
is so secured, unless after giving effect thereto, the aggregate amount of
Secured Debt, together with all Attributable Debt of the Company and its
Subsidiaries in respect of Restricted Sale/Leaseback Transactions would not
exceed 20% of Consolidated Net Tangible Assets.
SECTION 10.07. Limitation on Restricted Sale/Leaseback Transactions. The
Company shall not, and shall not permit any Subsidiary to, enter into, assume,
guarantee or otherwise become liable with respect to any Restricted
Sale/Leaseback Transaction, unless after giving effect thereto the aggregate
amount of Attributable Debt of the Company and its Subsidiaries in respect of
Restricted Sale/Leaseback Transactions, together (without duplication) with all
Secured Debt then outstanding, would not exceed 20% of Consolidated Net
Tangible Assets.
SECTION 10.08. Reports and Delivery of Certain Information. Whether or not
required by the rules and regulations of the Commission, so long as any
Securities are outstanding, the Company shall furnish to the Holders of the
Securities (i) all quarterly and annual financial information that is
substantially equivalent to that which would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were required
to file such Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants and (ii) all reports that are substantially equivalent
to that which
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would be required to be filed with the Commission on Form 8-K if the Company
were required to file such reports. In addition, whether or not required by the
rules and regulations of the Commission, the Company shall file a copy of all
such information with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available
to investors who request it in writing. So long as any of the Securities remain
Outstanding, the Company shall make available to any prospective purchaser of
Securities or beneficial owner of Securities in connection with any sale
thereof the information required by Rule 144A(d)(4) under the Securities Act,
until such time as the Company has either exchanged the Securities for
securities identical in all material respects which have been registered under
the Securities Act or until such time as the Holders thereof have disposed of
such Securities pursuant to an effective registration statement under the
Securities Act.
SECTION 10.09. Resale of Certain Securities. During the period beginning
on the Issue Date and ending on the date that is two years from the Issue Date,
the Company shall not, and shall not permit any of its "affiliates" (as defined
under Rule 144 under the Securities Act or any successor provision thereto) to,
resell any Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them. The Trustee shall have no
responsibility in respect of the Company's performance of its agreement in the
preceding sentence.
SECTION 10.10. Book-Entry System. If the Securities cease to trade in the
Depositary's book-entry settlement system, the Company covenants and agrees
that it shall use reasonable efforts to make such other book-entry arrangements
that it determines are reasonable for the Securities.
SECTION 10.11. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 10.06 and 10.07 if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
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ARTICLE 11
OPTIONAL REDEMPTION OF SECURITIES
SECTION 11.01. Right of Optional Redemption; Redemption Price. The
Securities are redeemable in whole or in part, at the option of the Company at
any time and from time to time, on not less than 30 or more than 60 days' prior
notice to the Holders of the Securities, at a redemption price equal to the
greater of (i) 100% of the principal amount of the Securities to be redeemed
and (ii) the sum of the present values of the Remaining Scheduled Payments
thereon discounted, to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at a rate equal to the sum of
the applicable Treasury Rate plus, in the case of the Notes due 2004, 20 basis
points, or in the case of the Notes due 2009, 25 basis points, as the case may
be ("Redemption Price"), together in either case with accrued interest on the
principal amount being redeemed to the Redemption Date.
SECTION 11.02. Notice of Redemption; Deposit of Redemption Price with
Trustee; Partial Redemptions. Notice of redemption to the Holders of Securities
to be redeemed in whole or in part 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 Redemption Date, to the Holders of such Securities at
their last addresses as they shall appear upon the Security 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 designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any other
Security. Any notice of redemption of Securities to be redeemed 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.
The Company will deliver to the Trustee at least 15 days prior to the date
on which any notice of redemption is to be mailed to the Holders an Officers'
Certificate stating the aggregate principal amount of Securities to be
redeemed.
The notice of redemption to each Holder of Securities to be redeemed shall
identify the Securities to be redeemed (including CUSIP numbers) and shall
specify the principal amount of each Security held by such Holder to be
redeemed, the Redemption Date, the formula for determining the Redemption Price
applicable to such Security, the place or places of payment, that payment will
be made upon presentation and surrender of such Securities, that interest
accrued to the Redemption Date will be paid and that on and after said date
interest on the Securities, or on the portions thereof to be redeemed, will
cease to accrue. In case any Security is to be redeemed in part only, the
notice of
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redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the Redemption Date, upon surrender
of such Security, a new Security or Securities in principal amount equal to the
unredeemed portion thereof will be issued.
No later than 10:00 a.m., New York City time, on the Redemption Date
specified in any 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) an amount of money sufficient to redeem on the Redemption Date all the
Securities so called for redemption at the applicable Redemption Price,
together with accrued interest to such Redemption Date.
If less than all the Securities are to be redeemed, the Trustee shall
select, either pro rata, by lot or by any other method it shall deem fair and
reasonable, Securities to be redeemed in whole or in part. Securities may be
redeemed in part in multiples of $1,000 only. The Trustee shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Securities 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 11.03. Payment to Holders of Securities Called for Redemption. If
notice of redemption has been given to the Holders as above provided, the
Securities or portions of Securities specified in such notice shall become due
and payable at the place stated in such notice on the Redemption Date specified
in such notice at the applicable Redemption Price, together with interest
accrued to such Redemption Date, and on and after said date (unless the Company
shall default in the payment of such Securities at the Redemption Price,
together with interest accrued to said date) interest on the Securities or
portions of Securities so called for redemption shall cease to accrue and such
Securities shall cease from and after such Redemption Date to be entitled to
any benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such Securities except the right to receive the
Redemption Price thereof and accrued interest to such Redemption Date. On
presentation and surrender of such Securities at an office or agency of the
Company maintained for that purpose in The City of New York, 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 such Redemption Date; provided that any semi-annual
payment of interest becoming due on such Redemption Date shall be
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payable to the Holders of such Securities registered as such on the relevant
Regular Record Date subject to the terms and provisions of Section 3.07 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 applicable Redemption Date at the rate borne by the
Security prior to such Redemption Date.
ARTICLE 12
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.01. Company's Option to Effect Defeasance or Covenant
Defeasance. The Company may elect, at its option at any time, to have Section
12.02 or Section 12.03 applied to the Outstanding Securities upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution.
SECTION 12.02. Defeasance and Discharge. Upon the Company's exercise of
its option (if any) to have this Section applied to the Outstanding Securities,
the Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date
the conditions set forth in Section 12.04 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
the Outstanding Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 12.04 and as more fully set forth in such Section, payments in respect
of the principal of and interest on such Securities when payments are due, (b)
the Company's obligations with respect to such Securities under Sections 3.04,
3.05, 3.06, 10.02 and 10.03, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (d) this Article. Subject to compliance
with this Article, the Company may exercise its option (if any) to have this
Section applied to the Outstanding Securities notwithstanding the prior
exercise of its option (if any) to have Section 12.03 applied to such
Securities.
SECTION 12.03. Covenant Defeasance. Upon the Company's exercise of its
option (if any) to have this Section applied to any Securities, (a) the Company
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shall be released from its obligations under Section 10.06, Section 10.07 or
Article 8 and (b) the occurrence of any event specified in Sections 5.01(c)
(with respect to any of Section 10.06, Section 10.07 or Article 8) or 5.01(d)
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date
the conditions set forth in Section 12.04 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that,
with respect to such Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
5.01(c)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 12.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 12.02 or
Section 12.03 to the then Outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 6.09 and agrees to comply with the provisions of this
Article applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefits of the Holders of such Securities, (i) money in an amount, or
(ii) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (iii) a combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying
trustee) to pay and discharge, the principal of and interest on such Securities
on the respective Stated Maturities, in accordance with the terms of this
Indenture and such Securities. As used herein, "U.S. Government Obligation"
means (x) any security which is (1) a direct obligation of the United States of
America for the payment of which the full faith and credit of the United States
of America is pledged or (2) an obligation of a Person controlled or supervised
by and acting as 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, which, in either case (1) or (2),
is not callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any
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U.S. Government Obligation which is specified in Clause (x) above and held by
such bank for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, 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 depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal or interest evidenced by such depositary receipt.
(b) In the event of an election to have Section 12.02 apply to such
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (ii) since the date of
this instrument, there has been a change in the applicable Federal income tax
law, in either case (i) or (ii) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities will not recognize
gain or loss for Federal income tax purposes as a result of the deposit,
Defeasance and discharge to be effected with respect to such Securities and
will be subject to Federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(c) In the event of an election to have Section 12.03 apply to such
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not recognize
gain or loss for Federal income tax purposes as a result of the deposit and
Covenant Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant Defeasance were
not to occur.
(d) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that such Securities, if then listed on any
securities exchange, will not be delisted as a result of such deposit.
(e) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities shall have occurred
and be continuing at the time of such deposit or, with regard to any such event
specified in Sections 5.01(e) and 5.01(f), at any time on or prior to the 90th
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 90th day).
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(f) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).
(g) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound.
(h) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act unless such trust shall be registered under such
Act or exempt from registration thereunder.
(i) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 12.05. Deposited Money and U.S. Government Obligations to be Held
in Trust; Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 12.06, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 12.04 in respect of the Outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
such Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities, of all sums due and
to become due thereon in respect of principal and interest, but money so held
in trust 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 12.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 12.04
with respect to the Outstanding Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written
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certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect the Defeasance
or Covenant Defeasance, as the case may be, with respect to such Securities.
SECTION 12.06. Reinstatement. If the Trustee or the Paying Agent is unable
to apply any money in accordance with this Article with respect to the
Outstanding Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture and such Securities from
which the Company has been discharged or released pursuant to Section 12.02 or
12.03 shall be revived and reinstated as though no deposit had occurred
pursuant to this Article with respect to such Securities, until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 12.05 with respect to such Securities in accordance with
this Article; provided, however, that if the Company makes any payment of
principal of or interest on any such Security following such reinstatement of
its obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
---------------------------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
AVON PRODUCTS, INC.
By /s/ Dennis Ling
--------------------------------------
Dennis Ling
Group Vice President Finance and
Treasurer
THE CHASE MANHATTAN BANK,
as Trustee,
By /s/ Sheik Wiltshire
--------------------------------------
Sheik Wiltshire
Assistant Vice President
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EXHIBIT A
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
----------, ----
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Capital Markets Fiduciary Services
Re: Avon Products, Inc. (the "Company")
[6.90% Notes due 2004 (the "Notes")]
[7.15% Notes due 2009 (the "Notes")]
------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_____ aggregate principal
amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated November 4, 1999, relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated on page
2 of the Offering Memorandum and in the section entitled "Notice to
Investors" of the Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as
of November 9, 1999 relating to the Notes and the [6.90% Notes due 2004]
[7.15% Notes due 2009] (the "Indenture") and that any subsequent transfer
of the notes is subject to certain restrictions and conditions set forth
under the section entitled "Notice to Investors" of the Offering
Memorandum, the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
A-1
<PAGE>
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell or otherwise transfer any Notes
prior to November 9, 2001, we will do so only (i) to the Company or any of
its subsidiaries, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), (iii) inside the United
States to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf of a
U.S. broker-dealer) to you a signed letter containing certain
representations and agreements relating to the restrictions on transfer of
the Notes, substantially in the form of this letter, (iv) outside the
United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available), or (vi) pursuant to
an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing any of the Notes from us
a notice advising such purchaser that resales of the Notes are restricted
as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section
3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Notice to Investors" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, legal
opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
A-2
<PAGE>
7. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You, the Company and the Initial Purchasers (as defined in the Offering
Memorandum) are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferee]
By:________________________________
Authorized Signature
A-3
<PAGE>
EXHIBIT B
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
----------, ----
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Capital Market Fiduciary Services
Re: Avon Products, Inc. (the "Company")
[6.90% Notes due 2004 (the "Notes")]
[7.15% Notes due 2009 (the "Notes")]
------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $_________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
1. the offer of the Notes was not made to a person in the United
States;
2. either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
B-1
<PAGE>
3. no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By___________________________
Authorized Signature
B-2
EXHIBIT 4.3
- --------------------------------------------------------------------------------
AVON PRODUCTS, INC.
as Issuer
and
THE CHASE MANHATTAN BANK
as Trustee
-----------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of December o, 1999
To Indenture of Avon Products, Inc.
Dated as of November 9, 1999
-----------------
$200,000,000 6.90% Notes due 2004
$300,000,000 7.15% Notes due 2009
- --------------------------------------------------------------------------------
1
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of December o, 1999, between
AVON PRODUCTS, INC., a New York corporation, as Issuer (the "Company"), and THE
CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (the
"Trustee"), under the Indenture referred to hereinafter.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee executed and delivered an Indenture
dated as of November 9, 1999 (the "Indenture"), providing for the issuance of
$200,000,000 principal amount of 6.90% Notes due 2004 and $300,000,000 principal
amount of 7.15% Notes due 2009 of the Company (collectively, the "Securities");
WHEREAS, except as otherwise defined herein, any capitalized term used but
not defined herein shall have the meaning set forth in the Indenture;
WHEREAS, pursuant to Section 9.01 of the Indenture, the Company and the
Trustee have agreed to enter into this First Supplemental Indenture to amend the
provisions of Sections 2.03, 2.05, 3.02 and 3.05 of the Indenture;
WHEREAS, the parties hereto are entering into this First Supplemental
Indenture, in connection with the filing with the Commission of a Registration
Statement on Form S-4 in respect of the Securities, for the purpose of amending
the Indenture to allow Exchange Securities to be issued thereunder in minimum
denominations of $1,000 and integral multiples thereof;
WHEREAS, the execution and delivery of this First Supplemental Indenture
has been authorized by a Board Resolution and all acts, conditions and
requirements necessary to make this First Supplemental Indenture a valid and
binding agreement in accordance with its terms and for the purposes herein set
forth have been done and taken, and the execution and delivery of this First
Supplemental Indenture have otherwise been in all respects duly authorized;
NOW THEREFORE, in consideration of the above premises, each party hereto
agrees, for the benefit of the other party and for the equal and proportionate
benefit of the Holders of the Securities, as follows:
ARTICLE 1
AMENDMENTS
SECTION 1.01. The first sentence of the thirteenth paragraph of the "Form
of Reverse of Security" appearing in Section 2.03 of the Indenture is hereby
amended to add to the end of such sentence, before the period, the following:
"; provided, that Exchange Securities may be issued in denominations
of $1,000 and any integral multiple thereof."
SECTION 1.02. The proviso to the first sentence of Section 2.05 is hereby
deleted in its entirety and replaced by the following:
"; provided, however, that the term "Restricted Security" shall not
include any Exchange Securities or any Securities as to which
restrictions have been terminated in accordance with Section 3.05."
SECTION 1.03. Section 3.02 of the Indenture is hereby amended to add to the
end of such section, before the period, the following:
1
<PAGE>
"; provided, that Exchange Securities may be issued in denominations
of $1,000 and any integral multiple thereof."
SECTION 1.04. The last sentence of the sixth paragraph of Section 3.05(a)
of the Indenture is hereby deleted in its entirety and replaced by the
following:
"Exchange Securities and other Securities which are not Restricted
Securities, as well as Securities which are issued upon registration
of transfer of, or in exchange for, Securities which are not
Restricted Securities, shall not bear such legend."
ARTICLE 2
MISCELLANEOUS PROVISIONS
SECTION 2.01. Except as specifically amended and supplemented by this First
Supplemental Indenture, the Indenture shall remain in full force and effect.
SECTION 2.02. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS FIRST
SUPPLEMENTAL INDENTURE.
SECTION 2.03. The Trustee accepts the modification of the Indenture as
hereby effected but only upon the terms and conditions set forth in the
Indenture as amended and supplemented by this First Supplemental Indenture.
SECTION 2.04. The parties may sign any number of counterparts of this First
Supplemental Indenture. Each such counterpart shall be an original, but all of
them together represent the same agreement.
SECTION 2.05. Except as otherwise provided in the Indenture, the Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this First Supplemental Indenture or for or in
respect of the recitals contained herein.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first written above.
AVON PRODUCTS, INC.
as Issuer
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:
------------------------------------
Name:
Title:
3
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 9, 1999 (this
"Agreement"), among AVON PRODUCTS, INC., a New York corporation (the "Company")
and SALOMON SMITH BARNEY INC., J.P. MORGAN SECURITIES INC., BANC OF AMERICA
SECURITIES LLC, CHASE SECURITIES INC., DEUTSCHE BANK SECURITIES INC., MORGAN
STANLEY & CO. INCORPORATED, and WARBURG DILLON READ LLC (the "Initial
Purchasers") of the 6.90% Notes due 2004 (the "2004 Notes") and the 7.15% Notes
due 2009 (the "2009 Notes"), to be issued pursuant to the provisions of an
Indenture dated as of November 9, 1999 (the "Indenture") between the Company
and The Chase Manhattan Bank, as Trustee (the "Trustee").
1. Certain Definitions.
For purposes of this Registration Rights Agreement, the following terms
shall have the following respective meanings:
(a) "Closing Date" means the date on which the Securities are
initially issued.
(b) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular
purpose.
(c) "Effective Time", in the case of (i) an Exchange Offer, means the
time and date as of which the Commission declares the Exchange Offer
Registration Statement effective or as of which the Exchange Offer
Registration Statement otherwise becomes effective and (ii) a Shelf
Registration, means the time and date as of which the Commission declares
the Shelf Registration effective or as of which the Shelf Registration
otherwise becomes effective.
(d) "Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
(e) "Exchange Offer" has the meaning assigned thereto in Section
2(a).
(f) "Exchange Offer Registration Statement" has the meaning assigned
thereto in Section 2(a).
<PAGE>
(g) "Exchange Registration" has the meaning assigned thereto in
Section 3(f).
(h) "Exchange Securities" has the meaning assigned thereto in Section
2(a).
(i) "Holder" means each Initial Purchaser for so long as it owns any
Registrable Securities, and such of its respective successors and assigns
who acquire Registrable Securities, directly or indirectly, from such
person or from any successor or assign of such person, in each case for so
long as such person owns any Registrable Securities.
(j) "Indenture" means the Indenture dated as of November 9, 1999,
between the Company and The Chase Manhattan Bank, as Trustee, as the same
shall be amended from time to time.
(k) "Person" means a corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
(l) "Purchase Agreement" means the Purchase Agreement dated November
4, 1999 among the Company and the Initial Purchasers.
(m) "Registrable Securities" means the Securities; provided, however,
that such Securities shall cease to be Registrable Securities when (i)
such Securities have been exchanged for Exchange Securities in an Exchange
Offer as contemplated in Section 2(a); (ii) in the circumstances
contemplated by Section 2(b), a registration statement registering such
Securities under the Securities Act has been declared or becomes effective
and such Securities have been sold or otherwise transferred by the holder
thereof pursuant to such effective registration statement; (iii) such
Securities are sold pursuant to Rule 144 under circumstances in which any
legend borne by such Securities relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is removed
or such Securities are eligible to be sold pursuant to paragraph (k) of
Rule 144; or (iv) such Securities shall cease to be outstanding.
(n) "Registration Default" has the meaning assigned thereto in
Section 2(c).
(o) "Registration Default Interest" has the meaning assigned thereto
in Section 2(c).
<PAGE>
(p) "Registration Expenses" has the meaning assigned thereto in
Section 4.
(q) "Resale Period" means the period beginning on the date the Shelf
Registration becomes effective and ending on the earlier of (i) the Shelf
Registration ceasing to be effective or (ii) the second anniversary of the
Closing Date.
(r) "Restricted Holder" means (i) a holder that is an affiliate of
the Company within the meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of such holder's business,
(iii) a holder who has arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing Exchange
Securities, or (iv) a broker-dealer who receives Securities for its own
account but did not acquire the Securities as a result of market-making
activities or other trading activities.
(s) "Rule 144," "Rule 405" and "Rule 415" means, in each case, such
rule promulgated under the Securities Act.
(t) "Securities" means the 2004 Notes and the 2009 Notes, to be
issued under the Indenture and sold by the Company to the Initial
Purchasers, and securities (other than Exchange Securities) issued in
exchange therefor or in lieu thereof pursuant to the Indenture.
(u) "Securities Act" means the Securities Act of 1933.
(v) "Shelf Registration" has the meaning assigned thereto in Section
2(b).
(w) "Trust Indenture Act" means the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same (including any
successor statute, rule or regulation thereto) as it may be amended from time
to time.
<PAGE>
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b), the Company agrees to use
its reasonable best efforts to file under the Securities Act a
registration statement (the "Exchange Offer Registration Statement")
relating to an offer to exchange (the "Exchange Offer") any and all of the
Securities for a like aggregate amount of securities issued by the
Company, which have the same terms as the Securities (and are entitled to
the benefits of a trust indenture which has been qualified under the Trust
Indenture Act), except that they have been registered pursuant to an
effective registration statement under the Securities Act, do not contain
restrictions on transfers and do not contain provisions for the additional
interest contemplated in Section 2(c) below (such new securities
hereinafter called "Exchange Securities"). The Company agrees to use its
reasonable best efforts to cause the Exchange Offer Registration Statement
to become filed with the Commission within 150 days after the Closing
Date, and to become effective under the Securities Act within 180 days
after the Closing Date. The Exchange Offer will be registered under the
Securities Act on the appropriate form and will comply with all applicable
tender offer rules and regulations under the Exchange Act. The Company
further agrees to use its reasonable best efforts to commence and complete
the Exchange Offer, for all Securities that have been properly tendered
and not withdrawn, within 225 days after the Closing Date. The Exchange
Offer will be deemed completed only if the Exchange Securities received by
holders (other than Restricted Holders) in the Exchange Offer for
Securities are, upon receipt, transferable by each such holder without
restriction imposed thereon by the Securities Act or the Exchange Act and
without material restrictions imposed thereon by the blue sky or
securities laws of a substantial majority of the States of the United
States of America. The Exchange Offer shall be deemed to have been
completed upon the Company having exchanged, pursuant to the Exchange
Offer, Exchange Securities for all Securities that have been properly
tendered and not withdrawn before the expiration of the Exchange Offer,
which shall be on a date that is at least 30 days following the
commencement of the Exchange Offer.
(b) If (i) because of any change in law or in applicable
interpretations by the staff of the Commission, the Company is not
permitted to effect the Exchange Offer or (ii) in the case of any holder,
other than a Restricted Holder, that participates in the Exchange Offer,
such holder does not receive Exchange Securities on the date of the
exchange that may be sold without restriction under state and federal
securities laws (other than due solely to the status of such holder as an
affiliate of the Company within the meaning of the Securities Act), then
in addition to or in lieu of conducting the Exchange Offer contemplated by
<PAGE>
Section 2(a), the Company shall file under the Securities Act as promptly
as practicable a "shelf" registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the
holders of, all of the Registrable Securities, pursuant to Rule 415 or any
similar rule that may be adopted by the Commission (the "Shelf
Registration"). The Company agrees to use its reasonable best efforts to
cause the Shelf Registration to become or be declared effective and to
keep such Shelf Registration continuously effective for a period ending on
the earlier of (iii) the second anniversary of the Closing Date or (iv)
such time as there are no longer any Registrable Securities outstanding.
The Company further agrees to supplement or make amendments to the Shelf
Registration, as and when required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration or by the Securities Act or rules and regulations thereunder
for shelf registration, and the Company agrees to furnish to the holders
of the Registrable Securities copies of any such supplement or amendment
prior to its being used or promptly following its filing with the
Commission.
(c) If any of the following events (any such event a "Registration
Default") shall occur, then, as liquidated damages, additional interest
(the "Registration Default Interest") shall become payable in respect of
the Securities as follows:
(i) if the Exchange Offer Registration Statement or a Shelf
Registration is not filed with the Commission within 150 days
following the Closing Date, then commencing on the 151st day after
the Closing Date, Registration Default Interest shall accrue on the
principal amount of the Securities at a rate of 0.25 % per annum; or
(ii) if neither the Exchange Offer Registration Statement nor a
Shelf Registration is declared effective by the Commission on or
prior to the 180th day following the Closing Date, then commencing on
the 181st day after the Closing Date, Registration Default Interest
shall accrue on the principal amount of the Securities at a rate of
0.25 % per annum; or
(iii) if either (A) the Company has not exchanged Exchange
Securities for all Securities validly tendered and not withdrawn, in
accordance with the terms of the Exchange Offer, on or prior to 225
days following the Closing Date, or (B) if applicable, the Shelf
Registration has been declared effective but such Shelf Registration
ceases to be effective at any time prior to two years from the
<PAGE>
Closing Date, then commencing on (x) the 226th day after the Closing
Date, in the case of (A) above, or (y) the day such Shelf
Registration ceases to be effective, in the case of (B) above,
Registration Default Interest shall accrue on the principal amount of
Securities at a rate of 0.25% per annum.
provided, however, that the Registration Default Interest rate on the
Securities, shall not exceed in the aggregate 0.25% per annum; provided
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration (in the case of clause (i) above), (2) upon
the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration (in the case of clause (ii) above), (3) upon the exchange of
Exchange Securities for all Securities validly tendered and not withdrawn (in
the case of clause (iii) (A) above), or upon the effectiveness of the Shelf
Registration which had ceased to remain effective (in the case of clause (iii)
(B) above), or (4) upon the termination of certain transfer restrictions on the
Securities as a result of the application of Rule 144(k), Registration Default
Interest on the Securities as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue.
(d) Any reference herein to a registration statement shall be deemed
to include any document incorporated therein by reference as of the
applicable Effective Time and any reference herein to any post-effective
amendment to a registration statement shall be deemed to include any
document incorporated therein by reference as of a time after such
Effective Time.
(e) Notwithstanding any other provision of this Agreement, no holder
of Registrable Securities who does not comply with the provisions of
Section 3(d), if applicable, shall be entitled to receive Registration
Default Interest unless and until such holder complies with the provisions
of such section, if applicable.
3. Registration Procedures.
The following provisions shall apply to registration statements filed
pursuant to Section 2:
(a) At or before the Effective Time of the Exchange Offer or the
Shelf Registration, as the case may be, the Company shall qualify the
Indenture under the Trust Indenture Act.
(b) In connection with the Company's obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as
reasonably practicable (or as otherwise specified herein):
<PAGE>
(i) prepare and file with the Commission a registration
statement with respect to the Shelf Registration on any form which
may be utilized by the Company and which shall permit the disposition
of the Registrable Securities in accordance with the intended method
or methods thereof, as specified in writing by the holders of the
Registrable Securities, and use its reasonable best efforts to cause
such registration statement to become effective as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
included therein as may be necessary to effect and maintain the
effectiveness of such registration statement for the period specified
in Section 2(b) and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the
form of such registration statement, and furnish to the holders of
the Registrable Securities copies of any such supplement or amendment
simultaneously with or prior to its being used or filed with the
Commission;
(iii) comply, as to all matters within the Company's control,
with the provisions of the Securities Act with respect to the
disposition of all of the Registrable Securities covered by such
registration statement in accordance with the intended methods of
disposition by the holders thereof provided for in such registration
statement;
(iv) provide to any of (A) the holders of the Registrable
Securities to be included in such registration statement, (B) the
underwriters (which term, for purposes of this Agreement, shall
include a person deemed to be an underwriter within the meaning of
Section 2(11) of the Securities Act), if any, thereof, (C) the sales
or placement agent, if any, therefor, (D) counsel for such
underwriters or agent and (E) not more than one counsel for all the
holders of such Registrable Securities who so request of the Company
in writing the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed
with the Commission and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such
registration statement, and throughout the Resale Period, make
available at reasonable times at the Company's principal place of
business or such other reasonable place for inspection by the
<PAGE>
persons referred to in Section 3(b)(iv), who shall certify to the
Company that they have a current intention to sell their Registrable
Securities pursuant to the Shelf Registration, such financial and
other information and books and records of the Company, and cause the
officers, employees, counsel and independent certified public
accountants of the Company to respond to such inquiries, as shall be
reasonably necessary, in the judgment of the respective counsel
referred to in such Section, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided,
however, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or
records reasonably designated by the Company in writing as being
confidential, until such time as (A) such information becomes a
matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such person shall be
required so to disclose such information pursuant to a subpoena or
order of any court or other governmental agency or body having
jurisdiction over the matter (subject to the requirements of such
order, and only after such person shall have given the Company prompt
prior written notice of such require ment and the opportunity to
contest the same or seek an appropriate protective order), or (C)
such information is required to be set forth in such registration
statement or the prospectus included therein or in an amendment to
such registration statement or an amendment or supplement to such
prospectus in order that such registration statement, prospectus,
amendment or supplement, as the case may be, does not contain an
untrue statement of a material fact or omit to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vi) promptly notify the selling holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof named in the
Shelf Registration or a supplement thereto, and confirm such notice
in writing, (A) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration
statement or the initiation or written threat of any proceedings for
that purpose, (C) of the receipt by the Company of any notification
<PAGE>
with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation
or written threat of any proceeding for such purpose, or (D) at any
time when a prospectus is required to be delivered under the
Securities Act, that such registration statement, prospectus,
prospectus amendment or supplement or post-effective amendment does
not conform in all material respects to the applicable requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder;
(vii) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest
practicable date;
(viii) if requested by any managing underwriter or underwriters,
any placement or sales agent or any holder of Registrable Securities,
promptly incorporate in a prospectus supplement or post-effective
amendment such information as is required by the applicable rules and
regulations of the Commission relating to the terms of the sale of
such Registrable Securities, including information with respect to
the principal amount of Registrable Securities being sold by such
holder or agent or to any underwriters, the name and description of
such holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other
compensation payable in respect thereof, the purchase price being
paid therefor by such underwriters and with respect to any other
terms of the offering of the Registrable Securities to be sold by
such holder or agent or to such underwriters; and make all required
filings of such prospectus supplement or post-effective amendment
promptly after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(ix) furnish to each holder of Registrable Securities, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(b)(iv) an
executed copy (or, in the case of a holder of Registrable Securities,
a conformed copy) of such registration statement, each such amendment
or supplement thereto (in each case including all exhibits thereto)
and such number of copies of such registration statement (excluding
exhibits thereto) and of the prospectus included in such registration
statement (including each preliminary prospectus and any summary
<PAGE>
prospectus), in conformity in all material respects with the
applicable requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder; and
the Company hereby consents to the use of such prospectus (including
any such preliminary or summary prospectus) and any amendment or
supplement thereto by each such holder and by any such agent and
underwriter, in each case in the form most recently provided to such
person by the Company in connection with the offering and sale of the
Registrable Securities covered by the prospectus (including any such
preliminary or summary prospectus) or any supplement or amendment
thereto; and
(x) use its reasonable best efforts to (A) register or qualify
the Registrable Securities to be included in such registration
statement under such securities laws or blue sky laws of such United
States jurisdictions as any holder of such Registrable Securities and
each placement or sales agent, if any, therefor and underwriter, if
any, thereof shall reasonably request, and (B) keep such
registrations or qualifications in effect and comply with such laws
so as to permit the continuance of offers, sales and dealings therein
in such jurisdictions during the period the Shelf Registration is
required to remain effective under Section 2(b) and for so long as
may be necessary to enable any such holder, agent or underwriter to
complete its distribution of Securities pursuant to such registration
statement but in any event not later than the date through which the
Company is required to keep the Shelf Registration effective pursuant
to Section 2(b); provided, however, that the Company shall not be
required for any such purpose to (1) qualify as a foreign corporation
in any jurisdiction wherein it would not otherwise be required to
qualify but for the requirements of this Section 3(b)(x), (2) consent
to general service of process in any such jurisdiction or (3) make
any changes to its certificate of incorporation or by-laws or any
agreement between it and its stockholders.
In case any of the foregoing obligations is dependent upon information provided
or to be provided by a party other than the Company, such obligation shall be
subject to the provision of such information by such party; provided that the
Company shall use its reasonable best efforts to obtain the necessary
information from any party responsible for providing such information.
(c) In the event that the Company would be required, pursuant to
Section 3(b)(vi)(D), to notify the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor or the managing
<PAGE>
underwriters, if any, thereof named in the Shelf Registration or a
supplement thereto of the existence of the circumstances described
therein, the Company shall promptly prepare and furnish to each such
holder, to each placement or sales agent, if any, and to each such
underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder. Each holder of Registrable Securities agrees that upon receipt
of any notice from the Company, pursuant to Section 3(b)(vi)(D), such
holder shall forthwith discontinue (and cause any placement or sales agent
or underwriters acting on their behalf to discontinue) the disposition of
Registrable Securities pursuant to the registration statement applicable
to such Registrable Securities until such holder (i) shall have received
copies of such amended or supplemented prospectus and, if so directed by
the Company, such holder shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such
holder's possession of the prospectus covering such Registrable Securities
at the time of receipt of such notice or (ii) shall have received notice
from the Company that the disposition of Registrable Securities pursuant
to the Shelf Registration may continue.
(d) The Company may require each holder of Registrable Securities as
to which any registration pursuant to Section 2(b) is being effected to
furnish to the Company such information regarding such holder and such
holder's intended method of distribution of such Registrable Securities as
the Company may from time to time reasonably request in writing, but only
to the extent that such information is required in order to comply with
the Securities Act. Each such holder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information
previously furnished by such holder to the Company or of the occurrence of
any event in either case as a result of which any prospectus relating to
such registration contains or would contain an untrue statement of a
material fact regarding such holder or such holder's intended method of
disposition of such Registrable Securities or omits to state any material
fact regarding such holder or such holder's intended method of disposition
of such Registrable Securities required to be stated therein or necessary
to make the statements therein not misleading, and promptly to furnish to
the Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall
not contain, with respect to such holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to
<PAGE>
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(e) Until the expiration of two years after the Closing Date, the
Company will not, and will not permit any of its "affiliates" (as defined
in Rule 144) to, resell any of the Securities that have been reacquired by
any of them except pursuant to an effective registration statement under
the Securities Act.
(f) In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
reasonably practicable (or as otherwise specified):
(i) prepare and file with the Commission such amendments and
supplements to the Exchange Offer Registration Statement and the
prospectus included therein as may be necessary to effect and
maintain the effectiveness thereof for the periods and purposes
contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the
instructions applicable to the form of the Exchange Offer
Registration Statement, and promptly provide each broker-dealer
holding Exchange Securities with such number of copies of the
prospectus included therein (as then amended or supplemented), in
conformity in all material respects with the requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, as such broker-dealer
reasonably may request for use in connection with resales of Exchange
Securities;
(ii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in the Exchange Offer
Registration Statement, and confirm such advice in writing, (A) when
any prospectus amendment or supplement or post-effective amendment to
the Exchange Offer Registration Statement has been filed, and, with
respect to any post-effective amendment to the Exchange Offer
Registration Statement, when the same has become effective, (B) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Exchange Offer Registration Statement or the
initiation or threatening of any proceedings for that purpose, (C) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Exchange Securities for sale
in any United States jurisdiction or the initiation or threatening in
<PAGE>
writing of any proceeding for such purpose, or (D) at any time when a
prospectus is required to be delivered under the Securities Act, that
the Exchange Offer Registration Statement, prospectus, prospectus
amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder;
(iii) in the event that the Company would be required, pursuant
to Section 3(f)(ii)(D), to notify any broker-dealers holding Exchange
Securities, promptly prepare and furnish to each such holder a
reasonable number of copies of a prospectus supplemented or amended
so that, as thereafter delivered to purchasers of such Exchange
Securities, such prospectus shall conform in all material respects to
the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or notify such broker-dealers that the offer and sale of
Exchange Securities pursuant to the Exchange Offer Registration
Statement may continue;
(iv) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of the Exchange Offer
Registration Statement or any post-effective amendment thereto at the
earliest practicable date;
(v) use its reasonable best efforts to register or qualify the
Exchange Securities under the securities laws or blue sky laws of
such jurisdictions as are contemplated by Section 2(a) no later than
the commencement of the Exchange Offer, provided, however, that the
Company shall not be required for any such purpose to (1) qualify as
a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 3(f)(v), (2) consent to general service of process in any
such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its
stockholders; and
(vi) make generally available to its security holders as soon as
practicable but no later than eighteen months after the effective
date of such registration statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).
<PAGE>
In case any of the foregoing obligations is dependent upon information provided
or to be provided by a party other than the Company, such obligation shall be
subject to the provision of such information; provided that the Company shall
use its reasonable best efforts to obtain the necessary information from any
party responsible for providing such information.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Company's performance
of or compliance with this Agreement, including (a) all Commission and any NASD
registration and filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities or Exchange Securities for
offering and sale under the State securities and blue sky laws referred to in
Section 3(b)(x) and Section 3(f)(v) hereof, including reasonable fees and
disbursements of one counsel for the placement or sales agent or underwriters,
if any, in connection with such qualifications, (c) all expenses relating to
the preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Securities and all other documents
relating hereto, (d) fees and expenses of the Trustee under the Indenture, and
of any escrow agent or custodian, (e) internal expenses (including all salaries
and expenses of the Company's officers and employees performing legal or
accounting duties), (f) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the expenses
of any opinions or "cold comfort" letters required by or incident to such
performance and compliance) and (g) reasonable fees, disbursements and expenses
of one counsel for the holders of Registrable Securities retained in connection
with a Shelf Registration, as selected by the holders of at least a majority in
aggregate principal amount of the Registrable Securities being registered and
approved by the Company, and fees, expenses and disbursements of any other
persons, including special experts, retained by the Company in connection with
such registration (collectively, the "Registration Expenses"). To the extent
that any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
documented request therefor. Notwithstanding the foregoing, the holders of the
Registrable Securities being registered shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly),
other than the counsel and experts specifically referred to above.
<PAGE>
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, the Initial
Purchasers and each of the holders from time to time of Registrable Securities
that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus)
contained therein or furnished pursuant to Section 3(c) or Section 3(f)
hereof and any further amendments or supplements to any such registration
statement or prospectus, when it becomes effective or is filed with the
Commission, as the case may be, and, in the case of an underwritten
offering of Registrable Securities, at the time of the closing under the
underwriting agreement relating thereto, will conform in all material
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and at all times subsequent
to the Effective Time when a prospectus would be required to be delivered
under the Securities Act, other than from (i) such time as a notice has
been given to holders of Registrable Securities pursuant to Section
3(b)(vi)(D) or Section 3(f)(ii)(D) hereof until (ii) such time as the
Company furnishes an amended or supplemented prospectus pursuant to
Section 3(c) or Section 3(f)(iii) hereof or such time as the Company
provides notice that offers and sales pursuant to the Exchange Offer
Registration Statement or the Shelf Registration, as the case may be, may
continue, each such registration statement, and each prospectus (including
any summary prospectus) contained therein or furnished pursuant to Section
3(b) or Section 3(f) hereof, as then amended or supplemented, will conform
in all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of a holder of Registrable Securities expressly
for use therein.
(b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a) hereof, when they become or became effective
or are or were filed with the Commission, as the case may be, will conform
or conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such
documents will contain or contained an untrue statement of a material fact
or will omit or omitted to state a material fact required to be stated
<PAGE>
therein or necessary to make the statements therein not misleading,
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a holder of
Registrable Securities expressly for use therein.
(c) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, except to the extent that any
such contravention would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, any indenture or instrument
relating to indebtedness for money borrowed or any agreement to which the
Company is a party or any order, rule, regulation or decree of any court
or governmental agency or authority located in the United States having
jurisdiction over the Company or any property of the Company; and, to the
best knowledge of the Company, no consent, authorization or order of, or
filing or registration with, any court or governmental agency or authority
is required for the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Securities Act contemplated hereby, qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under State securities
or blue sky laws.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
6. Indemnification.
(a) Indemnification by the Company. In connection with a Shelf
Registration, the Company shall, and it hereby agrees to, indemnify and
hold harmless each of the holders of Registrable Securities included in
such Shelf Registration, and each person who is named in such Shelf
Registration or a supplement thereto as a placement or sales agent or as
an underwriter in any offering or sale of such Registrable Securities and
each person who controls any such person (each, a "Participant") against
any losses, claims, damages or liabilities, joint or several, to which
such Participant may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such Registrable Securities were
<PAGE>
registered under the Securities Act, or any preliminary, final or summary
prospectus contained therein or furnished by the Company to any such
Participant, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading and the Company shall, and it hereby
agrees to, reimburse each such Participant for any legal or other expenses
reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
the Company shall not be liable to any such person in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, or preliminary,
final or summary prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such Participant expressly for use therein. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Indemnification by Participants. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2(b) and to entering into any
underwriting agreement with respect thereto, that the Company shall have
received an undertaking reasonably satisfactory to it from each
Participant, severally and not jointly, to indemnify and hold harmless the
Company, each of the Company's directors, officers and employees and each
person who controls the Company within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company, but only with reference to written information
furnished to the Company by or on behalf of such Participant specifically
for use in any registration statement, or any preliminary or final or
summary prospectus contained therein or any amendment or supplement
thereto. This indemnity agreement will be in addition to any liability
which any such person may otherwise have.
(c) Promptly after receipt by an indemnified party under Section 6(a)
or (b) of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve the indemnifying party from any liability which it
may have to any indemnified party otherwise than under Section 6(a) or
(b). In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
<PAGE>
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicting interests between them, the
indemnified party or parties shall have the right to select separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense
of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under
Section 6(a) or (b) for any legal or other expenses subsequently incurred
by such indemnified party (other than reasonable costs of investigation)
in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of
legal defenses in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that the indemnifying party shall
not be liable for the expenses of more than one separate national counsel,
approved by the indemnifying party, representing the indemnified parties
who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action 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 any claims that are the subject matter of such action.
(d) Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 6(a) or Section
6(b) are unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
<PAGE>
respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 6(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Participant shall be required to
contribute any amount in excess of the amount by which the dollar amount
of the proceeds received by such Participant from the sale of any
Registrable Securities exceeds the amount of any damages which such
Participant has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no
underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Participants' obligations in
this Section 6(d) to contribute shall be several in proportion to the
principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
partner of each Participant and each person, if any, who controls any
Participant within the meaning of the Securities Act or the Exchange Act;
<PAGE>
and the obligations of the Participants contemplated by this Section 6
shall be in addition to any liability which the respective Participants
may otherwise have and shall extend, upon the same terms and conditions,
to each officer, employee and director of the Company (including any
person who, with his consent, is named in any registration statement as
about to become a director of the Company), and to each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act.
7. Rule 144.
The Company covenants to the holders of Registrable Securities that the
Company shall use its reasonable best efforts to timely file the reports
required to be filed by it under the Exchange Act or the Securities Act
(including the reports under Section 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder, all to the extent required from time to time to enable such holder
to sell Registrable Securities without registration under the Securities Act
within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
or successor rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities in connection with that
holder's sale pursuant to Rule 144, the Company shall deliver to such holder a
written statement as to whether it has complied with such requirements.
8. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities which would be
inconsistent with the terms contained in this Agreement.
(b) Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: If
to the Company, to it at 1345 Avenue of the Americas, New York, New York
10105-0196, Attention: Treasurer; if to an Initial Purchaser, to it at the
address for the Initial Purchasers set forth in the Purchase Agreement;
and if to a holder, to the address of such holder set forth in the
security register or other records of the Company or to such other address
as the Company or any such holder may have furnished to the other in
<PAGE>
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
(c) Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall
be enforceable by the respective successors and assigns of the parties
hereto. In the event that any transferee of any holder of Registrable
Securities shall acquire Registrable Securities, in any manner, whether by
gift, bequest, purchase, operation of law or otherwise, such transferee
shall, without any further writing or action of any kind, be deemed a
party hereto for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such transferee shall be entitled to
receive the benefits of, and be conclusively deemed to have agreed to be
bound by and to perform, all of the applicable terms and provisions of
this Agreement.
(d) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof)
made by or on behalf of any holder of Registrable Securities, any
director, officer or partner of such holder, any agent or underwriter or
any director, officer or partner thereof, or any controlling person of any
of the foregoing. and shall survive delivery of and payment for the
Registrable Securities pursuant to the Purchase Agreement and the transfer
and registration of Registrable Securities by such holder and the
consummation of an Exchange Offer.
(e) LAW GOVERNING. THIS REGISTRATION RIGHTS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK.
(f) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) Entire Agreement; Amendments. This Agreement and the other
writings referred to herein (including the Indenture) or delivered
pursuant hereto which form a part hereof contain the entire understanding
of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended and
<PAGE>
the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company
and the holders of at least a majority in aggregate principal amount of
the Registrable Securities at the time outstanding. Each holder of any
Registrable Securities at the time or thereafter outstanding shall be
bound by any amendment or waiver effected pursuant to this Section 8(g),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such
holder.
(h) Inspection. For so long as this Agreement shall be in effect,
this Agreement and a complete list of the names and addresses of all the
holders of Registrable Securities shall be made available for inspection
and copying on any business day by any holder of Registrable Securities
for proper purposes only (which shall include any purpose related to the
rights of the holders of Registrable Securities under the Securities, the
Indenture and this Agreement) at the offices of the Company at the address
thereof set forth in Section 8(b) above, or at the office of the Trustee
under the Indenture.
(i) Counterparts. This Agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.
<PAGE>
Agreed to and accepted as of the date referred to above.
Very truly yours,
AVON PRODUCTS, INC.
By: /s/ Dennis Ling
----------------------------------------
Name: Dennis Ling
Title: Group Vice President,
Finance and Treasurer
Salomon Smith Barney Inc.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Chase Securities Inc.
Deutsche Bank Securities Inc.
Morgan Stanley & Co. Incorporated
Warburg Dillon Read LLC
By: Salomon Smith Barney Inc.
By: /s/ Kenneth J. Steinberg
--------------------------------
Name: Kenneth J. Steinberg
Title: Vice President
EXHIBIT 5.1
[o], 1999
Avon Products, Inc.
1345 Avenue of the Americas
New York, NY 10105-0196
Ladies and Gentlemen:
We have acted as special counsel to Avon Products, Inc., a New York
corporation (the "Company"), in connection with the Company's offer (the
"Exchange Offer") to exchange its 6.90% notes due 2004 and 7.15% notes due 2007
(together, the "New Notes") for any and all of its outstanding 6.90% notes due
2004 and 7.15% notes due 2009 (together, the "Old Notes") pursuant to (i) the
Indenture, dated as of November 9, 1999, between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"), as supplemented by the First
Supplemental Indenture, dated as of December [o] 1999, between the Company and
the Trustee (collectively, the "Indenture"), and (ii) the Registration Rights
Agreement, dated as of November 9, 1999 (the "Registration Rights Agreement"),
by and among the Company and Salomon Smith Barney Inc., J.P. Morgan Securities
Inc., Banc of America Securities LLC, Chase Securities Inc., Deutsche Bank
Securities Inc., Morgan Stanley & Co. Incorporated and Warburg Dillon Read LLC.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purposes of rendering this opinion.
Upon the basis of such examination, we advise you that, in our opinion, the
New Notes have been duly authorized by the Company and when the Securities and
Exchange Commission declares the Company's Registration Statement on Form S-4
(File No. 333-[o]) effective and the New Notes have been duly executed,
authenticated, issued and delivered in accordance with the terms of the
Registration Rights Agreement and the Indenture, the New Notes will constitute
valid and legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States.
In connection with the foregoing, we have assumed that at the time of the
issuance and delivery of the New Notes there will not have occurred any change
in law affecting the validity, legally binding character or enforceability of
the New Notes and that the issuance and delivery of the New Notes, all of the
terms of the New Notes and the performance by the Company of its obligations
thereunder will comply with applicable law and with each requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company and will not result in a default under or a breach of any agreement
or instrument then binding upon the Company.
<PAGE>
In rendering the foregoing opinion, we have relied as to certain matters on
information obtained from public officials, officers of the Company and other
sources believed by us to be responsible, and we have assumed (i) that the
Indenture has been duly authorized, executed and delivered by the Trustee, (ii)
that the New Notes will conform to the specimens thereof examined by us, (iii)
that the Trustee's certificates of authentication of the New Notes will be
manually signed by one of the Trustee's authorized officers and (iv) that the
signatures on all documents examined by us are genuine, assumptions which we
have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
the New Notes" in the prospectus which is part of such Registration Statement.
In giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
2
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Avon Products, Inc. of our report dated February 4,
1999 relating to the financial statements, which appear in Avon Products, Inc.'s
1998 Annual Report to Shareholders, which is incorporated by reference in its
Annual Report on Form 10-K for the year ended December 31, 1998. We also consent
to the incorporation by reference of our report dated February 4, 1999 relating
to the financial statement schedule, which appears in such Annual Report on Form
10-K. We also consent to the reference to us under the heading "Independent
Accountants" in such Registration Statement.
PricewaterhouseCoopers LLP
New York, NY
December 8, 1999
EXHIBIT 25.1
================================================================================
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)
------------------
AVON PRODUCTS, INC.
(Exact name of obligor as specified in its charter)
New York 13-0544597
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1345 Avenue of the Americas
New York, New York 10105
(Address of principal executive offices) (Zip Code)
------------------
Debt Securities
(Title of the indenture 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 Plaza,
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 Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
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).
2
<PAGE>
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or to 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 23rd day of November 1999.
THE CHASE MANHATTAN BANK
By: /s/ Kathleen Perry
---------------------
Kathleen Perry
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 June 30, 1999, in
accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
Dollar Amounts
in Millions
--------------
ASSETS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin....................................... $ 13,119
Interest-bearing balances................................................................ 6,761
Securities:
Held to maturity securities................................................................. 892
Available for sale securities............................................................... 42,965
Federal funds sold and securities purchased under agreements to resell...................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income...................................$ 130,602
Less: Allowance for loan and lease losses.................................. 2,551
Less: Allocated transfer risk reserved..................................... 0
-------
Loans and leases, net of unearned income, allowance and reserve.......................... 128,051
Trading Assets.............................................................................. 41,426
Premises and fixed assets (including capitalized leases).................................... 3,190
Other real estate owned..................................................................... 28
Investments in unconsolidated subsidiaries and associated companies......................... 182
Customers' liability to this bank on acceptances outstanding................................ 901
Intangible assets........................................................................... 2,010
Other assets................................................................................ 14,567
-------
Total Assets................................................................................ $ 286,369
=======
4
<PAGE>
Dollar Amounts
in Millions
--------------
LIABILITIES
Deposits
In domestic offices...................................................................... $ 101,979
Noninterest-bearing........................................................$ 42,241
Interest-bearing........................................................... 59,738
------
In foreign offices, Edge and Agreement subsidiaries and IBF's............................ $ 76,395
Noninterest-bearing........................................................$ 4,645
Interest-bearing........................................................... 71,750
Federal funds purchased and securities sold under agreements to repurchase.................. $ 36,604
Demand notes issued to the U.S. Treasury.................................................... 1,001
Trading liabilities......................................................................... 30,287
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less............................................ 3,606
With a remaining maturity of more than one year through three years...................... 14
With a remaining maturity of more than three years....................................... 91
Bank's liability on acceptances executed and outstanding................................. 901
Subordinated notes and debentures........................................................ 5,427
Other liabilities........................................................................ 11,247
-------
TOTAL LIABILITIES........................................................................... 267,552
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................................... 0
Common stock................................................................................ 1,211
Surplus (exclude all surplus related to preferred stock).................................... 11,016
Undivided profits and capital reserves...................................................... 7,317
Net unrealized holding gains (losses) on available-for-sale securities...................... (743)
Accumulated net gains (losses) on cash flow hedges.......................................... 0
Cumulative foreign currency translation adjustments......................................... 16
TOTAL EQUITY CAPITAL........................................................................ 18,817
-------
TOTAL LIABILITIES AND EQUITY CAPITAL........................................................$ 286,369
=======
</TABLE>
5
<PAGE>
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 )
William B. Harrison, Jr.) Directors
Frank A. Bennack, Jr. )
6
EXHIBIT 99.1
LETTER OF TRANSMITTAL
for
6.90% Notes Due 2004
7.15% Notes Due 2009
of
AVON PRODUCTS, INC.
Pursuant to the
EXCHANGE OFFER
in Respect of
All of Its Outstanding
6.90% Notes due 2004
7.15% Notes due 2009
for
6.90% New Notes due 2004
7.15% New Notes due 2009
------------------
Pursuant to the Prospectus Dated o, 1999
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY o, 2000 UNLESS THE EXCHANGE OFFER IS EXTENDED
(THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
To: The Chase Manhattan Bank, Exchange Agent
By Mail or Hand/Overnight Delivery: By Facsimile:
The Chase Manhattan Bank (212) 638-7380/81
55 Water Street
Room 234, North Building
New York, NY 10041 Confirm by Telephone:
Attention: Carlos Esteves (212) 638-0828
-----------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD NOTES
PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OLD
NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below). As used herein, the term
"holder" means a holder of Old Notes (as defined below), including any
participant ("DTC Participant") in the book-entry transfer facility system of
The Depository Trust Company ("DTC"), whose name appears on a security position
listing as the owner of the Old Notes. As used herein, the term "certificates"
means physical certificates representing Old Notes.
To participate in the Exchange Offer (as defined below), holders must
tender by (a) book-entry transfer pursuant to the procedures set forth in the
Prospectus under "The Exchange Offer--Book-Entry Transfer" or (b) forwarding
certificates herewith. Holders who are DTC Participants tendering by book-entry
transfer may execute such tender through the Automated Tender Offer Program
("ATOP") of DTC. A holder using ATOP should transmit its acceptance to DTC on or
prior to the Expiration Date. DTC will verify such acceptance, execute a
book-entry transfer of the
<PAGE>
tendered Old Notes into the account of The Chase Manhattan Bank (the "Exchange
Agent") at DTC and then send to the Exchange Agent a Book-Entry Confirmation (as
defined below), including an agent's message (as defined below) confirming that
DTC has received an express acknowledgment from such holder that such holder has
received and agrees to be bound by this Letter of Transmittal and that the
Company (as defined below) may enforce this Letter of Transmittal against such
holder. The Book-Entry Confirmation must be received by the Exchange Agent in
order for the tender relating thereto to be effective. Book-entry transfer to
DTC in accordance with DTC's procedures does not constitute delivery of the
Book-Entry Confirmation to the Exchange Agent.
If the tender is not made pursuant to the book-entry transfer procedures,
certificates, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Exchange Agent at its address set forth herein on or prior to the
Expiration Date in order for such tender to be effective.
Holders of Old Notes whose certificates for such Old Notes are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date or
who cannot complete the procedures for book-entry transfer on or prior to the
Expiration Date, must tender their Old Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery
Procedures" in the Prospectus.
The Company reserves the right, at any time or from time to time, to extend
the Exchange Offer at its sole discretion, in which event the term "Expiration
Date" shall mean the latest time and date to which the Exchange Offer is
extended. The Company shall notify the holders of the Old Notes of any extension
by means of a press release or other public announcement prior to 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If
the space provided below is inadequate, list the certificate numbers, principal
amounts and number of beneficial holders on a separately executed schedule and
affix the schedule to this Letter of Transmittal. See Instruction 3.
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- -----------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Certificate Principal Amount of Number of
(Please Fill In, If Blank) Number(s)* Old Notes Tendered Beneficial Holders
(If Less Than All Are for which Old Notes
Tendered)** are Held
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$
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$
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$
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$
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$
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$
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$
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$
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$
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$
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$
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$
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$
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TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED $
- -----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by holders tendering by book-entry transfer.
** Old Notes may be tendered in the principal amount of $100,000 and integral multiples of $1,000 in excess thereof,
provided that if fewer than all of the Old Notes of a holder are tendered for exchange, the untendered principal amount
of the holder's remaining Old Notes must be $100,000 or any integral multiple of $1,000 in excess thereof. All Old
Notes held shall be deemed tendered unless a lesser number is specified in this column. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS (defined in Instruction 1)
ONLY)
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution:
---------------------------------------------
DTC Account Number:
--------------------------------------------------------
Transaction Code Number:
---------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) of Old Notes:
------------------------------
Window Ticket Number (if any):
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
------------------------
Name of Institution which Guaranteed Delivery:
-----------------------------
If Guaranteed Delivery is to be made by Book-Entry Transfer:
Name of Tendering Institution:
---------------------------------------------
DTC Account Number:
--------------------------------------------------------
Transaction Code Number:
---------------------------------------------------
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER AND
NON-EXCHANGED OR UNTENDERED OLD NOTES ARE TO BE RETURNED BY CREDITING THE
DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO HOLDS OLD NOTES ACQUIRED FOR YOUR
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE ADDITIONAL COPIES OF THE
PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO FOR USE IN
CONNECTION WITH RESALES OF NEW NOTES RECEIVED FOR YOUR OWN ACCOUNT IN
EXCHANGE FOR SUCH OLD NOTES.
Name:
----------------------------------------------------------------------
Address:
-------------------------------------------------------------------
Area Code and Telephone Number:
----------------------
Contact Person:
--------------------------------------
Principal Amount of Old Notes so Held: $
-----------------------------------
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Avon Products, Inc., a New York
corporation (the "Company"), the aggregate principal amount of Old Notes
indicated in this Letter of Transmittal, upon the terms and subject to the
conditions set forth in the Company's Prospectus dated o, 1999 (as the same may
be amended or supplemented from time to time, the "Prospectus"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal, which together
constitute the Company's offer (the "Exchange Offer") to exchange $200 million
principal amount of its 6.90% notes due 2004 and $300 million principal amount
of its 7.15% notes due 2009, which have been registered under the Securities Act
of 1933, as amended (the "New Notes"), for $200 million principal amount of its
issued and outstanding 6.90% notes due 2004 and $300 million principal amount of
its issued and outstanding 7.15% notes due 2009 (the "Old Notes" and, together
with the "New Notes", the "Notes").
Subject to, and effective upon, the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Company all right, title and interest in and to such Old Notes as are being
tendered hereby and hereby irrevocably constitutes and appoints the Exchange
Agent as attorney-in-fact of the undersigned with respect to such Old Notes
(with full knowledge that the Exchange Agent is also acting as agent of the
Company in connection with the Exchange Offer), with full power of substitution
(such power of attorney being an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver certificates for Old Notes to the Company together with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company,
upon receipt by the Exchange Agent, as the undersigned's agent, of the New Notes
to be issued in exchange for such Old Notes, (ii) present certificates for such
Old Notes for transfer, and to transfer the Old Notes on the books of the
Company, and (iii) receive for the account of the Company all benefits and
otherwise exercise all rights of beneficial ownership of such Old Notes, all in
accordance with the terms and conditions of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Old Notes
tendered hereby and to acquire New Notes issuable upon exchange of such tendered
Old Notes, and that, when the Old Notes are accepted for exchange, the Company
will acquire good, marketable and unencumbered title thereto, free and clear of
all security interests, liens, restrictions, charges, encumbrances, conditional
sale agreements or other obligations relating to their sale or transfer, and not
subject to any adverse claim when the same are accepted by the Company. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Company or the Exchange Agent to be necessary or desirable to
complete the exchange, assignment and transfer of the Old Notes tendered hereby,
and the undersigned will comply with any obligations it may have under the
registration rights agreement (as set forth in the Prospectus). The undersigned
further agrees that acceptance of any tendered Old Notes by the Company and the
issuance of New Notes in exchange therefor shall constitute performance in full
by the Company of its obligations under the registration rights agreement and
that the Company shall have no further obligations or liabilities thereunder
(except in certain limited circumstances).
The undersigned hereby further represents that any New Notes acquired in
exchange for Old Notes tendered hereby will have been acquired in the ordinary
course of business of the person receiving such New Notes, whether or not such
person is the undersigned, that neither the holder of such Old Notes nor any
such other person is participating, or intends to participate, or has an
arrangement or understanding with any person to participate in the distribution
(within the meaning of the Securities Act of 1933 (as amended, the "Securities
Act")) of such New Notes and that neither the holder of such Old Notes nor any
such other person is an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the New Notes issued in exchange for the Old Notes pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
holders thereof (other than any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the provisions of the Securities
Act), provided that such New Notes are acquired in the ordinary course of such
holders' business and such holders are not participating, do not intend to
participate, and
<PAGE>
have no arrangement or understanding with any person to participate in the
distribution of such New Notes. However, the Company does not intend to request
the SEC to consider, and the SEC has not considered, the Exchange Offer in the
context of a no-action letter, and there can be no assurance that the staff of
the SEC would make a similar determination with respect to the Exchange Offer as
in other circumstances. If any holder is an affiliate of the Company, or is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the New Notes to be acquired pursuant to the
Exchange Offer, such holder (i) could not rely on the applicable interpretations
of the staff of the SEC and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. If the undersigned is a broker-dealer that will receive New
Notes for its own account in exchange for Old Notes acquired as a result of
market-making or other trading activities (a "Participating Broker-Dealer"), it
represents that the Old Notes to be exchanged for the New Notes were acquired by
it as a result of market-making or other trading activities and acknowledges
that it will deliver a Prospectus in connection with any resale of such New
Notes; however, by so acknowledging and by delivering a Prospectus, such
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Company has agreed that, subject to the provisions of the registration
rights agreement, the Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of New Notes received in exchange for Old Notes which were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities, for a period ending 90 days after the Expiration Date
or, if earlier, when all such New Notes have been disposed of by such
Participating Broker-Dealer. Any person, including any Participating
Broker-Dealer, who is an "affiliate" may not rely on such interpretive letters
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. In that regard,
each Participating Broker-Dealer by tendering such Old Notes and executing this
Letter of Transmittal, agrees that, upon receipt of notice from the Company of
the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in the Prospectus untrue in any
material respect or which causes the Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
therein, in light of the circumstances under which they were made, not
misleading, such Participating Broker-Dealer will suspend the sale of New Notes
pursuant to the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to the Participating Broker-Dealer or the
Company has given notice that the sale of the New Notes may be resumed, as the
case may be. If the Company gives such notice to suspend the sale of the New
Notes, it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use the Prospectus in connection
with the resale of New Notes by the number of days during the period from and
including the date of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the supplemented or
amended Prospectus necessary to permit resales of the New Notes or to and
including the date on which the Company has given notice that the sale of New
Notes may be resumed, as the case may be.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter of Transmittal and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in "The Exchange
Offer--Withdrawal of Tenders" section of the Prospectus.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive any interest on such Old Notes, and the undersigned hereby waives the
right to receive any interest on such Old Notes in connection with the Exchange
Offer.
The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed above in the box entitled "Description of Old
Notes Tendered," if they are not already set forth in such box, as they appear
on the certificates representing such Old Notes. The certificate number(s) of
the Old Notes that the undersigned wishes to tender should be indicated in the
appropriate boxes above.
<PAGE>
If tendered Old Notes are not exchanged pursuant to the Exchange Offer for
any reason, or if certificates are submitted for more Old Notes than are
tendered or accepted for exchange, certificates of such unexchanged or
untendered Old Notes will be returned (or, in the case of Old Notes tendered by
book-entry transfer, such Old Notes will be credited to an account maintained at
DTC), without expense to the tendering holder, promptly following the expiration
or termination of the Exchange Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus, the Company may not be required to accept for exchange any of
the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Notes be issued
in the name(s) of the undersigned or, in the case of a book-entry transfer of
Old Notes, that such New Notes be credited to the account indicated above
maintained at DTC. If applicable, substitute certificates representing Old Notes
not exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Notes, will be credited to the
account indicated above maintained at DTC. Similarly, unless otherwise indicated
under "Special Delivery Instructions" below, the undersigned hereby directs that
the New Notes be delivered to the undersigned at the address shown above in the
box entitled "Description of Old Notes Tendered."
<PAGE>
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Please Complete Substitute Form W-9 on Page 16)
(Note: Signature(s) Must be Guaranteed if Required by Instruction 2)
Must be signed by registered holders exactly as name(s) appear(s) on
certificates for the Old Notes hereby tendered or on a security position
listing, or by any persons authorized to become the registered holders by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the Company,
the Trustee for the Old Notes, or the Exchange Agent to comply with the
restrictions on transfer applicable to the Old Notes). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary or representative capacity, please
set forth the signer's full title. See Instruction 5.
- --------------------------------------------------------------------------------
(Signatures of Holders)
Date:
------------------------
Name:
---------------------------------------------------------------------------
(Please Print)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Taxpayer Identification or Social Security No.:
---------------------------------
GUARANTEE OF SIGNATURE
(See Instructions 2 and 5)
Authorized Signature:
-----------------------------------------------------------
Date:
---------------
Name of Firm:
-------------------------------------------------------------------
(Please Print)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if the New Notes and/or any Old Notes that are not
tendered are to be issued in the name of someone other than the registered
holder of the Old Notes whose name appears above.
Issue [ ] New Notes [ ] Old Notes not Tendered
to:
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
- --------------------------------------------------------------------------------
(Tax Identification or
Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if the New Notes and/or any Old Notes that are not
tendered are to be sent to someone other than the registered holder of the Old
Notes whose name appears above, or to such registered holder at an address other
than that shown above.
Mail [ ] New Notes [ ] Old Notes not Tendered
to:
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
- --------------------------------------------------------------------------------
(Tax Identification or
Social Security Number)
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer of Avon Products, Inc. to
Exchange its 6.90% New Notes Due 2004 and 7.15% New Notes Due 2009 for All of
its Outstanding 6.90% Notes Due 2004 and 7.15% Notes Due 2009.
1. Book-Entry Transfer; Delivery of this Letter of Transmittal and Notes;
Guaranteed Delivery Procedures. To tender in the Exchange Offer, holders must
tender by (a) forwarding certificates herewith or (b) book-entry transfer,
pursuant to the procedures set forth in "The Exchange Offer--Procedures for
Tendering" and "--Book-Entry Transfer" in the Prospectus. Holders who are DTC
Participants tendering by book-entry transfer may execute such tender through
DTC's ATOP system. A holder using ATOP should transmit its acceptance to DTC on
or prior to the Expiration Date. DTC will verify such acceptance, execute a
book-entry transfer of the tendered Old Notes into the Exchange Agent's account
at DTC and then send to the Exchange Agent a Book-Entry Confirmation, including
an agent's message confirming that DTC has received an express acknowledgment
from such holder that such holder has received and agrees to be bound by this
Letter of Transmittal and that the Company may enforce this Letter of
Transmittal against such holder. The Book-Entry Confirmation must be received by
the Exchange Agent in order for the tender relating thereto to be effective.
Book-entry transfer to DTC in accordance with DTC's procedures does not
constitute delivery of the Book-Entry Confirmation to the Exchange Agent. The
term "Book-Entry Confirmation" means a timely confirmation of a book-entry
transfer of Old Notes into the Exchange Agent's account at DTC. The term
"agent's message" means a message, transmitted by DTC to and received by the
Exchange Agent and forming a part of a Book- Entry Confirmation, which states
that DTC has received an express acknowledgment from the tendering participant,
which acknowledgment states that such participant has received and agrees to be
bound by the Letter of Transmittal (including the representations contained
herein) and that the Company may enforce the Letter of Transmittal against such
participant.
If the tender is not made pursuant to the book-entry transfer procedures,
certificates, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Exchange Agent at its address set forth herein on or prior to the
Expiration Date in order for such tender to be effective. Old Notes may be
tendered in the principal amount of $100,000 and integral multiples of $1,000 in
excess thereof, provided that if fewer than all of the Old Notes of a holder are
tendered for exchange, the untendered principal amount of the holder's remaining
Old Notes must be $100,000 or any integral multiple of $1,000 in excess thereof.
Holders of Old Notes whose certificates for Old Notes are not immediately
available or who cannot deliver their certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date, or who
cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Old Notes pursuant to the guaranteed delivery procedures set forth
in "The Exchange Offer-Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through an
Eligible Institution (as defined below), (ii) prior to the Expiration Date, the
Exchange Agent must receive from such Eligible Institution (by facsimile
transmission, mail or hand delivery) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the
Company, setting forth the name and address of the holder of Old Notes and the
amount of Old Notes tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange ("NYSE") trading days
after the Expiration Date, the certificates for all physically tendered Old
Notes, or a Book-Entry Confirmation, and any other documents required by this
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent, and (iii) a properly executed Letter of Transmittal, as well as
the certificates for all physically tendered Old Notes in proper form for
transfer or Book-Entry Confirmation, as the case may be, and all other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three NYSE trading days after the Expiration Date.
The Notice of Guaranteed Delivery must be delivered by hand, overnight
courier or mail, or transmitted by facsimile transmission, to the Exchange Agent
on or prior to the Expiration Date, and must include a guarantee by an Eligible
Institution in the form set forth in such notice. For Old Notes to be properly
tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must
receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As
used herein and in the Prospectus, "Eligible Institution" means a firm or other
entity identified in Rule 17Ad- 15 under the Securities Exchange Act of 1934 as
"an eligible guarantor institution," including (as such terms are defined
therein) (i) a bank; (ii) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a Securities
Transfer Association.
<PAGE>
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. DO NOT SEND THIS LETTER OF
TRANSMITTAL OR ANY OLD NOTES TO THE COMPANY.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by book-entry transfer through ATOP or execution
of a Letter of Transmittal (or facsimile thereof), waives any right to receive
any notice of the acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC whose
name appears on a security position listing as the owner of the Old Notes) of
Old Notes tendered herewith, unless such holder has completed either the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" above; or
(ii) such Old Notes are tendered for the account of a firm that is an
Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature on
this Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned
"Description of Old Notes Tendered" is inadequate, the certificate number(s)
and/or the principal amount of Old Notes and any other required information
should be listed on a separate signed schedule which is attached to this Letter
of Transmittal.
4. Partial Tenders (Not Applicable to Holders of Old Notes Who Tender by
Book-Entry Transfer); Withdrawal Rights. Tenders of Old Notes will be accepted
only in the principal amount of $100,000 and integral multiples of $1,000 in
excess thereof, provided that if fewer than all of the Old Notes of a holder are
tendered or exchanged, the untendered or unexchanged principal amount of the
holder's remaining Old Notes must be $100,000 or any integral multiple of $1,000
in excess thereof. If less than all of the Old Notes evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Old Notes to be tendered in the box above entitled
"Description of Old Notes Tendered--Principal Amount of Old Notes Tendered (If
Less Than All Are Tendered)." A reissued certificate representing the balance of
untendered Old Notes will be sent to such tendering holder, unless otherwise
provided in the appropriate box on this Letter of Transmittal, promptly after
the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL
BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to the expiration date. In order for a withdrawal to be
effective prior to that time, a written or facsimile transmission notice of
withdrawal must be timely received by the Exchange Agent at one of its addresses
set forth above prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person having deposited the Old Notes to be withdrawn,
the aggregate principal amount of Old Notes to be withdrawn and (if certificates
for such Old Notes have been tendered) the name of the registered holder of the
Old Notes as set forth on the certificate for the Old Notes, if different from
that of the person who tendered such Old Notes. If certificates for the Old
Notes have been delivered or otherwise identified to the Exchange Agent, then
prior to the physical release of such certificates for the Old Notes, the
tendering holder must submit the serial numbers shown on the particular
certificates for the Old Notes to be withdrawn and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution, except in the case
of Old Notes tendered for the account of an Eligible Institution. If Old Notes
have been tendered pursuant to the procedures for book-entry transfer set forth
in "The Exchange Offer--Book-Entry Transfer" section of the Prospectus, the
notice of withdrawal must specify the name and number of the account at the
book-entry transfer facility system of DTC to be credited with the withdrawal of
Old Notes, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written or facsimile transmission. Withdrawals of
tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not
be deemed to have been validly tendered for purposes of the Exchange Offer, and
no New Notes will be issued with respect thereto unless the Old Notes so
withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered
at any subsequent time on or prior to the
<PAGE>
Expiration Date by following the procedures described in the Prospectus under
"The Exchange Offer-- Procedures for Tendering."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any employees, agents, affiliates or assigns of the
Company, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give such notification. Any Old Notes which have been
tendered but which are withdrawn will be returned to the holder thereof without
cost to such holder as promptly as practicable after withdrawal.
5. Signatures on this Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal is signed by the holder
of the Old Notes tendered hereby, the signature must correspond exactly with the
name as written on the face of the certificates or on a securities position
listing without any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all of such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different names on several
certificates or securities positions listings, it will be necessary to complete,
sign and submit as many separate copies of this Letter of Transmittal as there
are different registrations.
When this Letter of Transmittal is signed by the holder or holders of the
Old Notes specified herein and tendered hereby, no endorsements of certificates
or separate bond powers are required. If, however, the New Notes are to be
issued, or any untendered Old Notes are to be reissued, to a person other than
the holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required. Signatures on such certificate(s) must be guaranteed
by an Eligible Institution.
In connection with any tender of Old Notes in definitive certificated form,
if this Letter of Transmittal is signed by a person other than the registered
holder or holders of any certificate(s) specified herein, such certificate(s)
must be endorsed or accompanied by appropriate bond powers, in either case
signed exactly as the name or names of the registered holder or holders
appear(s) on the certificate(s), and the signatures on such certificate(s) must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Old Notes or signatures on bond powers
required by this Instruction 5 must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If New Notes are to be
issued in the name of a person other than the registered holder, or if New Notes
are to be sent to someone other than the registered holder or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed. Certificates for Old Notes not exchanged will be returned
by mail or, if tendered by book-entry transfer, by crediting the account
indicated above maintained at DTC unless the appropriate boxes on this Letter of
Transmittal are completed. See Instruction 4.
7. Tax Identification Number. Under U.S. federal income tax law, a holder
whose tendered Old Notes are accepted for exchange is required to provide the
Exchange Agent (as payor) with such holder's correct taxpayer identification
number ("TIN") on the Substitute Form W-9 below which, in the case of a
tendering holder who is an individual, is his or her Social Security Number. In
the case of a tendering holder who is an individual who does not have and is not
eligible to obtain a Social Security Number (e.g., a resident alien), the
correct taxpayer identification number is such holder's IRS individual taxpayer
identification number ("ITIN"). If the Exchange Agent is not provided with the
correct TIN, the Internal Revenue Service (the "IRS") may subject the holder or
other payee to a $50 penalty. In addition, payments to such holders or other
payees with respect to Old Notes exchanged pursuant to the Exchange Offer may be
subject to 31% backup withholding.
<PAGE>
The box in Part 3 of the Substitute Form W-9 should be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid
backup withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent. The Exchange Agent
will retain such amounts withheld during the 60 day period following the date of
the Substitute Form W-9. If the holder furnishes the Exchange Agent with its TIN
within 60 days after the date of the Substitute Form W-9, the amounts retained
during the 60 day period will be remitted to the holder and no further amounts
shall be retained or withheld from payments made to the holder thereafter. If,
however, the holder has not provided the Exchange Agent with its TIN within such
60 day period, amounts withheld will be remitted to the IRS as backup
withholding. In addition, 31% of all payments made thereafter will be withheld
and remitted to the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number, employer identification number or IRS individual taxpayer
identification number) of the registered owner of the Old Notes or of the last
transferee appearing on the transfers attached to, or endorsed on, the Old
Notes. If the Old Notes are registered in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding requirements. Such holders should nevertheless complete the attached
Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid
possible erroneous backup withholding. A foreign person may qualify as an exempt
recipient by submitting a properly completed IRS Form W-8 (Certificate of
Foreign Status), signed under penalties of perjury, attesting to that holder's
exempt status. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
8. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the transfer of Old Notes to it or its order pursuant to the
Exchange Offer. If, however, New Notes and/or substitute Old Notes not exchanged
are to be delivered to, or are to be registered or issued in the name of, any
person other than the holder of the Old Notes tendered hereby, or if tendered
Old Notes are registered in the name of any person other than the person signing
this Letter of Transmittal, or if a transfer tax is imposed for any reason other
than the transfer of Old Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 8, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES SPECIFIED IN THIS LETTER OF
TRANSMITTAL.
9. Determination of Validity. The Company will determine, in its sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Notes, which determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any and all tenders determined by
it not to be in proper form or the acceptance of which, or exchange for which,
may, in the view of counsel to the Company, be unlawful. The Company also
reserves the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under the caption
"The Exchange Offer" or any conditions or irregularity in any tender of Old
Notes of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.
The Company's interpretation of the terms and conditions of the Exchange
Offer (including this Letter of Transmittal and the instructions hereto) will be
final and binding. No tender of Old Notes will be deemed to have been validly
made until all irregularities with respect to such tender have been cured or
waived. Although the Company
intends to notify holders of defects or irregularities with respect to tenders
of Old Notes, neither the Company, any employees, agents, affiliates or assigns
of the Company, the Exchange Agent, nor any other person shall be under any duty
to give notification of any irregularities in tenders or incur any liability for
failure to give such notification.
<PAGE>
10. No Conditional Tenders. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Old Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of Old
Notes nor shall any of them incur any liability for failure to give any such
notice.
11. Lost, Stolen or Destroyed Old Notes. If any certificates representing
Old Notes have been lost, destroyed or stolen, the holder should promptly notify
the Exchange Agent. The holder will then be instructed as to the steps that must
be taken in order to replace the certificates. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen certificates have been followed.
12. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus, the Notice of Guaranteed Delivery and this Letter of Transmittal,
may be directed to the Exchange Agent, at the address and telephone number
indicated on the front of this Letter of Transmittal.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AGENT'S
MESSAGE IN LIEU THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 7)
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Payer's Name: The Chase Manhattan Bank
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I -- Enter your TIN in the appropriate box. For Social security number, Employer
individuals, this is your social security number (SSN). For identification number OR IRS
individuals who do not have and are not eligible to obtain individual taxpayer identification
Form W-9 a Social Security Number, this is your IRS individual number:
taxpayer identification number (ITIN). For other entities,
it is your employer identification number (EIN). ----------------------
-----------------------------------------------------------------------------------------------------
Department of the Treasury Part 2 -- Certification -- Under penalties of perjury, I certify that: If exempt recipient, write
Internal Revenue Service (1) The number shown on this form is my correct Taxpayer "EXEMPT" in the space
Identification Number (or I am waiting for a number to be issued to below. See the
Payer's Request for Taxpayer me) and (2) I am not subject to backup withholding either because accompanying Guidelines
Identification Number (TIN) (a) I am exempt from backup withholding, or (b) I have not been for Certification of
notified by the Internal Revenue Service ("IRS") that I am subject to Taxpayer Identification
backup withholding as a result of a failure to report all interest or Number on Substitute
dividends, or (c) the IRS has notified me that I am no longer subject Form W-9.
to backup withholding.
Certification Instructions -- You must cross out item (2) above if Part 3 --
you have been notified by the IRS that you are currently subject to
backup withholding because you have failed to report interest or Awaiting TIN [ ]
dividends on your tax return. However, if after being notified by the
IRS that you are subject to backup withholding you received another
notification from the IRS that you are no longer subject to backup
withholding do no cross out such item (2).
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE
YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID
BACKUP WITHHOLDING.
SIGNATURE___________________ DATE________________
NAME_____________________________________________
(Please Print)
BUSINESS NAME____________________________________
(If different) (Please Print)
ADDRESS__________________________________________
(Please Print)
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
</TABLE>
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature____________________________________________ Date_____________________
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
(Please Print)
- --------------------------------------------------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
How to Get a TIN
If you don't have a taxpayer identification number (a "TIN"), apply for one
immediately. To apply, get Form SS-5, Application for a Social Security Number
Card (for individuals), from you local office of the Social Security
Administration, or Form SS-4,
Application for Employer Identification Number (for businesses and all other
entities), from you local IRS office. For individuals who do not have and are
not eligible to obtain a Social Security Number, apply for an IRS taxpayer
identification number on Form W-7 which is available from your local IRS office.
If you do not have a TIN, write "Applied For" in the space for the TIN in Part
1, sign and date the form, and give it to the requester. Generally, you will
then have 60 days to get a TIN and give it to the requester. If the requester
does not receive your TIN within 60 days, backup withholding, if applicable,
will begin and continue until you furnish your TIN.
NOTE: Writing "Applied For" on the form means that you have already
applied for a TIN or that you intend to apply for one soon.
As soon as you receive your TIN, complete a Form W-9, include your TIN, sign and
date the form, and give it to the requester.
Specific Instructions
Name. If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage, without informing the Social Security Administration of the
name change, please enter you first name, the last name shown on your social
security card, and your new last name.
Sole Proprietor. You must enter your individual name (enter either your social
security number ("SSN") or your employer identification number ("EIN") in Part
1). You may also enter your business name or "doing business as" name on the
business name line. Enter your name as shown on your social security card and
business name as it was used to apply for your EIN on Form SS-4.
Part I -- TIN
You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter either your SSN or your EIN. Also see the chart on the attached
page for further clarification of name and TIN combinations. If you do not have
a TIN, follow the instructions under "How to Get a TIN" above.
Part II -- For Payees Exempt from Backup Withholding
Individuals (including sole proprietors) are not exempt from backup withholding.
Corporations are exempt from backup withholding for certain payments. If you are
exempt from backup withholding, you should still complete this form to avoid
possible erroneous backup withholding. Enter your correct TIN in Part I, write
"Exempt" in the space provided, and sign and date the form.
If you are a nonresident alien or a foreign entity not subject to backup
withholding, give the requester a completed Form W-8, Certificate of Foreign
Status.
The following is a list of payees exempt from backup withholding. For interest
and dividends, all listed payees are exempt except the payee in item (ix). For
broker transactions, payees listed in items (i) through (xiii), and a person
registered under the Investment Advisors Act of 1940 who regularly acts as a
broker are exempt.
(i) a corporation;
(ii) an organization exempt from tax under Section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual retirement
account, or a custodial account under Section 403(b)(7) of the Code if the
account satisfies the requirements of Section 401(f)(2) of the Code;
(iii) the United States or any of its agencies or instrumentalities; (iv) a
state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities;
(v) a foreign government or any of its political subdivisions,
agencies or instrumentalities;
(vi) an international organization or any of its agencies or
instrumentalities;
(vii) a foreign central bank of issue;
(viii)a dealer in securities or commodities required to register in the
United States or a possession of the United States;
(ix) a futures commission merchant registered with the Commodity Futures
Trading Commission;
(x) a real estate investment trust;
(xi) an entity registered at all times during the tax year under the Investment
Company Act of 1940;
(xii) a common trust fund operated by a bank under Section 584(a) of the Code;
(xiii)a financial institution;
(xiv) a middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List; or
(xv) a trust exempt from tax under Section 664 or described in Section 4947.
Privacy Act Notice -- Section 6109 requires you to give your TIN to persons who
must report certain payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number. If you fail
to furnish your TIN to a requester, you are subject to a penalty of $50 for each
such failure unless your failure is due to reasonable cause and not to willful
neglect.
(2) Civil Penalty for False Information with Respect to Withholding. If you make
a false statement with no reasonable basis which results in no backup
withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information. Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Name and Identification Number to Give the
Requester.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the requester.
- --------------------------------- --------------------------------------
For this type of account: Give the SOCIAL
SECURITY NUMBER
of--
- --------------------------------- --------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, the first
individual on the
account(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.) (5)
- --------------------------------- --------------------------------------
For this type of account: Give the TAXPAYER
IDENTIFICATION
number of--
- --------------------------------- --------------------------------------
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
State or local government,
school district, or prison) that
receives agricultural program
payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You
may use either your Social Security Number or Employer Identification
Number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
for
6.90% NOTES DUE 2004
7.15% NOTES DUE 2009
of
AVON PRODUCTS, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Avon Products, Inc., a New York corporation (the "Company"),
made pursuant to the Prospectus, dated o, 1999 (as the same may be amended or
supplemented from time to time the "Prospectus"), if certificates for the
outstanding 6.90% notes due 2004 or outstanding 7.15% notes due 2009 of the
Company (together, the "Old Notes") are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or time
will not permit the Old Notes, the Letter of Transmittal and all other required
documents to reach The Chase Manhattan Bank (the "Exchange Agent") on or prior
to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer.
This Notice of Guaranteed Delivery may be delivered by hand, overnight courier
or mail, or transmitted by facsimile transmission, to the Exchange Agent as set
forth below. See "The Exchange Offer--Procedures for Tendering" in the
Prospectus. Capitalized terms used herein but not defined herein have the
respective meanings given to them in the Prospectus.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JANUARY o, 2000 UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
To: The Chase Manhattan Bank, as Exchange Agent
By Mail or Hand/Overnight Delivery: By Facsimile:
The Chase Manhattan Bank (212) 638-7380/81
55 Water Street
Room 234, North Building Confirm by Telephone:
New York, NY 10041
Attention: Carlos Esteves (212) 638-0828
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE
A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON THE LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the aggregate principal
amount of Old Notes set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures."
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
<TABLE>
- ------------------------------------------------------- ------------------------------------------------------
<S> <C>
PLEASE SIGN AND COMPLETE Name(s) of Registered Holder(s):
Signature(s) of Owner(s) or
------------------------------------------------------
Authorized Signatory:
- ------------------------------------------------------- ------------------------------------------------------
Address:
- ------------------------------------------------------- ----------------------------------------------
Principal Amount of Old Notes Tendered:*
------------------------------------------------------
Area Code and Telephone No.:
- ------------------------------------------------------- --------------------------
If Old Notes will be tendered by book-entry transfer
- ------------------------------------------------------- provide the following information:
Certificate No(s). of Old Notes (if available):
Signature:
- ------------------------------------------------------- --------------------------------------------
DTC Account Number:
- ------------------------------------------------------- -----------------------------------
Date: Date:
-------------------------------------------------- -------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the holder(s) of Old
Notes exactly as its (their) name(s) appear on certificates for Old Notes or on
a security position listing as the owner of Old Notes, or by person(s)
authorized to become holder(s) by endorsements and documents transmitted with
this Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information.
Please print name(s) and address(es)
Name(s):
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. NOTES SHOULD BE
SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
- ------------------------------
* Must be in denominations of principal amount of $100,000 and integral
multiples of $1,000 in excess thereof, provided that if fewer than all of
the Old Notes of a holder are tendered for exchange, the untendered
principal amount of the holder's remaining Old Notes must be $100,000 or
any integral multiple of $1,000 in excess thereof.
<PAGE>
GUARANTEE
(Not to Be Used for Signature Guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker, municipal
securities dealer, government securities broker or government securities dealer;
(iii) a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association recognized program (each of the
foregoing being referred to as an "Eligible Institution"), hereby guarantees to
deliver to the Exchange Agent at the address set forth above, either the Old
Notes tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Notes to the Exchange Agent's account at The
Depository Trust Company, pursuant to the procedure for book-entry transfer set
forth in the Prospectus, in either case together with one or more properly
completed and duly executed Letters of Transmittal (or facsimile thereof or
agent's message in lieu thereof) and any other required documents within three
New York Stock Exchange trading days after the Expiration Date.
The undersigned acknowledges that it must deliver the Letter of Transmittal
(or agent's message in lieu thereof) and Old Notes tendered hereby to the
Exchange Agent within the time period set forth above and that failure to do so
could result in financial loss to the undersigned.
- -------------------------------------- --------------------------------------
Name of Firm:
------------------------- --------------------------------------
(Authorized Signature)
Address:
------------------------------ Name:
---------------------------------
- --------------------------------------
(Include Zip Code) Title:
--------------------------------
Area Code and
Telephone No.: Date:
------------------------ ---------------------------------
- -------------------------------------- --------------------------------------
DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. NOTES SHOULD BE
SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL.
EXHIBIT 99.3
[o], 1999
EXCHANGE AGENT AGREEMENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, N.Y. 10001
Attention: Capital Markets Fiduciary Services
Ladies and Gentlemen:
Avon Products, Inc., a New York corporation (the "Company"), proposes to
make an offer (the "Exchange Offer") to exchange up to $200,000,000 principal
amount of its 6.90% notes due 2004 and $300,000,000 principal amount of its
7.15% notes due 2009 (the "New Notes"), for a like principal amount of its
respective outstanding 6.90% notes due 2004 and 7.15% notes due 2009 (the "Old
Notes"). The terms and conditions of the Exchange Offer are set forth in a
Prospectus (the "Prospectus") included in the Company's registration statement
on Form S-4 (File No. 333-[o]), as it may be amended from time to time (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "SEC"), and proposed to be distributed to all record holders of the Old
Notes. The Old Notes and the New Notes are collectively referred to herein as
the "Notes." Capitalized terms used herein and not defined shall have the
respective meanings ascribed to them in the Prospectus or accompanying Letter of
Transmittal.
The Company hereby appoints The Chase Manhattan Bank to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Chase Manhattan Bank.
The Exchange Offer is expected to be commenced by the Company on or about
December [o], 1999. The Letter of Transmittal accompanying the Prospectus (or in
the case of book entry securities, either the Letter of Transmittal or the
Automated Tender Offer Program ("ATOP") system) is to be used by the holders of
the Old Notes to accept the Exchange Offer and contains instructions with
respect to the delivery of certificates for Old Notes tendered.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
January [o], 2000, or on such later date or time to which the Company may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Company expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Company expressly reserves the right, in its sole discretion, to amend
or terminate the Exchange Offer, and not to accept for exchange any Old Notes
not theretofore accepted for exchange. The Company will give oral (confirmed in
writing) or written notice of any amendment, termination or nonacceptance to you
as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offer", in
the Letter of Transmittal accompanying the Prospectus or as specifically set
forth herein; provided, however, that in no way will your general duty to act in
good faith and without gross negligence or willful misconduct be limited by the
foregoing.
2. You will establish an account with respect to the Old Notes at The
Depository Trust Company ("DTC") for purposes of the Exchange Offer within two
business days after the date of the Prospectus, and any financial institution
that is a participant in DTC's systems may, until the Expiration Date, make
book-entry delivery of the Old Notes by
1
<PAGE>
causing DTC to transfer such Old Notes into your account in accordance with
DTC's procedures for such transfer. In every case, however, a Letter of
Transmittal (or a manually executed facsimile thereof) or an agent's message,
properly completed and duly executed, with any required signature guarantees and
any other required documents must be transmitted to and received by you prior to
the Expiration Date or the guaranteed delivery procedures described in the
Exchange Offer must be complied with.
3. You are to examine each of the Letters of Transmittal and certificates
for Old Notes (and confirmation of book-entry transfers of Old Notes into your
account at DTC) and any other documents delivered or mailed to you by or for
holders of the Old Notes, to ascertain whether: (i) the Letters of Transmittal,
certificates and any such other documents are duly executed and properly
completed in accordance with instructions set forth therein and that such
Book-Entry Confirmations are in due and proper form and contain the information
required to be set forth therein, (ii) the Old Notes have otherwise been
properly tendered, (iii) the Old Notes tendered in part are tendered in
principal amounts of $100,000 and integral multiples of $1,000 in excess thereof
and that if any Old Notes are tendered for exchange in part, the untendered
principal amount thereof is $100,000 or any integral multiple of $1,000 in
excess thereof, and (iv) holders have provided their Tax Identification Number
or required certification. In each case where the Letter of Transmittal or any
other document has been improperly completed or executed, or where Book-Entry
Confirmations are not in due and proper form or omit certain information, or any
of the certificates for Old Notes are not in proper form for transfer or some
other irregularity in connection with the acceptance of the Exchange Offer
exists, you will endeavor to inform the presenters of the need for fulfillment
of all requirements and to take any other action as may be necessary or
advisable to cause such irregularity to be corrected.
4. With the approval of the President, any Vice President, the Secretary or
any Assistant Secretary of the Company (such approval, if given orally, to be
confirmed in writing) or any other person designated by such an officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Old Notes pursuant to the Exchange Offer.
5. At the written request of the Company or its counsel, you shall notify
tendering holders of Old Notes in the event of any extension, termination or
amendment of the Exchange Offer. In the event of any such termination, you will
return all tendered Old Notes to the persons entitled thereto, at the request
and expense of the Company.
6. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange Offer,"
and Old Notes shall be considered properly tendered to you only when tendered in
accordance with the procedures set forth therein. Notwithstanding the provisions
of this paragraph 6, Old Notes which the President, any Vice President, the
Secretary or any Assistant Secretary of the Company or any other person
designated by any such person shall approve as having been properly tendered
shall be considered to be properly tendered (such approval, if given orally,
shall be confirmed in writing). New Notes are to be issued in exchange for Old
Notes pursuant to the Exchange Offer only (i) against deposit with you prior to
the Expiration Date or, in the case of a tender in accordance with the
guaranteed delivery procedures outlined in Instruction 1 of the Letter of
Transmittal, within three New York Stock Exchange trading days after the
Expiration Date of the Exchange Offer, together with executed Letters of
Transmittal and any other documents required by the Exchange Offer or (ii) in
the event that the holder is a participant in DTC's system, by the utilization
of DTC's ATOP and any evidence required by the Exchange Offer.
7. You shall advise the Company with respect to any Old Notes received
subsequent to the Expiration Date and accept its instructions with respect to
disposition of such Old Notes.
8. You shall accept tenders:
(a) in cases where the Old Notes are registered in two or more names
only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is
submitted; and
(c) from persons other than the registered holder of Old Notes
provided that customary transfer requirements, including those
regarding any applicable transfer taxes, are fulfilled.
2
<PAGE>
You shall accept partial tenders of Old Notes when so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Old Notes to
the Security Registrar for split-up and return any untendered Old Notes to the
holder (or such other person as may be designated in the Letter of Transmittal)
as promptly as practicable after expiration or termination of the Exchange
Offer.
9. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will notify you (such notice, if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Notes properly tendered and you, on behalf of the Company, will exchange
such Old Notes for New Notes and cause such Old Notes to be canceled. Delivery
of New Notes will be made on behalf of the Company by you at the rate of $1,000
principal amount of New Notes for each $1,000 principal amount of the Old Notes
tendered promptly after notice (such notice, if given orally, to be confirmed in
writing) of acceptance of said Old Notes by the Company; provided, however, that
in all cases, Old Notes tendered pursuant to the Exchange Offer will be
exchanged only after timely receipt by you of certificates for such Old Notes
(or confirmation of book-entry transfer into your account at DTC), a properly
completed and, except as described in the section of the Prospectus captioned
"The Exchange Offer--Procedures for Tendering", duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees and
any other required documents. Unless otherwise instructed by the Company, you
shall issue New Notes only in denominations of $1,000 or any integral multiple
thereof.
10. Tenders, pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time on or prior to the Expiration Date in accordance with the
terms of the Exchange Offer.
11. The Company shall not be required to exchange any Old Notes tendered if
any of the conditions set forth in the Exchange Offer are not met. Notice of any
decision by the Company not to exchange any Old Notes tendered shall be given
(and confirmed in writing) by the Company to you.
12. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Notes tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus or otherwise, you
shall as soon as practicable after the expiration or termination of the Exchange
Offer return those certificates for unaccepted Old Notes (or effect appropriate
book-entry transfer), together with any related required documents and the
Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them (or effected such book-entry transfer).
13. All certificates for reissued Old Notes, unaccepted Old Notes or for
New Notes (other than those effected by book-entry transfer) shall be forwarded
by (a) first-class certified mail, return receipt requested, under a blanket
surety bond obtained by you protecting you and the Company from loss or
liability arising out of the nonreceipt or nondelivery of such certificates or
(b) by registered mail insured by you separately for the replacement value of
each of such certificates.
14. As soon as practicable after the Expiration Date, you shall arrange for
cancellation of the Old Notes submitted to you or returned by DTC in connection
with ATOP. Such Old Notes shall be cancelled and retired by you as you are
instructed by the Company (or a representative designated by the Company) in
writing.
15. You are not authorized to pay or offer to pay any concessions,
commissions or other solicitation fees to any broker, dealer, commercial bank,
trust company or other nominee or to engage or use any person to solicit
tenders.
16. As Exchange Agent hereunder, you:
(a) shall have no duties or obligations other than those specifically
set forth in the Prospectus, the Letter of Transmittal or herein or as
may be subsequently agreed to in writing by you and the Company;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates for the Old Notes deposited with you
pursuant to the Exchange Offer, and will not be required to and will
make no representation as to the validity, value or genuineness of the
Exchange Offer;
3
<PAGE>
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability,
unless you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to you and reasonably
believed by you to be genuine and to have been signed by the proper
party or parties;
(e) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also
as to the truth and accuracy of any information contained therein,
which you shall in good faith believe to be genuine or to have been
signed or represented by a proper person or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any officer of the company;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities, and the written opinion
of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by you hereunder in good faith and in accordance with the
written opinion of such counsel; and
(h) shall not advise any person tendering Old Notes pursuant to the
Exchange Offer as to whether to tender or refrain from tendering all
or any portion of Old Notes or as to the market value, decline or
appreciation in market value of any Old Notes that may or may not
occur as a result of the Exchange Offer or as to the market value of
the New Notes;
provided, however, that in no way will your general duty to act in good faith
and without gross negligence or willful misconduct be limited by the foregoing.
17. You shall take such action as may from time to time be requested by the
Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided, that such information shall relate
only to the procedures for accepting (or withdrawing from) the Exchange Offer.
The Company will furnish you with copies of such documents at your request.
18. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to Katherine O'Hara, Assistant General Counsel, of
the Company (telephone number (212) 282-7243, facsimile number (212) 282-6509)
and to Margaret Aupke, Assistant Treasurer, of the Company (telephone number
(212) 282-5223, facsimile number (212) 282-6117) and such other person or
persons as the Company may request, daily (and more frequently during the week
immediately preceding the Expiration Date and if otherwise requested), up to and
including the Expiration Date, as to the number and aggregate principal amount
of Old Notes which have been duly tendered pursuant to the Exchange Offer and
the items received by you pursuant to the Exchange Offer and this Agreement,
separately reporting and giving cumulative totals as to items properly received
and items improperly received. In addition, you will also inform, and cooperate
in making available to, the Company or any such other person or persons upon
oral request made from time to time prior to the Expiration Date of such other
information as it or he or she reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Company and such person
as the Company may request of access to those persons on your staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Expiration Date the Company shall have received information in sufficient
detail to enable it to decide whether to extend the Exchange Offer, including
the identity of the holders of Old Notes who have not tendered such Old Notes as
of the date such request was made. You shall prepare a final list of all persons
whose tenders were accepted, the number and aggregate principal amount of Old
Notes tendered, the number and aggregate principal amount of Old Notes accepted
and the identity of any Participating Broker-Dealers (as defined in the Letter
of Transmittal) and the number and aggregate principal amount of New Notes
delivered to each, and deliver said list to the Company.
4
<PAGE>
19. Letters of Transmittal, Book-Entry Confirmations and Notices of
Guaranteed Delivery received by you shall be preserved by you for a period of
time at least equal to the period of time you preserve other records pertaining
to the transfer of securities, or one year, whichever is longer, and thereafter
shall be delivered by you to the Company. You shall dispose of unused Letters of
Transmittal and other surplus materials, upon consultation with the Company, in
accordance with your customary procedures.
20. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan, credit
or other agreement with you or for compensation owed to you hereunder or under
any other agreement.
21. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on the Schedule attached hereto.
22. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
23. The Company covenants and agrees to indemnify and hold you harmless in
your capacity as Exchange Agent hereunder against any loss, liability, cost or
expense, including reasonable attorneys' fees and expenses arising out of or in
connection with any act, omission, delay or refusal made by you in reliance upon
any signature, endorsement, assignment, certificate, order, request, notice,
instruction or other instrument or document reasonably believed by you to be
valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Old Notes reasonably believed by you in good faith to be authorized,
and in delaying or refusing in good faith to accept any tenders or effect any
transfer of Old Notes; provided, however, that anything in this Agreement to the
contrary notwithstanding, the Company shall not be liable for indemnification or
otherwise for any loss, liability, cost or expense to the extent arising out of
your gross negligence or willful misconduct. In no case shall the Company be
liable under this indemnity with respect to any claim against you unless the
Company shall be notified by you, by letter or cable or by facsimile which is
confirmed by letter, of the written assertion of a claim against you or of any
other action commenced against you, promptly after you shall have received any
such written assertion or notice of commencement of action. The Company shall be
entitled to participate, at its own expense, in the defense of any such claim or
other action, and, if the company so elects, the Company may assume the defense
of any pending or threatened action against you in respect of which
indemnification may be sought hereunder, in which case the Company shall not
thereafter be responsible for the subsequently incurred fees and disbursements
of legal counsel for you under this paragraph so long as the Company shall
retain counsel reasonably satisfactory to you to defend such suit; provided,
that the Company shall not be entitled to assume the defense of any such action
if the named parties to such action include both you and the Company and
representation of both parties by the same legal counsel would, in the written
opinion of your counsel, be inappropriate due to actual or potential conflicting
interests between you and the Company. You understand and agree that the Company
shall not be liable under this paragraph for the fees and expenses of more than
one legal counsel for you.
24. You shall arrange to comply with all requirements under the tax laws of
the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service. The Company understands that you are required, in certain instances, to
deduct thirty-one percent (31%) with respect to interest paid on the New Notes
and proceeds from the sale, exchange, redemption or retirement of the New Notes
from holders who have not supplied their correct Taxpayer Identification Numbers
or required certification. Such funds will be turned over to the Internal
Revenue Service in accordance with applicable regulations.
25. You shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Old Notes and, upon receipt of a written
approval from the Company, shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Notes, your check in the amount of all transfer
taxes so payable, and the Company shall reimburse you for the amount of any and
all transfer taxes payable in respect of the exchange of Old Notes; provided,
however, that you shall reimburse the
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Company for amounts refunded to you in respect of your payment of any such
transfer taxes, at such time as such refund is received by you.
26. THIS AGREEMENT AND YOUR APPOINTMENT AS EXCHANGE AGENT HEREUNDER SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
AND WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
27. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and its successor and assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. Without limitation of the foregoing, the parties hereto expressly
agree that no holder of Old Notes or New Notes shall have any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
28. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, and all of which taken together shall
constitute one and the same agreement.
29. In case any provision of this Agreement 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.
30. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
31. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company, to:
Avon Products, Inc.
1345 Avenue of the Americas
New York, New York 10105-0196
Telephone: (212) 282-5114
Telecopy: (212) 282-6116
Attention: Dennis Ling
Group Vice President,
Finance and Treasurer
with a copy to:
Sarah Beshar, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
If to the Exchange Agent, to:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Telephone: (212) 946-3083
Telecopy: (212) 946-8162
Attention: Capital Markets Fiduciary Services, Kathleen Perry
32. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
paragraphs 19, 21, 23 and 25 shall survive the termination of this
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Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for New Notes, funds or property then held by you
as Exchange Agent under this Agreement.
33. This Agreement shall be binding and effective as of the date hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
AVON PRODUCTS, INC.
By:
---------------------------------
Name:
Title:
Accepted as of the date first above written:
THE CHASE MANHATTAN BANK,
as Exchange Agent
By:
---------------------------------
Name:
Title:
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FEE SCHEDULE FOR
EXCHANGE AGENT SERVICES
Covers review of the Letter of Transmittal, DTC ATOP voluntary offering
instruction ("VOI"), the Exchange Agent Agreement and other related
documentation, if any, as required by the Exchange Offer; set-up of records and
accounts; distribution of materials; all operational and administrative charges
and time in connection with the review, receipt and processing of Letters of
Transmittal/VOI, processing delivery of guarantees, legal items, withdrawals,
record keeping, and answering securityholders' inquiries pertaining to the
Exchange Offer.
Flat Fee: $2,500.00
NOTE
These fees are also subject to change should circumstances warrant.
Reimbursement for all out-of-pocket expenses, disbursements (including postage,
telex, fax, photocopying and advertising costs), and reasonable fees of counsel
(including their disbursements and expenses) incurred in the performance of our
duties will be added to the billed fees. Once appointed, if the Exchange Offer
should fail to close for reasons beyond our control, we reserve the right to
charge a fee not to exceed the amount of our acceptance fee and we will require
reimbursement in full for our legal fees and any out-of-pocket expenses related
to our responsibilities under the Exchange Agent Agreement.
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