<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 3, 1998
REGISTRATION NO. 333-48355/48355-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
TOMMY HILFIGER CORPORATION TOMMY HILFIGER U.S.A., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER) IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF
BRITISH VIRGIN ISLANDS INCORPORATION OR ORGANIZATION)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
NOT APPLICABLE 22-2960611
(I.R.S. EMPLOYER IDENTIFICATION
NUMBER) (I.R.S. EMPLOYER IDENTIFICATION
NUMBER)
6/F PRECIOUS INDUSTRIAL CENTRE, 25 WEST 39TH STREET
18 CHEUNG YUE STREET, NEW YORK, NEW YORK 10018
CHEUNG SHA WAN, KOWLOON, HONG KONG (212) 840-8888
852-2745-7798
(ADDRESS, INCLUDING ZIP CODE, AND (ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, TELEPHONE NUMBER, INCLUDING AREA
OF REGISTRANT'S PRINCIPAL EXECUTIVE CODE, OF REGISTRANT'S PRINCIPAL
OFFICES) EXECUTIVE OFFICES)
---------------
MR. JOEL J. HOROWITZ
CHIEF EXECUTIVE OFFICER
TOMMY HILFIGER U.S.A., INC.
25 WEST 39TH STREET
NEW YORK, NEW YORK 10018
(212) 840-8888
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
ERIC S. ROBINSON, ESQ. GARY I. HOROWITZ, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ RISE B. NORMAN, ESQ.
51 WEST 52ND STREET SIMPSON THACHER & BARTLETT
NEW YORK, NEW YORK 10019 425 LEXINGTON AVENUE
(212) 403-1000 NEW YORK, NEW YORK 10017
(212) 455-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the Effective Date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) REGISTRATION FEE(3)
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<S> <C> <C> <C> <C>
Debt Securities and
Guarantees of Debt
Securities(2)......... $700,000,000 100% $700,000,000 $206,500
</TABLE>
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(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act").
(2) If any Debt Securities are issued at an original issue discount, then the
offering price shall be in such greater principal amount as shall result
in an aggregate initial offering price not to exceed $700,000,000 less the
dollar amount of any securities previously issued hereunder.
(3) The registration fee was paid on March 20, 1998.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 3, 1998
PROSPECTUS
TOMMY HILFIGER U.S.A., INC.
DEBT SECURITIES
TOMMY HILFIGER CORPORATION
GUARANTEES
-----------
Tommy Hilfiger U.S.A., Inc. (the "Company") may offer from time to time, in
one or more series, unsecured notes, debentures or other debt securities (the
"Debt Securities"), in amounts, at prices and on terms to be determined by
market conditions at the time of offering, having an aggregate initial offering
price of up to U.S. $700,000,000 or its equivalent in any other currency or
composite currency. The Debt Securities, when issued, will constitute unsecured
obligations of the Company and will rank on a parity with all the unsecured and
unsubordinated indebtedness of the Company. All Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by Tommy Hilfiger Corporation, the parent corporation of the Company
(the "Guarantor," and collectively with the Company and its other subsidiaries,
"Tommy Hilfiger"). The guarantees of the Debt Securities (the "Guarantees"),
when issued, will constitute unsecured obligations of the Guarantor and will
rank on a parity with all other unsecured indebtedness of the Guarantor.
The specific terms of the Debt Securities and the Guarantees with respect to
which this Prospectus is being delivered will be set forth in a supplement to
this Prospectus (a "Prospectus Supplement"), together with the terms of the
offering and sale of the Debt Securities and the Guarantees, the initial
offering price and the net proceeds to the Company from the sale thereof. The
Prospectus Supplement will include, with regard to the particular Debt
Securities, the following information: the specific designation, aggregate
principal amount, authorized denominations (which may be in U.S. dollars, or
any other currency or composite currency), maturity, rate or method of
calculation of interest and dates for payment thereof, any terms for optional
or mandatory redemption or payment of additional amounts or any sinking fund
provisions, any index or formula for determining the amount of any principal,
premium, or interest, whether the securities are issuable in certificated form
or in the form of global securities and any provisions for the conversion or
exchange of such Debt Securities. The Prospectus Supplement also will contain
information, where applicable, about material United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Debt Securities and the Guarantees covered by such Prospectus Supplement.
The Debt Securities may be sold directly by the Company through agents
designated from time to time or to or through underwriters or dealers. See
"Plan of Distribution." If any agents of the Company, underwriters or dealers
are involved in the sale of any Debt Securities in respect of which this
Prospectus is being delivered, the names of such agents, underwriters or
dealers and any applicable commissions or discounts and the net proceeds to the
Company will be set forth in a Prospectus Supplement.
The sale of Debt Securities under the Registration Statement of which this
Prospectus forms a part or under a Registration Statement to which this
Prospectus relates will reduce the amount of Debt Securities which may be sold
hereunder.
This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by a Prospectus Supplement.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE GUARANTOR OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE GUARANTOR SINCE THE DATE HEREUNDER OR THEREOF.
AVAILABLE INFORMATION
The Guarantor is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information concerning the Guarantor may be inspected and copies may be
obtained (at prescribed rates) at the Commission's Public Reference Section,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at the web site
(http://www.sec.gov) maintained by the Commission and at the Commission's
Regional Offices located at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Ordinary Shares of the Guarantor are listed on
the New York Stock Exchange, where reports, proxy statements and other
information concerning the Guarantor can also be inspected. The offices of the
New York Stock Exchange are located at 20 Broad Street, New York, New York
10005.
The Company plans to request that the Commission grant to the Company an
order exempting it from the reporting obligations of Sections 13 and 15(d) of
the Exchange Act. If such order or other relief is granted, the Company will
not file reports under the Exchange Act.
The Guarantor and the Company have filed a combined registration statement
on Form S-3 (the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with the Commission with respect to the
Debt Securities and the Guarantees offered hereby. As permitted by the rules
and regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement. For further information with respect
to the Guarantor, the Company, the Debt Securities and the Guarantees,
reference is hereby made to such Registration Statement, including the
exhibits filed as a part thereof. Statements contained in this Prospectus
concerning the provisions of certain documents filed with, or incorporated by
reference in, the Registration Statement are not necessarily complete, each
such statement being qualified in all respects by such reference. Copies of
all or any part of the Registration Statement, including the documents
incorporated by reference therein or exhibits thereto, may be obtained upon
payment of the prescribed rates at the offices of the Commission set forth
above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Guarantor pursuant
to the Exchange Act are incorporated herein by reference:
(a) the Guarantor's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, filed with the Commission on June 27, 1997 (the financial
statements included therein have been modified to include summarized
financial information of the Company and disclosure requirements related to
Statement of Financial Accounting Standards No. 128, "Earnings Per Share,"
as filed on Current Report on Form 8-K dated April 1, 1998);
2
<PAGE>
(b) the Guarantor's Proxy Statement for the October 27, 1997 Annual
Meeting of Shareholders of the Guarantor, filed with the Commission on
September 19, 1997;
(c) the Guarantor's Quarterly Reports on Form 10-Q for the fiscal
quarters ended June 30, 1997, September 30, 1997 and December 31, 1997,
filed with the Commission on August 5, 1997, November 5, 1997 and February
9, 1998, respectively;
(d) the Guarantor's Current Reports on Form 8-K dated January 31, 1998
and April 1, 1998, filed with the Commission on February 5, 1998 and April
1, 1998, respectively; and
(e) the following information included in the Guarantor's Proxy Statement
dated March 30, 1998, filed with the Commission on March 30, 1998:
(i) the unaudited condensed combined balance sheet of Pepe Jeans USA,
Inc. and TJ Far East Limited as of December 31, 1997, and the related
condensed combined statements of operations and retained earnings
(accumulated deficit) and condensed combined statements of cash flows
for the nine month periods ended December 31, 1997 and December 31,
1996 and the accompanying notes thereto (set forth at pages F-2 through
F-6);
(ii) the audited combined balance sheets of Pepe Jeans USA, Inc. and
Pepe Jeans Far East Limited (subsequently named TJ Far East Limited) as
of March 31, 1997 and March 31, 1996, and the related combined
statements of operations and retained earnings (accumulated deficit)
and combined statements of cash flows for each of the three fiscal
years in the period ended March 31, 1997 and the accompanying notes
thereto (set forth at pages F-7 through F-19);
(iii) the audited consolidated balance sheet of Tomcan Investments
Inc. as of December 31, 1997, and the related consolidated statement of
income and retained earnings and consolidated statement of changes in
financial position for the nine month period ended December 31, 1997
and the accompanying notes thereto (set forth at pages F-20 through F-
30);
(iv) the unaudited statement of income and retained earnings and
statement of changes in financial position of Tommy Hilfiger Canada
Inc. for the nine month period ended December 31, 1996 and the
accompanying notes thereto (set forth at pages F-31 through F-33);
(v) the audited balance sheets of Tommy Hilfiger Canada Inc. as of
March 31, 1997 and March 31, 1996, and the related statements of income
and retained earnings and statements of changes in financial position
for each of the three fiscal years in the period ended March 31, 1997
and the accompanying notes thereto (set forth at pages F-34 through F-
44);
(vi) the selected historical financial information of the Guarantor
as of and for the nine months ended December 31, 1997 (unaudited) and
1996 (unaudited) and as of and for each of the five fiscal years in the
period ended March 31, 1997 and the accompanying notes thereto (set
forth at pages 49 through 50); and
(vii) the unaudited pro forma combined balance sheet of the Guarantor
as of December 31, 1997, and unaudited pro forma combined statements of
operations of the Guarantor for the fiscal year ended March 31, 1997
and for the nine months ended December 31, 1997, reflecting the
Acquisition (as defined below) and the accompanying notes thereto (set
forth at pages 64 through 68).
All documents filed by the Guarantor or the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing such documents. Any statement contained
herein or in a document, all or a portion of which is incorporated or deemed
to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document or portion
thereof which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Guarantor and the Company will provide without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, on written
or oral request of such person, a copy of any or all of the
3
<PAGE>
documents incorporated by reference herein (other than exhibits to such
documents unless such exhibits are incorporated by reference into such
documents). Such written requests should be addressed to the Investor
Relations Department, Tommy Hilfiger U.S.A., Inc., 25 West 39th Street, New
York, New York 10018. Telephone requests may be directed to the Investor
Relations Department at (212) 840-8888.
ENFORCEABILITY OF CIVIL LIABILITIES
AND RELATED MATTERS
The Guarantor is organized under the laws of the British Virgin Islands.
Certain of its directors and officers are residents of non-United States
jurisdictions and certain of the assets of the Guarantor, and all or a
substantial portion of the assets of such other persons, are located in non-
United States jurisdictions. As a result, it may be difficult for investors to
effect service within the United States upon such persons or to enforce
against them in the United States, such judgments of courts of the United
States predicated upon civil liabilities under the United States federal
securities laws. Additionally, there is doubt as to the enforceability in the
British Virgin Islands, in original actions or in actions for enforcement of
judgments of United States courts, of liabilities predicated upon the United
States federal securities laws.
4
<PAGE>
TOMMY HILFIGER
Tommy Hilfiger, through its subsidiaries, designs, sources and markets men's
sportswear and childrenswear under the TOMMY HILFIGER[Registered] trademark.
Through a range of strategic licensing agreements, Tommy Hilfiger has expanded
its product lines to offer a broader array of apparel, accessories, footwear and
fragrance for men, women and children, as well as a home furnishings collection.
Tommy Hilfiger's products can be found in leading department and specialty
stores throughout the United States, Canada, Europe, Mexico, Japan, Hong Kong,
Central and South America and, commencing Spring 1998, other Far East locations.
The Company and its subsidiaries carry out all of Tommy Hilfiger's operations in
the United States. Following the Acquisition described below, the Company and
its subsidiaries will also carry out all of Tommy Hilfiger's operations in
Canada.
The Guarantor is organized under the laws of the British Virgin Islands. The
principal executive offices of the Guarantor are located at 6/F, Precious
Industrial Centre, 18 Cheung Yue Street, Cheung Sha Wan, Kowloon, Hong Kong.
The Guarantor's telephone number is 852-2745-7798.
The Company is a direct, wholly owned subsidiary of the Guarantor and is
organized under the laws of the State of Delaware. The principal executive
offices of the Company are located at 25 West 39th Street, New York, New York
10018. The Company's telephone number is (212) 840-8888.
THE PROPOSED ACQUISITION
GENERAL
On January 31, 1998, the Guarantor, the Company and Tommy Hilfiger (Eastern
Hemisphere) Limited, a wholly owned subsidiary of the Guarantor ("THEH"),
entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with
Pepe Jeans London Corporation ("PJLC"). The Stock Purchase Agreement provides
for the Company to purchase from PJLC all of the outstanding capital stock
(the "Pepe USA Shares") of Tommy Hilfiger's U.S. womenswear and jeanswear
licensee, Pepe Jeans USA, Inc. ("Pepe USA"), and for THEH to purchase from
PJLC all of the outstanding capital stock (the "Pepe Far East Shares") of Pepe
USA's buying agency affiliate, TJ Far East Limited ("Pepe Far East" and
together with its subsidiaries and Pepe USA, "Pepe Jeans") (such stock
purchases, the "Acquisition"). Under the Stock Purchase Agreement, the total
purchase price for the Pepe USA Shares is $730,760,000 in cash plus 9,045,930
ordinary shares, par value $.01 per share, of the Guarantor, and the total
purchase price for the Pepe Far East Shares is $25,000,000 in cash
(collectively with the cash consideration for the Pepe USA Shares, the "Cash
Consideration"). The Stock Purchase Agreement contemplates that, immediately
following the Acquisition, Pepe USA will purchase from Lawvest Holdings Inc.
("Lawvest") all of the outstanding shares of Tomcan Investments, Inc.
("Tomcan"), the parent corporation of Tommy Hilfiger Canada Inc., Tommy
Hilfiger's Canadian licensee (together with Tomcan, "Tommy Canada," and,
collectively with Pepe Jeans, the "Acquired Companies"), with funds provided
by PJLC using proceeds from the Cash Consideration (the "Canada Purchase"),
pursuant to a Share Purchase Agreement entered into between Pepe USA and
Lawvest on January 26, 1998.
The Acquisition is subject to, among other things, approval by the
Guarantor's shareholders and specified contractual consents, receipt by the
Guarantor and/or its subsidiaries of financing for the Acquisition on
reasonably satisfactory terms and satisfaction of all conditions to
consummation of the Canada Purchase by Pepe USA, other than payment for and
delivery of the Tomcan shares.
DESCRIPTION OF THE ACQUIRED COMPANIES
Pepe Jeans. Pepe USA was organized in 1984 to design, source and sell
PEPE[Registered] jeanswear throughout the United States. Pursuant to a license
agreement between Tommy Hilfiger and Pepe Jeans, Pepe USA acquired exclusive
United States rights to develop, source and market women's and girls' casualwear
bearing the TOMMY HILFIGER[Registered] trademark ("Tommy Womenswear"), men's
jeanswear and jeans-related apparel bearing
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<PAGE>
the TOMMY JEANS[Registered] trademark ("Tommy Men's Jeanswear") and the TOMMY
JEANS[Registered] women's line, which will initially include jeanswear and
jeans-related apparel for young women ("Tommy Women's Jeanswear"). In December
1997, Pepe USA discontinued marketing its PEPE[Registered] jeanswear in order
to focus its full attention and resources on Tommy Womenswear, Tommy Men's
Jeanswear and Tommy Women's Jeanswear. Pepe USA currently markets Tommy
Womenswear and Tommy Men's Jeanswear throughout the United States principally
through in-store shops and fixtured areas in leading department stores and
through leading specialty stores. Its department store customers include major
United States retailers such as Dillard Department Stores, Federated Department
Stores (including Macy's, Bloomingdale's and Burdines), The May Department
Stores Company (including Lord & Taylor and Foley's), Belk Stores and Dayton
Hudson.
Pepe Far East operates a buying office based in Hong Kong which performs
product development, sourcing, production scheduling and quality control
services. In addition, Pepe Far East contracts with various buying subagents.
Pepe Far East and its subsidiaries perform buying agency services with respect
to Tommy Womenswear, Tommy Men's Jeanswear and Tommy Women's Jeanswear for
both Pepe USA and Tommy Hilfiger's third party distributors outside the United
States.
Tommy Canada. Pursuant to a license agreement between Tommy Hilfiger and
Tommy Canada, since 1990 Tommy Canada has had exclusive Canadian rights to
source, manufacture and distribute apparel bearing the TOMMY
HILFIGER[Registered] trademark (and since 1995 the TOMMY JEANS[Registered]
trademark), including men's sportswear and athleticwear, boys' sportswear,
Tommy Womenswear and Tommy Men's and Women's Jeanswear. Tommy Canada markets
TOMMY HILFIGER[Registered] and TOMMY JEANS[Registered] products principally
through leading specialty and department stores in Canada. Approximately 55% of
Tommy Canada's sales are made through specialty stores, with the remainder made
through department stores. Tommy Canada's major department store customers are
the Eaton and The Bay chains.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used by the Company to
finance the Acquisition and for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES OF THE GUARANTOR
The following table sets forth the Guarantor's consolidated ratios of
earnings to fixed charges for the nine month period ended December 31, 1997
and for each of the fiscal years ended March 31, 1997, 1996, 1995, 1994 and
1993, and pro forma for the proposed Acquisition for the periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH
31,
------------------------
NINE MONTH PERIOD
ENDED
DECEMBER 31, 1997 1997 1996 1995 1994 1993
----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Historical................... 26.6 36.2 35.5 66.6 65.7 14.4
Pro Forma for the Acquisi-
tion........................ 4.2 2.2
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges, earnings
are the sum of net income, provision for income taxes and fixed charges (less
capitalized interest). Fixed charges are the sum of interest expense, the
estimated interest portion of rental charges and capitalized interest and,
with respect to the pro forma ratios only, financing cost amortization.
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The Debt Securities are to be issued under an Indenture (the "Indenture"),
among the Company, the Guarantor and The Chase Manhattan Bank, as trustee (the
"Trustee"), a copy of which is filed as an Exhibit to the Registration
Statement of which this Prospectus is a part. The following summary of certain
provisions of the Debt Securities, the Guarantees and the Indenture does not
purport to be complete and is subject to and is qualified in its entirety by
reference to all the provisions of the Indenture, including the definitions
therein of certain terms. Wherever particular Sections, Articles or defined
terms of the Indenture are referred to, it is intended that such Sections,
Articles or defined terms shall be incorporated herein by reference.
Capitalized terms not otherwise defined herein shall have the meaning given in
the Indenture.
The following sets forth certain general terms and provisions of the Debt
Securities and Guarantees. The specific terms of the Debt Securities and
Guarantees offered by any Prospectus Supplement (the "Offered Debt
Securities") will be described in the Prospectus Supplement relating to such
Offered Debt Securities (the "Applicable Prospectus Supplement").
GENERAL
All Debt Securities will be unsecured obligations of the Company, will rank
on a parity with all other unsecured and unsubordinated indebtedness of the
Company and will have the benefit of the Guarantees described below.
The Indenture does not limit the aggregate principal amount of the Debt
Securities or of any particular series of Offered Debt Securities and provides
that Debt Securities may be issued thereunder from time to time in one or more
series. All Debt Securities of any series need not be issued at the same time
or bear interest at the same rate or mature on the same date.
Reference is made to the Applicable Prospectus Supplement relating to the
Offered Debt Securities for the following terms thereof: (1) the title of the
Offered Debt Securities; (2) any limit on the aggregate principal amount of
the Offered Debt Securities; (3) the date or dates on which the Offered Debt
Securities will mature; (4) the rate or rates per annum (or the method of
calculating such rates) at which the Offered Debt Securities will bear
interest, if any, and the date from which such interest, if any, will accrue;
(5) the Interest Payment Dates on which any such interest on the Offered Debt
Securities will be payable and the Regular Record Date for any interest
payable on any Offered Debt Securities on any Interest Payment Date and the
extent to which, or the manner in which, any interest payable on a global Debt
Security (a "Global Note") on an Interest Payment Date will be paid if other
than in the manner described under "Global Notes" below; (6) the dates, if
any, on which and the price or prices at which the Offered Debt Securities
may, pursuant to any mandatory or optional sinking fund provisions, be
redeemed by the Company and other detailed terms and provisions of any such
sinking funds; (7) the date, if any, after which and the price or prices at
which the Offered Debt Securities may, pursuant to any optional redemption
provisions (other than as set forth under "Optional Tax Redemption"), be
redeemed at the option of the Company or of the holder thereof and other
detailed terms and provisions of any such optional redemption; (8) the
denominations (if other than U.S.$1,000 and integral multiples thereof) in
which the Offered Debt Securities are issuable; (9) the currency or
currencies, which may be a composite currency such as the European Currency
Unit, of payment of principal of and premium, if any, and interest of the
Offered Debt Securities, if other than U.S. dollars; (10) whether the Offered
Debt Securities are to be issued with original issue discount within the
meaning of Section 1273(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder; (11) whether the Offered Debt
Securities are to be issued in whole or in part in the form of one or more
Global Notes and, if so, the identity of the depositary, if any, for such
Global Note or Notes; (12) any addition to, or modification or deletion of,
any Events of Default or covenants provided for with respect to the Offered
Debt Securities; (13) any index used to determine the amount of payments of
principal of and premium, if any, and interest on the Offered Debt Securities;
and (14) any other terms of the Offered Debt Securities not inconsistent with
the terms of the Indenture.
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Unless otherwise indicated in the Applicable Prospectus Supplement relating
thereto, principal of and any premium and interest on the Offered Debt
Securities will be payable, and the Offered Debt Securities will be
exchangeable and transfers thereof will be registrable, at the corporate trust
office of the Trustee in New York, New York, provided that, at the option of
the Company, payment of any interest may be made by check mailed to the
address of the person entitled thereto as it appears in the Security Register.
Unless otherwise indicated in the Applicable Prospectus Supplement, payment of
any interest due on any Offered Debt Security will be made to the person in
whose name such Offered Debt Security is registered at the close of business
on the Regular Record Date for such interest. (Sections 301, 305, 307 and
1002)
Unless otherwise indicated in the Applicable Prospectus Supplement, the
Offered Debt Securities will be issued only in fully registered form without
coupons in denominations of $1,000 or any integral multiple thereof, and no
service charge will be made for any transfer or exchange of such Offered Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
(Sections 302 and 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special federal income tax, accounting and other
considerations applicable thereto will be described in the Applicable
Prospectus Supplement relating to any such Original Issue Discount Securities.
GUARANTEES
The Guarantor will unconditionally guarantee the due and punctual payment of
the principal, premium, if any, and interest (including additional amounts, if
any) on the Debt Securities when and as the same shall become due and payable,
whether at maturity, upon redemption, or otherwise. (Section 1301) The
Guarantees will rank equally with all other unsecured and unsubordinated
indebtedness of the Guarantor.
GLOBAL NOTES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (the "Depositary") identified in the
Applicable Prospectus Supplement relating to such series, which unless
otherwise specified therein will be The Depository Trust Company, New York,
New York.
The Depositary has advised the Company that the Depositary is a limited-
purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve 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. The Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a participant, either directly or indirectly.
Unless otherwise specified in the Applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Note to be deposited with
or on behalf of a Depositary will be represented by a Global Note registered
in the name of such Depositary or its nominee. Upon the issuance of a Global
Note in registered form, the Depositary for such Global Note will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Note to the accounts
of institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Notes
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will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Notes will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the Depositary or its nominee for
such Global Note. Ownership of beneficial interests in Global Notes by persons
that hold through participants will be effected only through records
maintained by such participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of such Global Note, such depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Note for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in such
Global Note will not be entitled to have Debt Securities of the series
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of Debt Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture. Accordingly, each person owning a beneficial interest in such
Global Security must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the Indenture. The Company understands that under existing practice, in the
event that the Company requests the holders to take, or a beneficial owner
desires to take, any action, the Depositary would act upon the instructions
of, or authorize, the participant to take such action.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Note representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or the Security
Registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Global Note for such Debt Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium, or interest in respect of a
permanent Global Note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
Depositary. The Company also expects that payments by participants to owners
of beneficial interest in such Global Note held through such participants will
be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name," and will be the responsibility of such participants.
A Global Note may not be transferred except as a whole by the Depositary for
such Global Note to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such depositary or by such
depositary or any such nominee to a successor of such depositary or a nominee
of such successor. (Section 304(b)) If a Depositary for Debt Securities of a
series is at any time unwilling or unable to continue as Depositary and a
successor depositary is not appointed by the Company within ninety days, the
Company will issue Debt Securities in definitive registered form in exchange
for the Global Note or Notes representing such Debt Securities. In addition,
the Company may at any time and in its sole discretion determine not to have
any Debt Securities represented by one or more Global Notes and, in such
event, will issue Debt Securities in definitive registered form in exchange
for all the Global Notes representing such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Note will be entitled
to physical delivery in definitive form of Debt Securities of the series
represented by such Global Note equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name.
CERTAIN COVENANTS OF THE COMPANY AND THE GUARANTOR
Restrictions on Liens. Except as provided below under "Exempted Debt," the
Company and the Guarantor will not, and will not permit any Restricted
Subsidiary to, create or suffer to exist any mortgage, lien, pledge, charge,
security interest or encumbrance (a "Lien" or "Liens") to secure any
Indebtedness of the
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Company, the Guarantor or any Restricted Subsidiary on any property of or any
shares of equity interests or evidences of Indebtedness issued by the Company,
the Guarantor or any Restricted Subsidiary and owned by the Company, the
Guarantor or any Restricted Subsidiary, without making, or causing such
Restricted Subsidiary to make, effective provision to secure all of the Debt
Securities offered hereunder and then outstanding by such Lien, equally and
ratably with any and all other such Indebtedness thereby secured, so long as
such other Indebtedness is so secured, except that the foregoing restrictions
shall not apply (subject in certain instances to certain qualifications) to:
(a) Liens on property of a corporation existing at the time such corporation is
merged into or consolidated with the Company, the Guarantor or a Restricted
Subsidiary or at the time of sale, lease or other disposition of the properties
of such corporation (or a division thereof) as an entirety or substantially as
an entirety to the Company, the Guarantor or a Restricted Subsidiary; (b) Liens
on property or shares of equity interests or evidences of indebtedness of a
corporation existing at the time such corporation becomes a Restricted
Subsidiary; (c) Liens securing Indebtedness between a Restricted Subsidiary and
the Company or the Guarantor or between Restricted Subsidiaries or between the
Guarantor and the Company; (d) Liens on any property created, assumed or
otherwise brought into existence in contemplation of the sale or other
disposition of the underlying property, whether directly or indirectly, by way
of share disposition or otherwise, provided that the Company, the Guarantor or
the Restricted Subsidiary, as applicable, must have disposed of such property
within 180 days after the creation of such Liens and that any Indebtedness
secured by such Liens shall be without recourse to the Company, the Guarantor
or any Restricted Subsidiary; (e) Liens in favor of the United States of
America or any State thereof, or any department, agency or instrumentality or
political subdivision thereof, to secure partial, progress, advance or other
payments; (f) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar rights and
remedies, in each case as to deposit accounts or other funds maintained with a
creditor depository institution, provided that (1) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access by the Company, the Guarantor or applicable Restricted Subsidiary in
excess of those set forth by regulations promulgated by the Federal Reserve
Board, and (2) such deposit account is not intended by the Company or any
Restricted Subsidiary to provide collateral to the depository institution; (g)
Liens arising from Uniform Commercial Code financing statements regarding
leases; (h) Liens on the Company's office facility located at 25 West 39th
Street, New York, New York; (i) the giving, simultaneously with or within 180
days after the latest of the date of the Indenture, or the acquisition or
construction of such property, of a purchase money Lien on property acquired or
constructed after the date of the Indenture, or the acquisition after the date
of the Indenture, of property subject to any Lien which is limited to such
property and which secures Indebtedness not in excess of the lesser of the cost
or fair market value of such property; (j) the giving of a Lien on real
property which is the sole security for Indebtedness incurred within two years
after the latest of the date of the Indenture, the acquisition of the property
or completion of the first substantial improvements thereon, provided that the
Indebtedness does not exceed the lesser of the cost of the property and
improvements or their fair market value and the holder of such Indebtedness is
entitled to enforce its payment only by resorting to such security; (k) Liens
arising under Tommy Hilfiger Canada Inc.'s existing loan agreement securing
Indebtedness not to exceed Can.$25,000,000; (l) Liens arising by the terms of
letters of credit entered into in the ordinary course of business to secure
reimbursement obligations thereunder; (m) Liens existing on the date of the
Indenture; and (n) extension, renewal, replacement or refunding of any Lien
existing on the date of the Indenture or referred to in clauses (a) to (d) and
(i) to (k), provided that the principal amount of Indebtedness secured thereby
and not otherwise authorized by clauses (a) to (d) and (i) to (k) shall not
exceed the principal amount of Indebtedness, plus any premium or fee payable in
connection with any such extension, renewal, replacement or refunding, so
secured at the time of such extension, renewal, replacement or refunding.
(Section 1007)
Restrictions on Sale and Leaseback Transactions. Except as provided below
under "Exempted Debt," the Company and the Guarantor will not, nor will they
permit any Restricted Subsidiary to, enter into any arrangements with any
person providing for the leasing by the Company, the Guarantor or any
Restricted Subsidiary of any property or asset now owned or hereafter acquired
which has been or is to be sold or transferred by the Company, the Guarantor or
such Restricted Subsidiary to such person with the intention of taking back a
lease of such property (a "Sale and Leaseback Transaction"), unless the net
proceeds of such sale or transfer have been determined by the Board of
Directors of the Company or the Guarantor (as applicable) to
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be at least equal to the fair value of such property or asset at the time of
such sale and transfer and either (i) the Company, the Guarantor or a
Restricted Subsidiary applies or causes to be applied an amount equal to the
net proceeds of such sale or transfer, within 180 days of receipt thereof, to
the retirement or prepayment (other than any mandatory retirement or
prepayment) of Senior Funded Debt of the Company, the Guarantor or any
Restricted Subsidiary or to the purchase of property or assets to be used in
the ordinary course of business, or (ii) the Company, the Guarantor or such
Restricted Subsidiary would, on the effective date of such sale or transfer,
be entitled, pursuant to the Indenture, to issue, assume or guarantee
Indebtedness secured by a Lien upon such property or asset at least equal in
amount to the Attributable Debt in respect of such Sale and Leaseback
Transaction without equally and ratably securing the Debt Securities having
the benefit of the "Restrictions on Liens." The foregoing restriction will not
apply to any Sale and Leaseback Transaction (i) between the Company and the
Guarantor, the Company or the Guarantor and any Restricted Subsidiary or
between Restricted Subsidiaries provided that the lessor shall be the Company,
the Guarantor or a Wholly-owned Restricted Subsidiary, or (ii) which has a
lease of less than three years in length. (Section 1008)
Exempted Debt. Notwithstanding the restrictions in the Indenture on (i)
Liens and (ii) Sale and Leaseback Transactions, the Company, the Guarantor or
the Restricted Subsidiaries may, in addition to amounts permitted under such
restrictions, create Indebtedness secured by Liens, or enter into Sale and
Leaseback Transactions, provided that, at the time of such transaction and
after giving effect thereto, the aggregate outstanding amount of all such
Indebtedness secured by Liens plus Attributable Debt resulting from such Sale
and Leaseback Transactions does not exceed 10% of Consolidated Stockholders
Equity. (Sections 1007(b) and 1008(b))
Restrictions on Subsidiary Indebtedness. The Company and the Guarantor will
not permit any Restricted Subsidiary to create, incur, issue, assume or
guarantee any Funded Debt, except: (i) Funded Debt outstanding on the date of
the Indenture; (ii) Funded Debt issued to and held by the Company, the
Guarantor or a Wholly-owned Restricted Subsidiary; (iii) Funded Debt created,
incurred, issued, assumed or guaranteed by a person prior to the time (a) such
person became a Restricted Subsidiary; (b) such person merges into or
consolidates with a Restricted Subsidiary; or (c) a Restricted Subsidiary
merges into or consolidates with such person (in a transaction in which such
person becomes a Restricted Subsidiary) (in the case of each of clauses (a),
(b) and (c), which Funded Debt was not incurred in anticipation of such
transaction and was outstanding prior to such transaction); (iv) Funded Debt
incurred to provide funds for all or part of the cost of acquisition,
construction, development or improvement of property (including shares of
equity interests), provided that the commitment of the creditor to extend the
credit evidenced by such Funded Debt shall have been obtained not later than
180 days after the later of (a) the completion of the acquisition,
construction, development or improvement of such property or (b) the placing
in operation of such property; (v) Funded Debt under Tommy Hilfiger Canada
Inc.'s existing loan agreement in a principal amount not to exceed
Can.$25,000,000; (vi) Funded Debt which is exchanged for, or the proceeds of
which are used to replace or refund, any Funded Debt permitted to be
outstanding pursuant to clauses (i) through (v) above (or any extension or
renewal thereof), in an aggregate principal amount not to exceed the principal
amount of the Indebtedness so exchanged, replaced or refunded; (vii) Funded
Debt not otherwise permitted pursuant to clauses (i) through (vi) above that,
together with any other outstanding Funded Debt created, incurred, issued,
assumed or guaranteed pursuant to this clause (vii), has an aggregate
principal amount at any time outstanding that does not exceed 10% of
Consolidated Stockholders Equity; and (viii) Funded Debt which would be
permitted to be incurred under the "Restrictions on Liens." (Section 1009)
No Special Protection in the Event of a Highly Leveraged Transaction. Unless
otherwise indicated in the Applicable Prospectus Supplement, the terms of the
Offered Debt Securities will not afford the holders special protection in the
event of a highly leveraged transaction.
Certain Definitions. Set forth below are certain significant terms which are
defined in Section 101 of the Indenture:
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, at
the time of determination, the present value (discounted at the actual rate of
interest of such transaction) of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
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The term "net rental payments" under any lease for any period shall mean the
sum of the rental and other payments required to be paid in such period by the
lessee thereunder, not including, however, any amounts required to be paid by
such lessee (whether or not designated as rental or additional rental) on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee thereunder or any
amounts required to be paid by such lessee thereunder contingent upon the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges.
"Capitalized Lease Obligations" means obligations created pursuant to leases
which are required to be shown on the liability side of the balance sheet in
accordance with generally accepted accounting principles.
"Consolidated Stockholders Equity" means consolidated stockholders equity of
the Guarantor and its Subsidiaries as determined in accordance with generally
accepted accounting principles and reflected on the most recent balance sheet
delivered to the Trustee pursuant to the Indenture.
"Funded Debt" means Indebtedness, whether incurred, assumed or guaranteed,
maturing by its terms more than one year from the date of creation thereof or
which is extendable or renewable at the sole option of the obligor in such
manner that it may become payable more than one year from the date of creation
thereof; provided, however, that Funded Debt shall not include obligations
created pursuant to leases, or any Indebtedness or portion thereof maturing by
its terms within one year from the time of any computation of the amount of
outstanding Funded Debt unless such Indebtedness shall be extendable or
renewable at the sole option of the obligor in such manner that it may become
payable more than one year from such time, or any Indebtedness for the payment
or redemption of which money in the necessary amount shall have been deposited
in trust either at or before the maturity or redemption date thereof.
"Indebtedness" of a person means indebtedness for borrowed money and all
indebtedness under purchase money mortgages or other purchase money liens or
conditional sales or similar title retention agreements in each case where
such indebtedness has been created, incurred, assumed or guaranteed by such
person or where such person is otherwise liable therefor and indebtedness for
borrowed money secured by any mortgage, pledge or other lien or encumbrance
upon property owned by such person even though such person has not assumed or
become liable for the payment of such indebtedness.
"Restricted Subsidiary" means, at any time, any Subsidiary of the Guarantor,
other than the Company, which would be a "Significant Subsidiary" at such
time, as such term is defined in Regulation S-X promulgated by the Commission,
as in effect on the date of the Indenture.
"Subsidiary" as to any person, means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by such
person or by one or more of its Subsidiaries, or by such person and one or
more of its 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.
MERGER AND CONSOLIDATION
The Indenture provides that the Company may not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and the Company may 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 consolidates with or merges into
another corporation or conveys, transfers or leases its properties and assets
substantially as an entirety to any person, the corporation 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 organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by a supplemental
indenture,
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the due and punctual payment of the principal of (and premium, if any) and
interest on all the Debt Securities and the performance of every covenant of
the 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 or a Subsidiary of the
Company as a result of such transaction as having been incurred by the Company
or such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event
of Default, shall have happened and be continuing; and (iii) if, as a result
of any such consolidation or merger or such conveyance, transfer or lease,
properties or assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which would not be
permitted by this Indenture, the Company or such successor corporation or
person, as the case may be, shall take such steps as shall be necessary
effectively to secure the Debt Securities equally and ratably with (or prior
to) all indebtedness secured thereby. (Section 801)
The Indenture provides that the Guarantor may not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and the Guarantor may not
permit any person to consolidate with or merge into the Guarantor or convey,
transfer or lease its properties and assets substantially as an entirety to
the Guarantor, unless: (i) in case the Guarantor shall consolidate with or
merge into another corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, the corporation formed by
such consolidation or into which the Guarantor is merged or the person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Guarantor substantially as an entirety shall be a corporation organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia or the British Virgin Islands and shall expressly
assume, by a supplemental indenture, the Guarantees and the performance of
every covenant of this Indenture on the part of the Guarantor to be performed
or observed; (ii) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Guarantor as a
result of such transaction as having been incurred by the Guarantor 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) if, as a result of any such
consolidation or merger or such conveyance, transfer or lease, properties or
assets of the Guarantor would become subject to a mortgage, pledge, lien,
security interest or other encumbrance which would not be permitted by this
Indenture, the Guarantor or such successor corporation or person, as the case
may be, shall take such steps as shall be necessary effectively to secure the
Debt Securities equally and ratably with (or prior to) all indebtedness
secured thereby. (Section 1303)
PAYMENT OF ADDITIONAL AMOUNTS
If any deduction or withholding for any present or future taxes, assessments
or other governmental charges of any jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the Guarantor is
resident for tax purposes shall at any time be required by such jurisdiction
in respect of any amounts to be paid by the Guarantor under the Guarantee of
Debt Securities of such series, the Guarantor will pay as additional interest
such additional amounts as may be necessary in order that the net amounts paid
to the holder of any such Debt Security pursuant to the terms of such Debt
Security, after such deduction or withholding, will be not less than the
amounts specified in such Debt Security to be then due and payable; provided,
however, that the Guarantor shall not be required to make any payment of
additional amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member
or shareholder of such holder, if such holder is an estate, trust,
partnership, limited liability company or corporation) and the taxing
jurisdiction or any political subdivision or territory or possession
thereof or area subject to its jurisdiction, including, without limitation,
such holder (or such fiduciary, settlor, beneficiary, member or
shareholder) being or having been a citizen or resident or treated as a
resident thereof or being or having been present or engaged in trade or
business therein or having had a permanent establishment therein or (ii)
the presentation of such Debt Security (where presentation is required) for
payment on a date more than 30 days after the date on which such payment
became due and payable or the date on which payment thereof was duly
provided for, whichever occurs later;
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(b) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of (or in respect of) principal
of, premium, if any, or interest on such Debt Security;
(d) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder or the beneficial
owner of a Debt Security with a request of the Guarantor addressed to the
holder (i) to provide information concerning the nationality, residence or
identity of the holder or beneficial owner of such Debt Security, or (ii)
to make such declaration or other similar claim or reporting requirement,
which is required by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, assessment or other governmental charge; provided
that, in the case of (ii), the holder is legally entitled to deliver such
declaration or similar claim; or
(e) any combination of items (a), (b), (c) and (d) above;
nor will additional amounts be paid with respect to any payment of the
principal of or interest on any such Debt Security to any such holder who is a
fiduciary or partnership or limited liability company or other than the sole
beneficial owner of such payment to the extent such payment would be required
by the laws of any jurisdiction in which the Guarantor is resident for tax
purposes (or any political subdivision or taxing authority thereof or therein)
to be included in the income for tax purposes of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership, limited liability
company, or a beneficial owner who would not have been entitled to such
additional amounts had it been the holder of such Debt Security. (Section 1306)
Under the laws of the British Virgin Islands, where the Guarantor is
incorporated, and Barbados, where the Guarantor is licensed as an external
International Business Company, as applied and interpreted on the date of this
Prospectus, no taxes, levies, imposts or charges of the British Virgin Islands,
Barbados or any political subdivision or taxing authority thereof or therein
would be required to be deducted or withheld from any payment by the Guarantor
under the Guarantees of the Debt Securities.
OPTIONAL TAX REDEMPTION
Debt Securities of any series may be redeemed at the option of the Guarantor,
in whole but not in part, upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at a redemption price equal to the
principal amount thereof (except for Debt Securities issued at a price
representing a discount from the principal amount payable at maturity which may
be redeemed at the redemption price set forth in such Debt Securities) plus
accrued interest to the date fixed for redemption if, as a result of any change
in or amendment to the laws or any regulations or ruling promulgated thereunder
of any jurisdiction (or of any political subdivision or taxing authority
thereof or therein) in which the Guarantor is incorporated or resident for tax
purposes, or any change in the official application or interpretation of such
laws, regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties
affecting taxation to which such jurisdiction (or such political subdivision or
taxing authority) is a party, which becomes effective on or after the original
issue date of such Debt Securities, the Guarantor is or would be required on
the next succeeding interest payment date to pay additional amounts with
respect to the Debt Securities (as described under "Payment of Additional
Amounts" above), and the payment of such additional amounts cannot be avoided
by the use of any reasonable measures available to the Guarantor.
The Debt Securities of any series may also be redeemed at the option of the
Guarantor, in whole but not in part, upon not less than 30 days' nor more than
60 days' notice at a redemption price equal to the principal amount thereof
(except for Debt Securities issued at a price representing a discount from the
principal amount payable at maturity which may be redeemed at the redemption
price set forth in such Debt Securities) plus accrued interest to the date
fixed for redemption if the person formed by a consolidation or amalgamation of
the Guarantor or into which the Guarantor is merged or to which the Guarantor
conveys, transfers or leases its properties and assets substantially as an
entirety is required, as a consequence of such consolidation,
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amalgamation, merger, conveyance, transfer or lease and as a consequence of a
change in tax law occurring after the date of such consolidation, amalgamation,
merger, conveyance, transfer or lease, to pay additional amounts in respect of
any tax, assessment or governmental charge imposed on any holder.
The Guarantor will also pay, or make available for payment, to holders on the
redemption date any additional amounts (as described under "Payment of
Additional Amounts" above) resulting from the payment of such redemption price.
(Section 1305)
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in the payment of any interest upon
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; (b) default in the payment
of the principal of (or premium, if any, on) any Debt Security of that series
at its maturity; (c) default in the deposit of any sinking fund payment, when
and as due by the terms of a Debt Security of that series; (d) default in the
performance, or breach, of any covenant or warranty of the Company or the
Guarantor (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in the Indenture specifically dealt with or which has
expressly been included in the Indenture solely for the benefit of series of
Debt Securities other than that series), and continuance of such default or
breach for a period of 60 days after written notice as provided in the
Indenture; (e) acceleration of indebtedness of the Guarantor or any Subsidiary
of the Guarantor for borrowed money in an outstanding principal amount in
excess of $25 million (including a default with respect to Securities of any
series other than that series) whether such indebtedness now exists or shall
hereafter be created, without such being cured within a period of 10 days after
written notice as provided in the Indenture; (f) certain events occurring under
bankruptcy, insolvency, reorganization or other similar laws; (g) the Guarantee
with respect to that series shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect; or (h) any other event of default provided with respect to Debt
Securities of that series. No Event of Default with respect to a particular
series of Debt Securities issued under the Indenture (except as to such events
in bankruptcy, insolvency or reorganization) necessarily constitutes an Event
of Default with respect to any other series of Debt Securities issued
thereunder. (Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the outstanding Debt
Securities of that series may declare the principal amount (or, if any of the
Debt Securities of that series are Original Issue Discount Securities, such
portion of the principal amount of such Debt Securities as may be specified in
the terms thereof) of all of the Debt Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable. However, at any
time after such a declaration of acceleration with respect to Debt Securities
of any series has been made, the Holders of a majority in principal amount of
outstanding Debt Securities of that series may, subject to certain conditions,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, with respect to Debt Securities of that
series have been cured or waived as provided in the Indenture. (Section 502)
For information as to waiver of defaults, see "Modification and Waiver" herein.
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such Original Issue Discount Securities upon the occurrence of an
Event of Default and the continuation thereof.
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
Indenture provides that 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 security and indemnity. (Sections 601 and 603) Subject to such
provisions for security and indemnification of the Trustee and certain other
rights of the Trustee, the Holders of
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a majority in principal amount of the Outstanding Debt Securities of any series
shall have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of that
series. (Section 512)
No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Debt Securities of that series
and unless also the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable security and indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) Notwithstanding the
foregoing, the Holder of any Debt Security will have an absolute and
unconditional right to receive payment of the principal of (and premium, if
any) and any interest on such Debt Security on or after the due dates expressed
in such Debt Security and to institute suit for the enforcement of any such
payment. (Section 508)
The Indenture requires the Company and the Guarantor to furnish to the
Trustee annually statements as to compliance with the Indenture. (Section 1011)
The Indenture provides that the Trustee may withhold notice to the Holders of
Debt Securities of any series of any default (except in payment of principal,
any premium, interest or any sinking fund payments) with respect to Debt
Securities of such series if it considers it in the interest of the Holders of
Debt Securities of such series to do so. (Section 602)
MODIFICATION AND WAIVER
With the consent of the holders of a majority of the outstanding Debt
Securities of each series affected, the Company, the Guarantor and the Trustee
may enter into an indenture or indentures supplemental to the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of modifying in any manner the rights
of the holders of Debt Securities of such series under the Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each outstanding Debt Security affected thereby: (a) change the
stated maturity date of the principal of, or any installment of principal of or
interest on, any Debt Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the maturity
thereof or change any place of payment where, or the coin or currency in which,
any Debt Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the stated maturity thereof (or, in the case of redemption, on or after the
redemption date); (b) reduce the percentage in principal amount of the
Outstanding Securities of any series, 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 the Indenture
or certain defaults under the Indenture and their consequences) provided for in
the Indenture; (c) subject to certain exceptions, modify certain specified
provisions of the Indenture relating to modification and waiver, except to
increase any percentage required to approve a modification or waiver or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the holder of each outstanding Security affected
thereby; or (d) modify any of the substantive provisions of the Guarantees or
release or discharge the Guarantor thereunder. (Section 902)
The Company and the Guarantor may omit in any particular instance to comply
with certain specified covenants in the Indenture with respect to the Debt
Securities of any series if before the time for such compliance the holders of
at least a majority in principal amount of the outstanding Debt Securities of
such series shall either waive such compliance in such instance or generally
waive compliance with such covenant but no such waiver shall extend to or
affect such covenant except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the Guarantor
and the duties of the Trustee in respect of any such covenant shall remain in
full force and effect. (Section 1012)
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The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
the Debt Securities of such series waive any past default with respect to such
series and its consequences, except a default: (a) in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series, or (b) in respect of a covenant or provision of the Indenture which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Debt Security of such series 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 the
Indenture; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon. (Section 513)
DEFEASANCE OF OFFERED DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN
CIRCUMSTANCES
Defeasance and Discharge. The provisions of the Indenture, as it relates to
outstanding Debt Securities of a series, shall no longer be in effect on the
91st day after the date the Company deposits or causes to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of making
the following payments: (i) in the case of Debt Securities of such series
denominated in U.S. dollars, cash in U.S. dollars (or such other money or
currencies as shall then be legal tender in the United States) and/or U.S.
government obligations, or (ii) in the case of Debt Securities of such series
denominated in a foreign currency (other than a basket currency), money and/or
foreign government securities in the same foreign currency, which through the
payment of interest and principal in respect thereof, in accordance with their
terms, will provide (and without reinvestment and assuming no tax liability
will be imposed on such Trustee), not later than one day before the due date of
any payment of money, an amount in cash, sufficient to pay and discharge each
installment of principal (and premium, if any) (including mandatory sinking
fund or analogous payments) of and any interest on all the Debt Securities of
such series on the dates such installments of interest or principal are due. It
is a condition of such defeasance that (a) such deposit will not result in a
breach or violation of, or constitute a default under, the Indenture or any
other agreement or instrument to which the Company is a party or by which it is
bound; (b) cause any outstanding Debt Securities of such series then listed on
the New York Stock Exchange or other securities exchange to be de-listed as a
result thereof; (c) no Event of Default or event which with notice or lapse of
time would become an Event of Default with respect to the Debt Securities of
such series shall have occurred and be continuing on the date of such deposit
or during the period ending on the 91st day after such date; and (d) the
Company has delivered to the Trustee an opinion of counsel to the effect that
(i) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling to the effect that, and based thereon, such opinion
shall confirm that holders of the Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
such deposits, defeasance and discharge and will be subject to Federal income
tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit, defeasance and discharge had not occurred
and (ii) upon the 91st day after the date of such deposit, the trust funds
would not be subject to being characterized as a preference for Bankruptcy Law
purposes. (Section 403)
Defeasance of Certain Covenants. The Company and the Guarantor may omit to
comply with certain specified covenants in the Indenture with respect to the
Debt Securities of a series, if the Company deposits or causes to be
irrevocably deposited with the Trustee as trust funds in trust specifically
pledged as security for, and dedicated solely to, the benefit of the holders of
such Debt Securities (i) in the case of Debt Securities of such series
denominated in U.S. dollars, cash in U.S. dollars (or such other money or
currencies as shall then be legal tender in the United States) and/or U.S.
government obligations, or (ii) in the case of Debt Securities of such series
denominated in a foreign currency (other than a basket currency), money and/or
foreign government securities in the same foreign currency, which through the
payment of interest and principal in respect thereof, in accordance with their
terms, will provide (and without reinvestment and assuming no tax liability
will be imposed on such Trustee), not later than one day before the due date of
any payment of money, an amount in cash, sufficient to pay and discharge each
installment of principal (and premium, if any) (including mandatory sinking
fund or analogous payments) of and any interest on all the Debt Securities of
such series on the dates such installments of interest or principal are due. It
is a condition of such defeasance that (a) such deposit shall not, in the
opinion of counsel, cause the Trustee with respect to the Debt Securities of
such series to have a
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conflicting interest with respect to the Debt Securities of such series; (b)
such deposit will not result in a breach or violation of, or constitute a
default under, the Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound; (c) no Event of Default or event
which with notice or lapse of time would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit; and (d) the Company has delivered to
the Trustee an opinion of counsel to the effect that (i) holders of the Debt
Securities of such series will not recognize income 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 and in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (ii) upon the 91st day after the
date of such deposit, the trust funds would not be subject to being
characterized as a preference for bankruptcy law purposes. (Section 1010)
Defeasance and Events of Default. In the event the Company exercises its
option to omit compliance with certain covenants of the Indenture with respect
to any series of Debt Securities and the Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. government obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities of such series at
the time of their stated maturity but may not be sufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company shall remain liable for such
payments.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture. The Trustee
performs services for the Company and the Guarantor in the ordinary course of
business and is the administrative agent under a Credit Agreement under which
the Company is a borrower.
GOVERNING LAW
The Indenture, the Debt Securities and the Guarantees are governed by and
construed in accordance with the laws of the State of New York. (Section 112)
Under New York law, claims for payment of principal, premium, if any, and
interest will be barred by the statute of limitations six years after such
amounts become due and payable.
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<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Debt Securities in or outside the United
States through underwriters or dealers, directly to one or more purchasers, or
through agents. The Applicable Prospectus Supplement with respect to the
Offered Debt Securities will set forth the terms of the offering of the
Offered Debt Securities, including the name or names of any underwriters,
dealers or agents, the purchase price of the Offered Debt Securities and the
proceeds to the Company from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters'
compensation, the initial public offering price, any discounts or concessions
allowed or re-allowed or paid to dealers, and any securities exchanges on
which the Offered Debt Securities may be listed.
If underwriters are used in the sale, the Offered Debt Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Offered Debt Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Offered
Debt Securities will be named in the Applicable Prospectus Supplement relating
to such offering, and if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Applicable Prospectus
Supplement, the obligations of the underwriters or agents to purchase the
Offered Debt Securities will be subject to conditions precedent, and the
underwriters will be obligated to purchase all the Offered Debt Securities if
any are purchased. The initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time
to time.
If dealers are used in the sale of Offered Debt Securities with respect to
which this Prospectus is delivered, the Company will sell such Offered Debt
Securities to the dealers as principals. The dealers may then resell such
Offered Debt Securities to the public at varying prices to be determined by
such dealers at the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the Prospectus Supplement relating
thereto.
Offered Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time at fixed prices, which may
be changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the Offered Debt Securities with respect to
which this Prospectus is delivered will be named, and any commissions payable
by the Company to such agent will be set forth, in the Applicable Prospectus
Supplement. Unless otherwise indicated in the Applicable Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
Offered Debt Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such sales will be described in the Applicable Prospectus Supplement.
In connection with the sale of the Offered Debt Securities, underwriters or
agents may receive compensation from the Company or from purchasers of Offered
Debt Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, agents and dealers participating in
the distribution of the Offered Debt Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of the Offered Debt Securities by them
may be deemed to be underwriting discounts or commissions under the Securities
Act.
If so indicated in the Applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Offered Debt Securities from the Company at the
public offering price set forth in the Applicable Prospectus Supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject only to those
conditions set forth in the Applicable Prospectus Supplement, and the
Applicable Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
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Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers, or
underwriters may be required to make with respect thereto.
Some or all of the Offered Debt Securities may be new issues of securities
with no established trading market. Any underwriters to whom Offered Debt
Securities are sold by the Company for public offering and sale may make a
market in such Offered Debt Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of or the trading
markets for any Offered Debt Securities.
Certain of the underwriters, dealers or agents and their affiliates may be
customers of, engage in transactions with, and perform services for, the
Guarantor or the Company in the ordinary course of business.
VALIDITY OF OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed upon for the
Company by Wachtell, Lipton, Rosen & Katz, New York, New York, and for any
underwriters by Simpson Thacher & Bartlett, New York, New York. The validity
of the Guarantees will be passed upon for the Guarantor by Harney, Westwood &
Riegels, the British Virgin Islands.
EXPERTS
The audited financial statements of the Guarantor at March 31, 1997 and 1996
and for the three years in the period ended March 31, 1997 incorporated in
this Registration Statement on Form S-3 by reference to (a) the Current Report
on Form 8-K of the Guarantor dated April 1, 1998 (the "April 1, 1998 Form 8-
K"), (b) the Annual Report on Form 10-K of the Guarantor for the fiscal year
ended March 31, 1997, which financial statements have been modified as filed
on the April 1, 1998 Form 8-K and (c) the audited combined financial
statements of Pepe Jeans USA, Inc. and Pepe Jeans Far East Limited included in
the Guarantor's Proxy Statement dated March 30, 1998, have been so
incorporated in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The audited financial statements of Tomcan Investments Inc. as at and for
the nine months ended December 31, 1997 and of Tommy Hilfiger Canada Inc. as
at and for the fiscal year ended March 31, 1997 incorporated in this
Registration Statement on Form S-3 by reference to the Guarantor's Proxy
Statement dated March 30, 1998, have been so incorporated in reliance on the
report of Price Waterhouse, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The audited financial statements of Tommy Hilfiger Canada Inc. as at March
31, 1996 and for the fiscal years ended March 31, 1996 and March 31, 1995
incorporated in this Registration Statement on Form S-3 by reference to the
Guarantor's Proxy Statement dated March 30, 1998, have been so incorporated in
reliance on the report of Ptack Schnarch Basevitz, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with the
issuance and distribution of the securities being registered, other than
underwriting compensation, are:
<TABLE>
<S> <C>
S.E.C. Registration Fee............................................ $206,500
Legal Fees and Expenses............................................ 125,000
Accounting Fees and Expenses....................................... 80,000
Trustee's Fees and Expenses........................................ 15,000
Rating Agency Fees................................................. 346,250
Blue Sky Fees and Expenses......................................... 7,500
Printing and Engraving Fees........................................ 50,000
Miscellaneous...................................................... 19,750
--------
$850,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
TOMMY HILFIGER CORPORATION
The Memorandum and Articles of Association of the Guarantor include
provisions for the protection of directors and officers. Paragraphs 110-115 of
the Articles of Association state:
110. Subject to the limitations hereinafter provided the Guarantor may
indemnify against all expenses, including legal fees, and against all
judgments, fines and amounts paid in settlement and reasonably incurred in
connection with legal, administrative or investigative proceedings any
person who
(a) is or was a party or is threatened to be made a party to any
threatened, pending or completed proceedings whether civil, criminal,
administrative or investigative, by reason of the fact that the person
is or was a director, an officer or a liquidator of the Guarantor; or
(b) is or was, at the request of the Guarantor serving as a director,
officer or liquidator of, or in any other capacity is or was acting
for, another company or a partnership, joint venture, trust or other
enterprise.
111. The Guarantor may only indemnify a person if the person acted
honestly and in good faith with a view to the best interests of the
Guarantor and, in the case of criminal proceedings, the person had no
reasonable cause to believe that his conduct was unlawful.
112. The decision of the directors as to whether the person acted
honestly and in good faith and with a view to the best interests of the
Guarantor and as to whether the person had no reasonable cause to believe
that his conduct was unlawful is, in the absence of fraud, sufficient for
the purposes of these Articles, unless a question of law is involved.
113. The Termination of any proceedings by any judgment, order,
settlement, conviction or the entering of a nolle prosequi does not, by
itself, create a presumption that the person did not act honestly and in
good faith and with a view to the best interests of the Guarantor or that
the person had reasonable cause to believe that his conduct was unlawful.
114. If a person to be indemnified has been successful in defense of any
proceedings referred to above the person is entitled to be indemnified
against all expenses, including legal fees, and against all judgments,
fines and amounts paid in settlement and reasonably incurred by the person
in connection with the proceedings.
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<PAGE>
115. The Guarantor may purchase and maintain insurance in relation to any
person who is or was a director, an officer or a liquidator of the
Guarantor or who at the request of the Guarantor is or was serving as a
director, an officer or a liquidator of, or in any other capacity is or was
acting for, another company or a partnership, joint venture, trust or other
enterprise, against any liability asserted against the person and incurred
by the person in that capacity, whether or not the Guarantor has or would
have had the power to indemnify the person against the liability as
provided in these Articles.
Section 57 of the British Virgin Islands International Business Companies
Ordinance provides as follows:
(1) Subject to subsection (2) and any limitations in its Memorandum or
Articles, a company incorporated under this Ordinance may indemnify against
all expenses, including legal fees, and against all judgments, fines, and
amounts paid in settlement and reasonably incurred in connection with
legal, administrative or investigative proceeding and person who
(a) is or was a party or is threatened to be made party to any
threatened, pending or completed proceedings, whether civil, criminal,
administrative or investigative, by reason of the fact that the person
is or was a director, an officer or a liquidator of the company; or
(b) is or was, at the request of the company, serving as a director,
officer or liquidator of, or in any other capacity is or was acting
for, another company or a partnership joint venture, trust or other
enterprise.
(2) Subsection (1) only applies to a person referred to in that
subsection if the person acted honestly and is good faith with a view to
the best interests of the company and, in the case of criminal proceedings,
the person had no reasonable cause to believe that his conduct was
unlawful.
(3) The decision of the directors as to whether the person acted honestly
and in good faith and with a view to the best interests of the company and
as to whether the person had no reasonable cause to believe that his
conduct was unlawful is in the absence of fraud, sufficient for the
purposes of this section, unless a question of law is involved.
(4) The termination of any proceedings by any judgment, order,
settlement, conviction or the entering of a nolle prosequi does not, by
itself, create a presumption that the person did not act honestly and in
good faith and with a view to the best interests of the company or that the
person had reasonable cause to believe that his conduct was unlawful.
(5) If a person referred to in subsection (1) has been successful in
defense of any proceedings referred to in subsection (1), the person is
entitled to be indemnified against all expenses, including legal fees, and
against all judgements, fines and amounts paid in settlement and reasonably
incurred by the person in connection with the proceedings.
In addition, Section 58 of the British Virgin Islands International Business
Companies Ordinance provides as follows:
A company incorporated under this Ordinance may purchase and maintain
insurance in relation to any person who is or was a director, an officer or
a liquidator of the company, or who at the request of the company is or was
serving as a director, an officer or a liquidator of, or in any other
capacity is or was acting for, another company or a partnership, joint
venture, trust or other enterprise, against any liability asserted against
the person and incurred by the person in that capacity, whether or not the
company has or would have had the power to indemnify the person against the
liability under subsection (1) of Section 57.
TOMMY HILFIGER U.S.A., INC.
The Certificate of Incorporation of the Company includes provisions for the
indemnification of directors and officers. Article SIXTH, Section 4 of the
Certificate of Incorporation reads as follows:
(4) No director shall be personally liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's
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duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of this
Article SIXTH by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at
the time of such repeal or modification with respect to acts or omissions
occurring prior to such repeal or modification.
The By-laws of the Company include provisions for the indemnification of
directors and officers. Article VIII of the By-laws reads as follows:
ARTICLE VIII
Indemnification
Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than
Those by or In the Right of the Corporation. Subject to Section 3 of this
Article VIII, The Corporation shall indemnify any person who was or is a party
or is threatened to be a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that 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, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit 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, officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation; except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under this
Article VIII (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification
of the director or officer is proper in the circumstances because he has met
the applicable standard conduct set forth in Section 1 or Section 2 of this
Article VIII, as the case may be. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (iii) by the
II-3
<PAGE>
stockholders. To the extent, however, that a director or officer of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe this conduct was
unlawful, if his action is based on the records or books of account of the
Corporation or another enterprise, or on information supplied to him by the
officers of the Corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Corporation or another enterprise. The term "another enterprise" as used
in this Section 4 shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such person
is or was serving at the request of the Corporation as a director or officer,
employee or agent. The provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any the circumstances in which a person may be deemed
to have met the applicable standard of conduct set forth in Sections 1 or 2 of
this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article VIII. The basis of such indemnification by a
court shall be a determination by such court that indemnification of the
director or officer is proper in the circumstances because he has met the
applicable standards of conduct set forth in Sections 1 or 2 of this Article
VIII, as the case may be. Neither a contrary determination in the specific
case under Section 3 of this Article VIII nor the absence of any determination
thereunder shall be a defense to such application or create a presumption that
the director or officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for indemnification pursuant to
this Section 5 shall be given to the Corporation promptly upon the filing of
such application. If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a director or
officer in defending or investigating a threatened or pending action, suit or
proceeding shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any By-Law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of
any court of competent jurisdiction or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to
the fullest extent permitted by law. The provisions of this Article VIII shall
not be deemed to preclude the indemnification of any person who is not
specified in Sections 1 or 2 of this Article VIII but whom the Corporation has
the power or obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a
II-4
<PAGE>
director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power or the
obligation to indemnify him against such liability under the provisions of
this Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued. For purposes of this Article VIII, references to
"fines" shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director or officer of the
Corporation which imposes duties on, or involves services by, such director or
officer with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to
in this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and administrators of
such a person.
In addition, Section 145 of the General Corporation Law of the State of
Delaware reads as follows:
(a) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interest of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation should have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person
II-5
<PAGE>
shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication or liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by a majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not
the corporation would have the power to indemnify such person against such
liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a
II-6
<PAGE>
director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such
person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
a manner "not opposed to the best interests of the corporation" as referred
to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligations to advance
expenses (including attorneys' fees).
Paragraph 7(b) of the Underwriting Agreement (filed as Exhibit 1.1 hereto)
provides that the Underwriters will indemnify and hold harmless the Guarantor
and the Company and each director, officer or controlling person of the
Guarantor and the Company from and against any liability caused by any
statement or omission in the Registration Statement or Prospectus based upon
certain information furnished in writing to the Guarantor and the Company by
the Underwriters for use in preparation thereof.
ITEM 16. EXHIBITS.
*1.1
Form of Underwriting Agreement Standard Provisions
2.1
Stock Purchase Agreement dated as of January 31, 1998 by and among Tommy
Hilfiger Corporation, Tommy Hilfiger U.S.A., Inc., Tommy Hilfiger
(Eastern Hemisphere) Limited and Pepe Jeans London Corporation
(incorporated by reference to Annex A to the Proxy Statement of Tommy
Hilfiger Corporation dated March 30, 1998)
*4.1
Form of Indenture among Tommy Hilfiger Corporation, Tommy Hilfiger
U.S.A., Inc. and The Chase Manhattan Bank, Trustee (including the form
of Debt Security)
*5.1
Opinion of Wachtell, Lipton, Rosen & Katz relating to the validity of
the Debt Securities
*5.2
Opinion of Harney, Westwood & Riegels, relating to the validity of the
Guarantees
*12.1
Statement re computation of ratio of earnings to fixed charges
*23.1
Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1)
*23.2
Consent of Harney, Westwood & Riegels (included in Exhibit 5.2)
*23.3
Consent of Price Waterhouse LLP, relating to the audited financial
statements of Tommy Hilfiger Corporation
*23.4
Consent of Price Waterhouse LLP, relating to the audited combined
financial statements of Pepe Jeans USA, Inc. and Pepe Jeans Far East
Limited
*23.5
Consent of Price Waterhouse, relating to the audited financial
statements of Tomcan Investments Inc. and Tommy Hilfiger Canada Inc.
*23.6
Consent of Ptack Schnarch Basevitz, relating to the audited financial
statements of Tommy Hilfiger Canada Inc.
**24.1
Powers of Attorney
**25.1
Form T-1 Statement of Eligibility of the Trustee
- --------
*Filed herewith
** Previously filed
II-7
<PAGE>
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement) shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(C) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specially incorporated by reference in the
prospectus to provide such interim financial information.
II-8
<PAGE>
(D) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TOMMY HILFIGER
CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE
3RD DAY OF APRIL, 1998.
Tommy Hilfiger Corporation
/s/ Benjamin M.T. Ng
By: _________________________________
NAME: BENJAMIN M.T. NG
TITLE: EVP--CORPORATE FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON APRIL 3, 1998 BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE CAPACITY
Chairman of the Board of Directors and
* Director
- -------------------------------------
(SILAS K. F. CHOU)
Honorary Chairman of the Board of
* Directors and Director
- -------------------------------------
(THOMAS J. HILFIGER)
Chief Executive Officer and President
* (principal executive officer) and
- ------------------------------------- Director
(JOEL J. HOROWITZ)
/s/ Benjamin M. T. Ng Executive Vice President--Corporate
- ------------------------------------- Finance (principal financial
(BENJAMIN M. T. NG) officer), Assistant Secretary and
Director
Director
*
- -------------------------------------
(LAWRENCE S. STROLL)
Director
*
- -------------------------------------
(RONALD K. Y. CHAO)
Director
*
- -------------------------------------
(LESTER M.Y. MA)
Director
- -------------------------------------
(JOSEPH M. ADAMKO)
Director
*
- -------------------------------------
(CLINTON V. SILVER)
Director
* -------------------------------------
(SIMON MURRAY)
Senior Vice President and Treasurer
* (principal accounting officer)
- -------------------------------------
(JOSEPH SCIROCCO)
*By: /s/ Benjamin M.T. Ng
- -------------------------------------
BENJAMIN M.T. NG, ATTORNEY-IN-FACT
II-10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TOMMY HILFIGER
U.S.A., INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE 3RD DAY OF
APRIL, 1998.
Tommy Hilfiger U.S.A., Inc.
/s/ Benjamin M.T. Ng
By: _________________________________
NAME: BENJAMIN M.T. NG
TITLE: EVP
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW ON APRIL 3, 1998 BY THE FOLLOWING PERSONS IN
THE CAPACITIES INDICATED.
SIGNATURE CAPACITY
Chairman of the Board of Directors and
* Director
- -------------------------------------
(SILAS K. F. CHOU)
Chief Executive Officer (principal
* executive officer) and Director
- -------------------------------------
(JOEL J. HOROWITZ)
Honorary Chairman of the Board and
* Director
- -------------------------------------
(THOMAS J. HILFIGER)
Director
*
- -------------------------------------
(LAWRENCE S. STROLL)
Senior Vice President and Chief
* Financial Officer (principal financial
- ------------------------------------- and accounting officer)
(JOSEPH SCIROCCO)
*By: /s/ Benjamin M.T. Ng
- -------------------------------------
BENJAMIN M.T. NG, ATTORNEY-IN-FACT
II-11
<PAGE>
EXHIBIT INDEX TO REGISTRATION STATEMENT ON FORM S-3
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
*1.1 Form of Underwriting Agreement Standard Provisions
2.1 Stock Purchase Agreement dated as of January 31, 1998 by and among
Tommy Hilfiger Corporation, Tommy Hilfiger U.S.A., Inc., Tommy
Hilfiger (Eastern Hemisphere) Limited and Pepe Jeans London
Corporation (incorporated by reference to Annex A to the Proxy
Statement of Tommy Hilfiger Corporation dated March 30, 1998)
*4.1 Form of Indenture among Tommy Hilfiger Corporation, Tommy Hilfiger
U.S.A., Inc. and The Chase Manhattan Bank, Trustee (including the form
of Debt Security)
*5.1 Opinion of Wachtell, Lipton, Rosen & Katz relating to the validity of
the Debt Securities
*5.2 Opinion of Harney, Westwood & Riegels, relating to the validity of the
Guarantees
*12.1 Statement re computation of ratio of earnings to fixed charges
*23.1 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1)
*23.2 Consent of Harney, Westwood & Riegels (included in Exhibit 5.2)
*23.3 Consent of Price Waterhouse LLP, relating to the audited financial
statements of Tommy Hilfiger Corporation
*23.4 Consent of Price Waterhouse LLP, relating to the audited combined
financial statements of Pepe Jeans USA, Inc. and Pepe Jeans Far East
Limited
*23.5 Consent of Price Waterhouse, relating to the audited financial
statements of Tomcan Investments Inc. and Tommy Hilfiger Canada Inc.
*23.6 Consent of Ptack Schnarch Basevitz, relating to the audited financial
statements of Tommy Hilfiger Canada Inc.
**24.1 Powers of Attorney
**25.1 Form T-1 Statement of Eligibility of the Trustee
</TABLE>
- --------
* Filed herewith
** Filed previously
<PAGE>
Exhibit 1.1
TOMMY HILFIGER U.S.A., INC.
DEBT SECURITIES
TOMMY HILFIGER CORPORATION
GUARANTOR
Form of Underwriting Agreement Standard Provisions
--------------------------------------------------
_______, 1998
From time to time, Tommy Hilfiger U.S.A., Inc., a Delaware corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities"). The Designated Securities shall be
guaranteed by Tommy Hilfiger Corporation (the "Guarantor") pursuant to a
Guarantee (the "Guarantee") attached to the Designated Securities.
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the Indenture, dated as of __________ ____, 1998, between the
Company, the Guarantor and The Chase Manhattan Bank, as Trustee (as it may be
amended or supplemented from time to time, the "Indenture").
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase any of the Securities. The obligation of
the Company to issue and sell any of the Securities and the obligation of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of
<PAGE>
2
such Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telecopied communications. The obligations
of the Underwriters under this Agreement and each Pricing Agreement shall be
several and not joint.
2. The Company and the Guarantor represent and warrant jointly and severally
to each of the Underwriters of Designated Securities under the Pricing Agreement
relating to such Designated Securities that:
(a) A registration statement on Form S-3 relating to the Securities and
the Guarantees and more particularly described in the applicable Pricing
Agreement has been filed with the Securities and Exchange Commission (the
"Commission") and has been declared effective by the Commission and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission. If any post-effective amendment to such registration
statement has been filed with the Commission prior to the date of the
applicable Pricing Agreement, the most recent such amendment has been
declared effective by the Commission. For purposes of this Agreement,
"Effective Date" means the date as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared
effective by the Commission. Such registration statement, as amended at
the Effective Date, including all material incorporated by reference
therein and, if the date of the Pricing Agreement is on or before the fifth
business day after the Effective Date, including all information deemed to
be a part thereof as of the Effective Date pursuant to paragraph (b) of
Rule 430A under the Securities Act of 1933, amended (the "Securities Act"),
is hereinafter referred to as the "Registration Statement," and the form of
prospectus relating to the Designated Securities, as first filed pursuant
to paragraph (1) or (4) of Rule 424(b) ("Rule 424(b)") under the Securities
Act or, if the date of the Pricing Agreement is after the fifth business
day after the Effective Date, pursuant to Rule 424(b)(2) or (5), as such
form of prospectus may be supplemented as contemplated by Section 1 to
reflect the terms of the Designated Securities and the terms of offering
thereof, including all documents
<PAGE>
3
incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
(b) Except for statements in such documents which do not constitute
part of the Registration Statement or the Prospectus pursuant to Rule 412,
and after substituting therefor any statements modifying or superseding
such excluded statements, on the Effective Date, the Registration Statement
conformed in all respects to the requirements of the Securities Act, the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and
regulations of the Commission ("Rules and Regulations") and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and on the date of the applicable Pricing Agreement, and at
the time of filing of the Prospectus pursuant to Rule 424(b) and on the
Closing Date, the Prospectus will conform in all respects to the
requirements of the Securities Act, the Trust Indenture Act and the Rules
and Regulations, and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that the foregoing does
not apply to statements in or omissions from any of such documents based
upon written information furnished to the Company in writing by or on
behalf of any Underwriter through the Representatives expressly for use
therein or to the part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of the
Trustee.
(c) The Guarantor, the Company and each of the corporations of which a
majority of the outstanding voting equity securities are owned, directly or
indirectly, by the Company (the "Subsidiaries") which would be "Significant
Subsidiaries" as such term is defined in Regulation S-X promulgated by the
Commission, as in effect on the date of this Agreement (the "Significant
Subsidiaries") have been duly incorporated and are validly existing as
corporations in good standing under the laws their respective jurisdictions
of incorporation, have the corporate power and authority to own their
property and to conduct their business as described in the Prospectus and
are duly qualified as a foreign corporation to transact business and are in
good standing in each jurisdiction in which the conduct of their respective
businesses or their 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
Guarantor and its Subsidiaries, taken as a whole.
(d) This Agreement and such Pricing Agreement has been duly authorized,
executed and delivered by the Guarantor and the Company.
<PAGE>
4
(e) The execution and delivery by the Guarantor and the Company of, and
the performance by each of the Guarantor and the Company of its obligations
under, this Agreement, such Pricing Agreement, the Indenture, the
Designated Securities and the Guarantees will not contravene any provision
of applicable law or the memorandum of association or certificate of
incorporation of the Guarantor or the Company or any agreement or other
instrument binding upon the Guarantor or Company or any of its Significant
Subsidiaries that is material to the Guarantor and its Subsidiaries, taken
as a whole, or any judgment, order, treaty or decree of any governmental
body, agency or court having jurisdiction over the Guarantor or the Company
or any Significant Subsidiary, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is required
for the performance by each of the Guarantor and the Company of its
obligations under this Agreement and such Pricing Agreement, except such as
have been obtained or may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Designated
Securities.
(f) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
business, financial position, stockholders' equity or results of operations
of the Guarantor and its Subsidiaries, taken as a whole, from that set
forth in the Prospectus.
(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Guarantor and the Company, threatened to which the
Guarantor or the Company or any of its Subsidiaries is a party or to which
any of the properties of the Guarantor or the Company or any of its
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(h) Each of the Guarantor and the Company and its Significant
Subsidiaries has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not have a material adverse effect
on the Guarantor and its Subsidiaries, taken as a whole.
<PAGE>
5
(i) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the rules and regulations
of the Commission thereunder.
(j) The Company, directly or through its Subsidiaries, is the owner of
record for the uses described in the Prospectus of the "TOMMY HILFIGER"
name, the Tommy Hilfiger red, white and blue flag logo and the Tommy
Hilfiger crest trademarks (the "Trademarks") in the United States and each
jurisdiction in which a material portion of its business is conducted and
neither the Company nor any of its Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, would reasonably be
expected to result in any material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(k) Each of the Guarantor and the Company has complied to the extent
necessary with all provisions of Florida H.B. 1771 and Section 517.075,
Florida Statutes (Chapter 93-198 Laws of Florida).
(l) The Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized by each of the Guarantor and the Company and,
when executed and delivered by the Guarantor, the Company and the Trustee,
will constitute a valid and binding agreement of each of the Guarantor and
the Company, enforceable against each of the Company and the Guarantor in
accordance with its terms (i) except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws relating to or affecting creditors' rights generally and (ii) subject
to the application of general principles of equity (regardless of whether
enforcement is considered in proceedings at law or in equity).
(m) The Designated Securities have been duly authorized and, when
executed and delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Pricing Agreement relating to such
Designated Securities (and assuming due authentication by the Trustee) will
be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms (i)
except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or
affecting creditors' rights generally and (ii) subject to the application
of general principles of equity (regardless of whether enforcement is
considered in proceedings at law or in equity).
<PAGE>
6
(n) The Guarantees have been duly authorized and, when the Designated
Securities (with the Guarantees endorsed thereon) are executed and
delivered to the Underwriters and paid for by the Underwriters in
accordance with the terms of this Agreement and the Pricing Agreement
relating thereto, the Guarantees will be valid and binding obligations of
the Guarantor, enforceable in accordance with their (i) terms except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
creditors' rights generally and (ii) subject to the application of general
principles of equity (regardless of whether enforcement is considered in
proceedings at law or in equity).
(o) Neither the Guarantor nor the Company is an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of such
Designated Securities, the several Underwriters propose to offer such Designated
Securities upon the terms and conditions set forth in the Prospectus as amended
or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in definitive form or temporary form, and
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full business days prior to the Closing
Date, shall be delivered to the Representatives on the Closing Date for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Designated Securities to the Underwriters
duly paid, against payment by such Underwriter or on its behalf of the purchase
price therefor by wire transfer of immediately available funds to an account
specified in writing by the Company, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives designate in writing (such time and date being referred to
as the "Closing Date").
5. The several obligations of the Underwriters of Designated Securities under
the Pricing Agreement relating to such Designated Securities are subject to the
following conditions:
(a) Subsequent to the execution and delivery of such Pricing 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 ratings
<PAGE>
7
watch with negative implications, in the rating accorded any of the
Company's securities by any of Standard & Poor's Rating Service,
Moody's Investors Service, Inc., Duff & Phelps Inc. or Fitch Investors
Service, Inc.; and
(ii) there shall not have occurred any material adverse change, or
any development involving a prospective material adverse change, in
the business, financial position, stockholders' equity or results of
operations of the Guarantor and its Subsidiaries, taken as a whole,
since the respective dates of which information is given in the
Prospectus that makes it, in the Representatives' reasonable judgment,
impracticable to market the Designated Securities on the terms and in
the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect that the representations and warranties of the
Company contained in this Agreement and such Pricing Agreement are true and
correct in all material respects as of the Closing Date and that the
Company has complied in all material respects with all of the agreements on
its part to be performed hereunder on or before the Closing Date. The
officer signing and delivering such certificate may rely upon the best of
his knowledge as to proceedings threatened.
(c) The Representatives shall have received on the Closing Date an
opinion of Wachtell, Lipton, Rosen & Katz, counsel to the Company and U.S.
counsel to the Guarantor, dated the Closing Date, to the effect that:
i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware;
ii) The Company has full corporate power and authority to enter
into this Agreement and such Pricing Agreement and to sell, transfer
and deliver the Designated Securities hereunder, and the execution and
delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement and such Pricing Agreement will not
contravene any provision of the Certificate of Incorporation of the
Company;
iii) To the best of such counsel's knowledge, without independent
investigation other than inquiries of the Chief Executive Officer, the
Chief Operating Officer, an Executive Vice President and the Vice
President-Corporate Affairs (the "Responsible Officers"), including
any documentation received by
<PAGE>
8
such counsel in response to such inquiries, and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending or threatened to which the Guarantor or any of its
Subsidiaries is a party or of which any property or assets of the
Guarantor or any of its Subsidiaries is the subject that are required
to be described in the Registration Statement or the Prospectus and
are not so described;
iv) Such counsel has been advised by the staff of the Commission
that the Registration Statement was declared effective under the
Securities Act as of the date and time specified in the opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) under the Securities Act specified in such opinion on
the date specified therein and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act or proceedings therefor initiated
or threatened by the Commission;
v) The Designated Securities have been duly authorized, executed
and delivered by the Company and, when duly authenticated in
accordance with the terms of the Indenture and delivered and paid for
by the Underwriters in accordance with the Pricing Agreement, will
constitute valid and legally binding instruments of the Company
enforceable against the Company in accordance with their terms
entitled to the benefits provided by the Indenture, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is considered in proceedings at law or in equity);
vi) Assuming that (1) the Guarantor is validly existing and in good
standing under the laws of the British Virgin Islands and has duly
authorized, executed and delivered the Guarantees in accordance with
its memorandum and articles of association, (2) execution, delivery
and performance by the Guarantor of the Guarantees do not violate the
laws of the British Virgin Islansd or any other applicable laws
(excepting the laws of the State of New York and the Federal laws of
the United States) and (3) execution, delivery and performance by the
Guarantor of the Guarantees do not constitute a breach or violation of
any agreement or instrument which is binding upon the Guarantor, the
Guarantees constitute the valid and legally binding obligations of the
Guarantor, enforceable against the Guarantor in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
<PAGE>
9
relating to or affecting creditors' rights and to general equity
principles (regardless of whether enforcement is considered in
proceedings at law or in equity);
vii) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation,
enforceable against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally and to general equity principles (regardless of whether
enforcement is considered in proceedings at law or in equity); the
Indenture has been duly qualified under the Trust Indenture Act;
viii) Assuming that (1) the Guarantor is validly existing and in
good standing under the laws of the British Virgin Islands and has
duly authorized, executed and delivered the Indenture in accordance
with its memorandum and articles of association, (2) execution,
delivery and performance by the Guarantor of the Indenture does not
violate the laws of the British Virgin Islands or any other applicable
laws (excepting the laws of the State of New York and the Federal laws
of the United States) and (3) execution, delivery and performance by
the Guarantor of the Indenture does not constitute a breach or
violation of any agreement or instrument which is binding upon the
Guarantor, the Indenture constitutes the valid and legally binding
obligations of the Guarantor, enforceable against the Guarantor in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforcement is
considered in proceedings at law or in equity);
ix) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules and notes and other financial, accounting or
statistical data therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder;
x) The Designated Securities, the Guarantees and the Indenture
conform in all material respects to the descriptions thereof in the
Prospectus as amended or supplemented;
<PAGE>
10
xi) The Registration Statement, the Prospectus and any further
amendments or supplements thereto made by the Company prior to the
Closing Date (other than the financial statements and related
schedules and notes and other financial, accounting or statistical
data therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the
Securities Act and the rules promulgated thereunder;
xii) To the best of such counsel's knowledge, without independent
investigation other than inquiries of the Responsible Officers,
including any documentation received by such counsel in response to
such inquiries, there are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the rules and
regulations promulgated thereunder which have not been described or
filed as exhibits to the Registration Statement or incorporated
therein by reference as permitted by such rules and regulations;
xiii) The issue and sale of the Designated Securities being
delivered on the Closing Date by the Company, the issue of the
Guarantees being delivered on the Closing Date by the Guarantor and
the compliance by the Guarantor and the Company with all of the
provisions of the Designated Securities, the Guarantees, the
Indenture, this Agreement and such Pricing Agreement and the
consummation of the transactions contemplated hereby and thereby will
not result in any violation of any applicable U.S. or New York State
statute, order, rule or regulation in each case which, in such
counsel's experience, are normally applicable to transactions of the
type provided for in the Designated Securities, the Guarantees, the
Indenture, this Agreement and such Pricing Agreement, or, to such
counsel's knowledge, any agreement or other instrument binding upon
the Guarantor or any of its Subsidiaries that is material,
individually or in the aggregate, to the Guarantor and its
Subsidiaries, taken as a whole, which, after due inquiry, has been
expressly identified in writing (included in a list attached to this
opinion) to such counsel by the Guarantor or the Company or, to such
counsel's knowledge, any judgment, order, treaty or decree of any
federal or New York governmental body, agency or court having
jurisdiction over the Guarantor or the Company or any Subsidiary
which, after due inquiry, has been expressly identified in writing
(included in a list attached to this opinion) to such counsel by the
Guarantor or the Company, and no consent, approval, authorization or
order of or qualification with any
<PAGE>
11
U.S. or New York governmental body or agency is required for the
performance by each of the Guarantor and the Company of its
obligations under the Designated Securities, the Guarantees, the
Indenture, this Agreement and such Pricing Agreement, except in any of
the foregoing cases 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 Designated Securities by the Underwriters and the securities
laws of any jurisdiction outside the United States in which the
Designated Securities are offered and sold, as to which such counsel
need express no opinion, and the federal securities laws, which are
addressed in subparagraph (v) hereof; and
xiv) This Agreement and such Pricing Agreement has been duly
authorized, executed and delivered by the Company.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the General Corporation Law
of the State of Delaware. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated the Closing Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as U.S.
counsel to the Guarantor and the Company in connection with the preparation
of the Registration Statement, has participated in conferences with certain
officers of the Guarantor and the Company, the independent public
accountants of the Guarantor and the Company and other representatives of
the Guarantor and the Company and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead them to believe that the
Registration Statement (except for financial statements and schedules and
notes and other financial, accounting or statistical data as to which such
counsel need express no belief), as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (except for financial
statements and schedules and notes and other financial, accounting or
statistical data as to which such counsel need express no belief), contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and are without
independent verification.
<PAGE>
12
(d) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated the
Closing Date for such Designated Securities and Guarantees, with respect to
the incorporation of the Company, the validity of the Indenture, the
Designated Securities, the Guarantees, the Registration Statement, the
Prospectus as amended or supplemented and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
The opinion of Wachtell, Lipton, Rosen & Katz described in paragraph (c)
above shall be rendered to the Representatives at the request of the
Company and shall so state therein. Wachtell, Lipton, Rosen & Katz and
Simpson Thacher & Bartlett may state that, insofar as their opinions
involve factual matters, they have relied to the extent they deem proper
upon certificates of the Guarantor, the Company and any of its Subsidiaries
and certificates of public officials.
(e) The Representatives shall have received on the Closing Date an
opinion of Harney, Westwood & Riegels, British Virgin Islands counsel to
the Guarantor, dated the Closing Date, to the effect that:
i) The Guarantor has been duly incorporated and is validly existing
as a company limited by shares in good standing under the laws of the
British Virgin Islands, and has the corporate power and authority
necessary to own its properties and conduct its businesses;
ii) The Guarantor has full right, power and authority to enter into
this Agreement and such Pricing Agreement and to deliver the
Guarantees hereunder, and the execution and delivery by the Guarantor
of, and the performance by the Guarantor of its obligations under,
this Agreement and such Pricing Agreement will not contravene any
provision of the Memorandum of Association of the Guarantor;
iii) The Guarantees have been duly authorized, executed, issued and
delivered by the Guarantor and, upon payment and delivery of the
Designated Securities (with the Guarantees endorsed thereon) in
accordance with the Pricing Agreement, the Guarantees will constitute
valid and legally binding obligations of the Guarantor enforceable
against the Guarantor in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
<PAGE>
13
iv) The Indenture has been duly authorized, executed and delivered
by the Guarantor;
v) The Guarantees being delivered on the Closing Date by the
Company and the compliance by the Guarantor with all of the provisions
of the Guarantees, the Indenture, this Agreement and such Pricing
Agreement and the consummation of the transactions contemplated hereby
and thereby will not result in any violation of any applicable British
Virgin Islands statute, order, rule or regulation in each case which,
in such counsel's experience, are normally applicable to transactions
of the type provided for in the Guarantees, the Indenture, this
Agreement and such Pricing Agreement, or, to such counsel's knowledge,
any judgment, order, treaty or decree of any British Virgin Islands
governmental body, agency or court having jurisdiction over the
Guarantor or any Subsidiary which, after due inquiry, has been
expressly identified in writing (included in a list attached to this
opinion) to such counsel by the Guarantor, and no consent, approval,
authorization or order of or qualification with any British Virgin
Islands governmental body or agency is required for the performance by
the Guarantor of its obligations under the Guarantees, the Indenture,
this Agreement and such Pricing Agreement;
vi) This Agreement and such Pricing Agreement has been duly
authorized, executed and delivered by the Guarantor;
vii) The statements contained in the Prospectus under the caption
"Enforceability of Civil Liabilities and Related Matters" insofar as
they purport to constitute a description of the laws and regulations
of the British Virgin Islands, or its respective agencies, authorities
or other governmental or quasi-governmental bodies or conclusions of
British Virgin Islands law, constitutes an accurate description of
British Virgin Islands law in all material respects;
viii) The Guarantor has the power insofar as British Virgin Islands
law is concerned to submit, and pursuant to this Agreement has
legally, validly, effectively and irrevocably submitted, to the
jurisdiction of any federal or state court in the State of New York,
County of New York, and has the power to designate, appoint and
empower and pursuant to this Agreement has legally, validly,
effectively and irrevocably designated, appointed and empowered an
agent for service of process in any suit or proceeding based on or
arising under this Agreement or the Pricing Agreement in any federal
or state court in the State of
<PAGE>
14
New York, County of New York as provided in Paragraphs 10 and 12
hereof;
ix) Under the laws of the British Virgin Islands, the Underwriters
would be permitted to commence actions or proceedings in British
Virgin Islands courts of competent jurisdiction based upon this
Agreement or the Pricing Agreement, and such courts would accept
jurisdiction over any such action or proceeding and would give effect
to the choice of the internal laws of the State of New York to govern
this Agreement; and
x) Neither the Underwriters nor any holder of Designated Securities
will become subject to any income, franchise or other tax imposed by a
governmental authority of the British Virgin Islands solely by reason
of the transactions contemplated by the Designated Securities, the
Guarantees, the Indenture, this Agreement and the Pricing Agreement
and the execution, delivery and performance of the Designated
Securities, the Guarantees, the Indenture, this Agreement and the
Pricing Agreement, and the transactions contemplated hereby and
thereby will not require the payment of any registration charge or
stamp or similar tax imposed by any Governmental Authority of the
British Virgin Islands.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the laws of the British Virgin Islands.
(f) The Representatives shall have received, on the Closing Date, a
letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to the Representatives, from Price
Waterhouse 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 and incorporated in the
Registration Statement and the Prospectus.
(g) The Guarantees shall be in full force and effect.
6. In further consideration of the agreements of the Underwriters herein
contained, the Guarantor and the Company jointly and severally covenant as
follows:
(a) To advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and to afford the
Representatives a reasonable opportunity to comment on any such proposed
amendment or supplement and not to file such proposed amendment or
supplement if the Representatives reasonably object other than an amendment
or supplement required to
<PAGE>
15
comply with law; to file the Prospectus as amended and supplemented in
accordance with Rule 424(b) and to advise the Representatives promptly of
any such filing; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or become
effective or any supplement to the Prospectus or any amended Prospectus has
been filed, or mailed for filing, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish to the Representatives, without charge, three signed
copies of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as the
Representatives may reasonably request.
(c) If, during such period after the first date of the public offering
of the Designated Securities as in the opinion of the Representatives'
counsel the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company) to
which Designated Securities may have been sold by the Representatives on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements
<PAGE>
16
to the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To take such actions as the Representatives may reasonably request
to qualify the Designated Securities for offer and sale under the
securities or Blue Sky laws of such states as the Representatives shall
reasonably request and to pay all expenses (including reasonable fees and
disbursements of counsel) in connection with such qualification and in
connection with any review of the offering of the Designated Securities by
the National Association of Securities Dealers, Inc.; provided that the
--------
Company shall not be obligated so to qualify the Designated Securities if
such qualification requires it to subject itself to any material additional
tax liabilities, to file a general consent to service of process or to
register to qualify as a foreign corporation in any jurisdiction in which
it is not so registered or qualified.
(e) To make generally available to the Company's security holders and
to the Representatives as soon as practicable an earning statement covering
the twelve-month period from the later of the effective date of the
Registration Statement and the effective date of any post-effective date of
any post-effective amendment that satisfies the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder.
(f) To pay or cause to be paid (i) all taxes, if any, on the transfer
and sale of the Designated Securities being delivered to the Underwriters
pursuant to this Agreement and the Pricing Agreement relating to such
Designated Securities and (ii) all costs and expenses incident to the
performance of the obligations of the Guarantor and the Company under this
Agreement and such Pricing Agreement, including, but not limited to, all
expenses incident to the delivery of the Designated Securities, the fees
and expenses of counsel and accountants for the Company, the costs and
expenses incident to the preparation, printing and filing of the
Registration Statement (including all exhibits thereto) and the Prospectus
and any amendments or supplements thereto, the expenses of qualifying the
Designated Securities under the securities or Blue Sky laws of various
jurisdictions (including reasonable fees and expenses of counsel to the
Underwriters related thereto), and the cost of furnishing to the
Underwriters the required copies of the Registration Statement and
Prospectus and any amendments or supplements thereto.
7. (a) The Guarantor and the Company agree, jointly and severally, to
indemnify and hold harmless each Underwriter and
<PAGE>
17
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, subject to the provisions of the second following paragraph, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company or the Guarantor shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company or the Guarantor by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Designated Securities;
provided, however, that the foregoing indemnity agreement with respect to any
- -------- -------
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Designated Securities, or any person controlling such Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Company or the
Guarantor shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Designated Securities to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Guarantor, Company, the directors of the Company and the
Guarantor, the officers of the Company and the Guarantor who sign the
Registration Statement and each person, if any, who controls the Company or the
Guarantor within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Underwriter, but only with reference to the information
furnished to the Company or the Guarantor in writing by such Underwriter through
the Representatives expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified
<PAGE>
18
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more 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. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case of
any such separate firm for the Guarantor, the Company, such directors, officers
and control persons of the Guarantor and the Company, such firm shall be
designated in writing by the Company. 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 clause (ii) of the second
sentence 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 in good faith more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) the
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) 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 a party or is or has been threatened to have been made a
party and indemnity could reasonably have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from
<PAGE>
19
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in the first or second
paragraph of this Paragraph 7 to an indemnified party is unavailable or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein (other than by reason of the exceptions set forth 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 indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Designated Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties 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 Guarantor and the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Designated Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Designated Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Designated Securities. The relative fault of the Guarantor and the Company on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Guarantor, the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Paragraph 7
are several in proportion to the respective number of Designated Securities they
have purchased hereunder, and not joint.
(e) The Guarantor, the Company and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Paragraph 7 were
determined by pro rata allocation (even if the Underwriters were treated as
--- ----
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding
<PAGE>
20
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Paragraph 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Designated Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Paragraph 7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Paragraph 7 and the representations and warranties contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Guarantor or the Company, the officers or directors or any person
controlling the Guarantor or the Company and (iii) acceptance of and payment for
any of the Designated Securities.
8. Each Pricing Agreement shall be subject to termination by notice given by
the Representatives to the Guarantor and the Company, if (a) after the execution
and delivery of such Pricing Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Guarantor or the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the Representatives' reasonable
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event singly or together with any
other such event makes it, in the Representatives' reasonable judgment,
impracticable to market the Designated Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase Designated Securities that it or they have agreed to purchase
hereunder on
<PAGE>
21
such date, and the aggregate number of Designated Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Designated Securities
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Designated Securities set forth
opposite their respective names in Schedule I of the applicable Pricing
Agreement bears to the aggregate number of Designated Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representatives may specify, to purchase the Designated
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the number
--------
of Designated Securities that any Underwriter has agreed to purchase pursuant to
Schedule I of the applicable Pricing Agreement be increased pursuant to this
Paragraph 9 by an amount in excess of one-ninth of such number of Designated
Securities without the written consent of such Underwriter. If, on the Closing
Date any Underwriter or Underwriters shall fail or refuse to purchase Designated
Securities under the Pricing Agreement relating to such Designated Securities
and the aggregate number of Designated Securities with respect to which such
default occurs is more than one-tenth of the aggregate number of Designated
Securities to be purchased on such date, and arrangements satisfactory to the
Representatives and the Guarantor and the Company for the purchase of such
Designated Securities are not made within 36 hours after such default, the
Pricing Agreement relating to such Designated Securities shall terminate without
liability on the part of any non-defaulting Underwriter or the Guarantor and the
Company. In any such case either the Representatives or the Guarantor or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement or such Pricing Agreement.
If any Pricing Agreement shall be terminated by the Underwriters of Designated
Securities under such Pricing Agreement because of any failure or refusal on the
part of the Guarantor or the Company to comply with the terms or to fulfill any
of the conditions of such Pricing Agreement, or if for any reason the Guarantor
or the Company shall be unable to perform its obligations under such Pricing
Agreement, the Guarantor and the Company will reimburse the Underwriters or such
Underwriters as have so terminated such Pricing Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with such Pricing Agreement or the Offering contemplated hereunder.
10. (a) Each of the parties hereto consents to the
<PAGE>
22
jurisdiction of and venue in federal and state courts located in the Borough of
Manhattan, City and State of New York, over any suit, action or proceeding with
respect to this Agreement.
(b) This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of New York.
(c) The provisions of this Paragraph 10 shall survive the termination
of this Agreement or any Pricing Agreement, in whole or in part.
11. The Guarantor and the Company shall indemnify each Underwriter against
any loss incurred by it as a result of any judgment or order being given or made
against the Guarantor and the Company and expressed and paid in a currency (the
"Judgment Currency") other than U.S. Dollars and as a result of any variation as
between (i) the rate of exchange at which the U.S. dollar amount is converted
into the Judgment Currency for the purpose of such judgment or order and (ii)
the spot rate of exchange in New York, New York at which such Underwriter on the
date of payment of such judgment or order is able to purchase U.S. dollars with
the amount of the Judgment Currency actually received by such Underwriter. If
the U.S. dollars so purchased are greater than the amount originally due to such
Underwriter hereunder, such Underwriter agrees to pay to the Guarantor and the
Company an amount equal to the excess of the U.S. dollars so purchased over the
amount originally due to such Underwriter hereunder. The foregoing indemnities
shall constitute a separate and independent obligation of the Guarantor and the
Company or the Underwriters, as the case may be, and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, U.S. dollars.
The provisions of this Paragraph 11 shall survive any termination of this
Agreement or any Pricing Agreement, in whole or in part.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be sufficient in all respects if
delivered or sent by registered mail to the address of the Representatives as
set forth in the Pricing Agreement; and if to the Company shall be sufficient in
all respects if delivered or sent by registered mail to Tommy Hilfiger U.S.A.,
Inc., 25 West 39th Street, New York, New York 10018, Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Paragraph 7(c) hereof shall be delivered or sent by registered mail to such
<PAGE>
23
Underwriter at the address set forth in the Pricing Agreement.
The Guarantor hereby irrevocably and unconditionally designates and directs
the Company with offices on the date hereof at 25 West 39th Street, New York,
New York 10018, as its agent to receive service of any and all process and
documents on its behalf in any legal action or proceeding referred to in
paragraph (a) of Paragraph 10 in the State of New York and agrees that service
upon such agent shall constitute valid and effective service upon the Guarantor
and that failure of the Company to give any notice of such service to such
parties shall not affect or impair in any way the validity of such service or of
any judgment rendered in any action or proceeding based thereon and (ii) agrees
to appoint, on terms and conditions satisfactory to the Representatives, a
successor agent to receive service of process on or prior to the termination for
any reason of the appointment of the Company (or any successor agent) as agent
to receive service of process.
The Guarantor hereby irrevocably and unconditionally agrees that service of
process in any such action or proceeding may also be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Company at its address set forth in the
Registration Statement.
13. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
---------------
<PAGE>
ANNEX I
PRICING AGREEMENT
-----------------
[ INSERT NAME ],
As Representatives of the several
Underwriters named in Schedule I hereto,
[Insert Address]
____________, 199__
Dear Sirs:
Tommy Hilfiger U.S.A., Inc. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement Standard Provisions
filed as an exhibit to the Company's registration statement on Form S-3 (No.
333-48355/48355-01) (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). The Designated
Securities shall be guaranteed by Tommy Hilfiger Corporation pursuant to a
Guarantee attached to the Designated Securities. Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
with respect to the Prospectus in Paragraph 2 of the Underwriting Agreement
shall be deemed to be a representation or warranty as of the date of the
Underwriting Agreement in relation to the Prospectus (as therein defined), and
also a representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Paragraph 12 of the Underwriting Agreement and the
address of the Representatives referred to in such Paragraph 12 are set forth at
the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Securities, in the form
heretofore delivered to the Representatives is now proposed be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference,
<PAGE>
the Company agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the principal amount of Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement among each of the Underwriters,
the Guarantor and the Company.
Very truly yours,
TOMMY HILFIGER U.S.A., INC.
BY:
-----------------------------------
TOMMY HILFIGER CORPORATION
BY:
-----------------------------------
Accepted as of the date hereof:
[ Insert Name ]
By:
-------------------------------------
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
UNDERWRITER PRINCIPAL AMOUNT OF
- ----------- DESIGNATED SECURITIES
TO BE PURCHASED
---------------------
[Names of Underwriters............... $
------------
$
Total................................ ============
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes] [Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
$
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus
accrued interest from to [and accrued
amortization, if any, from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus
accrued interest, if any, from to [and accrued
amortization, if any, from to ]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[Federal/Immediately Available] funds
INDENTURE:
Indenture, dated as of , between the Company and The Chase
Manhattan Bank, as Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates]
REGULAR RECORD DATES:
[months and dates]
REDEMPTION PROVISIONS:
[The Designated Securities may be redeemed upon certain changes in tax
law as specified in Section 1305 of the Indenture]
[No other provisions for redemption]
<PAGE>
[The Designated Securities may also be redeemed, otherwise than through
the sinking fund, in whole or in part at the option of the Company, in
the amount of $ or an integral multiple thereof,
[on or after , at the following redemption prices
(expressed in percentages of principal amount).] If [redeemed on or
before , %, and if] redeemed during the 12-month period
beginning
YEAR REDEMPTION
---- PRICE
-----
<PAGE>
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire $ principal amount of Designated Securities on in each of the
years through at 100% of their principal amount plus accrued
interest] [, together with [cumulative] [noncumulative] redemptions at the
option of the Company to retire an additional $ principal amount of
Designated Securities in the years through at 100% of their principal
amount plus accrued interest].
[If Securities are extendable Debt Securities, insert --
EXTENDABLE PROVISIONS:
Securities are repayable on , [insert date and years], at
the option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be %, and thereafter annual interest
rate will be adjusted on , and to a rate not
less than % of the effective annual interest rate on U.S. Treasury
obligations with -year maturities as of the [insert date 15 days prior
to maturity date] prior to such [insert maturity date].]
[If Securities are Floating Rate Debt Securities, insert --
FLOATING RATE PROVISIONS:
<PAGE>
Initial annual interest rate will be % through
[and thereafter will be adjusted [monthly] [on each ,
and ] [to an annual rate of % above the average rate
for -year [month] [securities] [certificates of deposit] by
and [insert names of banks].] [and the annual interest
rate [thereafter] [from, through ] will be the
interest yield equivalent of the weekly average per annum market
discount rate for -month Treasury bills plus % of Interest
Differential (the excess, if any, of (i) then current weekly average per
annum secondary market yield for -month certificates of deposit over
(ii) then current interest yield equivalent of the weekly average per
annum market discount rate for -month Treasury bills); from and
thereafter the rate will be the then current interest yield equivalent
plus % of Interest Differential].]
OTHER:
[If a Tax Section is contained in the Prospectus Supplement for the
Offering of Designated Securities -- Opinion of British Virgin Islands
counsel as to British Virgin Islands tax consequences, if applicable.]
TIME OF DELIVERY:
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
<PAGE>
EXHIBIT 4.1
FORM OF
- --------------------------------------------------------------------------------
TOMMY HILFIGER U.S.A., INC.
Issuer
TOMMY HILFIGER CORPORATION
Guarantor
and
THE CHASE MANHATTAN BANK
Trustee
_______________
INDENTURE
Dated as of ______ __, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
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Recitals of the Company................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application......................... 1
Section 101. Definitions........................................... 1
Act................................................... 2
Affiliate............................................. 2
Attributable Debt..................................... 2
Authenticating Agent.................................. 2
Bankruptcy Law........................................ 2
Board of Directors.................................... 3
Board Resolution...................................... 3
Business Day.......................................... 3
Canada Loan Agreement................................. 3
Capitalized Lease Obligations......................... 3
Commission............................................ 3
Company............................................... 3
Company Request....................................... 3
Company Order......................................... 3
Consolidated Stockholders Equity...................... 3
Corporate Trust Office................................ 3
corporation........................................... 4
Custodian............................................. 4
Defaulted Interest.................................... 4
Event of Default...................................... 4
Exempted Debt......................................... 4
Foreign Currency...................................... 4
Foreign Government Securities......................... 4
Funded Debt........................................... 4
Global Note........................................... 5
Guarantee............................................. 5
Guarantor............................................. 5
Holder................................................ 5
Indebtedness.......................................... 5
Indenture............................................. 5
interest.............................................. 5
Interest Payment Date................................. 5
Lien.................................................. 6
Market Exchange Rate.................................. 6
Maturity.............................................. 6
Officers' Certificate................................. 6
Opinion of Counsel.................................... 7
Original Issue Discount Security...................... 7
Outstanding........................................... 7
Paying Agent.......................................... 8
Periodic Offering..................................... 8
Permitted Liens....................................... 8
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Person................................................ 9
Place of Payment...................................... 9
Predecessor Security.................................. 10
Redemption Date....................................... 10
Redemption Price...................................... 10
Regular Record Date................................... 10
Responsible Officer................................... 10
Restricted Subsidiary................................. 10
Securities............................................ 10
Securities Exchange Act of 1934....................... 10
Security Register..................................... 10
Security Registrar.................................... 10
Senior Funded Debt.................................... 10
Special Record Date................................... 11
Specified Indebtedness................................ 11
Stated Maturity....................................... 11
Subordinated Funded Debt.............................. 11
Subsidiary............................................ 13
TIA................................................... 13
Trustee............................................... 13
Trust Indenture Act................................... 13
U.S. Depositary....................................... 13
U.S. Government Obligations........................... 14
Vice President........................................ 14
Wholly-owned Restricted Subsidiary.................... 14
Section 102. Compliance Certificates and Opinions.................. 14
Section 103. Form of Documents Delivered to Trustee................ 15
Section 104. Acts of Holders....................................... 15
Section 105. Notices, Etc., to Trustee, Company and
Guarantor............................................. 16
Section 106. Notice to Holders; Waiver............................. 17
Section 107. Conflict with Trust Indenture Act..................... 17
Section 108. Effect of Headings and Table of Contents.............. 17
Section 109. Successors and Assigns................................ 17
Section 110. Separability Clause................................... 17
Section 111. Benefits of Indenture................................. 18
Section 112. Governing Law......................................... 18
Section 113. Legal Holidays........................................ 18
ARTICLE TWO
Security Forms............................ 18
Section 201. Forms Generally....................................... 18
Section 202. Form of Face of Security.............................. 19
Section 203. Form of Reverse of Security........................... 21
Section 204. Additional Provisions Required in Global
Notes................................................. 26
Section 205. Form of Trustee's Certificate of
Authentication........................................ 26
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ARTICLE THREE
The Securities............................ 26
Section 301. Amount Unlimited; Issuable in Series.................. 26
Section 302. Denominations......................................... 29
Section 303. Execution, Authentication, Delivery and
Dating................................................ 29
Section 304. Temporary Securities.................................. 31
Section 305. Registration, Registration of Transfer
and Exchange.......................................... 34
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities............................................ 35
Section 307. Payment of Interest; Interest Rights
Preserved............................................. 36
Section 308. Persons Deemed Owners................................. 37
Section 309. Cancellation.......................................... 37
Section 310. Computation of Interest............................... 38
Section 311. Judgments............................................. 38
ARTICLE FOUR
Satisfaction and Discharge....................... 39
Section 401. Satisfaction and Discharge of Indenture............... 39
Section 402. Application of Trust Funds;
Indemnification....................................... 40
Section 403. Satisfaction, Discharge and Defeasance
of Securities of any Series........................... 41
ARTICLE FIVE
Remedies............................... 43
Section 501. Events of Default..................................... 43
Section 502. Acceleration of Maturity; Rescission and
Annulment............................................. 45
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee................................ 47
Section 504. Trustee May File Proofs of Claim...................... 48
Section 505. Trustee May Enforce Claims Without
Possession of Securities.............................. 48
Section 506. Application of Money Collected........................ 49
Section 507. Limitation on Suits................................... 49
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest............... 50
Section 509. Restoration of Rights and Remedies.................... 50
Section 510. Rights and Remedies Cumulative........................ 50
Section 511. Delay or Omission Not Waiver.......................... 51
Section 512. Control by Holders.................................... 51
Section 513. Waiver of Past Defaults............................... 52
Section 514. Undertaking for Costs................................. 52
Section 515. Waiver of Stay or Extension Laws...................... 53
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ARTICLE SIX
The Trustee............................. 53
Section 601. Certain Duties and Responsibilities................... 53
Section 602. Notice of Defaults.................................... 54
Section 603. Certain Rights of Trustee............................. 55
Section 604. Not Responsible for Recitals or Issuance
of Securities......................................... 56
Section 605. May Hold Securities................................... 56
Section 606. Money Held in Trust................................... 56
Section 607. Compensation and Reimbursement........................ 56
Section 608. Disqualification; Conflicting Interests............... 57
Section 609. Corporate Trustee Required; Eligibility............... 63
Section 610. Resignation and Removal; Appointment of
Successor............................................. 64
Section 611. Acceptance of Appointment by Successor................ 65
Section 612. Merger, Conversion, Consolidation or
Succession to Business................................ 67
Section 613. Preferential Collection of Claims
Against Company....................................... 67
Section 614. Appointment of Authenticating Agent................... 71
Section 615. Investment of Certain Payments Held by
the Trustee........................................... 73
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company............... 74
Section 701. Company to Furnish Trustee Names and
Addresses of Holders.................................. 74
Section 702. Preservation of Information;
Communications to Holders............................. 74
Section 703. Reports by Trustee.................................... 76
Section 704. Reports by Guarantor.................................. 77
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease............ 78
Section 801. Company May Consolidate, Etc., Only on Certain Terms.. 78
Section 802. Successor Corporation Substituted..................... 79
ARTICLE NINE
Supplemental Indentures........................ 79
Section 901. Supplemental Indentures Without Consent
of Holders............................................ 79
Section 902. Supplemental Indentures with Consent of
Holders............................................... 80
Section 903. Execution of Supplemental Indentures................. 81
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Section 904. Effect of Supplemental Indentures..................... 82
Section 905. Conformity with Trust Indenture Act................... 82
Section 906. Reference in Securities to Supplemental
Indentures............................................ 82
ARTICLE TEN
Covenants.............................. 82
Section 1001. Payment of Principal, Premium and
Interest.............................................. 82
Section 1002. Maintenance of Office or Agency....................... 82
Section 1003. Money for Securities Payments to Be Held
in Trust.............................................. 83
Section 1004. Corporate Existence................................... 85
Section 1005. Maintenance of Properties............................. 85
Section 1006. Payment of Taxes and Other Claims..................... 85
Section 1007. Limitation Upon Liens................................. 85
Section 1008. Limitation Upon Sale and Leaseback
Transactions.......................................... 86
Section 1009. Restriction on Indebtedness of
Restricted Subsidiaries............................... 87
Section 1010. Defeasance of Certain Obligations..................... 88
Section 1011. Statement by Officers as to Default................... 89
Section 1012. Waiver of Certain Covenants........................... 89
ARTICLE ELEVEN
Redemption of Securities......................... 90
Section 1101. Applicability of Article.............................. 90
Section 1102. Election to Redeem: Notice to Trustee................. 90
Section 1103. Selection by Trustee of Securities to Be
Redeemed.............................................. 90
Section 1104. Notice of Redemption.................................. 91
Section 1105. Deposit of Redemption Price........................... 91
Section 1106. Securities Payable on Redemption Date................. 91
Section 1107. Securities Redeemed in Part........................... 92
ARTICLE TWELVE
Sinking Funds.......................... 92
Section 1201. Applicability of Article.............................. 92
Section 1202. Satisfaction of Sinking Fund Payments
with Securities....................................... 93
Section 1203. Redemption of Securities for Sinking
Fund.................................................. 93
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ARTICLE THIRTEEN
Guarantee 93
Section 1301. Guarantee.......................................... 93
Section 1302. Execution and Delivery of Guarantee................ 95
Section 1303. Guarantor May Consolidate, etc., on
Certain Terms...................................... 95
Section 1304. [Intentionally omitted]............................ 96
Section 1305. Optional Tax Redemption............................ 96
Section 1306. Payment of Additional Amounts...................... 97
Section 1307. "Trustee" to Include Paying Agent.................. 99
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders,
Officers, Directors and Employees.................. 99
Section 1401. Exemption from Individual Liability................... 99
ARTICLE FIFTEEN
Miscellaneous............................. 100
Section 1501. Consent to Jurisdiction, Etc.......................... 100
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<PAGE>
INDENTURE, dated as of ______________ ___, 1998, by and among Tommy
Hilfiger U.S.A., Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company"), having its principal
office at 25 West 39th Street, New York, New York 10018, Tommy Hilfiger
Corporation, a corporation duly organized and existing under the laws of the
British Virgin Islands (herein called the "Guarantor"), having its principal
executive offices at 6/F Precious Industrial Center, 18 Cheung Yue Street,
Cheung Sha Wan, Kowloon, Hong Kong, and The Chase Manhattan Bank, a banking
corporation duly organized and existing under the laws of the State of New York,
Trustee (herein called the "Trustee").
Recitals of the Company
The Company and the Guarantor have duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company and the Guarantor, in accordance with its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed for the equal and
proportionate benefit of all Holders of the Securities or of a series thereof,
as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except otherwise herein expressly provided, the term
"generally
<PAGE>
2
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means in respect of a Sale and Leaseback
Transaction referred to in Section 1008, at the time of determination, the
present value (discounted at the actual rate of interest of such transaction) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such arrangement (including any period for which such
lease has been extended or may, at the option of the lessor, be extended). The
term "net rental payments" under any lease for any period shall mean the sum of
the rental and other payments required to be paid in such period by the lessee
thereunder, not including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts required to
be paid by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
<PAGE>
3
"Board of Directors" means either the board of directors of the
Company or of the Guarantor, as applicable, or any duly authorized committee of
that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
"Canada Loan Agreement" means the Factoring, Security and Loan
Agreement (Non-Processed), dated June 5, 1996, as amended or supplemented, by
and between BNY Financial Corporation - Canada/Corporation Financiere BNY -
Canada and Tommy Hilfiger Canada Inc.
"Capitalized Lease Obligations" means obligations created pursuant to
leases which are required to be shown on the liability side of the balance sheet
in accordance with generally accepted accounting principles.
"Commission" means the Securities Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, 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 corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman or Vice Chairman of the Board,
its Chief Executive Officer, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated Stockholders Equity" means consolidated stockholders
equity of the Guarantor and its Subsidiaries as determined in accordance with
generally accepted accounting principles and reflected on the most recent
consolidated balance sheet delivered to the Trustee pursuant to Section 704
hereof.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the
<PAGE>
4
date hereof is located at 450 West 33rd Street, 15th Floor, New York, New York
10001-2697.
"corporation" includes corporations, associations, companies and
business trusts.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Defaulted Interest" has the meaning specified in Section 307.
"Event of Default" has the meaning specified in Section 501.
"Exempted Debt" means the sum of the following items outstanding as of
the date Exempted Debt is being determined: (i) Indebtedness for money borrowed
of the Company, the Guarantor and the Restricted Subsidiaries incurred after the
date of this Indenture and secured by Liens created or assumed or permitted to
exist pursuant to Section 1007(b), and (ii) Attributable Debt of the Company,
the Guarantor and the Restricted Subsidiaries in respect of all Sale and
Leaseback Transactions entered into pursuant to Section 1008(b).
"Foreign Currency" means a currency or cash issued by the government
of any country other than the United States of America or units based on or
relating to such currencies (including European Currency Units) (such Units,
including European Currency Units, being hereinafter referred to as "basket
currencies").
"Foreign Government Securities" means with respect to Securities of
any series that are denominated in a Foreign Currency, noncallable (i) direct
obligations of the government that issued such Foreign Currency, for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of such government, the payment of which obligations is unconditionally
guaranteed as a full faith and credit obligation of such government.
"Funded Debt" of any Person means Indebtedness, whether incurred,
assumed or guaranteed, maturing by its terms more than one year from the date of
creation thereof or which is extendable or renewable at the sole option of the
obligor in such manner that it may become payable more than one year from the
date of creation thereof; provided, however, that Funded Debt shall not include
-------- -------
obligations created pursuant to leases, or any Indebtedness or portion thereof
maturing by its terms within one year from the time of any computation of the
amount of outstanding Funded Debt unless such Indebtedness shall be extendable
or renewable at the sole option of the obligor in such
<PAGE>
5
manner that it may become payable more than one year from such time, or any
Indebtedness for the payment or redemption of which money in the necessary
amount shall have been deposited in trust either at or before the maturity or
redemption date thereof.
"Global Note" means a registered Security evidencing all or part of a
series of Securities, including, without limitation, any temporary or permanent
Global Note.
"Guarantee" means the guarantee given by the Guarantor pursuant to
Article Thirteen hereof, including a notation in the securities substantially in
the form attached hereto as Exhibit A.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor Guarantor shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Guarantor" shall mean or include each Person who is then a Guarantor hereunder,
and if at any time there is more than one such Person, "Guarantor" as used with
respect to the Securities of any series shall mean the Guarantor with respect to
Securities of that series.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" of any Person means indebtedness for borrowed money and
all indebtedness under purchase money mortgages or other purchase money liens or
conditional sales or similar title retention agreements in each case where such
indebtedness has been created, incurred, assumed or guaranteed by such Person or
where such Person is otherwise liable therefor and indebtedness for borrowed
money secured by any mortgage, pledge or other lien or encumbrance upon property
owned by such Person even though such Person has not assumed or become liable
for the payment of such indebtedness.
"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
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security means
the Stated Maturity of an installment of interest on such Security.
<PAGE>
6
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, 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 any security interest in and any filing or other agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Market Exchange Rate" means (i) for any conversion involving a
currency unit on the one hand and U.S. Dollars or any Foreign Currency on the
other, the exchange rate between the relevant currency unit and U.S. Dollars or
such Foreign Currency calculated by the method specified pursuant to Section 301
for the securities of the relevant series, (ii) for any conversion of U.S.
Dollars into any Foreign Currency, the noon (New York City time) buying rate for
such Foreign Currency for cable transfers quoted in New York City as certified
for customs purposes by the Federal Reserve Bank of New York and (iii) for any
conversion of one Foreign Currency into U.S. Dollars or another Foreign
Currency, the spot rate at noon local time in the relevant market at which, in
accordance with normal banking procedures, the U.S. Dollars or Foreign Currency
into which conversion is being made could be purchased with the Foreign Currency
from which conversion is being made from major banks located in either New York
City, London or any other principal market for U.S. Dollars or such purchased
Foreign Currency. In the event of the unavailability of any of the exchange
rates provided for in the foregoing clauses (i), (ii) and (iii) the Trustee, or
such other Person appointed for such purpose pursuant to Section 301, shall use,
in its sole discretion and without liability on its part, such quotation of the
Federal Reserve Bank of New York as of the most recent available date, or
quotations from one or more major banks in New York City, London or other
principal market for such currency or currency unit in question, or such other
quotations as the Trustee, or such other Person, shall deem appropriate. Unless
there is more than one market for dealing in any currency or currency unit by
reason of foreign exchange regulations or otherwise, the market to be used in
respect of such currency or currency unit shall be that upon which a nonresident
issuer of securities designated in such currency or currency unit would purchase
such currency or currency unit in order to make payments in respect of such
securities.
"Maturity", when used with respect to any Security means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President, and
<PAGE>
7
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company or the Guarantor, as applicable, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or the Guarantor, if applicable, and who shall be
reasonably acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"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 for whose payment or redemption (a) 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 or (b)
obligations as contemplated by Section 403(d) in the necessary amount
have been theretofore deposited with the Trustee in trust, for the
Holders of such Securities; provided that, if such Securities are to
--------
be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination
<PAGE>
8
upon acceleration of the Maturity thereof pursuant to Section 502 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 actually 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 (and premium, if any) or interest on any Securities on behalf of
the Company.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities including without limitation
the rate or rates of interest, if any, thereon, the Stated Maturity or
Maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Company or its agents upon the issuance of such
Securities.
"Permitted Liens" means (i) Liens on property of a corporation
existing at the time such corporation is merged into or consolidated with the
Company, the Guarantor or a Restricted Subsidiary or at the time of sale, lease
or other disposition of the properties of such corporation (or a division
thereof) as an entirety or substantially as an entirety to the Company, the
Guarantor or a Restricted Subsidiary, provided that no such Lien as a result
--------
of such merger, consolidation, sale, lease or other disposition is extended to
property owned by the Company, the Guarantor or such Restricted Subsidiary
immediately prior thereto; (ii) Liens on property or shares of equity interests
or evidences of indebtedness of a corporation existing at the time such
corporation becomes a Restricted Subsidiary; (iii) Liens securing Indebtedness
between a Restricted Subsidiary and the Company or the Guarantor, between
Restricted Subsidiaries, or between the Company and the Guarantor; (iv) Liens on
any property created, assumed or otherwise brought into existence in
contemplation of the sale or other disposition of the underlying property,
whether directly or indirectly, by way of share disposition or otherwise,
provided that the Company, the Guarantor or such Restricted Subsidiary, as
- --------
applicable, must have disposed of such property within 180 days after the
creation of such Liens and that any Indebtedness secured by such Liens shall be
without recourse to the Company, the Guarantor or any Restricted Subsidiary; (v)
Liens in favor of the United States of America or any State thereof, or any
department, agency or
<PAGE>
9
instrumentality or political subdivision thereof, to secure partial, progress,
advance or other payments; (vi) Liens arising solely by virtue of any statutory
or common law provision relating to banker's liens, rights of setoff or similar
rights and remedies, in each case as to deposit accounts or other funds
maintained with a creditor depository institution, provided that (A) such
--------
deposit account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company, the Guarantor or applicable
Restricted Subsidiary in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (B) such deposit account is not intended by the
Company or any Restricted Subsidiary to provide collateral to the depository
institution; (vii) Liens arising from Uniform Commercial Code financing
statements regarding leases; (viii) Liens on the Company's office facility
located at 25 West 39th Street, New York, New York; (ix) the giving,
simultaneously with or within 180 days after the latest of the date of this
Indenture or the acquisition or construction of such property, of a purchase
money Lien on property acquired or constructed after the date of this Indenture,
or the acquisition after the date of this Indenture, of property subject to any
Lien which is limited to such property and which secures Indebtedness not in
excess of the lesser of the cost or fair market value of such property; (x) the
giving of a Lien on real property which is the sole security for Indebtedness
incurred within two years after the latest of the date of this Indenture, the
acquisition of the property or completion of the first substantial improvements
thereon, provided that the Indebtedness does not exceed the lesser of the cost
--------
of the property and improvements or their fair market value and the holder of
such Indebtedness is entitled to enforce its payment only by resorting to such
security; (xi) Liens arising under the Canada Loan Agreement securing
Indebtedness not to exceed Can. $25,000,000; (xii) Liens arising by the terms of
letters of credit entered into in the ordinary course of business to secure
reimbursement obligations thereunder; (xiii) Liens existing on the date hereof;
and (xiv) extension, renewal, replacement or refunding of any Lien existing on
the date hereof or referred to in clauses (i) to (iv) and (ix) to (xi), provided
--------
that the principal amount of Indebtedness secured thereby and not otherwise
authorized by clauses (i) to (iv) and (ix) to (xi) shall not exceed the
principal amount of Indebtedness, plus any premium or fee payable in connection
with any such extension, renewal, replacement or refunding, so secured at the
time of such extension, renewal, replacement or refunding.
"Person" means any individual, corporation. partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities
<PAGE>
10
of that series are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means
any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Subsidiary" means, at any time, any Subsidiary of the
Guarantor, other than the Company, which would be a "Significant Subsidiary" at
such time, as such term is defined in Regulation S-X promulgated by the
Commission, as in effect on the date of this Indenture.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Exchange Act of 1934" means the Securities and Exchange
Act of 1934, as amended, or any successor thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Funded Debt" means all Funded Debt of the Company or any other
Person, except Subordinated Funded Debt.
<PAGE>
11
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Specified Indebtedness" means any indebtedness of the Guarantor or
any Subsidiary or the Guarantor for borrowed money in an outstanding principal
amount in excess of $25,000,000.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subordinated Funded Debt" means any unsecured Indebtedness of the
Company which is expressly made subordinate and junior in rank and right of
payment to the Securities and such other Indebtedness of the Company as may be
specified or characterized in the instruments evidencing the Subordinated Funded
Debt or the indenture or other similar instrument under which it is issued
(which indenture or other instrument shall be binding on all holders of such
Subordinated Funded Debt) (the Securities and any other Indebtedness of the
Company to which the Subordinated Funded Debt is subordinate and junior being
hereinafter in this paragraph called "Superior Debt"), by provisions not
substantially more favorable to the holders of the Subordinated Funded Debt than
the following:
(i) In the event of any insolvency or bankruptcy proceedings,
any receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to the Company or to its creditors, as
such, or to its property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, then the holders of Superior Debt shall
be entitled to receive payment in full of all principal and interest on all
Superior Debt before the holders of the Subordinated Funded Debt are
entitled to receive any payment on account of principal or interest upon
the Subordinated Funded Debt, and to that end (but subject to the power of
a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred by the provisions of the Subordinated
Funded Debt upon the Superior Debt and the holders thereof with respect to
the Subordinated Funded Debt and the holders thereof by a lawful plan or
reorganization under applicable bankruptcy or insolvency law) the holders
of Superior Debt shall be entitled to receive for application in payment
thereof any payment or distribution of any kind or character, whether in
cash or property or securities, which may be payable or deliverable in any
such proceedings in respect of the Subordinated Funded Debt, except
securities which are subordinate and junior in right of payment to the
payment of all Superior
<PAGE>
12
Debt then outstanding, (ii) in the event that any Subordinated Funded Debt
is declared due and payable before its expressed maturity because of the
occurrence of an event of default with respect to such Subordinated Funded
Debt (under circumstances when the provisions of the foregoing clause (i)
shall not be applicable), the holders of the Superior Debt outstanding at
the time such Subordinated Funded Debt so becomes due and payable because
of such occurrence of such an event of default shall be entitled to receive
payment in full of all principal and interest on all Superior Debt before
the holders of such Subordinated Funded Debt are entitled to receive any
payment on account of the principal or interest upon such Subordinated
Funded Debt except payments at the expressed maturity of such Subordinated
Funded Debt, current interest payments as provided in such Subordinated
Funded Debt, payments pursuant to any mandatory sinking fund (or analogous
provision) in respect of such Subordinated Funded Debt, and payments for
the purpose of curing any such event of default; (iii) in the event that
(x) there shall have occurred a default in the payment of the principal of
or interest on any Superior Debt, or (y) there shall have occurred any
other event of default with respect to any Superior Debt permitting the
holders thereof to accelerate the maturity thereof and if written notice
thereof shall have been given to the Company by a holder or holders of such
Superior Debt or their representative or representatives or trustee or
trustees under any indenture pursuant to which any instruments evidencing
any of such Superior Debt may have been issued, or (z) the payment
hereinafter referred to would itself constitute an event of default with
respect to any Superior Debt, then, in any such case, unless or until such
event of default shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company on account of principal of
or interest on any Subordinated Funded Debt (whether pursuant to any
sinking fund or otherwise) or on account of the purchase or other
acquisition of any Subordinated Funded Debt; and (iv) no holder of Superior
Debt or trustee for such holder shall be prejudiced in his or her right to
enforce subordination of the Subordinated Funded Debt by any act or failure
to act on the part of the Company;
provided, however, that the Subordinated Funded Debt may provide that the
- -------- -------
foregoing provisions are solely for the purposes of defining the relative rights
of the holders of Superior Debt on the one hand, and the holders of the
Subordinated Funded Debt on the other hand, and that nothing therein shall
impair, as between the Company and the holders of the Subordinated Funded Debt,
the obligation of the Company, which is unconditional and absolute, to pay to
the holders thereof the principal thereof and interest thereon in accordance
with its terms, nor shall anything therein prevent the holders of the
Subordinated Funded Debt from exercising all remedies otherwise permitted by
applicable law or
<PAGE>
13
thereunder upon default thereunder, subject to the rights under clauses (i),
(ii) and (iii) above of holders of Superior Debt to receive cash, property or
securities otherwise payable or deliverable to the holders of the Subordinated
Funded Debt; and provided, further, that the Subordinated Funded Debt may
-------- -------
provide that, insofar as a trustee or paying agent for such Subordinated Funded
Debt is concerned, the foregoing provisions shall not prevent the application by
such trustee or paying agent of any moneys deposited with such trustee or paying
agent for the purpose of the payment of or on account of the principal and
interest on such Subordinated Funded Debt if such trustee or paying agent did
not have knowledge at the time of such application that such payment was
prohibited by the foregoing provisions.
"Subsidiary" as to any Person, means a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries, or by such Person and one or more
of its 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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture.
"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 or include each Person who is then a Trustee hereunder, and if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"U.S. Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934 which shall be designated by the Company
pursuant to Section 301 until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S.
<PAGE>
14
Depositary hereunder, and if at any time there is more than one such Person,
"U.S. Depositary" as used with respect to Securities of any series shall mean
the U.S. Depositary with respect to the Securities of that series.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is unconditionally
guaranteed by the United States.
"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".
"Wholly-owned Restricted Subsidiary" means any Restricted Subsidiary
all of the outstanding Funded Debt and capital stock of which, other than
directors' qualifying shares, is owned by the Company and its other Wholly-owned
Restricted Subsidiaries.
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company or the Guarantor to the Trustee to take
any action under any provision of this Indenture, the Company or the Guarantor,
as applicable, shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
<PAGE>
15
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person it is not necessary that all such
matters be certified by or covered by the opinion of only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by counsel unless such officer
knows or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company or the Guarantor that the information with respect to such factual
matters is in the possession of the Company or the Guarantor, 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 104. Acts of Holders.
(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
<PAGE>
16
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements 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 ownership of Securities shall be proved by the Security
Register.
(d) Any request, 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 105. Notices, Etc., to Trustee, Company and Guarantor.
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,
(1) the Trustee by any Holder or by the Company or the Guarantor shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its principal Corporate Trust
Office, Attention: Global Trust Services, or
(2) the Company or the Guarantor 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 of the Guarantor addressed to it at the address of its
principal office specified in the first paragraph of this
<PAGE>
17
instrument or at any other address previously furnished in writing to the
Trustee by the Company or the Guarantor.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date 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 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 actions taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or the
Guarantor shall bind its respective successors and assigns, whether so expressed
or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
<PAGE>
18
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
--------
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
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 as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by, or by
action taken pursuant to a Board Resolution, a copy of the Board Resolution
together with an appropriate record of any action taken pursuant thereto, which
Board Resolution or record of such action shall have attached thereto a true and
correct copy of the form of Security approved by or pursuant to such Board
Resolution, shall be certified by the Secretary or an Assistant Secretary of the
Company and
<PAGE>
19
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The Guarantee shall be in substantially the form of Exhibit A, the
terms of which are incorporated herein and made a part of this Indenture.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
TOMMY HILFIGER U.S.A., INC.
[TITLE OF SERIES]
REGISTERED REGISTERED
No. ...... $.........
CUSIP No. ......
Tommy Hilfiger U.S.A., Inc., a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ................................ or
registered assigns, the principal sum of ........................ Dollars on
.................................................... [If the Security is to
bear interest prior to Maturity, insert --, and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ......... and ........ in
each year commencing ........ at the rate of .....% per annum, until the
principal hereof is paid or made available for payment [If applicable insert --,
and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of .....% per annum on any overdue principal and
premium and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the .... or ....
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
<PAGE>
20
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 of this
series 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 of this series may be listed and
upon such notice as may be required by such exchange all as more fully provided
in said Indenture.]
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ...% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal and overdue interest shall be
payable on demand.]
Payment of the principal of (and premium, if any) and [If applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in .... 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 [if applicable, insert --
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].
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.
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE: See Exhibit A.]
<PAGE>
21
In Witness Whereof, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
Tommy Hilfiger U.S.A., Inc.
By---------------------------
Attest:
- --------------------------
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _________, 1998 (herein called the
"Indenture"), among the Company, the Guarantor and The Chase Manhattan Bank,
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 the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to $
].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ................. in any year commencing with the year .... and ending
with the year .... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after .............. 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ............,
....%, and if redeemed] during the 12-month period beginning .......... of the
years indicated,
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ------------------ ------------------- ------------------ -----------------
<S> <C> <C> <C>
</TABLE>
<PAGE>
22
and thereafter at a Redemption Price equal to ...% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after ...........], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ............ of
the years indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE
FOR REDEMPTION REDEMPTION PRICE FOR
THROUGH OPERATION REDEMPTION OTHERWISE
OF THE THAN THROUGH OPERATION
YEAR SINKING FUND OF THE SINKING FUND
- ----------------------- ------------------------ ------------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
, redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
<PAGE>
23
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than % per annum.]
[The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the year of [not
less than] $.......... ("mandatory sinking fund") and not more than $ ]
aggregate principal amount of Securities of this series. [Securities of this
series acquired or redeemed by the Company otherwise than through [mandatory]
sinking fund payments may be credited against subsequent [mandatory] sinking
fund payments otherwise required to be made.]
[In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion will be issued to the Holder upon the cancellation hereof, and in event
of transfer or exchange a new Security or Securities of this series and of like
tenor and for a like aggregate principal amount will be issued to the Holder, in
case of exchange, or the designated transferee or transferees, in case of
transfer.]
Subject to the relevant provisions set forth in the Indenture, the
Securities are subject to redemption, in whole but not in part, at the option of
the Guarantor in the event the Guarantor becomes obligated, in respect of any
amounts to be paid under the Guarantee and as a result of changes in applicable
tax law, to pay additional amounts in respect of any tax, assessment or
governmental charge imposed on any Holder, and the payments of such additional
amounts cannot be avoided by any reasonable means.
[If the Security is not an Original Issue Discount Security, -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
<PAGE>
24
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 of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of at least a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, 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 hereof 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,
judicial or otherwise, 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 of this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series 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 of this series a direction
inconsistent with such request, and the Trustee 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 instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium 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 premium, if any) 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 any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by
<PAGE>
25
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
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination as requested by the Holder surrenders 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.
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on this Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
26
Section 204. Additional Provisions Required in Global Notes.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, any Global Notes issued hereunder shall, in
addition to the provisions contained in Sections 202 and 203, bear a legend in
substantially the following form:
This Security is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of [Name of U.S.
Depositary] (the "Depositary") or a nominee of the Depositary. This Global
Note is exchangeable for Securities registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary.
Section 205. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein
referral to in the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By-----------------------------
Authorized Signatory
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
<PAGE>
27
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107) and except for any
Securities which, pursuant to Section 303 of the Indenture, shall have not
been issued and sold by the Company and are therefore deemed never to have
been authenticated and delivered hereunder;
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than 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;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest
Payment Date;
(6) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency or currencies, including composite currencies, in
which payment of the principal of (and premium, if any) and interest on the
Securities of the series shall be payable (if other than the currency of
the United States of America);
<PAGE>
28
(11) if the amount of payments of principal of (and premium, if any)
or interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(12) whether the Securities of the series are to be issued as Original
Issue Discount Securities and the amount of discount with which such
Securities may be issued and, if other than the principal amount thereof,
the portion of the principal amount of Securities of the series that shall
be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502;
(13) any addition to, or modification or deletion of, any Events of
Default or covenants provided with respect to Securities of the series;
(14) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Notes and, in such case, the U.S.
Depositary for such Global Note or Notes;
(15) whether Section 403 and/or 1010 providing for defeasance and
discharge and covenant defeasance, respectively, shall apply to Securities
of the series; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or delivered in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms or the manner
of determining the terms of the series. With respect to Securities of a series
offered in a Periodic Offering, such Board Resolution or action may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with a Company Order as contemplated by the
first proviso of the third paragraph of Section 303.
<PAGE>
29
Section 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, 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 of any series executed by the
Company and having the Guarantees endorsed thereon to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
-------- -------
with respect to Securities of a series offered in a Periodic Offering, (a) the
Trustee shall authenticate and deliver Securities of such series for original
issue from time to time, in an aggregate principal amount not exceeding the
aggregate principal amount established for such series, pursuant to a Company
Order or pursuant to such other procedures acceptable to the Trustee as may be
specified from time to time by a Company Order, (b) the maturity date or dates,
original issue date or dates, currency or currencies or composite currencies,
interest rate or rates and any other terms of the Securities of such series
shall be determined by Company Order or pursuant to such procedures and (c) if
provided for in such procedures, such Company Order may authorize authentication
and delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which instructions shall be promptly confirmed
in writing. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
<PAGE>
30
(a) that the form of such Securities has been established in
conformity with the provisions of this Indenture;
(b) that the terms of such Securities have been established in
conformity with the provisions of this Indenture; and
(c) that such Securities, with the Guarantees endorsed thereon, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company and
the Guarantor, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights
and to general equity principles; provided, however, that, with respect to
-------- -------
Securities of a series offered in a Periodic Offering, the Trustee shall be
entitled to receive such Opinion of Counsel in connection only with the
first authentication of Securities of such series and that the opinions
described in clauses (b) and (c) above may state, respectively,
(x) that, when the terms of such Securities shall have been
established pursuant to a Company Order or pursuant to such procedures as
may be specified from time to time by a Company Order, all as contemplated
by a Board Resolution or action taken pursuant thereto, such terms will
have been duly authorized by the Company and will have been established in
conformity with the provisions of this Indenture; and
(y) that such Securities, when (i) executed by the Company and having
Guarantees endorsed thereon, (ii) completed, authenticated and delivered by
the Trustee in accordance with this Indenture, (iii) issued and delivered
by the Company and (iv) paid for, all in accordance with any agreement of
the Company relating to the offering, issuance and sale of such Securities,
will have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company and the Guarantor, entitled
to the benefits provided by the Indenture, and enforceable in accordance
with their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
generally the enforcement of creditors' rights and to general principles of
equity.
With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability
<PAGE>
31
thereof, upon the Opinion of Counsel, Company Order and other documents
delivered pursuant to Sections 201 and 301 and this Section, as applicable,
delivered at or prior to the first authentication of Securities of such series
unless and until such opinion or other documents have been superseded or
revoked.
Notwithstanding the provisions of Section 301 and of the third
paragraph of this Section 303, if any Securities of a series are to be offered
in a Periodic Offering, it shall not be necessary to deliver the Opinion of
Counsel, Company Order and other documents otherwise required pursuant to
Sections 201 and 301 and this Section at or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the time of authentication upon original issuance of the first Security of such
series to be issued.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties, indemnities or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
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 and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any series,
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,
<PAGE>
32
substitutions and other variations as the officers executing such securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series and of like tenor of
authorized denominations. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
(b) If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Global Notes, then the Company shall execute and the Trustees shall, in
accordance with Section 303 and the Company Order with respect to such series,
authenticate and deliver one or more Global Notes in temporary or permanent form
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of the Outstanding Securities of such series to be
represented by one or more Global Notes, (ii) shall be registered in the name of
the U.S. Depositary for such Global Note or Notes or the nominee of such
depositary, (iii) shall be delivered by the Trustee to such depositary or
pursuant to such depositary's written instruction and (iv) shall bear a legend
substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary."
Notwithstanding any other provisions of this Section or Section 305,
unless and until it is exchanged in whole or in part for Securities in
definitive form, a Global Note representing all or a portion of the Securities
of a series may not be transferred except as a whole by the U.S. Depositary for
such series to a nominee of such depositary or by a nominee of such depositary
to such depositary or another nominee of such depositary or by such
<PAGE>
33
depositary or any such nominee to a successor U.S. Depositary for such series or
a nominee of such successor depositary.
If at any time the U.S. Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Securities of such series or if at any time the U.S.
Depositary for Securities of a series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934 or other applicable statute
or regulation, the Company shall appoint a successor U.S. Depositary with
respect to the Securities of such series.
If a successor U.S. Depositary for the Securities of such series is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, registered
Securities of such series in definitive form in an aggregate principal amount
equal to the principal amount of the Global Note or Notes representing such
series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global Notes
shall no longer be represented by such Global Note or Notes. In such event, the
Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, registered Securities of such series in definitive
form and in an aggregate principal amount equal to the principal amount of the
Global Note or Notes representing such series in exchange for such Global Notes
or Notes.
If specified by the Company pursuant to Section 301 with respect to
Securities of a series, the U.S. Depositary for such series of Securities may
surrender a Global Note for such series of Securities in exchange in whole or in
part for registered Securities of such series in definitive form on such terms
as are acceptable to the Company and such depositary. Thereupon, the Company
shall execute and the Trustee shall authenticate and deliver, without charge,
(i) to each Person specified by the U.S. Depositary a new registered
Security or Securities of the same series, of any authorized denomination
as requested by such Person in aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Note and the
<PAGE>
34
aggregate principal amount of registered Securities delivered to Holders
thereof.
Upon the exchange of a Global Note for Securities in definitive form, such
Global Note shall be cancelled by the Trustee. Debt Securities issued in
exchange for a Global Note pursuant to this subsection (b) shall be registered
in such names and in such authorized denomination as the U.S. Depositary for
such Global Note, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee in writing. The Trustee
shall deliver such Securities to the persons in whose names such Securities are
so registered.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the principal Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
the registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, 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
the same series of any authorized denominations and of a like aggregate
principal amount and of like tenor.
At the option of the Holder, Securities of any series (except Global
Notes) may be exchanged for other Securities of the same series of like
aggregate principal amount and of a like Stated Maturity and with the like terms
and conditions, 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.
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
<PAGE>
35
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities 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 the execution and delivery of the Securities or any registration of
transfer or exchange of Securities other than exchanges pursuant to Section 304,
906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and 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 upon its written request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
<PAGE>
36
Every new Security of any series 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 of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, 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 of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company at its election in each case,
as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (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 of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the
<PAGE>
37
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 of Securities of such series 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 of such series (or their respective Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed and upon such notice as may be required by such exchange, if, after
written notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever
and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for
<PAGE>
38
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of as directed by a Company Order.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. Judgments.
If for the purpose of obtaining a judgment in any court with respect
to any obligation of the Company hereunder or under any Security, it shall
become necessary to convert into any other currency any amount in the currency
due hereunder or under such Security, then such conversion shall be made at the
market Exchange Rate as in effect on the date the Company shall make payment to
any person in satisfaction of such judgment. If pursuant to any such judgment,
conversion shall be made on a date other than the date payment is made and there
shall occur a change between such Market Exchange Rate and the Market Exchange
Rate as in effect on the date of payment, the Company agrees to pay such
additional amounts (if any) as may be necessary to ensure that the amount paid
is equal to the amount in such other currency which, when converted at the
Market Exchange Rate as in effect on the date of payment or distribution, is the
amount due hereunder or under such Security. Any amount due from the Company
under this Section 311 shall be due as a separate debt and is not to be affected
by or merged into any judgment being obtained for any other sums due hereunder
or in respect of any Security. In no event, however, shall the Company be
required to pay more in the currency or currency unit due hereunder or under
such Security at the Market Exchange Rate as in effect when payment is made than
the amount of currency stated to be due hereunder or under such Security so that
in any event the Company's obligations hereunder or under such Security will be
effectively maintained as obligations in such currency, and the Company shall be
entitled to withhold (or be reimbursed for, as the case may be) any excess of
the amount actually realized upon any such conversion over the amount due and
payable on the date of payment or distribution.
<PAGE>
39
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are deemed paid and discharged pursuant to
Section 403, as applicable,
and the Company in the case of (i) or (ii) above has deposited or
caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
<PAGE>
40
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section or if money or obligations shall have been deposited with or
received by the Trustee pursuant to Section 403, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Funds; Indemnification.
(a) Subject to the provisions of the last paragraph of Section 1003
and subsection (c) of this Section 402 and Section 615, all money deposited with
the Trustee pursuant to Section 401, all money and U.S. Government Obligations
or Foreign Government Securities deposited with the Trustee pursuant to Section
403 or 1010 and all money received by the Trustee in respect of U.S. Government
Obligations or Foreign Government Securities deposited with the Trustee pursuant
to Section 403 or 1010, 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 premium, if any) and interest for whose payment such money
has been deposited with or received by the Trustee or to make mandatory sinking
fund payments or analogous payments as contemplated by Section 403 or 1010.
(b) The Company shall pay and shall indemnify the Trustee and its
officers, directors, agents and employees against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations or Foreign Government
Securities deposited pursuant to Section 403 or 1010 or the interest and
principal received in respect of such obligations other than any payable by or
on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Securities or money held by it as provided in Section 403 or 1010 which, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such Obligations or Foreign
Government Securities or money were deposited or received. In the event such
firm requires the Trustee to agree to the procedures performed by such firm, the
Company shall direct the Trustee in writing to so agree; it being understood and
agreed that the Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Company, and the Trustee makes no independent
inquiry or investigation as to, and shall have no
<PAGE>
41
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures. This provision shall not authorize the sale by the Trustee
of any U.S. Government Obligations or Foreign Government Securities held under
this Indenture.
Section 403. Satisfaction, Discharge and Defeasance of Securities of any
Series.
If this Section 403 is specified, as contemplated by Section 301, to
be applicable to Securities of any series the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Outstanding Securities of
any such series on the 91st day after the date of the deposit referred to in
subparagraph (d) hereof, and the provisions of this Indenture, as it relates to
such Outstanding Securities of any such series, shall no longer be in effect
(and the Trustee, at the expense of the Company, shall at Company Request,
execute proper instruments acknowledging the same) except as to:
(a) the rights of Holders of Securities of such series to receive,
from the trust funds described in subparagraph (d) hereof (i) payment of
the principal of (and premium, if any) and each installment of principal of
(and premium. if any) or interest on the Outstanding Securities of such
series on the Stated Maturity of such principal or installment of principal
or interest and (ii) the benefit of any mandatory sinking fund payments
applicable to the Securities of such series on the day on which such
payments are due and payable in accordance with the terms of this Indenture
and the Securities of such series;
(b) the Company's obligations with respect to such Securities of such
series under Sections 305, 306, 1002 and 1003; and
(c) the rights, powers, trust, indemnities and immunities of the
Trustee hereunder and the duties of the Trustee under Section 402 and the
duty of the Trustee to authenticate Securities of such series issued on
registration of transfer or exchange;
provided that, the following conditions shall have been satisfied:
- --------
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such series denominated in U.S. dollars, cash in
U.S. dollars (or such other money or currencies as shall then be legal
tender in the United States) and/or U.S. Government Obligations, or (ii) in
the
<PAGE>
42
case of Securities of such series denominated in a Foreign Currency (other
than a basket currency), money and/or Foreign Government Securities in the
same Foreign Currency, which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (and premium, if any) (including
mandatory sinking fund or analogous payments) of and any interest on all
the Securities of such series on the dates such installments of interest or
principal are due;
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) such provision would not cause any Outstanding Securities of such
series then listed on the New York Stock Exchange or other securities
exchange to be de-listed as a result thereof;
(g) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit or
during the period ending on the 91st day after such date;
(h) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel to the effect that (1) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
to the effect that, and based thereon, such opinion shall confirm that
Holders of the Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposits,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred
and (2) upon the 91st day after the date of such deposit, the trust funds
would not be subject to being characterized as a preference for Bankruptcy
Law purposes; and
(i) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this Section have been complied
with.
<PAGE>
43
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantor in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other than
that series), and continuance of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other evidence of
Specified Indebtedness (including a default with respect to Securities of
any series other than that series) or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any Specified Indebtedness (including this Indenture), whether
such Specified Indebtedness now exists or shall hereafter be created, which
default (A) shall be caused by the Guarantor or a Subsidiary of the
Guarantor failing to make a principal or interest payment at final Stated
Maturity or (B) shall have resulted in such Specified Indebtedness becoming
or being declared due and payable
<PAGE>
44
prior to the date on which it would otherwise have become due and payable,
without such default having been cured or acceleration having been
rescinded or annulled, as the case may be, within a period of 10 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 of that
series a written notice requiring the Company to cause such default to be
cured or acceleration to be rescinded or annulled, as the case may be, and
stating that such notice is a "Notice of Default" hereunder, provided,
--------
however, that, subject to the provisions of Sections 601 and 602, the
-------
Trustee shall not be deemed to have knowledge of such default unless either
(A) a Responsible Officer of the Trustee in its principal Corporate Trust
Office shall have actual knowledge of such default or (B) the Trustee shall
have received written notice thereof at its principal Corporate Trust
Office from the Company, from any Holder, from the holder of any such
Specified Indebtedness or from the trustee under any such mortgage,
indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Guarantor, the Company or any
Restricted Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any
Restricted Subsidiary a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Guarantor, the Company or any
Restricted Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Guarantor, the Company or any
Restricted Subsidiary 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
(7) the commencement by the Guarantor, the Company or any Restricted
Subsidiary 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 Guarantor, the Company or any Restricted Subsidiary 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
<PAGE>
45
answer or consent seeking reorganization or relief under any applicable
Federal or State laws, 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 similar official of the
Guarantor, the Company or any Restricted Subsidiary 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 Guarantor, the Company or any Restricted Subsidiary in furtherance of
any such action; or
(8) the Guarantee with respect to that series shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect with respect to the Guarantor or the
Guarantor shall deny or disaffirm its obligations under the Guarantee; or
(9) any other Event of Default provided with respect to Securities of
that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series had 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 of that series, by written notice to the Company and the
Trustee may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
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46
(B) the principal of (and premium, if, any on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such 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
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or
rescission and annulment thereof, with respect to Securities of a series all or
part of which is represented by one or more Global Notes, the Trustee shall
establish a record date for determining Holders of Outstanding Securities of
such series entitled to join in such declaration of acceleration, or rescission
and annulment, as the case may be, which record date shall be at the close of
business on the day the Trustee receives such declaration of acceleration, or
rescission and annulment, as the case may be. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such declaration of acceleration, or rescission and annulment, as the
case may be, whether or not such Holders remain Holders after such record date;
provided that unless such declaration of acceleration, or rescission and
- --------
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the day which is 90 days
after such record date, such declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be cancelled and of no further effect. Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of
such 90-day period, a new declaration of acceleration, or rescission or
annulment thereof, as the case may be, that is identical to a declaration of
acceleration, or rescission or annulment thereof, which has been cancelled
pursuant to the preceding sentence, in which event a new record
<PAGE>
47
date shall be established pursuant to the provisions of this Section 502.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the deposit of any sinking fund payment when
and as due by the terms of a Security,
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 premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series 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.
<PAGE>
48
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company or the Guarantor for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment
<PAGE>
49
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
First: To the payment of all amounts due the Trustee under Section
607; and
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) 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 premium, if
any) and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day
<PAGE>
50
period by the Holders of a majority in principal amount of the Outstanding
Securities of that series;
it being understood and intended that no one or more of such 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium 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 premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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51
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would involve the Trustee in personal
liability.
Upon receipt by the Trustee of any such direction with respect to
Securities of a series all or part of which is represented by one or more Global
Securities, the Trustee shall establish a record date for determining Holders of
Outstanding Securities of such series entitled to join in such direction, which
record date shall be at the close of business on the day the Trustee receives
such direction. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such direction,
whether or not such Holders remain Holders after such record date; provided that
--------
unless such majority in principal amount shall have been obtained prior to the
day which is 90 days after such record date, such direction shall automatically
and without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new direction identical to a
direction which has been cancelled pursuant to the preceding sentence, in which
event a new record date shall be established pursuant to the provisions of this
Section 512.
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52
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided that unless such majority in principal amount shall have been
--------
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
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 of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after
<PAGE>
53
the Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely and shall be fully protected in acting, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
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54
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series, given pursuant to Section 512, relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the Securities of such
series; and
(4) 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder actually known to a
Responsible Officer of the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
-------- -------
of the principal of (or premium, if any) or interest on any Security of such
series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Securities of such series; and provided, further, that in the case of
-------- -------
any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of
<PAGE>
55
time or both would become, an Event of Default with respect to Securities of
such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors 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, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
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56
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent, attorney,
custodian or nominee appointed with due care by it hereunder.
(h) In the event that the Trustee is also acting as a Paying Agent,
Authenticating Agent, and/or Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article Six shall also
be afforded to such Paying Agent, Authenticating Agent, and/or Registrar.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee 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 with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of
<PAGE>
57
law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and its officers, directors, employees
and agents for, and to hold them 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 the trust or
trusts hereunder and in connection with the other transaction documents,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder and thereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of, premium, if any, or interest, if
any, on particular Securities. The Company's obligations under this Section
6.07 shall survive the earlier resignation or removal of the Trustee or the
discharge of this Indenture.
Section 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it
shall, within 90 days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign with respect
to the Securities of that series in the manner and with the effect
hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities
of any series, the Trustee shall, within 10 days after the expiration of
such 90-day period, transmit by mail to all Holders of Securities of that
series, as their names and addresses appear in the Security Register,
notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to the Securities of any series if
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58
(1) the Trustee is trustee under this Indenture with respect to
the Outstanding Securities of any series other than that series or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Company or the Guarantor are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Securities issued under this Indenture,
provided that there shall be excluded from the operation of this
--------
paragraph this Indenture with respect to the Securities of any series
other than that series or any other indenture or indentures under
which other securities, or certificates of interest or participation
in other securities, of the Company or the Guarantor are outstanding,
if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or
indentures are hereafter qualified under the Trust Indenture Act,
unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust
Indenture Act that differences exist between the provisions of
this Indenture with respect to Securities of that series and one
or more other series or the provisions of such other indenture or
indentures which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for
the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the Securities of
that series and such other series or under such other indenture
or indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after opportunity
for hearing thereon, that trusteeship under this Indenture with
respect to the Securities of that series and such other series or
such other indenture or indentures is not so likely to involve a
material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify
the Trustee from acting as such under this Indenture with respect
to the Securities of that series and such other series or under
such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is
an obligor upon the Securities or an underwriter for the Company or
the Guarantor;
<PAGE>
59
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with the Company or the Guarantor or an underwriter for the Company or
the Guarantor;
(4) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee or representative of
the Company or the Guarantor, or of an underwriter (other than the
Trustee itself) for the Company or the Guarantor who is currently
engaged in the business of underwriting, except that (i) one
individual may be a director or an executive officer, or both, of the
Trustee and a director or an executive officer, or both, of the
Company but may not be at the same time an executive officer of both
the Trustee and the Company or the Guarantor; (ii) if and so long as
the number of directors of the Trustee in office is more than nine,
one additional individual may be a director or an executive officer,
or both, of the Trustee and a director of the Company or the
Guarantor; and (iii) the Trustee may be designated by the Company or
the Guarantor or by any underwriter for the Company or the Guarantor
to act in the capacity of transfer agent, registrar, custodian, paying
agent, fiscal agent, escrow agent or depositary; or in any other
similar capacity, or, subject to the provisions of paragraph (1) of
this Subsection, to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or the Guarantor or by any
director or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of
such persons; or 10% or more of the voting securities of the Trustee
is beneficially owned either by an underwriter for the Company or the
Guarantor or by any director or executive officer thereof, or is
beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of the
Company or the Guarantor not including the Securities issued under
this Indenture and securities issued under any other indenture under
which the Trustee is also trustee, or (ii) 10% or more of any class of
security of an underwriter for the Company;
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60
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns
10% or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the
Company or the Guarantor;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50%
or more of the voting securities of the Company or the Guarantor; or
(9) the Trustee owns, on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of
any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting
interest under paragraph (6), (7) or (8) of this Subsection. As to
any such securities of which the Trustee acquired ownership through
becoming executor, administrator or testamentary trustee of an estate
which included them, the provisions of the preceding sentence shall
not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such
estate do not exceed 25% of such voting securities or 25% of any such
class of security. Promptly after May 15 in each calendar year, the
Trustee shall make a check of its holdings of such securities in any
of the above-mentioned capacities as of such May 15. If the Company
or the Guarantor fails to make payment in full of the principal of (or
premium, if any) or interest on any of the Securities when and as the
same becomes due and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its holdings of
such securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such
securities so held by the Trustee, with sole or joint control over
such securities vested in it, shall, but only so long as such failure
shall continue, be considered as though beneficially owned by the
Trustee for the purposes of paragraphs (6), (7) and (8) of this
Subsection.
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61
The specification of percentages in paragraphs (5) to (9), inclusive,
of this Subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the
Company, means every person who, within three years prior to the time
as of which the determination is made, has purchased from the Company
or the Guarantor, as the case may be, with a view to, or has offered
or sold for the Company or the Guarantor, as the case may be, in
connection with, the distribution of any security of the Company or
the Guarantor, as the case may be, outstanding at such time, or has
participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or
any individual performing similar functions with respect to any
organization, whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-
<PAGE>
62
stock company, a trust, an unincorporated organization or a government
or political subdivision thereof. As used in this paragraph, the term
"trust" shall include only a trust where the interest or interests of
the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the
following provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company, the Guarantor or any other person referred to in
this Section (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting securities of
such person as entitles the holder or holders thereof to cast such
specified percentage of the aggregate votes which the holders of all
the outstanding voting securities of such person are entitled to cast
in the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the
class outstanding.
(3) The term "amount", when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares and the number of units
if relating to any other kind of security.
<PAGE>
63
(4) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not in
default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer shall be
-------- -------
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided,
--------
however, that, in the case of secured evidences of indebtedness, all
-------
of which are issued under a single indenture, differences in the
interest rates or maturity dates of various series thereof shall not
be deemed sufficient to constitute such series different classes and
provided, further, that, in the case of unsecured evidences of
-------- -------
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $100,000,000 subject to supervision or examination by Federal or
State authority. If such corporation publishes
<PAGE>
64
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 corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 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 with respect to
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii)
<PAGE>
65
subject to Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(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, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
principal Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument
<PAGE>
66
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
trust and that each such Trustee shall be trustee of a trust hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each 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 with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
(c) 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
<PAGE>
67
such rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.
(d) 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 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within four months prior to a default, as defined in Subsection (c)
of this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of set-
off which the Trustee could have exercised if a petition in bankruptcy had
been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four months'
period, or an amount
<PAGE>
68
equal to the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of the Company and its other creditors in
such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
Subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months' period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the
<PAGE>
69
Trustee, the Holders and the holders of other indenture securities realize, as a
result of payments from such special account and payments of dividends on claims
filed against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
the same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
of the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of other
indenture securities dividends on claims filed against the Company in bankruptcy
or receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, but after crediting thereon receipts on
account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Holders and the holders of other indenture securities with respect to their
respective claims, in which event it shall not be necessary to liquidate or to
appraise the value of any securities or other property held in such special
account or as security for any such claim, or to make a specific allocation of
such distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this Subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such four months' period; and
<PAGE>
70
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is
<PAGE>
71
also trustee, (ii) which contains provisions substantially similar to the
provisions of this Section, and (iii) under which a default exists at the
time of the apportionment of the funds and property held in such special
account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiation
or incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
Section 614. Appointment of Authenticating Agent.
At any time when any of the Securities remains Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having
<PAGE>
72
a combined capital and surplus of not less than $100,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent 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
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
<PAGE>
73
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By_________________________
As Authenticating Agent
By_________________________
Authorized Signatory
Section 615. Investment of Certain Payments Held by the Trustee.
Any amounts deposited by the Company or the Guarantor and held by the
Trustee hereunder, other than pursuant to Section 403 or Section 1010 hereof,
shall be invested by the Trustee from time to time at the written direction of
the Company or the Guarantor (as applicable) in such investments as may be
specified by the Company or the Guarantor (as applicable) and reasonably agreed
to by the Trustee from time to time; provided that no amounts deposited in
--------
respect of any payment on a Security shall be invested in an investment that
matures after the due date of such payment and that the Trustee shall have no
liability to the Company or the Guarantor for any loss on such investments;
provided, further, that in investing trust funds pursuant to the terms of this
- -------- -------
Section and liquidating any investments held in trust hereunder, the Trustee
may, to the extent permitted by law, purchase securities (including for the
purposes of this paragraph securities as to which the Trustee or a Trustee
Affiliate is the issuer or guarantor) from, and sell securities to, itself or
any Trustee Affiliate and purchase securities underwritten by, or in which a
market is made by, the Trustee or a Trustee Affiliate. For the purposes hereof,
a "Trustee Affiliate" shall mean an entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Trustee. Any income or gain realized as a result of any such
investment shall be promptly distributed (in no event later than the next
Business Day) to the Company after payment of any amounts required to be paid to
the Holders entitled thereto, except after the occurrence and during the
continuance of an Event of Default. The Trustee shall have no liability to the
Company or the Guarantor for the selection of investments or for any loss
resulting from any investment made in accordance with this Section, and shall
bear no expense in connection with any investment pursuant to this Section. The
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any investments prior to its stated maturity or the failure of
the Company or the Guarantor to provide timely written investment directions.
Any such investment may be sold (without regard to maturity date) by the
<PAGE>
74
Trustee whenever necessary to make any distribution required by this Indenture.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to Securities of each series
(a) semi-annually, not more than 15 days after the Regular Record
Date for the payment of interest in respect of the Securities of such
series, and on dates to be determined pursuant to Section 301 with respect
to Securities of any series which do not bear interest, a list, in such
form as the Trustee may reasonably require, of the names and addresses of
the Holders of such series as of a date not more than 15 days prior to the
time such information is furnished, 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;
provided, however, that so long as the Trustee is the Security Registrar for a
- -------- -------
particular series, no such list shall be required to be furnished with respect
to such series.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the
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75
Trustee shall, within five business days after the receipt of such application,
at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the information
preserved at the time by the Trustee in accordance with Section 702(a) a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the Holders
or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company, the Guarantor and the Trustee that neither the Company,
the Guarantor nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 702(b).
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Section 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1999, but only upon the occurrence within the previous 12 months of any events
specified in TIA (S)313(a), the Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Security Register, a brief report
dated as of such May 15 with respect to:
(1) its eligibility under Section 609 and its qualifications under
Section 608, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Securities, on any property or funds held or collected
by it as Trustee, except that the Trustee shall not be required (but may
elect) to report such advances if such advances so remaining unpaid
aggregate not more than 1/2 of 1% of the principal amount of the Securities
Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3), (4)
or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Security Register, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to state,
the
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circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) 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 any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee in writing when any Securities are listed on any
stock exchange.
Section 704. Reports by Guarantor.
Whether or not required by the rules and regulations of the
Commission, so long as any Securities are outstanding, the Guarantor shall
furnish to the Trustee (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Guarantor were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Guarantor's certified independent accountants and (ii) all reports that
would be required to be filed with the Commission on Form 8-K if the Guarantor
were required to file such reports. In addition, whether or not required by the
rules and regulations of the Commission, the Guarantor shall file a copy of all
such information with the Commission for public availability (unless the
Commission will not accept such a filing) and shall promptly make such
information available to all securities analysts and prospective investors who
request it in writing. The Guarantor shall at all times comply with TIA (S)
314(a).
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer Or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation 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:
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation 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
organized and 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 premium, if any) and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of the Company or a Subsidiary
of the Company as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor corporation or Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company 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
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79
required in connection with such transaction, such supplemental indenture
complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor corporation 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 corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, the Guarantor and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form,
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80
registrable or not registrable as to principal, and with or without
interest coupons; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities pursuant to the requirements of Section
1008 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) 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, provided such action shall not adversely affect the
--------
interests of the Holders of Securities of any series in any material
respect.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority of the Outstanding
Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, the Guarantor 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 of
Securities of such series under this Indenture; provided, however, that no such
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supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity
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81
thereof pursuant to Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1012, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
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the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1012, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(8), or
(4) modify any of the substantive provisions of the Guarantees or
release or discharge the Guarantor thereunder.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this
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Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series 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 of any series 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 of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the
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Company in respect of the Securities of that series and this Indenture may be
served. The Trustee is hereby initially appointed Paying Agent, and the
principal Corporate Trust Office of the Trustee is initially designated as the
office or agency where Securities may be presented or surrendered for payment.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series 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 obligations to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee in writing
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee in writing of
its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree
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84
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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 received
by the Trustee in respect of obligations deposited with the Trustee pursuant to
Section 403 or 1010, or then held by the Company, in trust for the payment of
the principal of (and premium, if any) or interest on any Security of any series
and remaining unclaimed for two years after such principal (and premium, if any)
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 Borough of Manhattan, The City
and State 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 will be
repaid to the Company.
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Section 1004. Corporate Existence.
Subject to Article Eight, each of the Company and the Guarantor will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights (charter and statutory) and
franchises; provided, however, that neither the Company nor the Guarantor shall
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be required to preserve any such right or franchise if its Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of its business and that the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 1005. Maintenance of Properties.
Each of the Company and the Guarantor will cause all properties used
or useful in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Guarantor or the Company, as the case may be, may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
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nothing in this Section shall prevent the Company or the Guarantor from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company or the Guarantor, as the case
may be, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
Section 1006. Payment of Taxes and Other Claims.
Each of the Guarantor and the Company will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon the
Guarantor, the Company or any of their respective Subsidiaries or upon the
income, profits or property of the Guarantor, the Company or any of their
respective Subsidiaries, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or the Guarantor or any of their respective Subsidiaries; provided,
--------
however, that the Guarantor, the Company and such Subsidiary shall not be
- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Section 1007. Limitation Upon Liens.
(a) Neither the Guarantor nor the Company shall, and the Guarantor
and the Company shall not permit any Restricted Subsidiary to, create or suffer
to exist any Lien to secure any
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86
Indebtedness of the Guarantor, the Company or any Restricted Subsidiary on any
property of or any shares of equity interests or evidences of Indebtedness
issued by the Company, the Guarantor or any Restricted Subsidiary and owned by
the Guarantor, the Company or any Restricted Subsidiary, without making, or
causing such Restricted Subsidiary to make, effective provision to secure all of
the Securities issued hereunder and then outstanding by such Lien, equally and
ratably with any and all other such Indebtedness thereby secured, so long as
such other Indebtedness is so secured. The foregoing restrictions shall not
apply to Permitted Liens.
(b) Notwithstanding the provisions of subsection (a) of this Section
1007, the Guarantor, the Company or any Restricted Subsidiary may create or
suffer to exist Liens securing Indebtedness in addition to those permitted by
subsection (a) of this Section 1007, and renew, extend or replace such Liens
provided that, at the time such Indebtedness is incurred and after giving effect
- --------
thereto, Exempted Debt does not exceed 10% of Consolidated Stockholders Equity.
Section 1008. Limitation Upon Sale and Leaseback Transactions.
(a) Neither the Guarantor nor the Company will, and the Guarantor and
the Company will not permit any Restricted Subsidiary to, enter into any
arrangements with any Person providing for the leasing by the Guarantor, the
Company or any Restricted Subsidiary of any property or asset now owned or
hereafter acquired which has been or is to be sold or transferred by the
Guarantor, the Company or such Restricted Subsidiary to such Person with the
intention of taking back a lease of such property (a "Sale and Leaseback
Transaction"), unless the net proceeds of such sale or transfer have been
determined by the Board of Directors of the Company or the Guarantor (as
applicable) to be at least equal to the fair value of such property or asset at
the time of such sale and transfer and either (i) the Guarantor, the Company or
a Restricted Subsidiary applies or causes to be applied an amount equal to the
net proceeds of such sale or transfer, within 180 days of receipt thereof, to
the retirement or prepayment (other than any mandatory retirement or prepayment)
of Senior Funded Debt of the Guarantor, the Company or any Restricted Subsidiary
or to the purchase of property or assets to be used in the ordinary course of
business, or (ii) the Guarantor, the Company or such Restricted Subsidiary
would, on the effective date of such sale or transfer, be entitled, pursuant to
Section 1007 hereof, to issue, assume or guarantee Indebtedness secured by a
Lien upon such property or asset at least equal in amount to the Attributable
Debt in respect of such Sale and Leaseback Transaction without equally and
ratably securing the Securities having the benefit of Section 1007. The
foregoing restriction shall not apply to any Sale and Leaseback Transaction (i)
between the Company and the Guarantor, between the Guarantor or the Company and
a Restricted Subsidiary, or between Restricted
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Subsidiaries, provided that the lessor shall be the Guarantor, the Company or a
--------
Wholly-owned Restricted Subsidiary or (ii) which has a lease of less than three
years in length.
(b) Notwithstanding the provisions of subsection (a) of this Section
1008, the Guarantor, the Company or any Restricted Subsidiary may enter into
Sale and Leaseback Transactions in addition to those permitted by paragraph (a)
of this Section 1008, and without any obligation to retire any Senior Funded
Debt of the Guarantor, the Company or a Restricted Subsidiary or to the purchase
of property or assets; provided that, at the time of entering into such Sale and
--------
Leaseback Transactions and after giving effect thereto, Exempted Debt does not
exceed 10% of Consolidated Stockholders Equity.
Section 1009. Restriction on Indebtedness of Restricted Subsidiaries.
The Company and the Guarantor shall not permit any Restricted
Subsidiary to create, incur, issue, assume or guaranty any Funded Debt, except:
(i) Funded Debt outstanding on the date of the Indenture; (ii) Funded Debt
issued to and held by the Company, the Guarantor or a Wholly-owned Restricted
Subsidiary; (iii) Funded Debt created, incurred, issued, assumed or guaranteed
by a Person prior to the time (A) such Person became a Restricted Subsidiary,
(B) such Person merges into or consolidates with a Restricted Subsidiary or (C)
a Restricted Subsidiary merges into or consolidates with such Person (in a
transaction in which such Person becomes a Restricted Subsidiary) (in the case
of each of clauses (A), (B) and (C), which Funded Debt was not incurred in
anticipation of such transaction and was outstanding prior to such transaction);
(iv) Funded Debt incurred to provide funds for all or part of the cost of
acquisition, construction, development or improvement of property (including
shares of equity interests), provided that the commitment of the creditor to
--------
extend the credit evidenced by such Funded Debt shall have been obtained not
later than 180 days after the later of (a) the completion of the acquisition,
construction, development or improvement of such property or (b) the placing in
operation of such property; (v) Funded Debt under the Canada Loan Agreement in a
principal amount not to exceed Can. $25,000,000; (vi) Funded Debt which is
exchanged for, or the proceeds of which are used to replace or refund, any
Funded Debt permitted to be outstanding pursuant to clauses (i) through (v)
above (or any extension or renewal thereof), in an aggregate principal amount
not to exceed the principal amount of the Indebtedness so exchanged, replaced or
refunded; (vii) Funded Debt not otherwise permitted pursuant to clauses (i)
through (v) above that, together with any other outstanding Funded Debt created,
incurred, issued, assumed or guaranteed pursuant to this clause (vii), has an
aggregate principal amount at any time outstanding that does not exceed 10% of
Consolidated Stockholders Equity; and (viii) Funded Debt which would be
permitted to be incurred under Section 1007(a).
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Section 1010. Defeasance of Certain Obligations.
If this Section is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Guarantor and the Company may omit
to comply with any term, provision or condition set forth in Sections 1007 to
1009, inclusive, with respect to the Securities of such series, provided that
--------
the following conditions shall have been satisfied:
(1) With reference to this Section 1010, the Company has deposited or
caused to be irrevocably deposited (except as provided in Section 403) with
the Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities (i)
in the case of Securities of such series denominated in U.S. dollars, cash
in U.S. dollars (or such other money or currencies as shall then be legal
tender in the United States) and/or U.S. Government obligations, or (ii) in
the case of Securities of such series denominated in a Foreign Currency
(other than a basket currency), money and/or Foreign Government Securities
in the same Foreign Currency, which through the payment of interest and
principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (and premium, if any) (including
mandatory sinking fund or analogous payments) of and any interest on all
the Securities of such series on the dates such installments of interest or
principal are due;
(2) Such deposit shall not, in the Opinion of Counsel, cause the
Trustee with respect to the Securities of such series to have a conflicting
interest as defined in Section 608 and for purposes of the Trust Indenture
Act with respect to the Securities of such series;
(3) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) No Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit;
(5) The Company has delivered to the Trustee an Opinion of Counsel to
the effect that (x) Holders of the Securities of such series will not
recognize income gain or
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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 and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred and (y)
upon the 91st day after the date of such deposit, the trust funds would not
be subject to being characterized as a preference for Bankruptcy Law
purposes; and
(6) 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 defeasance contemplated by this Section have
been complied with.
Section 1011. Statement by Officers as to Default.
Each of the Guarantor and the Company will deliver to the Trustee,
within 120 days after the end of each fiscal year of the Guarantor and the
Company ending after the date hereof, an Officers' Certificate stating whether
or not to the best knowledge of the signers thereof the Guarantor and the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture and if the Guarantor and the Company
shall be in default specifying all such defaults and the nature and status
thereof of which they may have knowledge.
Section 1012. Waiver of Certain Covenants.
The Guarantor and the Company may omit in any particular instance to
comply with any term, provision or condition set forth in Sections 1005 to 1009,
inclusive, with respect to the Securities of any series if before the time for
such compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Guarantor and
the Company and the duties of the Trustee in respect of any such term provision
or condition shall remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive compliance with any
covenant or condition hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any such compliance, whether or not such Holders remain
Holders after such record date; provided that unless the Holders of at least a
--------
majority in principal amount of the Outstanding Securities of such series shall
have waived such compliance prior
<PAGE>
90
to the date which is 90 days after such record date, any such waiver previously
given shall automatically and without further action by any Holder be cancelled
and of no further effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
Section 1102. Election to Redeem: Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
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
<PAGE>
91
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such Securities
which has been or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified,
<PAGE>
92
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date: provided, however, that
-------- -------
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of
<PAGE>
93
Securities of any series as provided for by the terms of Securities of such
series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such securities have not been previously so credited.
--------
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and the basis for such credit and will also deliver to
the Trustee any Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 1103 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 1104.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
Guarantee
Section 1301. Guarantee.
The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the obligations of the Company hereunder or
<PAGE>
94
thereunder, that: (a) the principal of, and premium, if any, and interest
(including additional amounts, if any) on the Securities will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of, premium, if any, and interest on the
Securities, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Securities or any of such
other obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantor will be obligated to pay the same immediately. The Guarantor hereby
agrees that its obligations hereunder shall be absolute and unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor other than the defense that
payment has been made or that the other relevant obligations have been paid or
performed. The Guarantor hereby waives diligence, presentment, demand of
payment, claim of fraud, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenant
that this Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities and this Indenture. If any Holder or
the Trustee is required by any court or otherwise to return to the Company or
Guarantor, or any Custodian, trustee, liquidator or other similar official
acting in relation to either the Company or Guarantor, any amount paid by either
to the Trustee or such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor agrees
that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Five for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article Five, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Guarantee. The
foregoing Guarantee shall rank pari passu with all other unsecured and
unsubordinated Indebtedness of the Guarantor.
<PAGE>
95
The Guarantor shall be subrogated to all rights of each Holder of any
Securities against the Company in respect of any amounts paid to the Holders by
the Guarantor pursuant to the provisions of this Guarantee; provided that the
--------
Guarantor shall not be entitled to enforce, or to receive, any payments arising
out of or based upon, such right of subrogation until the principal of, premium,
if any, and interest (including additional amounts, if any) on all the
Securities shall have been paid in full and nothing remains owed to the Trustee
pursuant to this Indenture.
Section 1302. Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 1301 hereof, the
Guarantor hereby agrees that a notation of such Guarantee substantially in the
form of Exhibit A shall be endorsed (manually or by facsimile) by an officer of
the Guarantor on each Security authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of the Guarantor by its
Chairman, Vice Chairman, President, Chief Executive Officer or one of its Vice
Presidents and attested to by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary.
The Guarantor hereby agrees that its Guarantee set forth in Section
1301 shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of such Guarantee.
If an officer whose signature is on this Indenture or on the Guarantee
no longer holds that office at the time the Trustee authenticates the Security
on which a Guarantee is endorsed, the Guarantee shall be valid, binding and
enforceable nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 1303. Guarantor May Consolidate, etc., on Certain Terms.
The Guarantor shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and the Guarantor shall not permit any Person to
consolidate with or merge into the Guarantor or convey, transfer or lease its
properties and assets substantially as an entirety to the Guarantor, unless:
(1) in case the Guarantor shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or
<PAGE>
96
into which the Guarantor is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of the
Guarantor substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State thereof
or the District of Columbia or the British Virgin Islands and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the
obligations under the Guarantee and the performance of every covenant of
this Indenture on the part of the Guarantor to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Guarantor as a result
of such transaction as having been incurred by the Guarantor at the time of
such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Guarantor would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Guarantor
or such successor corporation or Person, as the case may be, shall take
such steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured thereby;
and
(4) the Guarantor 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 complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
Section 1304. [Intentionally omitted]
Section 1305. Optional Tax Redemption.
The Securities of any series may be redeemed at the option of the
Guarantor, in whole but not in part, upon not less than 30 nor more than 60
days' notice given as provided herein, at a redemption price equal to the
principal amount thereof (except for Securities issued at a price representing a
discount from the principal amount payable at maturity which may be redeemed at
the redemption price set forth in such Securities) plus accrued interest to the
date fixed for redemption if, as a result of any change in or amendment to the
laws or any regulations or ruling promulgated thereunder of any jurisdiction
<PAGE>
97
(or of any political subdivision or taxing authority thereof or therein) in
which the Guarantor is resident for tax purposes, or any change in the official
application or interpretation of such laws, regulations or rulings, or any
change in the official application or interpretation of, or any execution of or
amendment to, any treaty or treaties affecting taxation to which such
jurisdiction (or such political subdivision or taxing authority) is a party (a
"Change in Tax Law"), which becomes effective on or after the original issue
date of such Securities, the Guarantor is or would be required on the next
succeeding Interest Payment Date to pay additional amounts with respect to the
Securities as described under Section 1306, and the payment of such additional
amounts cannot be avoided by the use of any reasonable measures available to the
Guarantor.
The Securities of any series may also be redeemed at the option of the
Guarantor, in whole but not in part, upon not less than 30 days nor more than 60
days' notice given as provided herein at a redemption price equal to the
principal amount thereof (except for Securities issued at a price representing a
discount from the principal amount payable at maturity which may be redeemed at
the redemption price set forth in such Securities) plus accrued interest to the
date fixed for redemption if the Person formed by a consolidation or
amalgamation of the Guarantor or into which the Guarantor is merged or to which
the Guarantor conveys, transfers or leases its properties and assets
substantially as an entirety is required, as a consequence of such
consolidation, amalgamation, merger, conveyance, transfer or lease and as a
consequence of a Change in Tax Law occurring after the date of such
consolidation, amalgamation, merger, conveyance, transfer or lease, to pay
additional amounts (as described in Section 1306) in respect of any tax,
assessment or governmental charge imposed on any Holder.
The Guarantor will also pay, or make available for payment, to Holders on
the redemption date any additional amounts (as described in Section 1306)
resulting from the payment of such redemption price.
Section 1306. Payment of Additional Amounts.
If any deduction or withholding for any present or future taxes,
assessments or other governmental charges of any jurisdiction (or any political
subdivision or taxing authority thereof or therein) in which the Guarantor is
resident for tax purposes shall at any time be required by such jurisdiction (or
any such political subdivision or taxing authority) in respect of any amounts to
be paid by the Guarantor under the Guarantee, the Guarantor will pay to each
Holder of Outstanding Securities as additional interest, such additional amounts
as may be necessary in order that the net amounts paid to such Holder who, with
respect to any such tax, assessment or other governmental charge, is not
resident in, or a citizen of, such jurisdiction, after such deduction or
withholding, shall be not less than the amount
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98
to which such Holder is entitled; provided, however, the Guarantor shall not be
-------- -------
required to make any payment of additional amounts for or on account of:
(i) Any tax, assessment or other governmental charge which would not
have been imposed but for (a) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of such Holder, if such Holder is an
estate, trust, partnership, limited liability company or corporation) and
the taxing jurisdiction or any political subdivision or territory or
possession thereof or area subject to its jurisdiction, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary, member or
shareholder) being or having been a citizen or resident thereof or being or
having been present or engaged in trade or business therein or having had a
permanent establishment therein or (b) the presentation of an Outstanding
Security (where presentation is required) for payment on a date more than
30 days after (x) the date on which such payment became due and payable or
(y) the date on which payment thereof is duly provided for, whichever
occurs later;
(ii) Any estate, inheritance, gift, sale, transfer, personal property
or similar tax, assessment or other governmental charge;
(iii) Any tax, assessment or other governmental charge which is
payable otherwise than by withholding from payment of (or in respect of)
principal of, premium, if any, or any interest on, Outstanding Securities;
(iv) Any tax, assessment or other governmental charge that is imposed
or withheld by reason of the failure to comply by the Holder or the
beneficial owner of the Outstanding Security with a request of the
Guarantor addressed to the Holder (a) to provide information, documents or
other evidence concerning the nationality, residence or identity of the
Holder or such beneficial owner or (b) to make and deliver any declaration
or other similar claim (other than a claim for refund of a tax, assessment
or other governmental charge withheld by the Guarantor) or satisfy any
information or reporting requirements, which, in the case of (a) or (b), is
required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, assessment or other governmental charge, provided
--------
that, in the case of (b), the Holder is legally entitled to deliver such
declaration or similar claim; or
(v) Any combination of items (i), (ii), (iii) and (iv) above;
<PAGE>
99
nor shall additional amounts be paid with respect to any payment of the
principal of, or any premium or interest on, any Outstanding Security to any
Holder who is a fiduciary or partnership or limited liability company or other
than the sole beneficial owner of such payment to the extent such payment would
be required by the laws of any jurisdiction in which the Guarantor is resident
for tax purposes (or any political subdivision or taxing authority thereof or
therein) to be included in the income for tax purposes of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership, limited
liability company or beneficial owner who would not have been entitled to such
additional amounts had it been the Holder of such Outstanding Security.
Section 1307. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article Thirteen shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article Thirteen in place of the Trustee.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders,
Officers, Directors and Employees
Section 1401. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer,
director, or employee, as such, past, present or future, of the Company,
Guarantor or of any successor Person, either directly or through the Company or
the Guarantor, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations of the Company and the Guarantor as the case may be, and
that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers, directors, or employees,
as such, of the Company, the Guarantor or of any successor Person, or any of
them, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all
such personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder,
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100
officer, director, or employee, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issue of
such Securities.
ARTICLE FIFTEEN
Miscellaneous
Section 1501. Consent to Jurisdiction, Etc.
(A) Each of the parties hereto consents to the jurisdiction of and
venue in federal and state courts located in the Borough of Manhattan, City and
State of New York, over any suit, action or proceeding with respect to this
Indenture.
(B) The Guarantor hereby irrevocably and unconditionally designates
and directs Tommy Hilfiger U.S.A., Inc. with offices on the date hereof at 25
West 39th Street, New York, New York, as respective agent to receive service of
any and all process and documents on its respective behalf in any legal action
or proceeding referred to in paragraph (a) of this Article in the State of New
York and agrees that service upon such agent shall constitute valid and
effective service upon the Guarantor and that failure of Tommy Hilfiger U.S.A.,
Inc. to give any notice of such service to the Guarantor shall not affect or
impair in any way the validity of such service or of any judgment rendered in
any action or proceeding based thereon and agrees to appoint a successor agent
to receive service of process on or prior to the termination for any reason of
the appointment of Tommy Hilfiger U.S.A., Inc. (or any successor agent) as agent
to receive service of process.
(C) Each of the Guarantor and the Company hereby irrevocably and
unconditionally agrees that service of process in any such action or proceeding
may also be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the Guarantor,
c/o the Company, at 25 West 39th Street, New York, New York or to the Company at
25 West 39th Street, New York, New York.
(D) The provisions of this Article shall survive the termination of
this Indenture, in whole or in part.
* * *
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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101
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
TOMMY HILFIGER U.S.A., INC.
By: _________________________
Name:
Title:
Attest:
TOMMY HILFIGER CORPORATION
By: ________________________
Name:
Title:
Attest:
THE CHASE MANHATTAN BANK, as
Trustee
By: ________________________
Name:
Title:
Attest:
<PAGE>
EXHIBIT A
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
Tommy Hilfiger Corporation, a corporation duly organized and existing
under the laws of the British Virgin Islands (herein called the "Guarantor",
which term includes any successor or additional Guarantor under the Indenture
(the "Indenture") referred to in the Security upon which this notation is
endorsed) (i) has unconditionally guaranteed, to the extent permitted by law,
that (a) the principal of, and premium, if any, and interest (including
additional amounts, if any) on the Securities will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of, premium, if any, and interest on the Securities, if
any, if lawful, and all other obligations of the Company to the Holders or the
Trustee will be promptly paid in full or performed, all in accordance with the
terms hereof and as set forth in the Indenture; and (b) in case of any extension
of time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, or otherwise.
No stockholder, officer, director, employee or incorporator, past,
present or future, of the Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his or its status as such stockholder,
officer, director, employee or incorporator.
This Guarantee shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.
This Guarantee shall not be valid or obligatory for any purpose with
respect to a Security until the certificate of authentication on the Security
upon which this Guarantee is noted shall have been executed by or on behalf of
the Trustee under the Indenture by the manual signature of one of its authorized
signatories.
TOMMY HILFIGER CORPORATION
By: ________________________
Name:
Title:
<PAGE>
Exhibit 5.1
[Letterhead of Wachtell, Lipton, Rosen & Katz]
April 3, 1998
Tommy Hilfiger Corporation
6/F, Precious Industrial Centre
18 Cheung Yue Street
Cheung Sha Wan
Kowloon
Hong Kong
Tommy Hilfiger U.S.A., Inc.
25 West 39th Street
New York, New York U.S.A. 10018
Dear Sirs,
We have acted as United States counsel for Tommy Hilfiger Corporation, a British
Virgin Islands corporation (the "Company"), and Tommy Hilfiger U.S.A., Inc., a
wholly owned subsidiary of the Company ("TH USA"), in connection with the
combined Registration Statement on Form S-3 of the Company and TH USA, in
connection with the registration under the Securities Act of 1933, as amended,
of $700,000,000 of debt securities of TH USA (the "Debt Securities") and related
guarantees of the Company (the "Guarantees"). In this regard, we have reviewed
the Registration Statement on Form S-3 (Registration No. 333-48355/48355-01), as
amended by Amendment No. 1 thereto (the "Registration Statement"), relating to
the Debt Securities and the Guarantees. We are familiar with the proceedings
heretofore taken, and the additional proceedings proposed to be taken, by TH USA
in connection with the authorization, registration, issuance and sale of the
Debt Securities.
For the purposes of our opinion in paragraph (2) below, we have assumed that (a)
the Company is validly existing and in good standing under the laws of the
British Virgin Islands and has duly authorized and will have, at the time the
Guarantees are issued by the Company, executed and delivered the Guarantees in
accordance with the Company's memorandum and articles of association, (b)
execution, delivery and performance by the Company of the Guarantees do not, and
will not at the time the Guarantees are issued by the Company, violate the laws
of the British Virgin Islands or any other applicable laws (excepting the laws
of the State of New York and the federal laws of the United States) and (c)
execution, delivery and performance by the Company of the Guarantees do not, and
will not at the time the Guarantees are issued by the Company, constitute a
breach or violation of any agreement or instrument which is binding upon the
Company. In addition, our opinion in paragraph (2) below is subject to the
effect of bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether enforcement is considered in
proceedings at law or in equity).
Based upon the foregoing, and subject to the proposed additional proceedings
being taken as now contemplated prior to the issuance of the Debt Securities and
the Guarantees, we are of the opinion that when the Debt Securities are issued
and sold by TH USA and the related Guarantees are issued by the Company pursuant
to the terms described in the Registration Statement:
(1) the Debt Securities will be validly issued and will constitute the
legally binding obligations of TH USA; and
(2) the Guarantees will constitute the legally binding obligations of the
Company, enforceable against the Company in accordance with their terms.
We consent to the use of our name in the Registration Statement under the
caption "Validity of Offered Debt Securities" and we also consent to the filing
of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Wachtell, Lipton, Rosen & Katz
<PAGE>
Exhibit 5.2
[Letterhead of Harney, Westwood & Riegels]
3rd April, 1998
Tommy Hilfiger Corporation
6/F, Precious Industrial Centre
18 Cheung Yue Street
Cheung Sha Wan
Kowloon
Hong Kong
Tommy Hilfiger U.S.A., Inc.
25 West 39th Street
New York, New York U.S.A. 10018
Dear Sirs,
We have acted as British Virgin Islands counsel for Tommy Hilfiger Corporation,
a British Virgin Islands corporation (the "Company"), in connection with the
combined Registration Statement on Form S-3 of the Company and Tommy Hilfiger
U.S.A., Inc., a wholly owned subsidiary of the Company ("TH USA"), in connection
with the registration under the United States Securities Act of 1933, as
amended, of $700,000,000 of debt securities of TH USA (the "Debt Securities")
and related guarantees of the Company (the "Guarantees"). In this regard, we
have reviewed the Registration Statement on Form S-3 (Registration No. 333-
48355-01), as amended by Amendment No. 1 thereto (the "Registration Statement"),
relating to the Debt Securities and the Guarantees.
We have also examined:
(a) the Memorandum and Articles of Association of the Company on file at the
Companies Registry in the British Virgin Islands on 3rd April, 1998.
(b) the Form of Guarantee; and
(c) a certified true copy of the resolutions adopted by written consent of a
majority of the directors of the Company dated March 20, 1998 authorising, inter
alia, the Company's filing of the Registration Statement and issuance of the
Guarantees.
We have assumed all copy documents examined by us conform to the original
instruments and that all signatures thereon are authentic.
We express no opinion as to matters of New York law which the Debt Securities
and related Guarantees are expressed to be governed, but we have assumed that
the Debt Securities and related Guarantees are, or will be, legal, valid,
binding on and enforceable against the Company under New York law.
Based upon the foregoing, we are of the opinion that when the Debt Securities
are issued and sold by TH USA and the related Guarantees are issued by the
Company pursuant to the terms described in the Registration Statement and in
conformity with applicable state securities law, such Guarantees will be the
legal, valid and binding obligations of the Company.
We consent to the use of our name in the Registration Statement under the
caption "Validity of Offered Debt Securities" and we also consent to the filing
of this opinion as an exhibit to the Registration Statement.
Yours faithfully,
HARNEY, WESTWOOD & RIEGELS
/s/ Hazel-Dawn Hewlett
<PAGE>
EXHIBIT 12.1
TOMMY HILFIGER CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, FISCAL YEAR ENDED MARCH 31,
------------------ --------------------------------------------------
1997 1997 1997 1997 1996 1995 1994 1993
--------- -------- --------- -------- ------- ------- ------- -------
PRO FORMA PRO FORMA
--------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Income before income
taxes.................. $132,512 $128,316 $ 64,766 $131,248 $92,400 $63,457 $41,766 $22,826
Fixed Charges
Interest expense...... 36,132 1,049 47,572 761 754 207 317 1,348
Portion of rent
expense representing
interest expense..... 3,752 3,011 3,691 2,970 1,923 761 328 356
Financing cost
amortization......... 975 -- 1,300 -- -- -- -- --
-------- -------- -------- -------- ------- ------- ------- -------
Total fixed charges
excluding capitalized
interest............... 40,859 4,060 52,563 3,731 2,677 968 645 1,704
Capitalized interest.... 915 915 -- -- -- -- -- --
-------- -------- -------- -------- ------- ------- ------- -------
Total fixed charges..... 41,774 4,975 52,563 3,731 2,677 968 645 1,704
-------- -------- -------- -------- ------- ------- ------- -------
Income before income
taxes and fixed
charges................ $173,371 $132,376 $117,329 $134,979 $95,077 $64,425 $42,411 $24,530
======== ======== ======== ======== ======= ======= ======= =======
Ratio of earnings to
fixed charges.......... 4.2 26.6 2.2 36.2 35.5 66.6 65.7 14.4
======== ======== ======== ======== ======= ======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this combined Registration Statement on Form S-3 of Tommy
Hilfiger U.S.A., Inc. and Tommy Hilfiger Corporation of our report dated May 21,
1997 on the financial statements of Tommy Hilfiger Corporation, which is
included in Exhibit 99.1 to the Current Report on Form 8-K dated April 1, 1998
and our report dated May 21, 1997 on the financial statements of Tommy Hilfiger
Corporation, appearing under Item 8 of the Annual Report on Form 10-K for
the fiscal year ended March 31, 1997 which financial statements have been
modified to include summarized financial information of Tommy Hilfiger U.S.A.,
Inc. and disclosure requirements related to Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," as filed on the Current
Report on Form 8-K dated April 1, 1998. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
New York, New York
April 3, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this combined Registration Statement on Form S-3 of Tommy
Hilfiger U.S.A., Inc. and Tommy Hilfiger Corporation of our report dated May 14,
1997, except Note 16 for which the date is January 31, 1998, relating to the
combined financial statements of Pepe Jeans USA, Inc. and Pepe Jeans Far East
Limited, appearing on page F-7 of the Tommy Hilfiger Corporation Proxy Statement
dated March 30, 1998. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
New York, New York
April 3, 1998
<PAGE>
EXHIBIT 23.5
[Letterhead of Price Waterhouse]
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this combined Registration Statement on Form S-3 of Tommy
Hilfiger U.S.A. Inc. and Tommy Hilfiger Corporation of our report dated January
23, 1998 relating to the financial statements of Tomcan Investments Inc. and our
report dated May 30, 1997 relating to the financial statements of Tommy Hilfiger
Canada Inc., appearing on pages F-20 and F-34, respectively, of the Tommy
Hilfiger Corporation Proxy Statement dated March 30, 1998. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE
Chartered Accountants
Montreal, Canada
April 3, 1998
<PAGE>
EXHIBIT 23.6
[Letterhead of Ptack Schnarch Basevitz]
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this combined Registration Statement on Form S-3 of Tommy
Hilfiger U.S.A., Inc. and Tommy Hilfiger Corporation of our report dated May 31,
1996 relating to the financial statements of Tommy Hilfiger Canada Inc.
appearing on page F-35 of the Tommy Hilfiger Corporation Proxy Statement dated
March 30, 1998. We also consent to the reference to our firm under the heading
"Experts" in such Prospectus.
/s/ Ptack Schnarch Basevitz
Montreal, Canada
April 1, 1998
