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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1996
REGISTRATION NO. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE SHERWIN-WILLIAMS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
Ohio
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
34-0526850
(I.R.S. EMPLOYER IDENTIFICATION NO.)
101 Prospect Avenue, N.W.
Cleveland, OH 44115
(216) 566-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
L.E. STELLATO
Vice President, General Counsel
and Secretary
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, OH 44115
(216) 566-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
TIMOTHY G. MASSAD
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, N.Y. 10019-7415
(212) 474-1000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
the market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT PRICE(1) REGISTRATION FEE
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Debt Securities............. $450,000,000(2)(3) (2) $450,000,000 $86,207(2)(3)
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</TABLE>
(1) United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) The aggregate offering price per unit has been omitted pursuant to
Securities Act Release No. 6964. The registration fee has been calculated in
accordance with Rule 457(o) under the Securities Act of 1933. The aggregate
amount registered reflects the offering price rather than the principal
amount of any Debt Securities issued at a discount.
(3) As discussed below, this Registration Statement constitutes a post-effective
amendment to Registration Statement No. 33-22705 previously filed by the
Registrant on Form S-3 covering $200,000,000 of Debt Securities. The
Registrant paid a registration fee relating to the $200,000,000 of the Debt
Securities registered pursuant to such Registration Statement at the time
such Registration Statement was filed. Accordingly, the Registrant is
required to pay a registration fee relating to only $250,000,000 of the Debt
Securities registered pursuant to this Registration Statement.
----------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT
IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO REGISTRATION STATEMENT NO.
33-22705, PREVIOUSLY FILED BY THE REGISTRANT ON FORM S-3. THIS REGISTRATION
STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 WITH RESPECT TO THE
REGISTRANT'S REGISTRATION STATEMENT NO. 33-22705, AND SUCH POST-EFFECTIVE
AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS
OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(C) OF THE SECURITIES
ACT OF 1933.
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<PAGE> 2
PROSPECTUS SUPPLEMENT
(To Prospectus Dated February , 1996)
U.S. $450,000,000
THE SHERWIN-WILLIAMS COMPANY [SHERWIN-WILLIAMS LOGO]
MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
The Sherwin-Williams Company (the "Company") may from time to time offer
pursuant to this Prospectus Supplement its Medium-Term Notes, Series A (the
"Notes"), with an aggregate initial public offering price or purchase price of
up to $450,000,000, (or the equivalent thereof in one or more foreign or
composite currencies), subject to reduction as a result of the sale of other
securities under the Registration Statement of which this Prospectus Supplement
and the accompanying Prospectus form a part or under a Registration Statement to
which this Prospectus Supplement and the accompanying Prospectus relate.
Unless otherwise specified in the applicable Pricing Supplement, each Note will
mature on a Business Day more than nine months from its date of issue (the
"Stated Maturity"), which maturity date may be subject to extension at the
option of the Company. Each Note may also be subject to redemption at the option
of the Company, or to repayment at the option of the Holder, prior to maturity.
The Notes may bear interest at a fixed rate (a "Fixed Rate Note"), which may be
zero in the case of certain Discount Notes, or at a floating rate (a "Floating
Rate Note") determined by reference to LIBOR, the CD Rate, the Commercial Paper
Rate, the Federal Funds Rate, the Treasury Rate, the Prime Rate, the CMT Rate,
the Eleventh District Cost of Funds Rate or any other Base Rate, as selected by
the purchaser and agreed to by the Company, adjusted by the Spread or Spread
Multiplier, if any, applicable to such Note. Unless otherwise indicated,
interest on each Fixed Rate Note will be payable semiannually in arrears on each
June 1 and December 1 (each an "Interest Payment Date") and at Stated Maturity.
A Note may be issued as an amortizing note (an "Amortizing Note") on which a
portion or all the principal amount is payable prior to Stated Maturity in
accordance with a schedule, by application of a formula, or by reference to an
index. A Note may be issued as an indexed note (an "Indexed Note") on which the
amount of any interest payment will be determined by reference to the level of a
specific index as defined on the applicable Pricing Supplement. The Specified
Currency, interest rate or interest rate formula, reset provisions, Issue Price,
Stated Maturity, Interest Payment Dates, redemption, repayment and extension
provisions and certain other terms with respect to each Note will be established
at the time of issuance and set forth in a pricing supplement to this Prospectus
Supplement (a "Pricing Supplement").
Each Note will be represented by either a Global Security registered in the name
of a nominee of The Depository Trust Company, as Depositary (a "Book-Entry
Note") or a certificate delivered to the Holder thereof or a person designated
by such Holder (a "Certificated Note"). Beneficial interests in Global
Securities representing Book-Entry Notes will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary and its
participants. Book-Entry Notes will not be issuable as Certificated Notes except
under the circumstances described herein.
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 THE PROSPECTUS, THIS PROSPECTUS SUPPLEMENT OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO AGENT'S PROCEEDS TO THE
PUBLIC(1) COMMISSION(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note...................... 100.000% .125%-.750% 99.875%-99.250%
Total(4)...................... US $450,000,000 $562,500-$3,375,000 $449,437,500-$446,625,000
</TABLE>
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(1) Unless otherwise specified in the applicable Pricing Supplement, the price
to public will be 100% of the principal amount.
(2) The Company will pay to Salomon Brothers Inc and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Agents") a
commission of from .125% to .750% of the principal amount of any Note,
depending upon its Stated Maturity through 30 years, sold through the
Agents.
(3) Before deduction of expenses payable by the Company estimated at $418,857,
including reimbursement of certain expenses of the Agents.
(4) Or the equivalent thereof in one or more foreign or composite currencies.
The Notes are being offered on a continuous basis by the Company through the
Agents, which have agreed to use their reasonable efforts to solicit orders to
purchase the Notes. The Company may also sell Notes at a discount to the Agents
for their own accounts or for resale to one or more purchasers at varying prices
related to prevailing market prices at the time of resale or, if set forth in
the applicable Pricing Supplement, at a fixed public offering price, as
determined by the Agents. In addition, the Agents may offer Notes purchased by
them as principal to other dealers. Unless otherwise specified in the applicable
Pricing Supplement, any Note purchased by an Agent as principal will be
purchased at 100% of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical maturity. The
Notes will not be listed on any securities exchange, and there can be no
assurance that the maximum amount of Notes offered by this Prospectus Supplement
will be sold or that there will be a secondary market for the Notes. The Company
reserves the right to withdraw, cancel or modify the offer made hereby without
notice. The Company or the Agents may reject any order to purchase Notes,
whether or not solicited, in whole or in part. See "Plan of Distribution".
SALOMON BROTHERS INC MERRILL LYNCH & CO.
The date of this Prospectus Supplement is February , 1996.
<PAGE> 3
COMPANY DESCRIPTION
The Sherwin-Williams Company, which was first incorporated in the State of
Ohio eighteen years after its founding in 1866, is engaged in the manufacture,
distribution and sale of paints, coatings and related products to professional,
industrial, commercial and retail customers.
RECENT DEVELOPMENTS
For the year ended December 31, 1995, net sales of the Company increased
5.6% to $3,273,819,000 from $3,100,069,000 for the year ended December 31, 1994.
Net income for 1995 increased 7.5% to $200,654,000, while income per share for
1995 increased 8.8% to $2.34 from $2.15 in 1994. Net sales in the Company's
Paint Stores Segment for 1995 were up 7.3% to $2,130,559,000, with
comparable-store sales increasing 6.5%. Operating profit for the Paint Stores
Segment for 1995 improved 12.7% to $158,458,000. The annual net sales of the
Company's Coating Segment for 1995 increased 2.7% to $1,129,429,000 from
$1,099,460,000 in 1994. Operating profits of the Coating Segment for 1995
increased .6% to $202,361,000.
In the three-month period ended December 31, 1995, consolidated net sales
of the Company were $740,907,000, 5.3% higher than the corresponding three-month
period of 1994. Net income for the three-month period increased 10.1% to
$33,766,000 and net income per share increased to $.39 from $.36 for the
corresponding three-month period in 1994. The Paint Stores Segment had a sales
gain of 5.4% in this three-month period and a 12.4% operating profit
improvement. The Coating Segment's sales increased 5.1% in this three-month
period while the operating profit for the Coating Segment increased 2.1 %.
PRICING SUPPLEMENT
Provisions of each transaction will be more fully described in a Pricing
Supplement to this Prospectus Supplement and the accompanying Prospectus.
Inconsistencies will be as described in the Pricing Supplement.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Debt Securities set forth in the Prospectus,
to which description reference is hereby made.
GENERAL
The Notes are a series of Debt Securities issued under an Indenture dated
as of February 1, 1996 with Chemical Bank as Trustee. At the date of this
Prospectus Supplement, the Notes offered pursuant to this Prospectus Supplement
are limited to an aggregate initial public offering price or purchase price of
up to $450,000,000 or the equivalent thereof in one or more foreign or composite
currencies, which amount is subject to reduction as a result of the sale of
other securities under the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus form a part or under a Registration
Statement to which this Prospectus Supplement and the accompanying Prospectus
relate. The aggregate amount of Notes may be increased from time to time to such
larger amount as may be authorized by the Company. The U.S. dollar equivalent of
the public offering price or purchase price of a Note having a Specified
Currency other than U.S. dollars will be determined on the basis of the noon
buying rate in New York City for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York (the
"Market Exchange Rate") for such Specified Currency on the applicable issue
date. Such determination will be made by the Company or its agent, as exchange
rate agent for the Notes (the "Exchange Rate Agent"). The Notes will constitute
part of the Senior
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Indebtedness of the Company and will rank pari passu with all other senior
unsecured debts of the Company.
The Notes will consist of Registered Notes, and will be offered on a
continuous basis. Notes will be issued in fully registered form only, without
coupons. Each Note will be issued initially as either a Book-Entry Note or, if
specified in the applicable Pricing Supplement, a Certificated Note. Except as
set forth in the Prospectus under "Description of Debt Securities -- Global
Securities", Book-Entry Notes will not be issuable as Certificated Notes. See
"Book-Entry System" below.
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be $1,000 and
any larger amount that is an integral multiple of $1,000, and the authorized
denominations of Notes having a Specified Currency other than U.S. dollars will
be the approximate equivalents thereof in the Specified Currency.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will mature on a Business Day more than nine months from its date of issue, as
selected by the purchaser and agreed to by the Company (the "Stated Maturity"),
which maturity date may be subject to extension at the option of the Company.
Each Note may also be subject to redemption at the option of the Company, or
repayment at the option of the Holder, prior to its Stated Maturity.
Notwithstanding the foregoing, each Note having a Specified Currency of Japanese
yen will have a Stated Maturity of not less than one year from its Original
Issue Date (as defined below), and will not be subject to optional redemption or
repayment prior to such time. Each Note having a Specified Currency of Pounds
Sterling will mature in compliance with such regulations as the Bank of England
may promulgate from time to time. Each Floating Rate Note will mature on an
Interest Payment Date for such Note.
The Pricing Supplement relating to a Note will describe the following
terms: (i) the Specified Currency for such Note; (ii) whether such Note is a
Fixed Rate Note, a Floating Rate Note, an Amortizing Note and/or an Indexed
Note; (iii) the price (expressed as a percentage of the aggregate principal
amount or face amount thereof) at which such Note will be issued (the "Issue
Price"); (iv) the date on which such Note will be issued (the "Original Issue
Date"); (v) the date of the Stated Maturity; (vi) if such Note is a Fixed Rate
Note, the rate per annum at which such Note will bear interest, if any, and
whether and the manner in which such rate may be changed prior to its Stated
Maturity; (vii) if such Note is a Floating Rate Note, the Base Rate, the Initial
Interest Rate, the Interest Reset Period or the Interest Reset Dates, the
Interest Payment Dates, and, if applicable, the Index Maturity, the Maximum
Interest Rate, the Minimum Interest Rate, the Spread or Spread Multiplier (all
as defined below), and any other terms relating to the particular method of
calculating the interest rate for such Note and whether and the manner in which
such Spread or Spread Multiplier may be changed prior to Stated Maturity; (viii)
whether such Note is an Original Issue Discount Note (as defined below); (ix) if
such Note is an Amortizing Note, the terms for repayment prior to Stated
Maturity; (x) if such Note is an Indexed Note, in the case of an Indexed Rate
Note, the manner in which the amount of any interest payment will be determined
or, in the case of an Indexed Principal Note, its Face Amount and the manner in
which the principal amount payable at Stated Maturity will be determined; (xi)
whether such Note may be redeemed at the option of the Company, or repaid at the
option of the Holder, prior to Stated Maturity as described under "Optional
Redemption, Repayment and Repurchase" below and, if so, the provisions relating
to such redemption or repayment, including, in the case of an Original Issue
Discount Note or Indexed Note, the information necessary to determine the amount
due upon redemption or repayment; (xii) whether such Note is subject to an
optional extension beyond its Stated Maturity as described under "Extension of
Maturity" below; and (xiii) any other terms of such Note not inconsistent with
the provisions of the Indenture under which such Note will be issued.
"Business Day" with respect to any Note means any day, other than a
Saturday or Sunday, that is (i) not a legal holiday or a day on which banking
institutions are authorized or required by law, regulation or executive order to
be closed in (a) The City of New York or (b) if the Specified Currency for such
Note is other than U.S. dollars, the financial center of the country issuing
such Specified Currency (which, in the case of ECU, shall be Brussels, Belgium)
and (ii) if such Note is a LIBOR Note (as defined below), a
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London Banking Day. "London Banking Day" with respect to any Note means any day
on which dealings in deposits in the Specified Currency of such Note are
transacted in the London interbank market.
"Original Issue Discount Note" means (i) a Note, including any such Note
whose interest rate is zero, that has a stated redemption price at Stated
Maturity that exceeds its Issue Price by at least 0.25% of its stated redemption
price at Stated Maturity, multiplied by the number of full years from the
Original Issue Date to the Stated Maturity for such Note and (ii) any other Note
designated by the Company as issued with original issue discount for United
States Federal income tax purposes.
A "basis point" or "bp" equals one one-hundredth of a percentage point.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on each Note are payable by
the Company in the Specified Currency for such Note. If the Specified Currency
for a Note is other than U.S. dollars, the Company will (unless otherwise
specified in the applicable Pricing Supplement) arrange to convert all payments
in respect of such Note into U.S. dollars in the manner described in the
following paragraph. The Holder of a Note having a Specified Currency other than
U.S. dollars may (if the applicable Pricing Supplement and such Note so
indicate) elect to receive all payments in respect of such Note in the Specified
Currency by delivery of a written notice to the Trustee for such Note not later
than fifteen calendar days prior to the applicable payment date, except under
the circumstances described under "Currency Risks -- Payment Currency" below.
Such election will remain in effect until revoked by written notice to such
Trustee received not later than fifteen calendar days prior to the applicable
payment date.
In the case of a Note having a Specified Currency other than U.S. dollars,
the amount of any U.S. dollar payment in respect of such Note will be determined
by the Exchange Rate Agent based on the highest firm bid quotation expressed in
U.S. dollars received by the Exchange Rate Agent at approximately 11:00 a.m.,
New York City time, on the second Business Day preceding the applicable payment
date (or, if no such rate is quoted on such date, the last date on which such
rate was quoted), from three (or, if three are not available, then two)
recognized foreign exchange dealers in The City of New York (one of which may be
an Agent and another of which may be the Exchange Rate Agent) selected by the
Exchange Rate Agent, for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of such Specified Currency payable on
such payment date in respect of all Notes denominated in such Specified
Currency. All currency exchange costs will be borne by the Holders of such Notes
by deductions from such payments. If no such bid quotations are available, such
payments will be made in such Specified Currency, unless such Specified Currency
is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, in which case such payments will be
made as described under "Currency Risks -- Payment Currency" below.
Unless otherwise specified in the applicable Pricing Supplement, U.S.
dollar payments of interest on Notes (other than interest payable at Stated
Maturity, on redemption or repayment) will be made, except as provided below, by
check mailed to the Registered Holders of such Notes as of the preceding Regular
Record Date (which, in the case of Global Securities representing Book-Entry
Notes, will be a nominee of the Depositary); provided, however, that, in the
case of a Note issued between a Regular Record Date and the related Interest
Payment Date, unless otherwise specified in the related Pricing Supplement,
interest for the period beginning on the Original Issue Date for such Note and
ending on such Interest Payment Date shall be paid on the next succeeding
Interest Payment Date to the Registered Holder of such Note on the related
Regular Record Date. A Holder of $10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars) or more in aggregate principal
amount of Notes of like tenor and terms shall be entitled to receive such U.S.
dollar interest payments by wire transfer of immediately available funds, but
only if appropriate wire transfer instructions have been received in writing by
the Paying Agent for such Notes not later than fifteen calendar days prior to
the applicable Interest Payment Date. Simultaneously with the election by any
Holder to receive payments in a Specified Currency other than U.S. dollars (as
provided above), such Holder shall provide appropriate wire transfer
instructions to the Paying Agent for such Notes. Unless otherwise specified in
the applicable Pricing Supplement,
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principal and any premium and interest payable at the Stated Maturity, on
redemption or repayment of a Note will be paid in immediately available funds
upon surrender of such Note at the corporate trust office or agency of the
Paying Agent for such Note in The City of New York, such interest being paid to
the person to whom principal is payable.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Discount Note is declared to be due and payable immediately as
described under "Description of Debt Securities -- Events of Default" in the
Prospectus, the amount of principal due and payable with respect to such Note
shall be limited to the aggregate principal amount (or face amount, in the case
of an Indexed Principal Note) of such Note multiplied by the sum of its Issue
Price (expressed as a percentage of the aggregate principal amount) plus the
original issue discount amortized from the date of issue to the date of
declaration, which amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles in effect
on the date of declaration).
The Regular Record Date with respect to any Interest Payment Date for a
Floating Rate Note or for an Indexed Rate Note shall be the date (whether or not
a Business Day) fifteen calendar days immediately preceding such Interest
Payment Date, and for a Fixed Rate Note (unless otherwise specified in the
applicable Pricing Supplement) shall be the May 15 or November 15 (whether or
not a Business Day) immediately preceding such Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date, or
from the last Interest Payment Date to which interest has been paid or duly
provided for, at the rate per annum stated in the applicable Pricing Supplement
until the principal amount thereof is paid or made available for payment, except
as described below under "Subsequent Interest Periods" and "Extension of
Maturity", and except that if so specified in the applicable Pricing Supplement,
the rate of interest payable on certain Fixed Rate Notes may be subject to
adjustment from time to time as described in such Pricing Supplement. Unless
otherwise set forth in the applicable Pricing Supplement, interest on each Fixed
Rate Note will be payable semiannually in arrears on each June 1 and December 1
(each such day being an "Interest Payment Date") and at Stated Maturity. If an
Interest Payment Date with respect to any Fixed Rate Note would otherwise be a
day that is not a Business Day, such Interest Payment Date shall not be
postponed; provided, however, that any payment required to be made in respect of
such Note on a date (including the day of Stated Maturity) that is not a
Business Day for such Note need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Each payment of interest in respect of an Interest Payment Date shall
include interest accrued through the day before such Interest Payment Date.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
FLOATING RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, each
Floating Rate Note will bear interest from its Original Issue Date to the first
Interest Reset Date (such period, the "Initial Interest Period") for such Note
at the Initial Interest Rate set forth on the face thereof and in the applicable
Pricing Supplement. The interest rate on such Note for each Interest Reset
Period (as defined below) (and for the Initial Interest Period if so specified
in the applicable Pricing Supplement) will be determined by reference to an
interest rate basis (the"Base Rate"), plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any. The "Spread" is the number of basis
points that may be specified in the applicable Pricing Supplement as being
applicable to such Note, and the "Spread Multiplier" is the percentage that may
be specified in the applicable Pricing Supplement as being applicable to such
Note, except in each case as described below under "Subsequent Interest Periods"
and "Extension of Maturity", and except that if so specified in the applicable
Pricing Supplement, the Spread or Spread Multiplier on certain Floating Rate
Notes may be subject to adjustment from time to time as described in such
Pricing Supplement. The applicable Pricing Supplement will designate one of the
following Base
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Rates as applicable to a Floating Rate Note: (i) LIBOR (a "LIBOR Note"), (ii)
the Commercial Paper Rate (a "Commercial Paper Rate Note"), (iii) the Treasury
Rate (a "Treasury Rate Note"), (iv) the Prime Rate (a "Prime Rate Note"), (v)
CMT Rate (a "CMT Note"), (vi) the Federal Funds Rate (a "Federal Funds Rate
Note"), (vii) the CD Rate (a "CD Rate Note"), (viii) the Eleventh District Cost
of Funds Rate (an "Eleventh District Cost of Funds Rate Note") or (ix) such
other Base Rate as is set forth in such Pricing Supplement and in such Note. The
"Index Maturity" for any Floating Rate Note is the period of maturity of the
instrument or obligation from which the Base Rate is calculated. "H.15(519)"
means the publication entitled "Statistical Release H.15(519), 'Selected
Interest Rates' ", or any successor publication, published by the Board of
Governors of the Federal Reserve System. "Composite Quotations" means the daily
statistical release entitled "Composite 3:30 p.m. Quotations for U.S. Government
Securities" published by the Federal Reserve Bank of New York.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following (in each case expressed as a rate per
annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period ("Maximum Interest
Rate") and (ii) a minimum limitation, or floor, on the rate at which interest
may accrue during any interest period ("Minimum Interest Rate"). In addition to
any Maximum Interest Rate that may be applicable to any Floating Rate Note, the
interest rate on a Floating Rate Note will in no event be higher than the
maximum rate permitted by applicable law, as the same may be modified by United
States law of general application. The Notes will be governed by the law of the
State of New York and, under such law as of the date of this Prospectus
Supplement, the maximum rate of interest under provisions of the penal law, with
certain exceptions, is 25% per annum on a simple interest basis. Such maximum
rate of interest only applies to obligations that are less than $2,500,000.
Unless otherwise specified in the Pricing Supplement, the Trustee will be
the "Calculation Agent". Upon request of the holder of any Floating Rate Note,
the Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate which will become effective as a result of a
determination for the next Interest Reset Date with respect to such Floating
Rate Note. Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date", if applicable, pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date, redemption date, repayment date or Stated Maturity, as
the case may be.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing Supplement, the
Interest Reset Dates will be, in the case of Floating Rate Notes that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate Notes that
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes that reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of each of two months of each year specified
in the applicable Pricing Supplement; and, in the case of Floating Rate Notes
that reset annually, the third Wednesday of one month of each year specified in
the applicable Pricing Supplement. If an Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding Business Day, except that,
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the rate
of interest that goes into effect on any Interest Reset Date shall be determined
on a date (the "Interest Determination Date") preceding such Interest Reset
Date, as further described below. Such Interest Determination Date may be
referred to below as a "CD Rate Determination Date" in the case of a CD Rate
Note, a "Commercial
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<PAGE> 8
Paper Rate Determination Date" in the case of a Commercial Paper Rate Note, a
"Federal Funds Rate Determination Date" in the case of a Federal Funds Rate
Note, a "LIBOR Determination Date" in the case of a LIBOR Rate Note, a "Treasury
Rate Determination Date" in the case of a Treasury Rate Note, A "Prime Rate
Determination Date" in the case of a Prime Rate Note, a "CMT Rate Determination
Date" in the case of a Constant Maturity Treasury Rate Note or an "Eleventh
District Cost of Funds Rate Determination Date" in the case of an Eleventh
District Cost of Funds Rate Note.
Unless otherwise specified in the applicable Pricing Supplement, interest
payable in respect of Floating Rate Notes shall be the accrued interest from and
including the Original Issue Date or the last date to which interest has been
paid or duly provided for, as the case may be, to but excluding the applicable
Interest Payment Date.
With respect to a Floating Rate Note, accrued interest shall be calculated
by multiplying the principal amount of such Note (or, in the case of a Floating
Rate Note that is an Indexed Principal Note, its Face Amount) by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
Pricing Supplement the interest factor (expressed as a decimal calculated to
seven decimal places without rounding) for each such day is computed by dividing
the interest rate in effect on such day by 360, in the case of LIBOR Notes,
Prime Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes,
Eleventh District Cost of Funds Rate Notes, and CD Rate Notes or by the actual
number of days in the year, in the case of CMT Rate Notes or Treasury Rate
Notes. For purposes of making the foregoing calculation, the interest rate in
effect on any Interest Reset Date will be the applicable rate as reset on such
date.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a Floating
Rate Note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward, and
all currency amounts used in or resulting from such calculation on Floating Rate
Notes will be rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March, June, September,
and December of each year; in the case of Floating Rate Notes that reset
semiannually, on the third Wednesday of each of two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, on the third Wednesday of one month of each year
specified in the applicable Pricing Supplement (each such day being an "Interest
Payment Date"). If an Interest Payment Date with respect to any Floating Rate
Note would otherwise be a day that is not a Business Day, such Interest Payment
Date shall be postponed to the next succeeding Business Day, except that, in the
case of a LIBOR Note, if such Business Day is in the next succeeding calendar
month, such Interest Payment Date shall be the immediately preceding Business
Day.
CD RATE NOTES
Each CD Rate Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to the CD Rate and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date pertaining to such CD Rate Determination Date, then the "CD
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<PAGE> 9
Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Certificates of Deposit". If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either H.15(519) or Composite Quotations, then the "CD Rate" for such Interest
Reset Period will be calculated by the Calculation Agent for such CD Rate Note
and will be the arithmetic mean of the secondary market offered rates as of
10:00 a.m., New York City time, on such CD Rate Determination Date of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation Agent for such CD Rate Note for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing (in the market for negotiable certificates of
deposit) with a remaining maturity closest to the Index Maturity designated in
the Pricing Supplement in a denomination of $5,000,000; provided, however, that
if the dealers selected as aforesaid by such Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "CD Rate" for such Interest
Reset Period will be the same as the CD Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Note as of the second Business
Day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published prior
to 3:00 p.m., New York City time, on the Calculation Date pertaining to such
Commercial Paper Rate Determination Date, then the "Commercial Paper Rate" for
such Interest Reset Period shall be the Money Market Yield on such Commercial
Paper Rate Determination Date of the rate for commercial paper of the specified
Index Maturity as published in Composite Quotations under the heading
"Commercial Paper". If by 3:00 p.m., New York City time, on such Calculation
Date such rate is not yet published in either H.15(519) or Composite Quotations,
then the "Commercial Paper Rate" for such Interest Reset Period shall be the
Money Market Yield of the arithmetic mean of the offered rates, as of 11:00
a.m., New York City time, on such Commercial Paper Rate Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for such Commercial Paper Rate Note for commercial paper
of the specified Index Maturity placed for an industrial issuer whose bonds are
rated "AA" or the equivalent by a nationally recognized rating agency; provided,
however, that if the dealers selected as aforesaid by such Calculation Agent are
not quoting offered rates as mentioned in this sentence, the "Commercial Paper
Rate" for such Interest Reset Period will be the same as the Commercial Paper
Rate for the immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C> <C> <C>
Money Market Yield = D X 360 X 100
-------------------------
360 - (D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
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FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Rate Determination Date, the "Federal Funds
Rate" for such Interest Reset Period shall be the rate on such Federal Funds
Rate Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "Federal Funds Rate" for such Interest Reset Period shall
be the rate on such Federal Funds Rate Determination Date made publicly
available by the Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal Funds (Effective)";
provided, however, that if such rate is not made publicly available by the
Federal Reserve Bank of New York by 3:00 p.m., New York City time, on such
Calculation Date, the "Federal Funds Rate" for such Interest Reset Period will
be the same as the Federal Funds Rate in effect for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
LIBOR NOTES
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest Reset Date for
such Interest Reset Period (a "LIBOR Determination Date"), the Calculation Agent
for such LIBOR Note will determine (a) in the case of LIBOR Telerate (as defined
below), the offered rate, and (b) in the case of LIBOR Reuters (as defined
below), the arithmetic mean of the offered rates, for deposits in the Specified
Currency for the period of the Index Maturity specified in the applicable
Pricing Supplement, commencing on such Interest Reset Date, which appear on the
Designated LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR
Determination Date. "Designated LIBOR Page" means "LIBOR Telerate", which shall
be the display designated as page "3750" on the Dow Jones Telerate Service (or
such other page as may replace page "3750" on such service or such other service
as may be nominated by the British Bankers' Association for the purpose of
displaying the London interbank offered rates of major banks), unless "LIBOR
Reuters" is designated in the applicable Pricing Supplement, in which case
"Designated LIBOR Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on such service or such other service as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates of major banks). In the case of LIBOR Reuters, if at least two such
offered rates appear on the Designated LIBOR Page, "LIBOR" for such Interest
Reset Period will be the arithmetic mean of such offered rates as determined by
the Calculation Agent for such LIBOR Note.
(ii) In the case of LIBOR Telerate, if no rate appears, or in the case of
LIBOR Reuters, if fewer than two offered rates appear, on the Designated LIBOR
Page on such LIBOR Determination Date, the Calculation Agent for such LIBOR Note
will request the principal London offices of each of four major banks in the
London interbank market selected by such Calculation Agent to provide such
Calculation Agent with its offered quotations for deposits in U.S. dollars for
the period of the specified Index Maturity, commencing on such Interest Reset
Date, to prime banks in the London interbank market at approxi-
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<PAGE> 11
mately 11:00 a.m., London time, on such LIBOR Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative of a single transaction in such market at such time. If at least
two such quotations are provided, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such quotations. If fewer than two such quotations are
provided, "LIBOR" for such Interest Reset Period will be the arithmetic mean of
rates quoted by three major banks in The City of New York selected by the
Calculation Agent for such LIBOR Note at approximately 11:00 a.m., New York City
time, on such LIBOR Determination Date for loans in U.S. dollars to leading
European banks, for the period of the specified Index Maturity, commencing on
such Interest Reset Date, and in a principal amount equal to an amount of not
less than $1,000,000 that is representative of a single transaction in such
market at such time; provided, however, that if fewer than three banks selected
as aforesaid by such Calculation Agent are quoting rates as mentioned in this
sentence, "LIBOR" for such Interest Reset Period will be the same as LIBOR for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate).
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Treasury Rate and the
Spread or Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" for each Interest Reset Period will be the rate for the auction
held on the Treasury Rate Determination Date (as defined below) for such
Interest Reset Period of direct obligations of the United States ("Treasury
securities") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate shall be published in H.15(519) under the heading "U.S.
Government Securities -- Treasury bills -- auction average (investment)" or, in
the event that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date pertaining to such Treasury Rate Determination
Date, the auction average rate (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) on such
Treasury Rate Determination Date as otherwise announced by the United States
Department of the Treasury. In the event the results of the auction of Treasury
securities having the specified Index Maturity are not published or reported as
provided above by 3:00 p.m., New York City time, on such Calculation Date, or if
no such auction is held on such Treasury Rate Determination Date, then the
"Treasury Rate" for such Interest Reset Period shall be calculated by the
Calculation Agent for such Treasury Rate Note and shall be a yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Determination Date, of three leading primary United States
government securities dealers selected by such Calculation Agent for the issue
of Treasury securities with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting bid rates as mentioned in this sentence, then
the "Treasury Rate" for such Interest Reset Period will be the same as the
Treasury Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury securities would normally be auctioned. Treasury
securities are normally sold at auction on Monday of each week, unless that day
is a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an auction date
shall fall on any day that would otherwise be an Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the Business
Day immediately following such auction date.
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<PAGE> 12
PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate calculated
with reference to the Prime Rate and the Spread or Spread multiplier, if any
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Prime
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Prime Rate Note as of the second Business Day prior to the Interest
Reset Date for such Interest Reset Period (a "Prime Rate Determination Date")
and shall be the rate on such date as published in H.15(519) under the heading
"Bank Prime Loan." In the event that such rate is not published by 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Prime Rate
Determination Date, then the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen USPRIME1 Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
such Prime Rate Determination Date. "Reuters Screen USPRIME1" means the display
designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or
such other page as may replace the USPRIME1 page on that service or such other
service as may be nominated by the British Bankers' Association for the purpose
of displaying prime rates or base lending rates of major United States banks).
If fewer than four such rates but more than one such rate appear on the Reuters
Screen USPRIME1 Page for such Prime Rate Determination Date, the Prime Rate
shall be determined by the Calculation Agent and will be the arithmetic mean of
the prime rates quoted on the basis of actual number of days in the year divided
by 360 as of the close of business on such Prime Rate Determination Date by at
least two major money center banks in New York City selected by the Calculation
Agent (after consulting with the Company). If fewer than two such rates appear
on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the
Calculation Agent and will be the arithmetic mean of the prime rates furnished
in New York City by three substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500,000,000 and being
subject to supervision or examination by Federal or State authority, selected by
the Calculation Agent (after consulting with the Company) to provide such rate
or rates; provided, however, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will remain the Prime Rate
in effect on such Prime Rate Determination Date (or, if there was no preceding
Interest Reset Period, the Initial Interest Rate).
CMT RATE NOTES
Each CMT Rate Note will bear interest at the rate (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Note and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "CMT
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such CMT Rate Note as of the second Business Day prior to the Interest Reset
Date for such Interest Reset Period (a "CMT Rate Interest Determination Date")
and shall be the rate displayed on the Designated CMT Telerate Page under the
caption "...Treasury Constant Maturities...Federal Reserve Board release H.15...
Mondays approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated Telerate Page is
7055, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week, or the month, as applicable,
ended immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published,
or if not published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate for such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT
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<PAGE> 13
Maturity Index) for the CMT Rate Interest Determination Date with respect to the
related Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity, based on the arithmetic mean of the secondary market
closing side offer prices as of approximately 3:30 P.M., New York City time, on
the CMT Rate Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in the City of New York selected by the Calculation
Agent (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on the CMT Rate Interest Determination Date of three Reference
Dealers in the City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for such Treasury Notes with an original maturity
of the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index in an amount of at least U.S. $100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Rate Interest Determination Date (or, if there is no
preceding Interest Reset Period, the Initial Interest Rate). If two Treasury
Notes with an original maturity as described in the third preceding sentence
have remaining terms to maturity equally close to the Designated CMT Maturity
Index, the quotes for the CMT Rate Note with the shorter remaining term to
maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service designated in the applicable Pricing Supplement for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)). If no such page is
specified in the applicable Pricing Supplement, the Designated CMT Telerate Page
shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
ELEVENTH DISTRICT COST OF FUNDS RATE
Each Eleventh District Cost of Funds Rate Note will bear interest at
interest rates calculated with reference to the Eleventh District Cost of Funds
Rate and the Spread or Spread Multiplier, if any, specified in such Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" for each Interest Reset Period shall be determined
by the Calculation Agent on the "Eleventh District Cost of Funds Rate
Determination Date" (as defined below) as the rate equal to the monthly weighted
average cost of funds for the calendar month immediately preceding the month in
which such
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<PAGE> 14
Eleventh District Cost of Funds Rate Determination Date falls, as set forth
under the caption "11th district" on Telerate Page 7058 (as defined below) as of
11:00 A. M., San Francisco time, on such Eleventh District Cost of Funds Rate
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Determination Date, then the Eleventh
District Cost of Funds Rate on such Eleventh District Cost of Funds Rate
Determination Date will be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced (the "Index") by the FHLB of San Francisco as such cost
of funds for the calendar month immediately preceding the date of such
announcement. If the FHLB of San Francisco fails to announce such rate for the
calendar month immediately preceding such Eleventh District Cost of Funds Rate
Determination Date, then the Eleventh District Cost of Funds Rate determined as
of such Eleventh District Cost of Funds Rate Determination Date will be the
Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of
Funds Rate Determination Date (or, if there is no preceding Interest Reset
Period, the Initial Interest Rate).
The "Eleventh District Cost of Funds Rate Determination Date" will be the
last working day of the month on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the Index (as defined above)
immediately preceding the Interest Reset Date. "Telerate Page 7058" means the
display designated as page "7058" on the Dow Jones Telerate Service (or such
other page as may replace the 7058 page on that service or such other service as
may be nominated by the British Bankers' Association for the purpose of
displaying the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District).
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to reset the interest rate (in the case of a Fixed Rate
Note) with respect to such Note or the Spread or Spread Multiplier (in the case
of a Floating Rate Note) with respect to such Note and, if so, the date or dates
on which such interest rate or such Spread or Spread Multiplier, as the case may
be, may be reset (each an "Optional Reset Date").
The Company shall notify the Trustee for a Note whether or not it intends
to exercise such option with respect to such Note at least 50 but not more than
60 calendar days prior to an Optional Reset Date for such Note. Not later than
40 calendar days prior to such Optional Reset Date, the Trustee for such Note
will mail to the Holder of such Note a notice (the "Reset Notice"), first class,
postage prepaid, indicating whether the Company has elected to reset the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) and if so, (i) such new
interest rate or such new Spread or Spread Multiplier, as the case may be; and
(ii) the provisions, if any, for redemption during the period from such Optional
Reset Date to the next Optional Reset Date or, if there is no such next Optional
Reset Date, to the Stated Maturity of such Note (each such period a "Subsequent
Interest Period"), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 calendar days prior to an
Optional Reset Date for a Note, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Reset
Notice with respect to such Optional Reset Date and establish a higher interest
rate (in the case of a Fixed Rate Note) or a higher Spread or Spread Multiplier
(in the case of a Floating Rate Note) for the Subsequent Interest Period
commencing on such Optional Reset Date by causing the Trustee for such Note to
mail notice of such higher interest rate or higher Spread or Spread Multiplier,
as the case may be, first class, postage prepaid, to the Holder of such Note.
Such notice shall be irrevocable. All Notes with respect to which the interest
rate or Spread or Spread Multiplier is reset on an Optional Reset Date will bear
such higher interest rate (in the case of Fixed Rate Notes) or higher Spread or
Spread Multiplier (in the case of Floating Rate Notes), whether or not tendered
for repayment.
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The Holder of a Note will have the option to elect repayment of such Note
by the Company on each Optional Reset Date at a price equal to the principal
amount thereof, plus interest accrued to such Optional Reset Date. In order for
a Note to be repaid on an Optional Reset Date, the Holder thereof must follow
the procedures set forth below under "Optional Redemption, Repayment and
Repurchase" for optional repayment, except that the period for delivery of such
Note or notification to the Trustee for such Note shall be at least 25 but not
more than 35 calendar days prior to such Optional Reset Date, and except that a
Holder who has tendered a Note for repayment pursuant to a Reset Notice may, by
written notice to the Trustee for such Note, revoke any such tender for
repayment until the close of business on the tenth day prior to such Optional
Reset Date.
AMORTIZING NOTES
The Company may from time to time offer Notes ("Amortizing Notes") on which
a portion or all the principal amount is payable prior to Stated Maturity in
accordance with a schedule, by application of a formula, or by reference to an
Index (as defined below). Further information concerning additional terms and
conditions of any Amortizing Notes, including terms for repayment thereof, will
be set forth in the applicable Pricing Supplement.
INDEXED NOTES
The Company may from time to time offer Notes ("Indexed Notes") on which
certain or all interest payments (in the case of an "Indexed Rate Note"), and/or
the principal amount payable at Stated Maturity or earlier redemption or
retirement (in the case of an "Indexed Principal Note"), is determined by
reference to the principal amount of such Notes (or, in the case of an Indexed
Principal Note, to the amount designated in the applicable Pricing Supplement as
the "Face Amount" of such Indexed Note) and by reference to prices, changes in
prices, or differences between prices, of securities, currencies, intangibles,
goods, articles or commodities or by such other objective price, economic or
other measures as are described in the applicable Pricing Supplement (the
"Index"). A description of the Index used in any determination of an interest or
principal payment, and the method or formula by which interest or principal
payments will be determined by reference to such Index, will be set forth in the
applicable Pricing Supplement.
In the case of a Fixed Rate Note, Floating Rate Note or Indexed Rate Note
that is also an Indexed Principal Note, the amount of any interest payment will
be determined by reference to the Face Amount of such Indexed Note unless
specified otherwise in the applicable Pricing Supplement. In the case of an
Indexed Principal Note, the principal amount payable at Stated Maturity or any
earlier redemption or repayment of the Indexed Note may be different from the
Face Amount.
If the determination of the Index on which any interest payment or the
principal amount of an Indexed Note is calculated or announced by a third party,
which may be an Agent or another affiliate of the Company, and such third party
either suspends the calculation or announcement of such Index or changes the
basis upon which such Index is calculated (other than changes consistent with
policies in effect at the time such Indexed Note was issued and permitted
changes described in the applicable Pricing Supplement), then such Index shall
be calculated for purposes of such Indexed Note by another third party selected
by the Company, which may be an Agent or another affiliate of the Company,
subject to the same conditions and controls as applied to the original third
party. If for any reason such Index cannot be calculated on the same basis and
subject to the same conditions and controls as applied to the original third
party, then the indexed interest payments, if any, or any indexed principal
amount of such Indexed Note shall be calculated in the manner set forth in the
applicable Pricing Supplement. Any determination of such third party shall in
the absence of manifest error be binding on all parties.
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EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of whole years from one to five (each an "Extension Period") up to
but not beyond the date (the "Final Maturity") set forth in such Pricing
Supplement.
The Company may exercise such option with respect to a Note by notifying
the Trustee for such Note at least 50 but not more than 60 calendar days prior
to the old Stated Maturity of such Note. Not later than 40 calendar days prior
to the old Stated Maturity of such Note, the Trustee for such Note will mail to
the Holder of such Note a notice (the "Extension Notice"), first class, postage
prepaid. The Extension Notice will set forth (i) the election of the Company to
extend the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in
the case of a Fixed Rate Note, the interest rate applicable to the Extension
Period or, in the case of a Floating Rate Note, the Spread or Spread Multiplier
applicable to the Extension Period; and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by such
Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, such Note will have the
same terms as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to the
old Stated Maturity of such Note, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Extension
Notice for such Note and establish a higher interest rate (in the case of a
Fixed Rate Note) or a higher Spread or Spread Multiplier (in the case of a
Floating Rate Note) for the Extension Period, by causing the Trustee for such
Note to mail notice of such higher interest rate or higher Spread or Spread
Multiplier, as the case may be, first class, postage prepaid, to the Holder of
such Note. Such notice shall be irrevocable. All Notes with respect to which the
Stated Maturity is extended will bear such higher interest rate (in the case of
Fixed Rate Notes) or higher Spread or Spread Multiplier (in the case of Floating
Rate Notes) for the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity of a Note, the Holder of such
Note will have the option to elect repayment of such Note by the Company on the
old Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order for a Note to be repaid on the old
Stated Maturity once the Company has extended the Stated Maturity thereof, the
Holder thereof must follow the procedures set forth below under "Optional
Redemption, Repayment and Repurchase" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee for such Note
shall be at least 25 but not more than 35 days prior to the old Stated Maturity
and except that a Holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee for such Note, revoke any
such tender for repayment until the close of business on the tenth day before
the old Stated Maturity.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable at the option of the Company, in whole or in part, and the date or
dates (each an "Optional Redemption Date") on which such Note may be redeemed
and the price (the "Redemption Price") at which (together with accrued interest
to such Optional Redemption Date) such Note may be redeemed on each such
Optional Redemption Date. The Company may exercise such option with respect to a
Note by notifying the Trustee for such Note at least 60 days prior to any
Optional Redemption Date. Unless otherwise specified in the applicable Pricing
Supplement, at least 30 but not more than 60 days prior to the date of
redemption, such Trustee shall mail notice of such redemption, first class,
postage prepaid, to the Holder of such Note. In the event of redemption of a
Note in part only, a new Note or Notes for the unredeemed portion thereof shall
be issued to the Holder thereof upon the cancellation thereof. The Notes will
not be subject to any sinking fund.
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The Pricing Supplement relating to each Note will also indicate whether the
Holder of such Note will have the option to elect repayment of such Note by the
Company prior to its Stated Maturity, and, if so, such Pricing Supplement will
specify the date or dates on which such Note may be repaid (each an "Optional
Repayment Date") and the price (the "Optional Repayment Price") at which,
together with accrued interest to such Optional Repayment Date, such Note may be
repaid on each such Optional Repayment Date.
In order for a Note to be repaid, the Trustee for such Note must receive,
at least 30 but not more than 45 days prior to an Optional Repayment Date (i)
such Note with the form entitled "Option to Elect Repayment" on the reverse
thereof duly completed, or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder of such Note, the
principal amount of such Note to be repaid, the certificate number or a
description of the tenor and terms of such Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed will be received by such Trustee not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter. If the procedure described in clause (ii) of the preceding sentence is
followed, then such Note and form duly completed must be received by such
Trustee by such fifth Business Day. Any tender of a Note by the Holder for
repayment (except pursuant to a Reset Notice or an Extension Notice) shall be
irrevocable. The repayment option may be exercised by the Holder of a Note for
less than the entire principal amount of such Note provided that the principal
amount of such Note remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment, such Note shall be cancelled and a
new Note or Notes for the remaining principal amount thereof shall be issued in
the name of the Holder of such repaid Note.
If a Note is represented by a Global Security, the Depositary's nominee
will be the Holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the cut-off time by which such an instruction must be given
in order for timely notice to be delivered to the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary, if
a Note is an Original Issue Discount Note (other than an Indexed Note), the
amount payable on such Note in the event of redemption or repayment prior to its
Stated Maturity shall be the Amortized Face Amount of such Note as of the date
of redemption or the date of repayment, as the case may be. The "Amortized Face
Amount" of a Discount Note shall be the amount equal to (i) the Issue Price set
forth in the applicable Pricing Supplement plus (ii) that portion of the
difference between the Issue Price and the principal amount of such Note that
has accrued at the Yield to Maturity set forth in the Pricing Supplement
(computed in accordance with generally accepted United States bond yield
computation principles) by such date of redemption or repayment, but in no event
shall the Amortized Face Amount of a Discount Note exceed its principal amount.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the Trustee for cancellation.
BOOK-ENTRY SYSTEM
Upon issuance, and subject to the rules of the Depositary, all Book-Entry
Notes having the same Original Issue Date and otherwise identical terms will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depositary"), and registered in the name of a
nominee of the
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Depositary. Book-Entry Notes will not be exchangeable for Certificated Notes
and, except under the circumstances described in the Prospectus under
"Description of Debt Securities -- Global Securities", will not otherwise be
issuable as Certificated Notes.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under 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 Securities Exchange
Act of 1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), 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.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities -- Global Securities". The Depositary has
confirmed to the Company, the Agents and the Trustee that it intends to follow
such procedures.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Note having a Specified Currency other than U.S. dollars
entails significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include, without limitation,
the possibility of significant changes in rates of exchange between the U.S.
dollar and such Specified Currency and the possibility of the imposition or
modification of foreign exchange controls with respect to such Specified
Currency. Such risks generally depend on factors over which the Company has no
control and which cannot be readily foreseen, such as economic and political
events and the supply of and demand for the relevant currencies. In recent
years, rates of exchange between the U.S. dollar and certain currencies have
been highly volatile, and such volatility may be expected in the future.
Fluctuations in any particular exchange rate that have occurred in the past are
not necessarily indicative, however, of fluctuations in the rate that may occur
during the term of any Note. Depreciation of the Specified Currency for a Note
against the U.S. dollar would result in a decrease in the effective yield of
such Note below its coupon rate and, in certain circumstances, could result in a
substantial loss to the investor on a U.S. dollar basis.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments in respect of Notes denominated in
such currency. At present, the Company has identified the following currencies
in which payments of principal, premium and interest on Notes may be made:
Australian dollars, Canadian dollars, Danish kroner, English pounds sterling,
French francs, German deutsche marks, Italian lire, Japanese yen, New Zealand
dollars, U.S. dollars and ECU. However, the Company may determine at any time to
issue Notes with Specified Currencies other than those listed. There can be no
assurances that exchange controls will not restrict or prohibit payments of
principal, premium or interest in any Specified Currency. Even if there are no
actual exchange controls, it is possible that, on a payment date with respect to
any particular Note, the currency in which amounts then due in respect of such
Note are payable would not be available to the Company. In that event, the
Company will make such payments in the manner set forth under "Description of
Notes -- Payment of Principal and Interest" above.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN A CURRENCY OTHER
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THAN U.S. DOLLARS, AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE
PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED IN A CURRENCY OTHER THAN U.S.
DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States residents, and the Company
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase or holding of, or receipt of payments of principal, premium
or interest in respect of, Notes. Such persons should consult their own advisors
with regard to such matters.
Any Pricing Supplement relating to Notes having a Specified Currency other
than U.S. dollars will contain a description of any material exchange controls
affecting such currency and any other required information concerning such
currency.
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Note is required to
be made in a Specified Currency other than U.S. dollars and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control or is no longer used by the government of the
country issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then all payments
in respect of such Note shall be made in U.S. dollars until such currency is
again available or so used. The amounts so payable on any date in such currency
shall be converted into U.S. dollars on the basis of the most recently available
Market Exchange Rate for such currency or as otherwise indicated in the
applicable Pricing Supplement. Any payment in respect of such Note made under
such circumstances in U.S. dollars will not constitute an Event of Default under
the Indenture under which such Note shall have been issued.
If payment in respect of a Note is required to be made in ECU and ECU are
no longer used in the European Monetary System, then all payments in respect of
such Note shall be made in U.S. dollars until ECU are again so used. The amount
of each payment in U.S. dollars shall be computed on the basis of the equivalent
of ECU in U.S. dollars, determined as described below, as of the second Business
Day prior to the date on which such payment is due.
The equivalent of ECU in U.S. dollars as of any date (the "Day of
Valuation") shall be determined by the Trustee or the Exchange Rate Agent for
such Note on the following basis. The component currencies of ECU for this
purpose (the "Components") shall be the currency amounts that were components of
ECU as of the last date on which ECU were used in the European Monetary System.
The equivalent of ECU in U.S. dollars shall be calculated by aggregating the
U.S. dollar equivalents of the Components. The U.S. dollar equivalent of each of
the Components shall be determined by such Trustee or such Exchange Rate Agent,
as the case may be, on the basis of the most recently available Market Exchange
Rates for such Components or as otherwise indicated in the applicable Pricing
Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of currencies into
which that currency was divided.
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All determinations referred to above made by the Trustee for the Notes or
the Exchange Rate Agent, as the case may be, shall be at its sole discretion and
shall, in the absence of manifest error, be conclusive for all purposes and
binding on holders of Notes.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the law of
the State of New York. Courts in the United States customarily have not rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. A 1987 amendment to the Judiciary Law of the State of New York provides,
however, that an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation and converted into U.S. dollars at the rate of exchange prevailing on
the date of the entry of the judgment or decree.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal U.S. Federal tax consequences
resulting from the beneficial ownership of Notes by certain persons. This
summary does not purport to consider all the possible U.S. Federal tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes and currencies or composite currencies other than U.S.
dollars ("Foreign Currency") held as capital assets. Moreover, except as
expressly indicated, it addresses initial purchasers and does not address
beneficial owners with a special tax status or special tax situations, such as
dealers in securities or currencies, Notes (or Foreign Currency) held as a hedge
against currency risks or as part of a straddle with other investments or as
part of a "synthetic security" or other integrated investment (including a
"conversion transaction") comprised of a Note and one or more other investments,
or situations in which the functional currency of the beneficial owner is not
the U.S. dollar. This summary is not applicable to non-United States persons not
subject to U.S. Federal income tax on their worldwide income. This summary is
based upon the U.S. Federal tax laws and regulations as now in effect and as
currently interpreted and does not take into account possible changes in such
tax laws or such interpretations, any of which may be applied retroactively. It
does not include any description of the tax laws of any state, local or foreign
governments that may be applicable to the Notes or holders thereof. Persons
considering the purchase of Notes should consult their own tax advisors
concerning the application of the U.S. Federal tax laws to their particular
situations as well as any consequences to them under the laws of any other
taxing jurisdiction.
PAYMENTS OF INTEREST
In general, interest on a Note, whether payable in U.S. dollars or a
Foreign Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a holder as
ordinary income at the time it is received or accrued, depending on the holder's
method of accounting for tax purposes. If an interest payment is denominated in
or determined by reference to a Foreign Currency, then special rules, described
below under "Foreign Currency Notes", apply.
The rate of interest payable on certain Fixed Rate Notes and the Spread and
Spread Multiplier on certain Floating Rate Notes may be subject to adjustment
from time to time as described in the applicable Pricing Supplement. These
adjustments may result in a United States Federal income tax treatment different
than described herein. The applicable Pricing Supplement will discuss such
different treatment.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the United States Federal income tax
consequences to holders of Notes issued with original issue discount ("OID").
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the "Code"). On February 4, 1994, the Treasury
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Department published final regulations (the "OID Regulations"), which expand and
illustrate the rules provided by the Code.
Special rules apply to OID on a Discount Note that is denominated in
Foreign Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
General. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the "stated redemption price at maturity" of a Note is the sum of all payments
provided by the Note that are not payments of "qualified stated interest". A
"qualified stated interest" payment includes any stated interest payment on a
Note that is unconditionally payable at least annually at a single fixed rate
(or at certain floating rates) that appropriately takes into account the length
of the interval between stated interest payments. The applicable Pricing
Supplement will state whether a particular issue of Notes will constitute an
issue of Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a Note
will not be treated as issued with OID, (in which case the following paragraphs
under "Original Issue Discount" will not apply) and a holder of such a Note will
recognize capital gain, with respect to such de minimis OID as stated principal
payments on the Note are made. The amount of such gain with respect to each such
payment will equal the product of the total amount of the Note's de minimis OID
and a fraction, the numerator of which is the amount of the principal payment
made and the denominator of which is the stated principal amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where, among other things, (i) a Note bearing interest at a
floating rate (a "Floating Rate Note") provides for a maximum interest rate or a
minimum interest rate that is reasonably expected as of the issue date to cause
the yield on the debt instrument to be significantly less, in the case of a
maximum rate, or more, in the case of a minimum rate, than the expected yield
determined without the maximum or minimum rate, as the case may be, (ii) a
Floating Rate Note provides for significant front-loading or back-loading of
interest, or (iii) a Note bears interest at a floating rate in combination with
one or more other floating or fixed rates. Notice will be given in the
applicable Pricing Supplement when the Company determines that a particular Note
will be a Discount Note. Unless specified in the applicable Pricing Supplement,
Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations provide rules that require a holder of a
Discount Note having a maturity of more than one year from its date of issue to
include OID in gross income before the receipt of cash attributable to such
income, without regard to the holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a holder of a Discount Note is
the sum of the "daily portions" of OID with respect to the Discount Note for
each day during the taxable year or portion of the taxable year in which the
holder holds such Discount Note ("accrued OID"). The daily portion is determined
by allocating to each day in any "accrual period" a pro rata portion of the OID
allocable to that accrual period. Under the OID Regulations, accrual periods
with respect to a Note may be any set of periods (which may be of varying
lengths) selected by the holder as long as (i) no accrual period is longer than
one year and (ii) each scheduled payment of interest or principal on the Note
occurs on the first day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly
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adjusted for the length of the accrual period) over (b) the sum of any payments
of qualified stated interest on the Discount Note allocable to the accrual
period. The "adjusted issue price" of a Discount Note at the beginning of the
first accrual period is the issue price and at the beginning of any accrual
period thereafter is (x) the sum of the issue price of such Discount Note, the
accrued OID for each prior accrual period (determined without regard to the
amortization of any acquisition premium or bond premium, which are discussed
below), and the amount of any qualified stated interest on the Note that has
accrued prior to the beginning of the accrual period but is not payable until a
later date, less (y) any prior payments on the Discount Note that were not
qualified stated interest payments. If a payment (other than a payment of
qualified stated interest) is made on the first day of an accrual period, then
the adjusted issue price at the beginning of such accrual period is reduced by
the amount of the payment. If a portion of the initial purchase price of a Note
is attributable to interest that accrued prior to the Note's issue date, the
first stated interest payment on the Note is to be made within one year of the
Note's issue date and such payment will equal or exceed the amount of
pre-issuance accrued interest, then the holder may elect to decrease the issue
price of the Note by the amount of pre-issuance accrued interest, in which case
a portion of the first stated interest payment will be treated as a return of
the excluded pre-issuance accrued interest and not as an amount payable on the
Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length),
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Note (other than any
payment of qualified stated interest) over the Note's adjusted issue price as of
the beginning of such final accrual period. In addition, if an interval between
payments of qualified stated interest on a Note contains more than one accrual
period, then the amount of qualified stated interest payable at the end of such
interval is allocated pro rata (on the basis of their relative lengths) between
the accrual periods contained in the interval.
Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Notes.
Acquisition Premium. A holder that purchases a Note at its original
issuance for an amount in excess of its issue price but less than its stated
redemption price at maturity (any such excess being "acquisition premium"), and
that does not make the election described below under "Original Issue Discount
- -- Election To Treat All Interest as Original Issue Discount", is permitted to
reduce the daily portions of OID by a fraction, the numerator of which is the
excess of the holder's purchase price for the Note over the issue price, and the
denominator of which is the excess of the sum of all amounts payable on the Note
after the purchase date, other than payments of qualified stated interest, over
the Note's issue price. Alternatively, a holder may elect to compute OID
accruals as described under "Original Issue Discount -- General" above, treating
the holder's purchase price as the issue price.
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than its
yield to stated maturity, or (ii) in the case of an option of the Holder, higher
than its yield to stated maturity. If such option is not in fact exercised when
presumed to be exercised, the Note would be treated solely for OID purposes as
if it were redeemed or repurchased, and a new Note were issued, on the presumed
exercise date for an amount equal to the Note's adjusted issue price on that
date.
Short-Term Notes. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis holder of a Short-Term Note is not required to
include OID in income as it accrues for United States Federal income tax
purposes unless it elects to do so. Accrual basis holders and certain other
holders, including banks, regulated investment companies, dealers in securities,
and cash basis holders who so elect, are required
S-21
<PAGE> 23
to include OID, in income as it accrues on Short-Term Notes on either a
straight-line basis or under the constant yield method (based on daily
compounding), at the election of the holder. In the case of a holder not
required and not electing to include OID in income currently, any gain realized
on the sale or retirement of Short-Term Notes will be ordinary income to the
extent of the OID accrued on a straight-line basis (unless an election is made
to accrue the original issue discount under the constant yield method) through
the date of sale or retirement. Holders who are not required and do not elect to
include OID on Short-Term Notes in income as it accrues will be required to
defer deductions for interest on borrowings allocable to Short-Term Notes in an
amount not exceeding the deferred income until the deferred income is realized.
Any holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount", if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the holder's purchase price therefor. Acquisition
discount will be treated as accruing on a ratable basis or, at the election of
the holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
NOTES PURCHASED AT A PREMIUM
Under the Code, a holder that purchases a Note for an amount in excess of
its principal amount will not be subject to the OID rules, and may elect to
treat such excess as "amortizable bond premium", in which case the amount of
qualified stated interest required to be included in the holder's income each
year with respect to interest on the Note will be reduced by the amount of
amortizable bond premium allocable (based on the Note's yield to maturity) to
such year. Any election to amortize bond premium is applicable to all bonds
(other than bonds the interest on which is excludible from gross income) held by
the holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the holder, and may not be revoked without the
consent of the Internal Revenue Service ("IRS"). See also "Original Issue
Discount -- Election to Treat All Interest as Original Issue Discount".
NOTES PURCHASED AT A MARKET DISCOUNT
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a holder purchased
the Note is less than the Note's issue price, subject to a de minimis rule
similar to the rule relating to de minimis OID described under "Original Issue
Discount -- General".
In general, any (partial) payment of principal on, or gain recognized on
the maturity or disposition of a Market Discount Note will be treated as
ordinary income to the extent that such gain does not exceed the accrued market
discount on such Note. Alternatively, a holder of a Market Discount Note may
elect to include market discount in income currently over the life of the Market
Discount Note. Such an election applies to all debt instruments with market
discount acquired by the electing holder on or after the first day of the first
taxable year to which the election applies and may not be revoked without the
consent of the IRS.
Market discount accrues on a straight-line basis, unless the holder elects
to accrue such discount on a constant yield to maturity basis. Such an election
is applicable only to the Note with respect to which it is made and is
irrevocable. A holder of a Market Discount Note that does not elect to include
market discount in income currently generally will be required to defer
deductions for interest on borrowings allocable to such Note in an amount not
exceeding the accrued market discount on such Note, until the maturity or
disposition of such Note. Furthermore, in any year where there is "net interest
income" with respect to such Note, which means that the aggregate amount of
interest includible in income with respect to such Note in such year--including
any recognized market discount attributable to the receipt of a partial payment
of principal--exceeds the amount of interest paid or accrued on borrowings with
S-22
<PAGE> 24
respect to such Note in such year, the holder may elect to deduct an amount of
disallowed interest expenses not exceeding such net interest income.
The market discount rules do not apply to a Short-Term Note.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT.
Any holder may elect to include in gross income all interest that accrues
on a Note using the constant yield method described above under the heading
"Original Issue Discount--General", with the modifications described below. For
purposes of this election, interest includes stated interest, OID, de minimis
OID, market discount, acquisition discount, de minimis market discount and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing holder, and
no payments on the Note will be treated as payments of qualified stated
interest. This election is generally applicable only to the Note with respect to
which it is made and may not be revoked without the consent of the IRS. If this
election is made with respect to a Note with amortizable bond premium, the
electing holder will be deemed to have elected to apply amortizable bond premium
against interest with respect to all debt instruments with amortizable bond
premium (other than debt instruments the interest on which is excludible from
gross income) held by such electing holder as of the beginning of the taxable
year in which the Note with respect to which the election is made is acquired or
thereafter acquired. The deemed election with respect to amortizable bond
premium may not be revoked without the consent of the IRS.
If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing holder will be treated as having made the election
discussed above under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such holder.
PURCHASE, SALE AND RETIREMENT OF THE NOTES
General. A holder's tax basis in a Note will generally be its U.S. dollar
cost (which, in the case of a Note purchased with a foreign currency, will be
the U.S. dollar value of the purchase price on the date of purchase), increased
by the amount of any OID, or market discount (or acquisition discount, in the
case of a Short-Term Note) included in the holder's income with respect to the
Note and the amount, if any, of income attributable to de minimis OID included
in the holder's income with respect to the Note, and reduced by the sum of (i)
the amount of any payments that are not qualified stated interest payments, and
(ii) the amount of any amortizable bond premium applied to reduce interest on
the Note. A holder generally will recognize gain or loss on the sale or
retirement of a Note equal to the difference between the amount realized on the
sale or retirement and the tax basis of the Note. The amount realized on a sale
or retirement for an amount in foreign currency will be the U.S. dollar value of
such amount on the date of sale or retirement. Except to the extent described
above under "Original Issue Discount -- Short Term Notes" or "Market Discount"
or below under "Foreign Currency Notes -- Exchange Gain or Loss", and except to
the extent attributable to accrued but unpaid qualified stated interest, gain or
loss recognized on the sale or retirement of a Note will be capital gain or loss
and will be long-term capital gain or loss if the Note was held for more than
one year.
FOREIGN CURRENCY NOTES
Interest Payments. If a qualified stated interest payment is denominated in
or determined by reference to a Foreign Currency, the amount of income
recognized by a cash basis holder will be the U.S. dollar value of the interest
payment, based on the exchange rate in effect on the date of receipt, regardless
of whether the payment is in fact converted into U.S. dollars. Accrual basis
holders may determine the amount of income recognized with respect to such
interest payment in accordance with
S-23
<PAGE> 25
either of two methods. Under the first method, the amount of income recognized
will be based on the average exchange rate in effect during the interest accrual
period (or, with respect to an accrual period that spans two taxable years, the
partial period within the taxable year). Upon receipt of an interest payment
(including a payment attributable to accrued but unpaid qualified stated
interest upon the sale or retirement of a Note) determined by reference to a
Foreign Currency, an accrual basis holder will recognize ordinary income or loss
measured by the difference between such average exchange rate and the exchange
rate in effect on the date of receipt, regardless of whether the payment is in
fact converted into U.S. dollars. Under the second method, an accrual basis
holder may elect to translate interest income into U.S. dollars at the spot
exchange rate in effect on the last day of the accrual period or, in the case of
an accrual period that spans two taxable years, at the exchange rate in effect
on the last day of the partial period within the taxable year. Additionally, if
a payment of interest is actually received within 5 business days of the last
day of the accrual period or taxable year, an accrual basis holder applying the
second method may instead translate such accrued interest into U.S. dollars at
the spot exchange rate in effect on the day of actual receipt (in which case no
exchange gain or loss will result). Any election to apply the second method will
apply to all debt instruments held by the holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the holder
and may not be revoked without the consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar value of
the Foreign Currency on the date of purchase. Any gain or loss recognized on a
sale or other disposition of a Foreign Currency (including its use to purchase
Notes or upon exchange for U.S. dollars) will be ordinary income or loss.
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as qualified
stated interest accrued by an accrual basis holder. Upon receipt of an amount
attributable to original issue discount (whether in connection with a payment of
interest or the sale or retirement of a Note), a holder may recognize ordinary
income or loss.
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a holder
may realize ordinary income or loss, measured by the difference between exchange
rates at that time and at the time of the acquisition of the Notes.
Market Discount. Market discount is determined in units of the Foreign
Currency. Accrued market discount that is required to be taken into account on
the maturity or upon disposition of a Note is translated into U.S. dollars at
the exchange rate on the maturity or the disposition date, as the case may be
(and no part is treated as exchange gain or loss). Accrued market discount
currently includible in income by an electing holder is translated into U.S.
dollars at the average exchange rate for the accrual period (or the partial
accrual period during which the holder held the Note), and exchange gain or loss
is determined on maturity or disposition of the Note (as the case may be) in the
manner described above under "Foreign Currency Notes--Interest Payments" with
respect to the computation of exchange gain or loss on the receipt of accrued
interest by an accrual method holder.
Exchange Gain or Loss. Gain or loss recognized by a holder on the sale or
retirement of a Note that is attributable to changes in exchange rates will be
treated as ordinary income or loss. However, exchange gain or loss is taken into
account only to the extent of total gain or loss realized on the transaction.
S-24
<PAGE> 26
INDEXED NOTES, AMORTIZING NOTES OR NOTES WITH EXTENDABLE STATED MATURITY
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to Indexed Rate Notes,
Indexed Principal Notes, Amortizing Notes or Notes the Stated Maturity of which
may be extended at the option of the Company.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the holder's
name, address and taxpayer identification number (either the holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
holder during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain holders, including
corporations, tax-exempt organizations, qualified pension and profit sharing
trusts and individual retirement accounts and foreign holders who provide
appropriate certification that they are not United States persons or have
otherwise established an exemption.
In the event that a holder subject to the reporting requirements described
above fails to supply its correct taxpayer identification number in the manner
required by applicable law or underreports its tax liability, the Company, its
agents or paying agents or a broker may be required to "backup" withhold a tax
equal to 31% of each payment of interest (including OID) and principal (and
premium, if any) on the Notes. This backup withholding is not an additional tax
and may be credited against the holder's U.S. Federal income tax liability,
provided that the required information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
the Agents which have agreed to use their reasonable efforts to solicit orders
to purchase Notes. The Company will have the sole right to accept orders to
purchase Notes and may reject proposed purchases in whole or in part. The Agents
shall have the right, in their discretion reasonably exercised and without
notice to the Company, to reject any proposed purchase of Notes in whole or in
part. The Company will pay the Agents a commission of from .125% to .750% of the
principal amount of Notes sold through them, depending upon the Stated Maturity.
The Company may also sell Notes at a discount to the Agents for their own
accounts or for resale to one or more purchasers at varying prices related to
prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by the Agents. After any initial public offering of Notes to be resold to
purchasers at a fixed public offering price, the public offering price and any
concession or discount may be changed. In addition, the Agents may offer Notes
purchased by them as principal to other dealers. Notes sold by an Agent to a
dealer may be sold at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by such Agent from the Company. Unless otherwise specified
in the applicable Pricing Supplement, any Note purchased by an Agent as
principal will be purchased at 100% of the principal amount or face amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. The Agents may make a market in the
Notes, but the Agents are not obligated to do so and may discontinue any
market-making at any time without notice. There can be no assurance of a
secondary market for any Notes, or that the Notes will be sold.
Each Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act. The Company has agreed
to indemnify each Agent against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments that such Agent may be required
to make in respect thereof.
S-25
<PAGE> 27
SUBJECT TO COMPLETION, DATED FEBRUARY 20, 1996
PROSPECTUS
THE SHERWIN-WILLIAMS COMPANY [LOGO]
DEBT SECURITIES
The Sherwin-Williams Company (the "Company") from time to time may offer its
debt securities (the "Debt Securities"), in one or more series, from which the
Company will receive up to $450,000,000 in proceeds, including the equivalent
thereof in other currencies or composite currency units such as the European
Currency Unit. The Debt Securities may be offered in one or more series, in
amounts, at prices and on terms determined at the time of sale and set forth in
a supplement to this Prospectus (a "Prospectus Supplement").
Unless otherwise specified in an accompanying Prospectus Supplement, the Debt
Securities will be senior securities of the Company, ranking equally with all
other unsubordinated and unsecured indebtedness of the Company.
The specific terms of the Debt Securities with respect to which this Prospectus
is being delivered will be set forth in an accompanying Prospectus Supplement
including, where applicable, the specific designation, aggregate principal
amount, ranking, authorized denomination, maturity, rate or method of
calculation of interest and dates for payment thereof, any exchangeability,
conversion, redemption, prepayment, or sinking fund provisions, the currency or
currency unit in which principal, premium, or interest is payable, the
designation of the trustee acting under the applicable indenture, the initial
offering price and any other specific terms of such Debt Securities. The
Prospectus Supplement will also 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 covered by such
Prospectus Supplement.
The Company may sell the Debt Securities directly, through agents designated
from time to time, or through underwriters or dealers. If any agents,
underwriters, or dealers are involved in the sale of the Debt Securities, the
names of such agents, underwriters, or dealers and any applicable commissions or
discounts and the net proceeds to the Company from such sale will be set forth
in the applicable Prospectus Supplement.
The Debt Securities may be issued only in registered form, including in the form
of one or more global securities ("Global Securities"), unless otherwise set
forth in the Prospectus Supplement.
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 February , 1996.
<PAGE> 28
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE DEBT SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street (Suite
1400), Chicago, Illinois 60661; and copies of such material may be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information may also
be inspected at the offices of the New York Stock Exchange, Inc. ("NYSE"), 20
Broad Street, New York, New York.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to the Company and the Debt
Securities. Statements contained herein concerning the provisions of any
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The Company incorporates herein by reference the following documents filed
with the Commission pursuant to the Exchange Act:
(a) The Company's Annual Report on Form 1O-K for the fiscal year ended
December 31, 1994.
(b) The Company's Quarterly Reports on Form 1O-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995.
(c) The Company's Current Report on Form 8-K dated January 8, 1996 and
Form 8-K/A dated February 8, 1996, amending such Form 8-K.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus or any Prospectus Supplement to the extent that
a statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein 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 or any Prospectus Supplement.
2
<PAGE> 29
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person, a
copy of any or all the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents, and any other documents specifically identified
herein as incorporated by reference into the Registration Statement to which
this Prospectus relates or into such other documents.
Requests for such copies should be addressed to:
The Sherwin-Williams Company
Att.: Corporate Secretary
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Telephone Number: (216) 566-2000
THE COMPANY
The Sherwin-Williams Company, which was first incorporated under the Laws
of the State of Ohio eighteen years after its founding in 1866, is engaged in
the manufacture, distribution and sale of paints, coatings and related products
to professional, industrial, commercial and retail customers.
The Sherwin-Williams Company, together with its consolidated subsidiaries,
is herein called the "Company". The Company's principal executive offices are
located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, and its telephone
number is (212) 566-2000.
RECENT DEVELOPMENTS
For the year ended December 31, 1995, net sales of the Company increased
5.6% to $3,273,819,000 from $3,100,069,000 for the year ended December 31, 1994.
Net income for 1995 increased 7.5% to $200,654,000, while income per share for
1995 increased 8.8% to $2.34 from $2.15 in 1994. Net sales in the Company's
Paint Stores Segment for 1995 were up 7.3% to $2,130,559,000, with
comparable-store sales increasing 6.5%. Operating profit for the Paint Stores
Segment for 1995 improved 12.7% to $158,458,000. The annual net sales of the
Company's Coating Segment for 1995 increased 2.7% to $1,129,429,000 from
$1,099,460,000 in 1994. Operating profits of the Coating Segment for 1995
increased .6% to $202,361,000.
In the three-month period ended December 31, 1995, consolidated net sales
of the Company were $740,907,000, 5.3% higher than the corresponding three-month
period of 1994. Net income for the three-month period increased 10.1% to
$33,766,000 and net income per share increased to $.39 from $.36 for the
corresponding three-month period in 1994. The Paint Stores Segment had a sales
gain of 5.4% in this three-month period and a 12.4% operating profit
improvement. The Coating Segment's sales increased 5.1 % in this three-month
period while the operating profit for the Coating Segment increased 2.1%.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, which may include repayment of indebtedness, acquisitions, additions
to working capital and capital expenditures. Additional information on the use
of net proceeds from the sale of any particular Debt Securities will be set
forth in the Prospectus Supplement relating to such Debt Securities.
3
<PAGE> 30
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges (a) for each of 1994, 1993, 1992, 1991 and 1990 and
for the nine months ended September 30, 1995 on a historical basis and (b) for
1994 and the nine months ended September 30, 1995 on a pro forma basis. The pro
forma ratios give effect to the acquisition of all the capital stock of Pratt &
Lambert United, Inc., a New York corporation, at $35.00 per share, by the
Company pursuant to a public tender offer by SWACQ, Inc., a New York corporation
and a wholly owned subsidiary of the Company, which was followed by the merger
of SWACQ, Inc. into Pratt & Lambert United, Inc. resulting in Pratt & Lambert
United, Inc. becoming a wholly owned subsidiary of the Company, as if such
transaction had been completed on January 1, 1994.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ------------------------------------------------------------
ENDED
SEPTEMBER 30, 1995 1994 1993 1992 1991 1990
------------------------ ------------------------ ---- ---- ---- ----
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(a) 4.6 4.1 4.1 3.5 3.7 3.4 3.1 3.0
<FN>
- ---------------
(a) For purposes of computing such ratio, earnings consist of income before
income taxes and the cumulative effect of accounting changes plus fixed
charges, and fixed charges consist of interest expense and gross rent
expense.
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities. Accordingly, for
a description of the terms of a particular issue of Debt Securities, reference
must be made to both the Prospectus Supplement relating thereto and to the
following description.
Debt Securities will be issued under an indenture dated as of February 1,
1996 (the "Indenture"), between the Company and Chemical Bank, as trustee (the
"Trustee"). A copy of the form of Indenture has been filed as an exhibit to the
Registration Statement filed with the Commission. The following discussion of
certain provisions of the Indenture is a summary only and does not purport to be
a complete description of the terms and provisions of the Indenture. References
appearing below are to the Indenture and, wherever particular provisions are
referred to, such provisions are incorporated by reference as a part of the
statement made, and the statement is qualified in its entirety by such
reference. Accordingly, the following discussion is qualified in its entirety by
reference to the provisions of the Indenture, including the definition therein
of terms used below with their initial letters capitalized.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that can be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by the Company.
(Section 2.03.) Reference is made to the applicable Prospectus Supplement for
the following terms of the Debt Securities of the series with respect to which
such Prospectus Supplement is being delivered:
(a) The title of the Debt Securities of the series;
(b) Any limit on the aggregate principal amount of the Debt Securities
of the series that may be authenticated and delivered under the Indenture;
(c) The date or dates on which the principal and premium with respect
to the Debt Securities of the series are payable;
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(d) The rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest (if any) or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable or the method by which such dates will be determined, the record
dates for the determination of holders thereof to whom such interest is
payable, and the basis upon which interest will be calculated if other than
that of a 360-day year of twelve 30-day months;
(e) The place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee, where the principal, premium, and
interest with respect to Debt Securities of the series shall be payable;
(f) The price or prices at which, the period or periods within which,
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) The obligation, if any, of the Company to redeem, purchase, or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased, or repaid, in whole or in part, pursuant to such obligations;
(h) The terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by Depositary Shares), other Debt Securities, or
warrants for Common Stock, Preferred Stock, or indebtedness or other
securities of any kind of the Company or any other issuer or obligor and
the terms and conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the
conversion or exchange period, and any other additional provisions;
(i) If other than denominations of $1,000 or any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(j) If the amount of principal, premium, if any, or interest with
respect to the Debt Securities of the series may be determined with
reference to an index or pursuant to a formula, the manner in which such
amounts will be determined;
(k) If the principal amount payable at the stated maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such stated maturity, the amount that will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity or which will be deemed to be outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined);
(l) Any changes or additions to the provisions of the Indenture
dealing with defeasance, including the addition of additional covenants
that may be subject to the Company's covenant defeasance option;
(m) If other than such coin or currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or currency in which payment of the principal, premium, if any,
and interest with respect to Debt Securities of the series shall be
payable, and if necessary, the manner of determining the equivalent thereof
in United States currency.
(n) If other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series that shall be payable
upon declaration of acceleration of the maturity thereof or provable in
bankruptcy;
(o) Any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the
Trustee or the holders to declare the principal, premium, if any, and
interest with respect to such Debt Securities due and payable;
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(p) If the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security, the terms and conditions, if any,
upon which such Global Security may be exchanged in whole or in part for
other individual Debt Securities in definitive registered form, the
Depositary for such Global Security, and the form of any legend or legends
to be borne by any such Global Security in addition to or in lieu of the
legend referred to in the Indenture;
(q) Any trustee, authenticating or paying agents, transfer agents, or
registrars;
(r) The applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms
then set forth in the Indenture relating to permitted consolidations,
mergers, or sales of assets, including conditioning any merger, conveyance,
transfer, or lease permitted by the Indenture upon the satisfaction of an
indebtedness coverage standard by the Company and any successor to the
Company;
(s) The terms, if any, of any guarantee of the payment of principal,
premium, and interest with respect to Debt Securities of the series and any
corresponding changes to the provision of the Indenture as then in effect;
(t) The terms, if any, of the transfer, mortgage, pledge, or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities, or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of the Indenture as
then in effect;
(u) With regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(v) Any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of the Indenture). (Section
2.03.)
The Prospectus Supplement will also describe any material United States
federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Debt Securities with respect to which payments
of principal, premium, if any, or interest are determined with reference to an
index or formula (including changes in prices of particular securities,
currencies or commodities), (b) Debt Securities with respect to which principal,
premium, if any, or interest is payable in a foreign or composite currency, (c)
Debt Securities that are issued at a discount below their stated principal
amount, bearing no interest or interest at a rate that at the time of issuance
is below market rates ("Original Issue Discount Debt Securities"), and (d)
variable rate Debt Securities that are exchangeable for fixed rate Debt
Securities.
Payments of interest on Registered Securities may be made at the option of
the Company by check mailed to the registered holders thereof or, if so provided
in the applicable Prospectus Supplement, at the option of a holder by wire
transfer to an account designated by such holder. (Section 2.12.)
Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities may be transferred or exchanged at the office of the
Trustee at which its corporate trust business is principally administered in the
United States or at the office of the Trustee or the Trustee's agent in the
Borough of Manhattan, the City and State of New York, at which its corporate
agency business is conducted, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. (Section 2.07.)
All funds paid by the Company to a paying agent for the payment of
principal, premium, if any, or interest with respect to any Debt Securities that
remain unclaimed at the end of two years after such principal, premium, or
interest shall have become due and payable will be repaid to the Company, and
the holders of such Debt Securities will thereafter look only to the Company for
payment thereof.
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GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities. (Section 2.15.) A Global Security is a
Debt Security that represents, and is denominated in an amount equal to the
aggregate principal amount of, all outstanding Debt Securities of a series, or
any portion thereof, in either case having the same terms, including the same
original issue date, date or dates on which principal and interest are due, and
interest rate or method of determining interest. A Global Security will be
deposited with, or on behalf of, a Depositary, which will be identified in the
Prospectus Supplement relating to such Debt Securities. Global Securities may be
issued in only fully registered form and in either temporary or definitive form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary, or by the
Depositary or any nominee of the Depositary to a successor Depositary or any
nominee of such successor. (Section 2.15.)
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such Debt Securities. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Debt Securities represented by
such Global Security to the accounts of persons that have accounts with the
Depositary ("participants"). Such accounts shall be designated by the dealers or
underwriters with respect to such Debt Securities or, if such Debt Securities
are offered and sold directly by the Company or through one or more agents, by
the Company or such agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that hold beneficial
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary (with respect to interests of
participants) or records maintained by participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limitations and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or nominee, as the
case may be, will be considered the sole owner or holder of the individual Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of any of such Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Indenture. (Section 2.15.) Accordingly, each person owning a beneficial
interest in a Global Security must rely on the procedures of the Depository for
such Global Security 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 industry practices, if the Company requests any action of holders or if
an owner of a beneficial interest in a Global Security desires to give or take
any action which a holder is entitled to give or take under the Indenture, the
Depositary for such Global Security would authorize the participants holding the
relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners holding through them.
Payments of principal, premium, if any, and interest with respect to
individual Debt Securities represented by a Global Security will be made to the
Depositary or its nominee, as the case may be, as the registered owner or holder
of such Global Security. Neither the Company, the Trustee, any paying agent or
registrar for such Debt Securities, or any agent of the Company or the Trustee
will have any responsibility or liability for (a) any aspect of the records
relating to or payments made by the
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Depositary, its nominee, or any participants on account of beneficial interests
in the Global Security or for maintaining, supervising, or reviewing any records
relating to such beneficial interests, (b) the payment to the owners of
beneficial interests in the Global Security of amounts paid to the Depositary or
its nominee, or (c) any other matter relating to the actions and practices of
the Depositary, its nominee, or its participants. (Section 2.15.) Neither the
Company, the Trustee, any paying agent or registrar for such Debt Securities, or
any agent of the Company or the Trustee will be liable for any delay by the
Depositary, its nominee, or any of its participants in identifying the owners of
beneficial interests in the Global Security, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium, if any, or
interest with respect to a definitive Global Security representing any of such
Debt Securities, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security, as shown on the records of the Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security 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 and registered in "street
name." Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable, or ineligible to continue as depositary, the Company shall appoint a
successor depositary. If a successor depositary is not appointed by the Company
within 90 days, the Company will issue individual Debt Securities of such series
in exchange for the Global Security representing such series of Debt Securities.
(Section 2.15.) In addition, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities, determine no longer to have Debt Securities of
a series represented by a Global Security and, in such event, will issue
individual Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. (Section 2.15.) Furthermore, if the
Company so specifies with respect to the Debt Securities of a series, an owner
of a beneficial interest in a Global Security representing Debt Securities of
such series may, on terms acceptable to the Company, the Trustee, and the
Depositary for such Global Security, receive individual Debt Securities of such
series in exchange for such beneficial interests, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens
Unless otherwise provided in the Prospectus Supplement, the Company and its
Restricted Subsidiaries will not create any Liens unless Debt Securities then
outstanding are equally and ratably secured, with certain exceptions, including
but not limited to: (a) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (including government contracts, but
excluding contracts for the payment of Indebtedness) or other obligations of
like nature, in each case incurred in the ordinary course of business, (b)
statutory and tax Liens for sums not yet due or delinquent or being contested in
good faith by appropriate proceedings, (c) certain encumbrances and easements,
(d) Liens existing at the date of the Indenture, (e) Liens securing only
Indebtedness of a Wholly Owned Subsidiary of the Company to the Company or one
or more Wholly Owned Subsidiaries of the Company, (f) Purchase Money Liens, (g)
Liens on property or shares of stock of another Person at the time such other
Person becomes a Subsidiary of such Person, provided that such Liens are not
created in connection with such other Person becoming a Subsidiary of such
Person, (h) Liens securing a Hedging Obligation, (i) Liens created in connection
with a tax-free financing, (j) Liens resulting from the deposit of funds or
evidences of
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Indebtedness in trust for the purpose of defeasing Indebtedness of the Company
or any of its Subsidiaries, (k) rights of a common owner of any interest in
property, (l) Liens placed upon any real property owned or acquired by the
Company or any of its Subsidiaries securing Indebtedness in an amount up to 80%
of the fair market value of such real property, (m) Liens to secure any
refinancing, refunding, extension, renewal or replacement of any Indebtedness
secured by certain permitted Liens, and (n) additional Liens not to exceed a
total of 15% of Consolidated Net Tangible Assets. (Section 4.07.)
Limitation on Sale/Leaseback Transactions
Unless otherwise provided in the Prospectus Supplement, the Company and its
Restricted Subsidiaries shall not enter into any Sale/Leaseback Transaction with
respect to any Principal Property unless (i) the Company or such Restricted
Subsidiary would be entitled to create a Lien on such Principal Property
securing Indebtedness in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction without securing the Debt Securities
pursuant to the provisions described above under "-- Limitation on Liens" or
(ii) the Company, within six months from the effective date of such
Sale/Leaseback Transaction, applies an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction to the voluntary
defeasance or retirement of Debt Securities or other Indebtedness ranking pari
passu with the Debt Securities; provided that the foregoing will not prevent the
Company or any Restricted Subsidiary from (x) entering into any Sale/Leaseback
Transaction involving a lease with a term of less than three years or (y)
entering into any Sale/Leaseback Transaction between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries. (Section 4.08.)
Limitation on Consolidations and Mergers
The Company shall not consolidate with or merge into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its assets
(in one transaction or a series of related transactions) to another entity
unless such entity is a corporation that assumes all the obligations under the
Debt Securities and the Indenture and certain other conditions are met
(whereupon all such obligations of the Company shall terminate). (Section
10.01.)
EVENTS OF DEFAULT AND REMEDIES
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities (Section 6.01.):
(a) Default in the payment of any installment of interest on any Debt
Securities of that series, as and when the same shall become due and
payable and continuance of such default for a period of 30 days;
(b) Default in the payment of all or any part of the principal or
premium with respect to any Debt Securities of that series as and when the
same shall become due and payable, whether at maturity, upon redemption, by
declaration, upon required repurchase, or otherwise;
(c) Default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable and continuance of such default for a period of 30 days;
(d) Failure on the part of the Company to comply with the provisions
of the Indenture relating to consolidations, mergers, and sales of assets;
(e) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in the Indenture with respect to such series, or
in any supplemental Indenture with respect to such series (other than
covenants or agreements included solely by or for the benefit of a series
of Debt Securities thereunder other than that series) continuing for a
period of 90 days after the date on which written
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notice specifying such failure and requiring the Company to remedy the same
and stating that such notice is a "Notice of Default" hereunder shall have
been given to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in aggregate principal amount of the Debt
Securities of that series at the time outstanding;
(f) The Company or any of its "Significant Subsidiaries" (defined as
any subsidiary of the Company that would be a "significant subsidiary" as
defined in Rule 405 under the Securities Act as in effect on the date of
the Indenture) shall (1) voluntarily commence any proceeding or file any
petition seeking relief under the United States Bankruptcy Code or other
federal or state bankruptcy, insolvency, or similar law, (2) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such petition,
(3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, or similar official for the Company or any such
Significant Subsidiary or for a substantial part of its property, (4) file
an answer admitting the material allegations of a petition filed against it
in any such proceeding, (5) make a general assignment for the benefit of
creditors, (6) admit in writing its inability or fail generally to pay its
debts as they become due, (7) take corporate action for the purpose of
effecting any of the foregoing, or (8) take any comparable action under any
foreign laws relating to insolvency of the Company or any Significant
Subsidiary.
(g) The entry of an order or decree by a court having competent
jurisdiction for (1) relief with respect to the Company or any of its
Significant Subsidiaries or a substantial part of any of their property
under the United States Bankruptcy Code or any other federal or state
bankruptcy, insolvency, or similar law, (2) the appointment of a receiver,
trustee, custodian, sequestrator, or similar official for the Company or
any such Significant Subsidiary or for a substantial part of any of their
property (except any decree or order appointing such official of any
Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or combined
with another Subsidiary or Subsidiaries of the Company or to the Company),
or (3) the winding-up or liquidation of the Company or any such Significant
Subsidiary (except any decree or order approving or ordering the winding-up
or liquidation of the affairs of a Significant Subsidiary pursuant to a
plan under which the assets and operations of such Significant Subsidiary
are transferred to or combined with another Subsidiary or Subsidiaries of
the Company or to the Company), and such order or decree shall continue
unstayed and in effect for 60 consecutive days, or any similar relief is
granted under any foreign laws and the order or decree stays in effect for
60 consecutive days;
(h) Any other Event of Default provided with respect to Debt
Securities of that series.
An Event of Default with respect to one series of Debt Securities is not
necessarily an Event of Default for another series.
If an Event of Default described in clause (a), (b), (c), (d), (e), (f)
(other than with respect to the Company), (g) (other than with respect to the
Company) or (h) above occurs and is continuing with respect to any series of
Debt Securities, unless the principal and interest with respect to all the Debt
Securities of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities of such series (each such series voting as a separate class)
then outstanding may declare the principal amount (or, if Original Issue
Discount Debt Securities, such portion of the principal amount as may be
specified in such series) of and interest on all the Debt Securities of such
series due and payable immediately. If an Event of Default described in clause
(f) or (g) (in each case with respect to the Company) above occurs, unless the
principal and interest with respect to all the Debt Securities of all series
shall have become due and payable, the principal amount (or, if any series are
Original Issue Discount Debt Securities, such portion of the principal amount as
may be specified in such series) of and interest on all Debt Securities of all
series then outstanding shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any holder of Debt
Securities. (Section 6.01.)
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If an Event of Default occurs and is continuing, the Trustee shall be
entitled and empowered to institute any action or proceeding for the collection
of the sums so due and unpaid or to enforce the performance of any provisions of
the Debt Securities of the affected series or the Indenture, to prosecute any
such action or proceeding to judgment or final decree, and to enforce any such
judgment or final decree against the Company or any other obligor on the Debt
Securities of such series. In addition, if there shall be pending proceedings
for the bankruptcy or reorganization of the Company or any other obligor on the
Debt Securities, or if a receiver, trustee, or similar official shall have been
appointed for its property, the Trustee shall be entitled and empowered to file
and prove a claim for the whole amount of principal, premium, and interest (or,
in the case of Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid with respect to the Debt Securities. (Section 6.02.) No holder of any
Debt Security of any series shall have any right to institute any action or
proceeding upon or under or with respect to the Indenture, for the appointment
of a receiver or trustee, or for any other remedy, unless (a) such holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to Debt Securities of that series and of the continuance thereof,
(b) the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities of that series (each such series voting as a
separate class) shall have made written request to the Trustee to institute such
action or proceeding with respect to such Event of Default and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby, and (c) the
Trustee, for 60 days after its receipt of such notice, request, and offer of
indemnity shall have failed to institute such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to the provisions of the Indenture. (Section 6.04.)
Prior to the acceleration of the maturity of the Debt Securities of any
series, the holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may, on behalf of the holders
of all Debt Securities of that series, waive any past default or Event of
Default and its consequences for that series, except (a) a default in the
payment of the principal, premium, if any, or interest with respect to such Debt
Securities or (b) a default with respect to a provision of the Indenture that
cannot be amended without the consent of each holder affected thereby. In case
of any such waiver, such default shall cease to exist, any Event of Default
arising therefrom shall be deemed to have been cured for all purposes, and the
Company, the Trustee, and the holders of the Debt Securities of that series
shall be restored to their former positions and rights under the Indenture.
(Section 6.06.)
The Trustee shall promptly after the occurrence of a default known to it
with respect to a series of Debt Securities, give to the holders of the Debt
Securities of such series notice of all uncured defaults with respect to such
series known to it, unless such defaults shall have been cured or waived before
the giving of such notice; provided, however, that except in the case of default
in the payment of principal, premium, if any, or interest with respect to the
Debt Securities of such series or in the making of any sinking fund payment with
respect to the Debt Securities of such series, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interest of the holders of such Debt Securities. (Section
6.07.)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may enter into supplemental Indentures without
the consent of the holders of Debt Securities for one or more of the following
purposes (Section 9.01.):
(a) To evidence the succession of another person to the Company
pursuant to the provisions of the Indenture relating to consolidations,
mergers, and sales of assets and the assumption by such successor of the
covenants, agreements, and obligations of the Company in the Indenture and
in the Debt Securities;
(b) To surrender any right or power conferred upon the Company by the
Indenture, to add to the covenants of the Company such further covenants,
restrictions, conditions, or provisions for the protection of the holders
of all or any series of Debt Securities as the Board of Directors of the
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Company shall consider to be for the protection of the holders of such Debt
Securities and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions, conditions
or provisions a default or an Event of Default under the Indenture
(provided, however, that with respect to any such additional covenant,
restriction, condition or provision, such supplemental Indenture may
provide for a period of grace after default, which may be shorter or longer
than that allowed in the case of other defaults, may provide for an
immediate enforcement upon such default, may limit the remedies available
to the Trustee upon such default, or may limit the right of holders of a
majority in aggregate principal amount of any or all series of Debt
Securities to waive such default);
(c) To cure any ambiguity or to correct or supplement any provision
contained in the Indenture, in any supplemental Indenture, or in any Debt
Securities that may be defective or inconsistent with any other provision
contained therein;
(d) To modify or amend the Indenture in such a manner as to permit the
qualification of the Indenture or any supplemental Indenture under the
Trust Indenture Act as then in effect;
(e) To convey, transfer, assign, mortgage, or pledge any property to
or with the Trustee, or to make such other provisions in regard to matters
or questions arising under the Indenture as shall not adversely affect the
interests of any holders of Debt Securities of any series;
(f) To comply with the provisions of the Indenture relating to
consolidations, mergers, and sales of assets;
(g) To add guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(h) To make any change that does not adversely affect the rights of
any holder;
(i) To add to, change, or eliminate any of the provisions of the
Indenture with respect to one or more series of Debt Securities, so long as
any such addition, change, or elimination not otherwise permitted under the
Indenture shall (1) neither apply to any Debt Security of any series
created prior to the execution of such supplemental Indenture and entitled
to the benefit of such provision nor modify the rights of the holders of
any such Debt Security with respect to such provision or (2) become
effective only when there is no such Debt Security outstanding;
(j) To evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of
the Indenture by more than one Trustee; and
(k) To establish the form or terms of Debt Securities as described
under "Description of Debt Securities -- General" above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected thereby, the Company
and the Trustee may from time to time and at any time enter into a supplemental
Indenture for the purpose of adding any provisions to, changing in any manner,
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holder of the Debt
Securities of such series; provided, however, that without the consent of the
holders of each Debt Security so affected, no such supplemental Indenture shall
(a) reduce the percentage in principal amount of Debt Securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any Debt Security, (c) reduce the principal of
or extend the stated maturity of any Debt Security, (d) reduce the premium
payable upon the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed, (e) make any Debt Security payable in a
currency other than that stated in the Debt Security, (f) release any security
that may have been granted with respect to the Debt Securities or (g) make any
change in the provisions of the Indenture relating to waivers of defaults or
amendments that require unanimous consent. (Section 9.02.)
12
<PAGE> 39
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any person, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its assets (in one transaction or a series of related transactions), unless
the following conditions have been satisfied (Section 10.01.):
(a) Either (1) the Company shall be the continuing person in the case
of a merger or (2) the resulting, surviving, or transferee person, if other
than the Company (the "Successor Company"), shall be a corporation
organized and existing under the laws of the United States, any State, or
the District of Columbia and shall expressly assume all of the obligations
of the Company under the Debt Securities and the Indenture;
(b) Immediately after giving effect to such transaction (and treating
any indebtedness that becomes an obligation of the Successor Company or any
subsidiary of the Company as a result of such transaction as having been
incurred by the Successor Company or such subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing;
(c) The Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger, or transfer complies with the Indenture.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect with
respect to a series of Debt Securities if (a) the Company has delivered to the
Trustee for cancellation all Debt Securities of such series (with certain
limited exceptions) or (b) all Debt Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year, and the Company shall have deposited with the
Trustee as trust funds the entire amount sufficient (in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee) without consideration of
any reinvestment and after payment of all taxes or other charges and assessments
in respect thereof payable by the Trustee to pay at maturity or upon redemption
all such Debt Securities, no default with respect to the Debt Securities has
occurred and is continuing on the date of such deposit, such deposit does 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 and the
Company delivered an officers' certificate and an opinion of counsel each
stating that such conditions have been complied with (and if, in either case,
the Company shall also pay or cause to be paid all other sums payable under the
Indenture by the Company). (Section 11.02.)
In addition, the Company shall have a "legal defeasance option" (pursuant
to which it may terminate, with respect to the Debt Securities of a particular
series, all of its obligations under such Debt Securities and the Indenture with
respect to such Debt Securities) and a "covenant defeasance option" (pursuant to
which it may terminate, with respect to the Debt Securities of a particular
series, its obligations with respect to such Debt Securities under certain
specified covenants contained in the Indenture). If the Company exercises its
legal defeasance option with respect to a series of Debt Securities, payment of
such Debt Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option with respect to a series of
Debt Securities, payment of such Debt Securities may not be accelerated because
of an Event of Default related to the specified covenants. (Section 11.02.)
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (a)
the Company irrevocably deposits in trust with the Trustee cash or U.S.
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, if any, and interest with respect to such Debt Securities to
maturity or redemption, as the case may be, (b) the Company delivers to the
Trustee a certificate from a nationally recognized firm of independent public
accountants expressing their opinion that the payments of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited
13
<PAGE> 40
money without investment will provide cash at such times and in such amounts as
will be sufficient to pay the principal, premium, if any, and interest when due
with respect to all the Debt Securities of such series to maturity or
redemption, as the case may be, (c) 91 days pass after the deposit is made and
during the 91-day period no default described in clause (f) or (g) under
"Description of Debt Securities -- Events of Default and Remedies" above with
respect to the Company occurs that is continuing at the end of such period, (e)
the deposit does not constitute a default under any other agreement binding on
the Company, (f) the Company delivers to the Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, (g) the Company shall have delivered to the Trustee an opinion of counsel
addressing certain federal income tax matters relating to the defeasance, and
(h) the Company delivers to the Trustee an officers' certificate and an opinion
of counsel, each stating that all conditions precedent to the defeasance and
discharge of the Debt Securities of such series as contemplated by the Indenture
have been complied with. (Section 11.03.)
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and the
proceeds from deposited U.S. Government Obligations to the payment of principal,
premium, if any, and interest with respect to the Debt Securities of the
defeased series. (Section 11.04.)
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to such series
of Debt Securities. In addition, the Company has the right to replace the
Trustee under certain circumstances, including (subject to certain conditions)
if the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to another corporation
or banking association. (Section 7.08.)
The Company may maintain banking and other commercial relationships with
the Trustee and its affiliates in the ordinary course of business, and the
Trustee may own Debt Securities.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Debt Securities will set
forth the terms of the offering of the Debt Securities, including the name or
names of any underwriters, dealers, or agents, the purchase price of the 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 reallowed or paid to dealers, and any securities
exchanges on which the Debt Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Debt
Securities may be offered to the public 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 Debt Securities will be named in the
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
Prospectus Supplement relating thereto, the obligations of the underwriters or
agents to purchase the Debt Securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the Debt Securities if
any are purchased. The initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
14
<PAGE> 41
If dealers are utilized in the sale of Debt Securities with respect to
which this Prospectus is delivered, the Company will sell such 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.
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 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 Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Debt Securities, underwriters or agents
may receive compensation from the Company or from purchasers of 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 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 Debt Securities by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers from certain types of
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the 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
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
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. Agents, dealers, and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The Debt Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Debt
Securities.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Company by Louis E. Stellato, Vice President, General Counsel and
Secretary of the Company, and for the underwriters or agents, if any, by
Cravath, Swaine & Moore. At December 31, 1995, Mr. Stellato beneficially owned
16,848 shares of Common Stock of the Company and held options to purchase an
additional 36,800 shares of Common Stock of which 25,799 shares were exercisable
at such date.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended as of
December 31, 1994 have been audited by Ernst & Young LLP, independent auditors
as set forth in their report thereon included therein and incorporated therein
by reference. Such consolidated financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements and schedules of Pratt & Lambert
United, Inc. as of December 31, 1994 and 1993, and for each of the years in the
three-year period ended December 31, 1994, have been incorporated by reference
herein in reliance upon the report of Deloitte & Touche LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
15
<PAGE> 42
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES HEREOF OR THEREOF. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE
ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Company Description.................. S-2
Recent Developments.................. S-2
Pricing Supplement................... S-2
Description of Notes................. S-2
Currency Risks....................... S-17
Certain U. S. Federal Income Tax
Considerations..................... S-19
Plan of Distribution................. S-25
PROSPECTUS
Available Information................ 2
Information Incorporated by
Reference.......................... 2
The Company.......................... 3
Recent Developments.................. 3
Use of Proceeds...................... 3
Ratios of Earnings to Fixed
Charges............................ 4
Description of Debt Securities....... 4
Plan of Distribution................. 14
Legal Opinions....................... 15
Experts.............................. 15
</TABLE>
U.S. $450,000,000
THE SHERWIN-WILLIAMS
COMPANY
MEDIUM-TERM NOTES,
SERIES A
DUE NINE MONTHS OR
MORE FROM DATE OF ISSUE
[LOGO]
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
PROSPECTUS SUPPLEMENT
DATED FEBRUARY , 1996
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts, to be borne by the Registrant in connection with
the distribution of the Securities.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee...................... $ 86,207
Trustees' fees........................................................... 13,000
Printing and engraving expenses.......................................... 48,000
Rating agency fees....................................................... 130,000
Accounting fees and expenses............................................. 40,000
Legal fees and expenses.................................................. 100,000
Blue Sky fees and expenses............................................... 1,650
--------
Total Expenses........................................................... 418,857
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IV of the Company's Code of Regulations, as amended April 27, 1988
("Regulations"), filed as Exhibit 4(b) to Post-Effective Amendment No. 1 to Form
S-8 Registration Statement Number 2-91401, dated April 29, 1988, is incorporated
herein by reference.
Reference is made to Section 1701.13(E) of the Ohio Revised Code relating
to the indemnification of directors and officers of an Ohio corporation and to
Sections 1 and 2 of Article IV of the Regulations.
The Ohio Revised Code and Section 1 of Article IV of the Regulations
provide that the Company will indemnify its directors, officers, employees and
agents against amounts which may be incurred in connection with certain actions,
suits or proceedings under the circumstances as set out in Sections 1(a) and
1(b) of Article IV of the Regulations. However, the Ohio Revised Code and
Section 1 of Article IV of the Regulations limit indemnification in respect of
certain claims, issues or matters as to which such party is adjudged to be
liable for negligence or misconduct in performance of his duty to the Company
and also in actions in which the only liability asserted against a director is
for certain statutory violations. The Ohio Revised Code and Section 1 of Article
IV of the Regulations also provide that general indemnification provisions as
found in Sections 1(a) and 1(b) of Article IV of the Regulations do not limit
the remaining provisions of Article IV of the Regulations.
In addition, the Ohio Revised Code and Section 1(e) of Article IV of the
Regulations provide that the Company may pay certain expenses in advance of the
final disposition of an action if the person receiving the advance undertakes to
repay the advance if it is ultimately determined that the person receiving the
advance is not entitled to indemnification. Also, with certain limited
exceptions, expenses incurred by a director in defending an action must be paid
by the Company as they are incurred in advance of the final disposition if the
director agrees (i) to repay such advances if it is proved by clear and
convincing evidence that the director's action or failure to act involved an act
or omission undertaken with reckless disregard for the Company's interests and
(ii) to reasonably cooperate with the Company concerning the action.
The Company may from time to time maintain insurance on behalf of any
person who is or was a director or officer against any loss arising from any
claim asserted against such director or officer in any such capacity, subject to
certain exclusions. The Company also has entered into indemnification agreements
with its directors and certain of its officers providing protection as permitted
by law.
II-1
<PAGE> 44
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
(1)(a) -- Form of Underwriting Agreement (also deemed to be filed as Exhibit 1 to the
Registrant's Registration Statement on Form S-3 (File No. 33-22705) filed with
the Commission on June 24, 1988).
(1)(b) -- Form of Selling Agency Agreement for Medium Term Notes (also deemed to be
filed as Exhibit 1(b) to the Registrant's Registration Statement on Form S-3
(File No. 33-22705) filed with the Commission on June 24, 1988)
(4)(a) -- Form of Indenture between The Sherwin-Williams Company and Chemical Bank, as
Trustee (also deemed to be filed as Exhibit 4(b) to the Registrant's
Registration Statement on Form S-3 (File No. 33-22705) filed with the
Commission on June 24, 1988).
(4)(b) -- Form of Debt Securities (also deemed to be filed as Exhibit 4(a) to the
Registrant's Registration Statement on Form S-3 (File No. 33-22705) filed with
the Commission on June 24, 1988).
(5) -- Opinion of Counsel
(12) -- Statement regarding the computation of the ratio of earnings to fixed
charges.
(23)(a) -- Consent of Ernst & Young LLP, Independent Auditors.
(23)(b) -- Consent of Counsel (included in Exhibit (5)).
(23)(c) -- Consent of Deloitte & Touche LLP, Independent Auditors.
(24) -- Powers of Attorney
(25) -- Statement of Eligibility on Form T-1 of Chemical Bank.
</TABLE>
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415
The undersigned Registrant hereby undertakes:
(a) 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 "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,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
provided, however, that paragraphs (a)(i) and (a)(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;
II-2
<PAGE> 45
(b) that, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) 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. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS
BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and 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. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether or not such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
D. UNDERTAKINGS IN RESPECT OF RULE 430A
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE> 46
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO, ON FEBRUARY 20, 1996.
By: /s/ Louis E. Stellato
-----------------------------------
LOUIS E. STELLATO
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON FEBRUARY 20, 1996, BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
(i) Principal Executive Officer:
*J. G. Breen Director, Chairman of the Board and Chief Executive
- ---------------------------------------------- Officer
(J. G. BREEN)
(ii)
*T. A. Commes Director, President and Chief Operating Officer
- ----------------------------------------------
(T. A. COMMES)
(iii) Principal Financial Officer:
*L. J. Pitorak Senior Vice President-Finance, Treasurer and Chief
- ----------------------------------------------
(L. J. PITORAK) Financial Officer
(iv) Principal Accounting Officer:
*J. L. Ault Vice President-Corporate Controller
- ----------------------------------------------
(J. L. AULT)
(v) Directors:
*J. M. Biggar
- ----------------------------------------------
(J. M. BIGGAR)
*L. Carter
- ----------------------------------------------
(L. CARTER)
*D. E. Collins
- ----------------------------------------------
(D. E. COLLINS)
*D. E. Evans
- ----------------------------------------------
(D. E. EVANS)
*R. W. Mahoney
- ----------------------------------------------
(R. W. MAHONEY)
*W. G. Mitchell
- ----------------------------------------------
(W. G. MITCHELL)
*A. M. Mixon, III
- ----------------------------------------------
(A. M. MIXON, III)
</TABLE>
II-4
<PAGE> 47
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
*H. O. Petrauskas
- ---------------------------------------------
(H. O. PETRAUSKAS)
*R. K. Smucker
- ---------------------------------------------
(R. K. SMUCKER)
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on behalf of the designated Officers and Directors of
The Sherwin-Williams Company pursuant to Powers of Attorney executed on behalf
of each of such Directors and Officers which are filed as an Exhibit hereto.
<TABLE>
<S> <C>
By: /s/ Louis E. Stellato
------------------------------------- February 20, 1996
LOUIS E. STELLATO
(ATTORNEY-IN-FACT)
</TABLE>
II-5
<PAGE> 48
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----
<C> <S> <C>
1(a) Form of Underwriting Agreement (also deemed to be filed as Exhibit I to
the Registrant's Registration Statement on Form S-3 (File No. 33-22705)
filed with the Commission on June 24, 1988).
1(b) Form of Selling Agency Agreement for Medium Term Notes (also deemed to
be filed as Exhibit 1(b) to the Registrant's Registration Statement on
Form S-3 (File No. 33-22705) filed with the Commission on June 24,
1988)
4(a) Form of Indenture between The Sherwin-Williams Company and Chemical
Bank, as Trustee (also deemed to be filed as Exhibit 4(b) to the
Registrant's Registration Statement on Form S-3 (File No. 33-22705)
filed with the Commission on June 24, 1988).
4(b) Form of Debt Securities (also deemed to be filed as Exhibit 4(a) to the
Registrant's Registration Statement on Form S-3 (File No. 33-22705)
filed with the Commission on June 24, 1988).
5 Opinion of Counsel.
12 Statement regarding the computation of the ratio of earnings to fixed
charges.
23(a) Consent of Ernst & Young LLP, Independent Auditors.
23(b) Consent of Counsel (included in Exhibit (5)).
23(c) Consent of Deloitte & Touche LLP, Independent Auditors.
24 Powers of Attorney.
25 Statement of Eligibility on Form T-1 of Chemical Bank.
</TABLE>
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<PAGE> 1
The Sherwin-Williams Company EXHIBIT 1(a)
Underwriting Agreement
New York, New York
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Dear Sirs:
The Sherwin-Williams Company, an Ohio corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule
I hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of February 1, 1996, between the Company and Chemical Bank, as trustee
(the "Trustee"). If the firm or firms listed in Schedule II hereto include
only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed to
refer to such firm or firms.
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as
so specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of
Form S-3 under the Securities Act of
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1933 (the "Act") and has filed with the Securities and Exchange
Commission (the "Commission") registration statements (the file
numbers of which are set forth in Schedule I hereto) on such Form,
including the same basic prospectus, for registration under the Act of
the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you.
Schedule I hereto will specify the registration statement under which
such Securities are registered or, if portions of such Securities are
registered under each of such registration statements, the respective
portions thereof. Such registration statements, as so amended, have
become effective. The offering of the Securities is a Delayed
Offering and, although the Basic Prospectus may not include all the
information with respect to the Securities and the offering thereof
required by the Act and the rules thereunder to be included in the
Final Prospectus, the Basic Prospectus includes all such information
required by the Act and the rules thereunder to be included therein as
of the Effective Date. The Company will next file with the Commission
pursuant to Rules 415 and 424(b)(2) or (5) a final supplement to the
form of prospectus included in such registration statement relating to
the Securities and the offering thereof. As filed, such final
prospectus supplement shall include all required information with
respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein. If the Rule 434 Delivery Alternative is used, the Company
will also file the Rule 434 Term Sheet in accordance with Rule 434.
As filed, such Rule 434 Term Sheet shall contain all the information
required by Rule 434, and except to the extent the Representatives
shall agree in
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writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein. Upon your
request, but not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with Rule 462(b).
(ii) The Company meets the requirements for the use of Form
S-3 under the Act and has filed with the Commission registration
statements (the file numbers of which are set forth in Schedule I
hereto) on such Form, including the same basic prospectus, for
registration under the Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been
furnished to you. Schedule I hereto will specify the registration
statement under which such Securities are registered or, if portions of
such Securities are registered under each of such registration
statements, the respective portions thereof. The Company will next
file with the Commission either (x) a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b)(1)
or (4), or (y) prior to the effectiveness of such registration
statements, an amendment to such registration statements, including the
form of final prospectus supplement. In the case of clause (x), the
Company has included in such registration statements, each as amended
at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in the Final Prospectus with respect to the Securities and the
offering thereof. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required
information, with respect to the Securities and the offering thereof
and, except to the extent the Representatives shall agree in writing to
a
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modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or made
therein. If the Rule 434 Delivery Alternative is used, the Company
will also file the Rule 434 Term Sheet in accordance with Rule 434.
As filed, such Rule 434 Term Sheet shall contain all the information
required by Rule 434, and except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein. Upon your request, but not without your agreement, the
Company will also file a Rule 462(b) Registration Statement in
accordance with Rule 462(b).
(b) On the respective Effective Dates, each registration statement
referred to in paragraph (a) above did or will, and when the Final
Prospectus is first filed (if required) in accordance with Rule 424(b) and
on the Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the Act,
the Securities Exchange Act of 1934 (the "Exchange Act") and the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective rules
thereunder; on the respective Effective Dates, each such registration
statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply in
all material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final Prospectus, if
not filed
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pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration Statement
or the Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean, with
respect to each registration statement referred to in paragraph (a) above,
each date that such registration statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration Statement became or
become effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed. "Execution
Time" shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall mean the
prospectus referred to in paragraph (a) above contained in the Registration
Statement at the Effective Date including, in the case of a Non-Delayed
Offering, any Preliminary Final Prospectus. "Preliminary Final Prospectus"
shall mean any preliminary prospectus supplement to the Basic Prospectus
which describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the Basic
Prospectus or, if, in the case of a Non-Delayed Offering, no filing pursuant
to Rule 424(b) is required, shall mean the form of final prospectus relating
to the Securities,
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including the Basic Prospectus, included in the Registration Statement at
the Effective Date. If the Rule 434 Delivery Alternative is used, such term
shall also include the Basic Prospectus and the Rule 434 Term Sheet, taken
together. "Registration Statement" shall mean, collectively, the
registration statements referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in
which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include any
Rule 430A Information and Rule 434 Information deemed to be included therein
at the Effective Date as provided by Rule 430A and Rule 434, respectively.
"Rule 415", "Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A. "Rule 434 Delivery
Alternative" shall mean the delivery alternative permitted by Rule 434.
"Rule 434 Information" shall mean any information to be included in a Rule
434 Term Sheet. "Rule 434 Term Sheet" shall mean the term sheet or
abbreviated term sheet delivered by the Underwriters to investors and filed
by the Company with the Commission pursuant to Rule 434. "Rule 462(b)
Registration Statement" shall mean a registration statement and any
amendments thereto filed pursuant to Rule 462(b) relating to the final
Delayed Offering covered by the initial Registration Statement (file number
333-[ ]). Any reference herein to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement
or the issue date of the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
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Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be, deemed to be
incorporated therein by reference. A "Non-Delayed Offering" shall mean an
offering of securities which is intended to commence promptly after the
effective date of a registration statement, with the result that, pursuant
to Rules 415 and 430A, all information (other than Rule 430A Information)
with respect to the securities so offered must be included in such
registration statement at the effective date thereof. A "Delayed Offering"
shall mean an offering of securities pursuant to Rule 415 which does not
commence promptly after the effective date of a registration statement, with
the result that only information required pursuant to Rule 415 need be
included in such registration statement at the effective date thereof with
respect to the securities so offered. Whether the offering of the
Securities is a Non-Delayed Offering or a Delayed Offering shall be set
forth in Schedule I hereto.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Schedule I hereto the principal amount of the Securities set forth
opposite such Underwriter's name in Schedule II hereto, except that, if Schedule
I hereto provides for the sale of Securities pursuant to delayed delivery
arrangements, the respective principal amounts of Securities to be purchased by
the Underwriters shall be as set forth in Schedule II hereto less the respective
amounts of Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to Delayed Delivery
Contracts as hereinafter provided are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts"), substantially in the
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form of Schedule III hereto but with such changes therein as the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements
and, as compensation therefor, the Company will pay to the Representatives, for
the account of the Underwriters, on the Closing Date, the percentage set forth
in Schedule I hereto of the principal amount of the Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will enter into Delayed Delivery Contracts in all
cases where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any responsibility
in respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set forth
in Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name of such Underwriter
bears to the aggregate principal amount set forth in Schedule II hereto, except
to the extent that you determine that such reduction shall be otherwise than in
such proportion and so advise the Company in writing; provided, however, that
the total principal amount of Securities to be purchased by all Underwriters
shall be the aggregate principal amount set forth in Schedule II hereto less
the aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified in
Schedule I hereto (or such later date not later than five business days after
such specified date as the Representatives shall designate), which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 8 hereof (such date and time of delivery and payment
for the Underwriters' Securities being herein called the "Closing Date").
Delivery of the Underwriters' Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
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several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by certified or official bank check or
checks drawn on or by a New York Clearing House bank and payable in next day
funds. Delivery of the Underwriters' Securities shall be made at such location
as the Representatives shall reasonably designate at least one business day in
advance of the Closing Date and payment for the Securities shall be made at the
office specified in Schedule I hereto. Certificates for the Underwriters'
Securities shall be registered in such names and in such denominations as the
Representatives may request not less than two full business days in advance of
the Closing Date.
The Company agrees to have the Underwriters' Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement (including the
Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement or Rule 462(b)
Registration Statement to which you reasonably object. Subject to the
foregoing sentence, the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing. If the Rule 434 Delivery
Alternative is used, the Company will also cause the Rule 434 Term
Sheet, properly completed, to be filed with the Commission pursuant to
Rule 434 within the time period prescribed and will provide evidence
satisfactory to the Representatives of each timely filing. Upon your
request, the Company will cause the Rule 462(b) Registration
Statement, properly
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completed, to be filed with the Commission pursuant to Rule 462(b) and
will provide evidence satisfactory to the Representatives of such
filing. The Company will promptly advise the Representatives (i) when
the Registration Statement, if not effective at the Execution Time,
and any amendment thereto, shall have become effective, (ii) when the
Final Prospectus, any supplement thereto, any Rule 434 Term Sheet or
any Rule 462(b) Registration Statement shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iv) of any
request by the Commission for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii) supply
any supplemented Prospectus to you in such quantities as you may
reasonably request.
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(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Securities and
will arrange for the determination of the legality of the Securities
for purchase by institutional investors.
(f) Until the business date set forth on Schedule I hereto,
the Company will not, without the consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities).
(g) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Securities and Exchange Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if
any, concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company will
provide the Department
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notice of such business or change, as appropriate, in a form acceptable
to the Department.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b), or if the filing of the Rule 434 Term Sheet is required
pursuant to Rule 434, the Rule 434 Term Sheet will be filed in the
manner and within the time period required by Rule 434; and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of the Vice President, General Counsel and Secretary of
the Company, 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 Ohio, with full corporate power to own
its properties and conduct its business as described in the
Final Prospectus and is qualified to do business as a foreign
corporation and is in
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good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material
properties or conducts material business except where the
failure to so qualify would not have a material adverse effect
on the Company and its subsidiaries taken as a whole. The
Company's significant subsidiaries (as defined in Rule 405
under the Securities Act) (the "Subsidiaries") are duly
incorporated and validly existing as corporations in good
standing under the laws of the jurisdiction in which it is
organized, each with full corporate power and authority to own
properties and conduct business as described in the Final
Prospectus, and are duly qualified to do business as foreign
corporations and are in good standing under the laws of each
jurisdiction which requires such qualification wherein each
such Subsidiary owns or leases material properties or conducts
material business except where the failure to so qualify would
not have a material adverse effect on the operations of the
Company and its Subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding
shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any other
security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Prospectus; the Securities
conform to the description thereof contained in the Final
Prospectus; and, if the Securities are to be listed on any
securities exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting
documents with respect to the Securities with such securities
exchange and such counsel has no reason to believe that the
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Securities will not be authorized for listing, subject to
official notice of issuance and evidence of satisfactory
distribution;
(iv) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, in the
case of the Underwriters' Securities, or by the purchasers
thereof pursuant to Delayed Delivery Contracts, in the case of
any Contract Securities, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of
the Indenture;
(v) to the knowledge of such counsel, after due
inquiry, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Final Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as
an exhibit, which is not described or filed as required; and
the statements included or incorporated in the Final
Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(vi) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period
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required by Rule 424(b), or if the Rule 434 Delivery
Alternative was used, the required filing of the Rule 434 Term
Sheet has been made in the manner and time period required by
Rule 434; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Final Prospectus (other than the financial statements and
other financial and statistical information contained therein
as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements
of the Act, the Exchange Act and the Trust Indenture Act and
the respective rules thereunder; and such counsel has no reason
to believe that at the Effective Date the Registration
Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Final Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vii) this Agreement and any Delayed Delivery
Contracts have been duly authorized, executed and delivered by
the Company;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation of the transactions contemplated herein or in
any Delayed Delivery Contracts, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(ix) neither the execution and delivery of the
Indenture, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of
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the terms hereof or of any Delayed Delivery Contracts will
conflict with, result in a breach or violation of, or
constitute a default under the Amended Articles of
Incorporation or the Code of Regulations, as amended, of the
Company or the terms of any indenture or other material
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company or any
of its subsidiaries; and
(x) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Ohio or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of the Company
and public officials. References to the Final Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Securities, the Indenture, any Delayed Delivery Contracts,
the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
<PAGE> 17
17
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) At the Execution Time, Ernst & Young LLP shall have
furnished to the Representatives a letter or letters (which may refer
to letters previously delivered to the Representatives), dated as of
the Execution Time, in form and substance reasonably satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Final Prospectus and
reported on
<PAGE> 18
18
by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the amounts
included or incorporated in the Registration Statement and the
Final Prospectus in response to Item 301 of Regulation S-K and
of the latest unaudited financial statements made available by
the Company and its subsidiaries; their limited review in
accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited
interim financial information as indicated in their reports
incorporated in the Registration Statement and the Prospectus;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committees of the
Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to the date of the most
recent audited financial statements included or incorporated
in the Registration Statement and the Final Prospectus,
nothing came to their attention which caused them to believe
that:
(1) the amounts in the "Selected Financial
Data", if any, included or incorporated in the
Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited
financial statements from which such amounts were
derived;
(2) any unaudited financial statements
included or incorporated in the Registration
Statement and the Final Prospectus do not comply in
form in all material respects with applicable
accounting requirements and with the published rules
and regulations of the Commission with respect to
financial
<PAGE> 19
19
statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Final
Prospectus;
(3) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information), audited or
unaudited, in or incorporated in the Registration
Statement and the Final Prospectus, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in the
aggregate long-term debt due within one year and
long-term debt (exclusive of current portion) of the
Company and its consolidated subsidiaries or common
stock of the Company or decreases in the
shareholders' equity of the Company and its
consolidated subsidiaries as compared with the
amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration
Statement and the Final Prospectus, or for the period
from the date of the most recent financial statements
included or incorporated in the Registration
Statement and the Final Prospectus to the date of the
most recently available monthly unaudited financial
information there were any decreases relating to
continuing operations, as compared with the
corresponding period in the preceding year in total
revenue or earnings before income taxes or in the
total or per share amounts of net earnings of the
Company and its consolidated subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; or
<PAGE> 20
20
(4) the amounts included in any unaudited
"capsule" information included or incorporated in the
Registration Statement and the Final Prospectus do not
agree with the amounts set forth in the unaudited
financial statements for the same periods or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement, including the information included or
incorporated in Items 1, 2, 5, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated in the Registration
Statement and the Final Prospectus, and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Registration Statement and the Final
Prospectus, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal
interpretation; and
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Final Prospectus, on the basis of a reading of the unaudited
pro forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and
the acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the
<PAGE> 21
21
pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, Ernst & Young LLP shall have furnished to the Representatives a
letter or letters, dated as of the Execution Time, in form and substance
satisfactory to the Representatives, to the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities by Moody's Investors Service Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P"), Duff & Phelps Inc. ("Duff & Phelps") or
any successor to such rating organizations or any other nationally
recognized statistical rating organization which is comparable to
Moody's, S&P or Duff & Phelps, or any notice given of any intended or
potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible
change.
<PAGE> 22
22
(h) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request, including any further items specified in Schedule I.
(i) The Company shall have accepted Delayed Delivery
Contracts in any case where sales of Contract Securities arranged by
the Underwriters have been approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or telecopy confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. Reimbursement of Underwriters' Expenses. The Company will
pay all costs, expenses, fees, disbursements and taxes incident to (i) the
preparation by the Company, printing, filing and distribution under the Act of
the Registration Statement (including financial statements and exhibits), the
Final Prospectus, each Preliminary Final Prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
4(b), (ii) the preparation, printing (including word processing and duplication
costs) and delivery of this Agreement, preliminary and supplemental blue sky
memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Securities, (iii) the registration with the Commission and the offer and sale
of the Securities, (iv) the registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states
(including the reasonable fees and
<PAGE> 23
23
disbursements of your counsel relating to such registration or qualification),
(v) filings and clearance with the National Association of Securities Dealers,
Inc., in connection with the offering, and (vi) the performance by the Company
of its other obligations under this Agreement.
If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 5 hereof is not satisfied, because of any termination pursuant
to Section 9 hereof or because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged
<PAGE> 24
24
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein and (ii) such indemnity
with respect to the Basic Prospectus or any Preliminary Final Prospectus shall
not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such person
did not receive a copy of the Final Prospectus (or the Final Prospectus as
supplemented) excluding documents incorporated therein by reference at or prior
to the confirmation of the sale of such Securities to such person in any case
where such delivery is required by the Act and the untrue statement or omission
of a material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers and employees
who sign the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page, under the heading
"Underwriting" or "Plan of Distribution" and, if Schedule I hereto provides for
sales of Securities pursuant to delayed delivery arrangements, in the last
sentence under the heading "Delayed Delivery Arrangements" in any Preliminary
Final Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in the foregoing indemnity, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of
<PAGE> 25
25
any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the commencement thereof; but the failure so
to notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent
the indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded after consultation with legal counsel of its choosing that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party in writing to employ
separate counsel at the expense of the indemnifying party. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual
<PAGE> 26
26
or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of
<PAGE> 27
27
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule II hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the
event of a default by any Underwriter as set forth in this Section 8, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been
<PAGE> 28
28
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 101 Prospect Avenue, N.W.,
Cleveland, Ohio 44115, attention of the Vice President, General Counsel and
Secretary.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
<PAGE> 29
29
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
By: THE SHERWIN-WILLIAMS
COMPANY,
-------------------
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By: Salomon Brothers Inc
By:
--------------------------
Vice President
<PAGE> 30
30
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
or
Salomon Brothers Inc
By:
--------------------------
Vice President
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE> 31
SCHEDULE I
Underwriting Agreement dated February , 1996
Representatives:
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Title, Purchase Price and Description of Securities:
Title:
Principal amount:
Purchase price (include accrued
interest or amortization, if
any):
Sinking fund provisions:
Redemption provisions:
Other provisions:
Registration Statements: $ of such Securities are registered under
Registration Statement No. 33-22705 and $ of such Securities are
registered under Registration Statement No. 333-[ ].
Closing Date, Time and Location:
Type of Offering: [Delayed Offering or Non-Delayed Offering]
<PAGE> 32
2
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract: $
Maximum aggregate principal amount of all contracts: $
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative:
Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 5(e) at the Execution Time:
<PAGE> 33
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
of Securities to
Underwriters be Purchased
------------ ----------------
<S> <C>
$
----------------
Total........................... $
================
</TABLE>
<PAGE> 34
SCHEDULE III
Delayed Delivery Contract
, 19
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Merrill Lynch & Co.
World Financial Center
North Tower
New York, NY 10281
Dear Sirs:
The undersigned hereby agrees to purchase from The Sherwin-Williams
Company (the "Company"), and the Company agrees to sell to the undersigned,
on , 19 , (the "Delivery Date"), $ principal amount of the
Company's (the "Securities") offered by the
Company's Prospectus dated , 19 , and related Prospectus Supplement
dated , 19 , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus [accrued interest]
[amortization of original issue discount], if any, thereon from ,
19 , to the date of payment and delivery, and on the further terms and
conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 AM, New York City time, on the Delivery Date to or upon
the order of the Company in New York Clearing House (next day) funds, at your
office or at such other place as shall be agreed between the Company and the
undersigned, upon delivery to the undersigned of the Securities in definitive
fully registered form
<PAGE> 35
2
and in such authorized denominations and registered in such names as the
undersigned may request by written or telecopy communication addressed to the
Company not less than five full business days prior to the Delivery Date. If no
request is received, the Securities will be registered in the name of the
undersigned and issued in a denomination equal to the aggregate principal amount
of Securities to be purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to sell
and deliver Securities on the Delivery Date, shall be subject to the conditions
(and neither party shall incur any liability by reason of the failure thereof)
that (1) the purchase of Securities to be made by the undersigned, which
purchase the undersigned represents is not prohibited on the date hereof, shall
not on the Delivery Date be prohibited under the laws of the jurisdiction to
which the undersigned is subject, and (2) the Company, on or before the Delivery
Date, shall have sold to certain underwriters (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Underwriting Agreement referred to in the Prospectus and Prospectus Supplement
mentioned above. Promptly after completion of such sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith. The obligation of
the undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract is
acceptable to the Company, it is required that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address
<PAGE> 36
3
set forth below. This will become a binding contract between the Company and the
undersigned, as of the date first above written, when such counterpart is so
mailed or delivered.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
--------------------------------
(Name of Purchaser)
By
--------------------------------
(Signature and Title of Officer)
--------------------------------
(Address)
Accepted:
The Sherwin-Williams Company,
By
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(Authorized Signature)
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EXHIBIT 1B
The Sherwin-Williams Company
Medium-Term Notes, Series A
Due Nine Months or More
From Date of Issue
Selling Agency Agreement
February , 1996
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Merrill Lynch & Co.
World Financial Center, North Tower
New York, NY 10281
Dear Sirs:
The Sherwin-Williams Company, an Ohio corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company of up to the aggregate principal amount set forth in Schedule I
hereto of its Medium-Term Notes, Series A, Due Nine Months or More from Date of
Issue (the "Notes"). The Notes will be issued under an indenture dated as of
February 1, 1996 between the Company and Chemical Bank, as trustee (the
"Trustee") (the "Indenture"). Unless otherwise specifically provided for and set
forth in a supplement to the Prospectus referred to below, the Notes in minimum
denominations of $1,000 and in denominations exceeding such amount by integral
multiples of $1,000, will be issued only in fully registered form and will have
the maturities, annual interest rates and, if appropriate, other terms set forth
in such supplement to the Prospectus. The Notes will be issued, and the terms
thereof established, in accordance with the Indenture and the Medium-Term Notes
Administrative Procedures attached hereto as Exhibit A (the "Procedures"). The
Procedures may only be amended by written agreement of the Company and you after
notice to, and with the approval of, the Trustee. For the purposes of this
Agreement, the term "Agent" shall refer to any of you acting solely in the
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capacity as agent for the Company pursuant to Section 2(a) and not as principal
(collectively, the "Agents"), the term the "Purchaser" shall refer to one of you
acting solely as principal pursuant to Section 2(b) and not as agent, and the
term "you" shall refer to collectively whether at any time any of you is acting
in both such capacities or in either such capacity. In acting under this
Agreement, in whatever capacity, each of you is acting individually and not
jointly.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each of you as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") registration statements on
such Form (File Numbers: 33-22705 and 333-[ ]), including the same basic
prospectus, which have become effective, for the registration under the Act of
$450,000,000 aggregate principal amount of debt securities (the "Securities"),
including the Notes. The Terms Agreement referred to in Section 2 for any
offering of Securities will specify the registration statement under which such
Securities are registered or, if portions of such Securities are registered
under each of such registration statements, the respective portions thereof.
Such registration statements, as amended as of the Execution Time, meet the
requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and comply in
all other material respects with said Rule. The Company has included in such
registration statements, or has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act, a supplement to the
form of prospectus included in such registration statements relating to the
Notes and the plan of distribution thereof (the "Prospectus Supplement"). In
connection with the sale of Notes the Company proposes to file with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the Act
further supplements to the Prospectus Supplement (each a "Pricing Supplement"),
specifying the interest rates, maturity dates and, if appropriate, other similar
terms of the Notes sold pursuant hereto or the offering thereof. If the Rule 434
Delivery Alternative is used, the Company will also file the Rule 434 Term Sheet
in accordance with Rule 434. As filed, such Rule 434 Term Sheet shall
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contain all the information required by Rule 434, and except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. Upon your request, but not
without your agreement, the Company will also file a Rule 462(b) Registration
Statement in accordance with Rule 462(b).
(b) As of the Execution Time, on the respective Effective Dates of each
of the registration statements referred to in paragraph (a) above, on the dates
of each post-effective amendment thereto, when any supplement to the Prospectus
is filed with the Commission, as of the date of a Terms Agreement and at the
date of delivery by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the registration statements, each as amended as of any such time, and the
Prospectus, as supplemented as of any such time, and the Indenture will comply
in all material respects with the applicable requirements of the Act, the Trust
Indenture Act of 1939 (the "Trust Indenture Act"), as amended and the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective rules thereunder;
(ii) the registration statements, each as amended as of any such time, did not
or will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and (iii) the Prospectus, as supplemented as
of any such time, will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the Statement
of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any or all of you specifically for use in connection with the preparation of
the Registration Statement or the Prospectus (or any supplement thereto).
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(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, and, when issued to and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture.
(d) The Company has complied with the provisions of the Laws of
Florida, Chapter 92-198 Securities Business with Cuba.
(e) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean, with respect to
each registration statement referred to in paragraph (a) above, each date that
such registration statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement became or become effective.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Basic Prospectus" shall mean the form of
basic prospectus relating to the Securities contained in the Registration
Statement at the Effective Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. If the Rule 434 Delivery Alternative
is used, such term shall also include the Basic Prospectus and the Rule 434 Term
Sheet, taken together. "Registration Statement" shall mean, collectively, the
registration statements referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information and Rule 434 Information deemed to
be included therein at the Effective Date as provided by Rule 430A and Rule 434,
respectively. "Rule 415", "Rule 424", "Rule 430A, "Rule 434", "Rule 462(b)" and
"Regulation S-K" refer to such rules under the Act. "Rule 430A Information"
means information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall mean the
delivery alternative permitted
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by Rule 434. "Rule 434 Information" shall mean any information to be included in
a Rule 434 Term Sheet. "Rule 434 Term Sheet" shall mean the term sheet or
abbreviated term sheet delivered by the Underwriters to investors and filed by
the Company with the Commission pursuant to Rule 434. "Rule 462(b) Registration
Statement" shall mean a registration statement and any amendments thereto filed
pursuant to Rule 462(b) relating to the final Delayed Offering covered by the
initial Registration Statement (file number 333-[ ]). Any reference herein to
the Registration Statement, the Basic Prospectus, the Prospectus Supplement or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, the Prospectus Supplement
or the Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be, deemed to be incorporated therein by reference.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to Purchaser. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not, except as otherwise provided in this
Agreement, have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under
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no circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in effect the Company
shall not solicit or accept offers to purchase Notes through any agent
(excluding the Company's or its subsidiaries' employees) other than an Agent.
(b) Subject to the terms and conditions set forth herein, whenever the
Company and any of you determines that the Company shall sell Notes directly to
any of you as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and, a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either an oral agreement
confirmed in writing or a written agreement) is herein referred to as a "Terms
Agreement". Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto and shall specify the principal amount of each such
Note, the aggregate principal amount of all such Notes, the maturity date of
such Notes, the rate at which interest will be paid on such Notes, the dates on
which interest will be paid on such Notes and the record
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date with respect to each such payment of interest, the Closing Date for such
Notes, the place of delivery of the Notes and payment therefor, the method of
payment and any requirements for the delivery of opinions of counsel,
certificates from the Company or its officers or a letter from the Company's
independent public accountants, as described in Section 6(b). Any such Terms
Agreement may also specify the period of time referred to in Section 4(m). Any
written Terms Agreement may be in the form attached hereto as Exhibit B. The
Purchaser's commitment to purchase Notes shall be deemed to have been made on
the basis of the representation and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not later than the Closing Date agreed to in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of Note of
identical maturity and (ii) may be resold by such Agent at varying prices from
time to time or, if set forth in the applicable Terms Agreement and Pricing
Supplement, at a fixed public offering price. In connection with any resale of
Notes purchased, a Purchaser may use a selling or dealer group and may reallow
any portion of the discount or commission payable pursuant hereto to dealers or
purchasers.
3. Offering and Sale of Notes. Each Agent shall communicate to the
Company, orally or in writing, each offer (unless previously rejected by such
Agent as provided below) to purchase Notes on terms previously communicated by
the Company to such Agent, and the Company shall have the sole right to accept
such offers to purchase Notes and may refuse any proposed purchase of Notes in
whole or in part for any reason. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any such offer received by it in
whole or in part. Each Agent and the Company agree to
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perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes (including by
way of resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except for (i) a
periodic or current report filed under the Exchange Act, (ii) a Supplement
relating to any offering of, or a change in the maturity dates, interest rates,
issuance prices or other similar terms of, any Notes or (iii) a supplement
relating to an offering of Securities other than the Notes) or any Rule 462(b)
Registration Statement unless the Company has furnished each of you a copy for
your review prior to filing and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement or Rule 462(b) Registration
Statement. Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. If the Rule 434 Delivery
Alternative is used, the Company will also cause the Rule 434 Term Sheet,
properly completed, to be filed with the Commission pursuant to Rule 434 within
the time period prescribed and will provide evidence satisfactory to the Agents
of such timely filing. Upon your request, the Company will cause the Rule 462(b)
Registration Statement, properly completed, to be filed with the Commission
pursuant to Rule 462(b) and will provide evidence satisfactory to the Agents of
such filing. The Company will promptly advise each of you (i) when the
Prospectus, any supplement thereto (except for a supplement relating to an
offering of Securities other than the Notes), any Rule 434 Term Sheet or any
Rule 462(b) Registration Statement, shall have been filed with the Commission
pursuant to Rule 424(b), (ii) when, prior to the termination of the offering of
the Notes, any amendment of the Registration Statement shall have been filed or
become effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by
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the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any reasonable proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof;
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the Registration Statement or
to supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such solicitation and ceasing using
the Prospectus as then supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of you pursuant to
paragraph (g) of this Section 4 in connection with the preparation or filing of
such amendment or supplement are reasonably satisfactory in all respects to you,
you will, upon the filing of such amendment or supplement with the Commission
and upon the effectiveness of an amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be
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described, or which the Company proposes to describe, in a document filed
pursuant to the Exchange Act, the Company will furnish to each of you the
information contained or to be contained in such announcement. The Company also
will furnish to each of you copies of all material press releases or material
announcements furnished to news or wire services. The Company will promptly
notify each of you by telephone or telecopy of (i) any decrease in the rating of
the Notes or any other debt securities of the Company by Moody's Investors
Service Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") or (ii) any
written notice received from S&P or Moody's of any intended or contemplated
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change;
(d) As soon as practicable, the Company will make generally available
to its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act;
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request;
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Notes and will arrange for the determination of the legality of the Notes
for purchase by institutional investors;
(g) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request;
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(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expense incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the reasonable fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, (ii) reimburse each of you, upon
request, on a monthly basis for all out-of-pocket expenses, if any, incurred by
you and approved by the Company in advance, in connection with this Agreement
and (iii) pay the reasonable fees and expenses of your counsel incurred in
connection with this Agreement and approved by the Company in advance (which
approval may be oral);
(i) Each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation that its representations and warranties contained
in Section 1 of this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to the
Registration Statement and Prospectus as amendment or supplemented at each such
time). Each such acceptance by the Company of an offer for the purchase of Notes
shall be deemed to constitute an additional representation, warranty and
agreement by the Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes, of any other Notes to
be issued on or prior to such settlement date and of any other Securities to be
issued and sold by the Company on or prior to such settlement date, the
aggregate amount of Securities (including any Notes) which have been issued and
sold by the Company will not exceed the amount of Securities registered pursuant
to the Registration Statement. The Company will inform you promptly upon your
inquiry of the aggregate amount of Securities registered under the Registration
Statement which remain unsold;
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(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates (whether pursuant to a sinking fund or
otherwise) or other similar terms of any Notes sold pursuant hereto), the
Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the chairman of the board, or the
president and the principal financial or accounting officer of the Company,
dated the date of the effectiveness of such amendment or the date of the filing
of such supplement, in form reasonably satisfactory to you, of the same tenor as
the certificate referred to in Section 5(d) but modified to relate to the last
day of the fiscal quarter for which financial statements of the Company were
last filed with the Commission and to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement;
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i) relating
to any offering of Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the interest rates, the
issuance prices, the redemption dates or other similar terms of any Notes sold
pursuant hereto), the Company shall furnish or cause to be furnished promptly to
each of you a written opinion of counsel of the Company in form reasonably
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, of the same tenor as the
opinion referred to in Section 5(b) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to you may furnish each of
you with a letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such supplement);
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(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company shall
cause Ernst & Young LLP, its independent public accountants, promptly to furnish
each of you a letter, dated the date of the effectiveness of such amendment or
the date of the filing of such supplement, in form reasonably satisfactory to
each of you, of the same tenor as the letter referred to in Section 5(e) with
such changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date of such
letter; provided, however, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, Ernst & Young LLP may
limit the scope of such letter, which shall be reasonably satisfactory in form
to each of you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statistical nature included
in such amendment or supplement, unless, in the reasonable judgment of any of
you, such letter should cover other information; and
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement, other than borrowings under its revolving credit agreements and lines
of credit and issuances of its commercial paper.
5. Conditions to the Obligations of the Agents. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
in all material respects of the representations and warranties on the part of
the Company contained in Section 1 hereof as of the Execution Time, on the
Effective Date, as of the date any supplement to the Prospectus is filed with
the Commission and as of each Closing Date, to the accuracy in all material
respects of the statements of the Company made in any certificates pursuant to
the provisions of this Section 5, to the performance in all material respects by
the Company
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of its obligations hereunder and to satisfaction of the following additional
conditions in all material respects:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b), or if the filing of the Rule 434 Term
Sheet is required pursuant to Rule 434, the Rule 434 Term Sheet will be
filed in the manner and within the time period required by Rule 434;
and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened;
(b) The Company shall have furnished to each Agent the opinion
of the Vice President, General Counsel and Secretary of the Company,
dated the Execution Time, 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 Ohio, with full corporate power to own its
properties and conduct its business as described in the
Prospectus and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own its properties and
conduct business as described in the Prospectus, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its subsidiaries taken as a whole;
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(ii) all the outstanding shares of capital stock of the
Subsidiaries have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as
incorporated in the Prospectus; and the Notes conform to the
description thereof contained in the Prospectus (subject to
the insertion in the Notes of the maturity dates, the interest
rates and other similar terms thereof which will be described
in supplements to the Prospectus as contemplated by the fourth
sentence of Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized, executed and
delivered, has duly qualified under the Trust Indenture Act,
and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time
in effect); and the Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
purchasers thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture;
(v) to the knowledge of such counsel, after due inquiry,
there is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document
<PAGE> 16
16
of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and the statements
included or incorporated in the Prospectus describing any
legal proceedings or material contracts or agreements relating
to the Company fairly summarize such matters;
(vi) the Registration Statement has become effective under
the Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b), or if the Rule 434 Delivery
Alternative was used, the required filing of the Rule 434 Term
Sheet has been made in the manner and time period required by
Rule 434; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form
in all material respects with the applicable requirements of
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to
believe that the Registration Statement at the Effective Date
or at the Execution Time contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes any
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transac-
<PAGE> 17
17
tions contemplated herein except such as have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the sale of the
Notes as contemplated by this Agreement and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture,
the issue and sale of the Notes, nor the consummation of any
other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach of, or constitute a default under the Amended
Articles of Incorporation or Code of Regulations, as amended,
of the Company or the terms of any indenture or other material
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound, or any
judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company or any
of its subsidiaries; and
(x) no holders of securities of the Company have rights to
the registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Ohio or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are reasonably satisfactory to
counsel for the Agents and (B) as to matter of fact, to the extent
deemed proper, on certificates of responsible officers of the Company
and public officials.
(c) The Agents shall have received from Cravath, Swaine &
Moore, counsel for the Agents, such opinion or opinions, dated the
Execution Time, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus and other related
matters as the Agents may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably
require, and the
<PAGE> 18
18
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters;
(d) The Company shall have furnished to the Agents a
certificate of the Company, signed by the chairman of the board or the
president and the principal financial or accounting officer of the
Company, dated the Execution Time, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
(i) the representations and warranties in Section 1 hereof
of the Company in this Agreement are true and correct in all
material respects on and as of the date hereof with the same
effect as if made on the date hereof and the Company has
substantially complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied as
a condition to the obligation of the Agents to solicit offers
to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus;
(e) At the Execution Time, Ernst & Young LLP shall have
furnished to the Agents a letter or letters (which may refer to letters
previously delivered to the Agents), dated as of the Execution Time, in
form and substance reasonably satisfactory to the Agents, confirming
that they are independent accountants within the meaning of the Act and
the Exchange Act and the
<PAGE> 19
19
respective applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by
them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the amounts included or
incorporated in the Registration Statement and the Prospectus
in response to Item 301 of Regulation S-K and of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited interim financial
information as indicated in their reports incorporated in the
Registration Statement and the Prospectus; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated in the Registration
Statement and the Prospectus, nothing came to their attention
which caused them to believe that:
(1) the amounts in the "Selected Financial
Data", if any, included or incorporated in the
Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited
financial statements from which such amounts were
derived;
<PAGE> 20
20
(2) any unaudited financial statements included
or incorporated in the Registration Statement and the
Prospectus do not comply in form in all material
respects with applicable accounting requirements and
with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Prospectus;
(3) with respect to the period subsequent to the
date of the most recent financial statements (other
than any capsule information), audited or unaudited,
in or incorporated in the Registration Statement and
the Prospectus, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the aggregate long-term
debt due within one year and long-term debt
(exclusive of current portion) of the Company and its
consolidated subsidiaries or common stock of the
Company or decreases in the shareholders' equity of
the Company and its consolidated subsidiaries as
compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated
in the Registration Statement and the Prospectus, or
for the period from the date of the most recent
financial statements included or incorporated in the
Registration Statement and the Prospectus to the date
of the most recently available monthly unaudited
financial information there were any decreases
relating to continuing operations, as compared with
the corresponding period in the preceding year in
total revenue or earnings before income taxes or in
the total or per share amounts of net earnings of the
Company and its consolidated subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
<PAGE> 21
21
accompanied by an explanation by the Company
as to the significance thereof unless said
explanation is not deemed necessary by the
Agents; or
(4) the amounts included in any unaudited
"capsule" information included or incorporated in the
Registration Statement and the Prospectus do not
agree with the amounts set forth in the unaudited
financial statements for the same periods or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
financial statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the
Registration Statement, including the information included or
incorporated in Items 1, 2, 5, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated
in the Company's Quarterly Reports on Form 10-Q, incorporated
in the Registration Statement and the Prospectus, agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and
the acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application
<PAGE> 22
22
of the pro forma adjustments to the historical amounts in the
pro forma financial statements, nothing came to their
attention which caused them to believe that the pro forma
financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements; and
(f) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Agents and their counsel, this agreement and all
obligations of any Agent hereunder may be canceled at any time by such
Agent. Notice of such cancellation shall be given to the Company in writing
or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Agents, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
date hereof.
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase any Notes will be subject to the
accuracy in all material respects of the representations and warranties on
the part of the Company in Section 1 of this Agreement as of the date of
the Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance in all material respects by the Company of all
covenants and agreements herein contained on its part to be performed and
observed and to satisfaction of the following additional conditions
precedent in all material respects:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened;
<PAGE> 23
23
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement and except to the extent modified by
such Terms Agreement, the Purchaser shall have received, appropriately
updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) (except that references
to the Prospectus shall be to the Prospectus as supplemented at the
time of execution of the Terms Agreement), (ii) the opinion of counsel
for the Company, dated as of the Closing Date, to the effect set forth
in Section 5(b), (iii) the opinion of Cravath, Swaine & Moore, counsel
for the Purchaser, dated as of the Closing Date, to the effect set
forth in Section 5(c), and (iv) letter of Ernst & Young, dated as of
the Closing Date, to the effect set forth in Section 5(e); and
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request, including any
further items specified in Exhibit B.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement and an
applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in
form and substance to the Purchaser and its counsel, such Terms Agreement
and all obligations of the Purchaser thereunder and with respect to the
Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation shall
be given to the Company in writing or by telephone or telegraph confirmed
in writing.
7. Right of Person Who Agreed to Purchase to Refuse to
Purchase. (a) The Company agrees that any person who has agreed to purchase
and pay for any Note, including the Purchaser and any person who purchases
pursuant to a solicitation by any of the Agents, shall have the right to
refuse to purchase such Note if (a) at the Closing Date therefor, any
condition set forth in Section 5 or 6, as applicable, shall not be
satisfied.
<PAGE> 24
24
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the
Agents shall have the right to refuse to purchase such note if, subsequent
to the agreement to purchase such Note, any change, condition or
development specified in any of Sections 9(b)(i) through (v) shall have
occurred (with the judgment of the Agent which presented the offer to
purchase such Note being substituted for any judgment of a Purchaser
required therein), the effect of which is, in the judgment of the Agent
which presented the offer to purchase such Note, so material and adverse as
to make it impractical to proceed with the sale and delivery of such Note
(it being understood that under no circumstance shall any such Agent have
any duty or obligation under this Agreement to the Company or to any such
person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each of you, the directors, officers and
employees of each of you and each person who controls each of you within
the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which you,
they or any of you or them may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof, or
in the Prospectus or any preliminary Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse as incurred each such indemnified party
for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any of you specifically for use in connection with the
<PAGE> 25
25
preparation thereof, and (ii) such indemnity with respect to the Prospectus
or any preliminary Prospectus shall not inure to the benefit of any of you
(or any person controlling any of you) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the
subject thereof if such person did not receive a copy of the Prospectus (or
the Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in the Prospectus
or any preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have. If the Company shall
default in its obligations to deliver Notes to a purchaser whose offer it
has accepted, the Company shall indemnify and hold each of you harmless
against any loss, claim or damage arising from or as a result of such
default by the Company.
(b) Each of you agrees to indemnify and hold harmless the
Company, each of its employees and directors, each of its officers who
signs the Registration Statement and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to you, but only with
reference to written information relating to such of you furnished to the
Company by or on behalf of such of you specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which you may
otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page and under the heading "Underwriting"
or "Plan of Distribution", of any preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of any
of you for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Agents, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party (i) will not relieve it from liability which it may have
to any indemnified party
<PAGE> 26
26
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with
the assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel and an additional local counsel, if needed, approved by you in the
case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party or (iv) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification
<PAGE> 27
27
provided for in paragraph (a) or (b) of this Section 8 is due in accordance
with its terms, but is held by a court to be unavailable in whole or in
part to hold harmless an indemnified party for any reason (other than an
act or omission or such indemnified party), the Company and each of you
agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively, "Losses")
to which the Company and one or more of you may be subject in such
proportion so that each of you is responsible for that portion as is
appropriate to reflect the relative benefits received by the Company and
each of you from the offering of the Notes from which such Losses arise;
provided, however, that in no case shall any of you be responsible for any
amount in excess of the commissions received by such of you in connection
with the Notes from which such Losses arise (or, in the case of Notes sold
pursuant to a Terms Agreement, the aggregate commissions that would have
been received by such of you if such commissions had been payable). If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and each of you shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of each of you in connection
with the statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Notes from which such Losses
arise, and benefits received by each of you shall be deemed to be equal to
the total commissions received by such of you in connection with the Notes
from which such Losses arise (or, in the case of Notes sold pursuant to a
Terms Agreement, the aggregate commissions that would have been received by
such of you if such commissions had been payable). Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or any of you. The Company
and each of you agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent
<PAGE> 28
28
misrepresentation. For purposes of this Section 8, each person who controls
any of you within the meaning of the Act or the Exchange Act and each
director, officer and employee of any of you shall have the same rights to
contribution as you and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director, officer
and employee of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of
this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. Termination. (a) This Agreement will continue in effect
until terminated as provided in this Section 9. This Agreement may be
terminated by either the Company as to any of you insofar as this Agreement
relates to such of you, giving written notice of such termination to such
of you or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given. In the
event of such termination, no party shall have any liability to the other
party hereto, except as provided in Section 2(a), Section 4(h), Section 8
and Section 10.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company
prior to delivery of any payment for any Note to be purchased thereunder,
if prior to such time (i) there shall have occurred, subsequent to the
agreement to purchase such Note, any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which is, in
the judgment of the Purchaser, so material and adverse as to make it
impractical to proceed with the offering or delivery of such Note, (ii)
there shall have been, subsequent to the agreement to purchase such Note,
any decrease in the rating
<PAGE> 29
29
of any of the Company's debt securities by Moody's or S&P or any formal
notice given of any intended or contemplated decrease in any such rating,
(iii) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange (other than temporarily
pending an announcement or development) or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (iv) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (v) there shall have occurred any material outbreak or
material escalation of hostilities, declaration by the United States of war
or other calamity or crisis, the effect of which on financial markets is
such as to make it, in the judgment of the Purchaser, impracticable to
proceed with the offering or delivery of such Notes as contemplated by the
Prospectus (exclusive of any supplement subsequent to such event).
10. Survival of Certain Provisions. The respective agreements,
representations, warranties, indemnities and other statements of the
Company or its officers and of you set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of you or the Company or any of the
directors, officers, employees or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Notes.
The provisions of Sections 4(h) and 8 hereof shall survive the termination
or cancellation of this Agreement. The provisions of this Agreement
(including without limitation Section 7 hereof) applicable to any purchase
of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement. If at
the time of termination of this Agreement any Purchaser shall own any Notes
purchased pursuant to a Terms Agreement with the intention of selling them,
the provisions of Section 4 shall remain in effect until such Notes are
resold.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to any of you, will be mailed,
delivered or telegraphed and confirmed to such of you, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telecopied and confirmed to it at 101 Prospect Avenue, N.W.,
Cleveland, Ohio 44115, attention of the Treasurer.
<PAGE> 30
30
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
directors, officers, employees, and controlling persons referred to in
Section 8 hereof and, to the extent provided in Section 7, any person will
have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same instrument.
<PAGE> 31
31
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and you.
Very truly yours,
THE SHERWIN-WILLIAMS COMPANY,
by
-------------------------
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date hereof.
SALOMON BROTHERS INC,
by
--------------------
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
by
----------------------
Title:
<PAGE> 32
SCHEDULE I
Selling Agency Agreement dated [ ], 1996
Registration Statement No. 33-22705 ("Registration Statement 1")
Amount of the Securities registered under Registration Statement 1: $200,000,000
Registration Statement No. 333-[ ] ("Registration Statement 2")
Amount of the Securities registered under Registration Statement 2: $250,000,000
Aggregate Amount of the Securities Registered: $450,000,000
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by each Agent:
<TABLE>
<CAPTION>
Maturity Range of Notes % of Principal Amount
----------------------- ---------------------
<S> <C>
From 9 months to less than 1 year....................................... .125%
From 1 year to less than 18 months ..................................... .150%
From 18 months to less than 2 years..................................... .200%
From 2 years to less than 3 years....................................... .250%
From 3 years to less than 4 years....................................... .350%
From 4 years to less than 5 years....................................... .450%
From 5 years to less than 6 years....................................... .500%
From 6 years to less than 7 years....................................... .550%
From 7 years to less than 10 years...................................... .600%
From 10 years to less than 15 years..................................... .625%
From 15 years to less than 20 years..................................... .700%
20 years up to and including 30 years .................................. .750%
</TABLE>
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address for notices:
Notices to Salomon Brothers Inc shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention Medium Term Notes Department.
<PAGE> 33
2
Notices to Merrill Lynch & Co. shall be directed to it at Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower,
10th Floor, New York, New York 10281-1311, Attention: MTN Product Management.
Notices to The Sherwin-Williams Company shall be directed to it at 101
Prospect Avenue, N.W., Cleveland, Ohio 44115, Attention Treasurer.
The Company may satisfy its obligation under subsection (c) of Section
4 of the Selling Agency Agreement to furnish to each of the Agents copies of all
documents filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act by promptly furnishing such documents to
Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York, 10019,
Attention: Timothy G. Massad, Esq.
<PAGE> 34
EXHIBIT A
THE SHERWIN-WILLIAMS COMPANY
Medium-Term Note Administrative Procedures
February , 1996
Medium-Term Notes, Series A, Due Nine Months or More from Date of Issue
(the "Notes") are to be offered on a continuing basis by The Sherwin-Williams
Company (the "Company"). Salomon Brothers Inc and Merrill Lynch & Co., as agents
(individually, an "Agent" and collectively, the "Agents"), have agreed to
solicit purchases of Notes issued in fully registered form. The Agents will not
be obligated to purchase Notes for their own accounts. The Notes are being sold
pursuant to a Selling Agency Agreement among the Company and the Agents dated
February , 1996 (the "Agency Agreement"). The Notes will rank equally with all
other unsecured and unsubordinated debt of the Company and have been registered
with the Securities and Exchange Commission (the "Commission"). Chemical Bank
(the "Trustee") is the trustee under the Indenture dated as of February 1, 1996
(the "Indenture").
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to Chemical Bank ("Chemical"), as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder
thereof or a Person designated by such Holder (a "Certificated Note"). Only
Notes denominated and payable in U.S. dollars may be issued as Book-Entry Notes.
An owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note, except in the event that use of the book-entry system
for the Notes is discontinued.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are
<PAGE> 35
2
explained below. Administrative and record-keeping responsibilities will be
handled for the Company by its Treasury Department. The Company will advise the
Agents and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents and the Trustee are to communicate
regarding offers to purchase Notes and the details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book- Entry Notes for
eligibility in the book-entry system maintained by DTC, Chemical will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and Chemical to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between Chemical and DTC and its
obligations as a participant in DTC, including DTC's Same- Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes,
<PAGE> 36
3
the Company will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to
$200,000,000 principal amount of all such
Book-Entry Notes that have the same original issue
date, original issue discount provisions, if any,
Interest Payment Dates, Record Dates, reset,
extension, repayment, sinking fund and redemption
provisions, if any, Maturity Date and, in the case
of Fixed Rate Notes, interest rate, or, in the case
of Floating Rate Notes, initial interest rate, Base
Rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier,
if any, minimum interest rate, if any, and maximum
interest rate, if any (all of the foregoing are
collectively referred to as the "Terms"). Each
Global Security will be dated and issued as of the
date of settlement and authenticated by the
Trustee. Each Global Security will bear an original
issue date, which will be (i) with respect to an
original Global Security (or any portion thereof),
the original issue date specified in such Global
Security and (ii) following a consolidation of
Global Securities, with respect to the Global
Security resulting from such consolidation, the
most recent Interest Payment Date to which interest
has been paid or duly provided for on the
predecessor Global Securities, regardless of the
date of authentication of such resulting Global
Security. No Global Security will represent (i)
both Fixed Rate and Floating Rate Book- Entry Notes
or (ii) any Certificated Note.
<PAGE> 37
4
Identification The Company has arranged with the CUSIP Service
Numbers: Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of
CUSIP numbers, which series consists of
approximately 900 CUSIP numbers and relates to
Global Securities representing Book-Entry Notes and
book-entry medium-term notes issued by the Company
with other series designations. Chemical, the
Company and DTC have obtained from the CUSIP
Service Bureau a written list of such reserved
CUSIP numbers. The Company will assign CUSIP
numbers to Global Securities as described below
under Settlement Procedure "B". DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Securities. Chemical will notify the Company at any
time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global Securities,
and, if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment to
Global Securities. Upon obtaining such additional
CUSIP numbers, the Company shall deliver a list of
such additional CUSIP numbers to Chemical and DTC.
Registration: Global Securities will be issued only in fully
registered form without coupons. Each Global
Security will be registered in the name of Cede &
Co., as nominee for DTC, on the securities register
for the Notes maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by
such owner) will designate one or more participants
in DTC (with respect to such Book-
<PAGE> 38
5
Entry Note, the "Participants") to act as agent or
agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a
credit balance with respect to such beneficial
owner of such Book-Entry Note in the account of
such Participants. The ownership interest of such
beneficial owner (or such participant) in such
Book- Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such
Note.
Exchanges: Chemical may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of
consolidation (a copy of which shall be attached to
the resulting Global Security described below)
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A)
Fixed-Rate Book-Entry Notes having the same Terms
and for which interest has been paid to the same
date, or (B) Floating Rate Book-Entry Notes having
the same terms and for which interest has been paid
to the same date, (ii) a date, occurring at least
thirty days after such written notice is delivered
and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on
<PAGE> 39
6
which such Global Securities shall be exchanged for
a single replacement Global Security and (iii) a
new CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security. Upon
receipt of such a notice, DTC will send to its
participants (including Chemical) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, Chemical will deliver to
the CUSIP Service Bureau a written notice setting
forth such exchange date and such new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, Chemical will exchange such Global
Securities for a single Global Security bearing the
new CUSIP number and the CUSIP numbers of the
exchanged Global Securities will, in accordance
with CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged
exceed $200,000,000 in aggregate principal amount,
one Global Security will be authenticated and
issued to represent each $200,000,000 of principal
amount of the exchanged Global Securities and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date (the
"Maturity Date") not less than 9 months after the
Original Issue Date for such Note.
<PAGE> 40
7
Price to Public: Each Book-Entry Note will be issued at the
percentage of principal amount specified in the
Prospectus Supplement (as defined in Section 1(c)
of the Agency Agreement) or in a Pricing Supplement
as defined in the Prospectus Supplement relating to
such Note.
Denominations: The denomination of any Book-Entry Note will be a
minimum of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. Global
Securities will be denominated in principal amounts
not in excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single
Global Security, then one Global Security will be
authenticated and issued to represent each
$200,000,000 principal amount of such Book-Entry
Note or Notes and an additional Global Security
will be authenticated and issued to represent any
remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
Interest: General. Except as set forth in the Book-Entry
Note, interest, if any, on each Book-Entry Note
will accrue from the original issue date for the
first interest period or the last date to which
interest has been paid, if any, for each subsequent
interest period, on the Global Security
representing such Book-Entry Note, and will be
calculated and paid in the manner described in such
Book-Entry Note
<PAGE> 41
8
and in the Prospectus, as supplemented by the
applicable Pricing Supplement. Unless otherwise
specified therein, each payment of interest on a
Book-Entry Note will include interest accrued to
but excluding the Interest Payment Date or to but
excluding the maturity of any payment of principal
(hereinafter referred to as "Maturity"), other than
a Maturity of a Fixed Rate Book-Entry Note
occurring on the 31st day of a month, in which case
such payment of interest will include interest
accrued to but excluding the 30th day of such
month, or to but excluding the date of redemption
or repayment in full of such Book-Entry Note
(hereinafter referred to as "Redemption"). Interest
payable at the Maturity or upon Redemption of a
Book-Entry Note will be payable to the person to
whom the principal of such Note is payable.
Standard & Poor's Corporation will use the
information received in the pending deposit message
described under Settlement Procedure "C" below in
order to include the amount of any interest payable
and certain other information regarding the related
Global Security in the appropriate (daily or
weekly) bond report published by Standard & Poor's
Corporation.
Record Dates. The Record Date with respect to any
Interest Payment Date shall be the date 15 calendar
days immediately preceding such Interest Payment
Date (whether or not a Business Day).
Interest Payment Dates on Fixed Rate Book-Entry
Notes. Unless otherwise specified pursuant to
Settlement Procedure "A" below,
<PAGE> 42
9
interest payments on Fixed Rate Book-Entry Notes
will be made semi-annually on May 1 and November 1
of each year and at Maturity or upon Redemption;
provided, however, that in the case of a Fixed Rate
Book- Entry Note issued between a Record Date and
an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Record Date. If any
Interest Payment Date for a Fixed Rate Book- Entry
Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment
for the period from and after such Interest Payment
Date.
Interest Payment Dates on Floating Rate Book-Entry
Notes. Interest Payments will be made on Floating
Rate Book-Entry Notes monthly, quarterly,
semi-annually or annually, or as specified in the
applicable Pricing Supplement. Unless otherwise set
forth in the Note, interest will be payable, in the
case of Floating Rate Book- Entry Notes with a
monthly Interest Payment Period, on the third
Wednesday of each month; with a quarterly Interest
Payment Period, on the third Wednesday of March,
June, September and December of each year; with a
semi-annual Interest Payment Period, on the third
Wednesday of the two months specified pursuant to
Settlement Procedure "A" below; and with an annual
Interest Payment Period, on the third Wednesday of
the month specified pursuant to Settlement
Procedure "A" below; provided, however, that if an
Interest Payment Date for a Floating Rate
<PAGE> 43
10
Book-Entry Note would otherwise be a day that is
not a Business Day with respect to such Floating
Rate Book-Entry Notes, such Interest Payment Date
will be the next succeeding Business Day with
respect to such Floating Rate Book-Entry Note,
except in the case of a Floating Book-Entry Note
for which the Base Rate is LIBOR, if such Business
Day is in the next succeeding calendar month, such
Interest Payment Date will be the immediately
preceding Business Day; and provided further that
in the case of a Floating Rate Book-Entry Note
issued between a Record Date and an Interest
Payment Date, the first interest payment will be
made on the Interest Payment Date following the
next succeeding Record Date.
Notice of Interest Payment and Record Dates. At the
written request of the Company, Chemical will
deliver to the Company and DTC a written list of
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes. Promptly
after each Interest Determination Date for Floating
Rate Book-Entry Notes, Chemical, as Calculation
Agent, will notify Standard & Poor's Corporation of
the interest rates determined on such Interest
Determination Date.
Calculation of Interest: Fixed Rate Book-Entry Notes. Interest on Fixed Rate
Book-Entry Notes (including interest for partial
periods) will be calculated on the basis of a
360-day year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate
<PAGE> 44
11
Book-Entry Notes will be determined as set forth in
the form of Notes. Interest on Floating Rate Book-
Entry Notes, except as otherwise set forth therein,
will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the
case of a Floating Rate Book-Entry Note for which
the Base Rate is the Treasury Rate, interest will
be calculated on the basis of the actual number of
days in the year.
Payment of Principal and Payment of Interest Only. Promptly after each
Interest: Record Date, Chemical will deliver to the Company
and DTC a written notice setting forth, by CUSIP
number, to the extent then ascertainable, the
amount of interest to be paid on each Global
Security on the following Interest Payment Date
(other than an Interest Payment Date coinciding
with Maturity or Redemption) and the total of such
amounts. DTC will confirm the amount payable on
each Global Security on such Interest Payment Date
by reference to the appropriate bond reports
published by Standard & Poor's Corporation. The
Company will pay to Chemical, as paying agent, the
total amount of interest due on such Interest
Payment Date (other than at Maturity or upon
Redemption), and Chemical will pay such amount to
DTC, at the times and in the manner set forth below
under "Manner of Payment".
Payments at Maturity or Upon Redemption. On or
about the first Business Day of each month,
Chemical will deliver to the Company, DTC and the
Trustee a written list of principal and to the
extent then ascertainable,
<PAGE> 45
12
interest to be paid on each Global Security
maturing (at Maturity or upon Redemption or
otherwise) in such month. Chemical, the Company and
DTC will confirm the amounts of such principal and
interest payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity Date or Redemption Date, as
the case may be, of such Global Security. On or
before the Maturity Date or Redemption Date, as the
case may be, the Company will pay to Chemical, as
paying agent, the principal amount of such Global
Security, together with interest due at such
Maturity Date or Redemption Date, as the case may
be. Chemical will pay such amount to DTC at the
times and in the manner set forth below under
"Manner of Payment". If any Maturity Date or
Redemption Date of a Global Security representing
Book-Entry Notes is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Maturity Date or Redemption Date.
Promptly after payment to DTC of the principal and
interest due at Maturity or upon Redemption of such
Global Security, the Trustee will cancel such
Global Security in accordance with the Indenture
and so advise the Company. On the first Business
Day of each month, if Chemical is not the Trustee,
then Chemical will deliver to the Trustee a written
statement indicating the total principal amount of
Outstanding Global Securities as of the immediately
preceding Business Day.
<PAGE> 46
13
Manner of Payment. The total amount of any
principal and interest due on Global Securities on
any Interest Payment Date or at Maturity or upon
Redemption shall be paid by the Company to Chemical
in immediately available funds no later than 9:30
A.M. (New York City time) on such date, or as soon
as possible thereafter. The Company will make such
payment on such Global Securities by instructing
Chemical to withdraw funds from an account
maintained by the Company at Chemical or by wire
transfer to Chemical. The Company will confirm any
such instructions in writing to Chemical. Prior to
10 A.M. (New York City time) on the Maturity Date
or Redemption Date or as soon as possible
thereafter, Chemical will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal
(together with interest thereon) due on a Global
Security on such date. On each Interest Payment
Date (other than at Maturity or upon Redemption),
interest payments shall be made to DTC, in funds
available for immediate use by DTC, in accordance
with existing arrangements between Chemical and
DTC. On each such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect,
such amounts in funds available for immediate use
to the respective Participants in whose names the
Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system
maintained by
<PAGE> 47
14
DTC. None of the Company (as issuer or as paying
agent), the Trustee or Chemical shall have any
direct responsibility or liability for the payment
by DTC to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and withheld by the Participant,
indirect participant in DTC or other Person
responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company's Exercise Optional Reset. Not less than 50 or more than 60
of Optional Reset or days before an Optional Reset Date as set forth in
Optional Extension a Book-Entry Note, the Company will notify the
of Maturity: Trustee whether it is exercising its option to
reset the Interest Rate or Spread or Spread
Multiplier, as the case may be, for such Book-Entry
Note, and if so, (i) the new Interest Rate or
Spread or Spread Multiplier, as the case may be,
for such Book-Entry Note during the period from
such Optional Reset Date to the next Optional Reset
Date as set forth in such Book- Entry Note or, if
there is no such next Optional Reset Date, to the
Stated Maturity of such Book-Entry Note (the
"Subsequent Interest Period"); and (ii) the
provisions, if any, for redemption of such
Book-Entry Note during such Subsequent Interest
Period, including the date or dates on which or the
period or periods
<PAGE> 48
15
during which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee Regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Book-Entry Note, to extend the Stated Maturity of
such Note, it will so notify the Trustee no less
than 50 or more than 60 days before the Stated
Maturity of such Book- Entry Note, and will further
indicate (i) the new Stated Maturity; (ii) the
Interest Rate or Spread or Spread Multiplier, as
the case may be, applicable to such extension
period and (iii) the provisions, if any, for
redemption of such Book-Entry Note during such
extension period, including the date or dates on
which or the period or periods during which such
redemption may occur during such extension period.
Trustee Notice to DTC Regarding Company's Exercise
of Optional Extension or Reset. Upon receipt of
notice from the Company regarding the Company's
exercise of either an optional extension of
maturity or an optional reset, the Trustee will
hand-deliver a notice to DTC not less than 40 days
before the Optional Reset Date (in which case a
"Reset Notice") or the old Stated Maturity (in
which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall
identify such Book-Entry Note by CUSIP number and
shall contain the information required by the terms
of the Book-Entry Note.
Trustee Notice to Company Regarding
<PAGE> 49
16
Option to be Repaid. If, after receipt of either a
Reset Notice or an Extension Notice, DTC exercises
the option for repayment by tendering the Global
Security representing the Book-Entry Note to be
repaid as set forth in such Note, the Trustee shall
give notice to the Company not less than 22 days
before the Optional Reset Date or the old Stated
Maturity, as the case may be, of the principal
amount of Book-Entry Notes to be repaid on such
Optional Reset Date or old Stated Maturity, as the
case may be.
Company Notice Regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the Interest Rate or Spread or Spread
Multiplier and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset
Period or extension period, as the case may be, it
shall, not less than 20 days before such Optional
Reset Date or old Stated Maturity, so notify the
Trustee. The Trustee will immediately thereafter
notify DTC of the new Interest Rate or Spread or
Spread Multiplier applicable to such Book-Entry
Note.
Trustee Notice to Company Regarding DTC Revocation
of Option to be Repaid. If, after DTC has tendered
any Book-Entry Notes for repayment pursuant to an
Extension Notice or an Optional Reset Notice, DTC
then revokes such tender for repayment, the Trustee
shall give notice to the Company not less than five
days prior to the old Stated Maturity or Optional
Reset Date, as the case may be, of such revocation
and of the principal amount of Book-Entry
<PAGE> 50
17
Notes for which tender for repayment has been
revoked.
Deposit of Repayment Price. On or before any old
Stated Maturity where the Maturity has been
extended, and on or before an Optional Reset Date,
the Company shall deposit with the Trustee an
amount of money sufficient to pay the principal
amount, plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the case may
be, for all the Book-Entry Notes or portions
thereof which are to be repaid on such old Stated
Maturity or Optional Reset Date, as the case may
be. Such Trustee will use such money to repay such
Book- Entry Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company Notice to Optional Redemption. At least 45 days prior to the
Trustee Regarding date on which it intends to redeem a Book-Entry
Company's Exercise Note, the Company will notify the Trustee that it
of Optional Redemption: is exercising such option with respect to such
Book-Entry Note on such date.
Trustee Notice to DTC Regarding Company's Exercise
of Optional Redemption. After receipt of notice
that the Company is exercising its option to redeem
a Book-Entry Note, the Trustee will, at least 30
days before the redemption date for such Book-Entry
Note, hand deliver to DTC a notice identifying such
Book-Entry Note by CUSIP number and informing DTC
of the Company's exercise of such option with
respect to such Book- Entry Note.
Deposit of Redemption Price. On or
<PAGE> 51
18
before any redemption date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the redemption price, plus
interest accrued to such redemption date, for all
the Book-Entry Notes or portions thereof which are
to be repaid on such redemption date. Such Trustee
will use such money to repay such Book-Entry Notes
pursuant to the terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid.
and Interest upon Upon receipt of notice of exercise of the option
Exercise of Optional for repayment and the Global Securities
Repayment (Except representing the Book-Entry Notes so to be repaid
Pursuant to Company's as set forth in such Notes, the Trustee shall
Exercise of Optional (unless such notice was received pursuant to the
Reset or Optional Company's exercise of an optional reset or an
Extension) optional extension of maturity, in each of which
cases the relevant procedures set forth above are
to be followed) give notice to the Company not less
than 20 days prior to each Optional Repayment Date
of such Optional Repayment Date and of the
principal amount of Book-Entry Notes to be repaid
on such Optional Repayment Date.
Deposit of Repayment Price. On or prior to any
Optional Repayment Date, the Company shall deposit
with such Trustee an amount of money sufficient to
pay the optional repayment price, and accrued
interest thereon to such date, of all the
Book-Entry Notes or portions thereof which are to
be repaid on such date. Such Trustee will use such
money to repay such Book-Entry Notes pursuant to
the terms set forth in such Notes.
<PAGE> 52
19
Procedure for Rate The Company and the Agents will discuss from time
Setting and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by, Book-Entry Notes that may be sold as a
result of the solicitation of orders by the Agents.
If the Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which
the Agents are to solicit orders (the setting of
such prices and rates to be referred to herein as
"posting") or if the Company decides to change
prices or rates previously posted by it, it will
promptly advise the Agents of the prices and rates
to be posted.
Acceptance and Rejection Each Agent will promptly advise the Company by
of Offers: telephone of any offers to purchase Book-Entry
Notes received by such Agent. The Company will have
the sole right to accept any such offer to purchase
Book-Entry Notes. The Company may reject any such
orders in whole or in part.
Each Agent may, in its discretion reasonably
exercised, reject an offer to purchase Book-Entry
Notes received by it in whole or in part.
Preparation of Pricing If an offer to purchase a Book- Entry Note is
Supplement: accepted by or on behalf of the Company, the
Company, with the approval of the Agent that
presented such offer (the "Presenting Agent"), will
prepare a pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Book-Entry Note and will arrange to have 10 copies
thereof filed with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Act and will supply at least
<PAGE> 53
20
10 copies thereof (and additional copies if
requested) to the Presenting Agent and one copy to
the Trustee. The Presenting Agent will cause a
Pricing Supplement to be delivered to the purchaser
of the Book-Entry Note.
The copies of the Pricing Supplement to be sent to
the Presenting Agent shall be sent by telecopy or
overnight courier to arrive no later than 11:00
a.m., New York City time, on the second business
day following the sale date and shall be sent:
(a) if to Salomon Brothers Inc, to
it at:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33167
Attn: Enrique Castro
Tel: 813-558-7165
Telecopy: 813-558-4123
(b) if to Merrill Lynch & Co., to
it at:
(i) for overnight, express or special delivery
packages:
Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
(ii) for all other types of deliveries:
Tritech Services
#4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
<PAGE> 54
21
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
Telecopy: 908-885-2775/2776
and, in each case, please send a copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: 212-449-7476
Telecopy: 212-449-2234
or to such other address as the Presenting Agent
may specify. Receipt of all telecopy transmissions
shall be confirmed by telephone.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Out-dated Pricing Supplements and the
Prospectuses to which they are attached (other than
those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole
Solicitation; Amendment discretion, to instruct the Agents to suspend at
or Supplement: any time, for any period of time or permanently,
the solicitation of orders to purchase Book-Entry
Notes. Upon receipt of such instructions, the
Agents will forthwith suspend solicitation until
such time as the Company has advised them that such
solicitation may be resumed.
<PAGE> 55
22
If the Company decides to amend or supplement the
Registration Statement (as defined in Section 1(c)
of the Agency Agreement) or the Prospectus (except
for a supplement relating to an offering of
securities other than the Notes), it will promptly
advise the Agents and furnish the Agents with the
proposed amendment or supplement and with such
certificates and opinions as are required, all to
the extent required by and in accordance with the
terms of the Agency Agreement. Subject to the
provisions of the Agency Agreement, the Company may
file with the Commission any supplement to the
Prospectus relating to the Notes. The Company will
provide the Agents, the Trustee and Chemical with
copies of any supplement and confirm to the Agents
that such supplement has been filed with the
Commission pursuant to the applicable paragraph of
Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Book-Entry Notes
there shall be any outstanding offers to purchase
Book-Entry Notes that have been accepted by the
Company but for which settlement has not yet
occurred, the Company will promptly advise the
Agents, the Trustee and Chemical whether such
orders may be settled and whether copies of the
Prospectus as supplemented to the time of the
suspension may be delivered in connection with the
settlement of such sales. The Company will have the
sole responsibility for such decision and for any
arrangements that may be made in the event that the
Company determines that such orders may not be
settled or that
<PAGE> 56
23
copies of such Prospectus may not be so delivered.
Procedure for Rate When the Company has determined to change the
Changes: interest rates of Book- Entry Notes being offered,
it will promptly advise the Agents and the Agents
will forthwith suspend solicitation of orders. The
Agents will telephone the Company with
recommendations as to the changed interest rates.
At such time as the Company has advised the Agents
of the new interest rates, the Agents may resume
solicitation of orders. Until such time, only
"indications of interest" may be recorded.
Delivery of Prospectus:
A copy of the Prospectus and a Pricing Supplement
relating to a Book-Entry Note must accompany or
precede the earliest of any written offer of such
Book-Entry Note, confirmation of the purchase of
such Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes is
received by the Agents between the time an order
for a Book-Entry Note is placed and the time
written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement as
herein described with respect to each Book-Entry
Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold
<PAGE> 57
24
directly by the Company to a purchaser (other than
an Agent).
Confirmation: For each offer to purchase a Book-Entry Note
solicited by an Agent and accepted by the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth below and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry Note.
All orders accepted by the Company will be settled
on the third Business Day following the date of
sale of such Book-Entry Note pursuant to the
timetable for settlement set forth below unless the
Company and the purchaser agree to settlement on
another day which shall be no earlier than the next
Business Day following the date of sale.
Details for Settlement: Settlement Procedures with regard to each
Book-Entry Note sold by the Company through any
Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Company by
telephone of the following settlement
information:
1. Principal amount of the Book-Entry Note.
2. In the case of a Fixed Rate Book-Entry Note,
the
<PAGE> 58
25
interest rate or, in the case of a Floating
Rate Book-Entry Note, the Base Rate, initial
interest rate (if known at such time), Index
Maturity, Interest Reset Period, Interest
Reset Dates, Spread or Spread Multiplier (if
any), minimum interest rate (if any).
3. Issuance price of the Book-Entry Note.
4. Trade and Settlement dates.
5. Maturity Date and, if applicable, the
Extension Period and Final Maturity Date.
6. Record Dates, Interest Payment Dates and the
Interest Payment Period.
7. Optional Reset Dates, if any.
8. Redemption provisions, if any.
9. Repayment or sinking fund provisions, if any.
10. Presenting Agent's DTC participant account
number and commission, to be paid in the
form of a discount upon settlement.
11. Whether such Book-Entry Note is issued at an
original issue discount and, if so, the
total amount of OID, the yield
<PAGE> 59
26
to maturity and the initial accrual period
OID.
12. Taxpayer identification number of the
purchaser.
13. Net proceeds to the Company.
14. Any other applicable terms.
B. The Company will assign a CUSIP number to the
Global Security representing such Book-Entry
Note, assign an order number to such Book-
Entry Note and then advise Chemical by
telephone (confirmed in writing at any time on
the same date) or electronic transmission of
the information set forth in Settlement
Procedure "A" above, such CUSIP number, such
order number, the name of the Presenting Agent
and any other applicable information. The
Company will also notify the Presenting Agent
by telephone or electronic transmission of such
CUSIP number as soon as practicable. The
Company will provide Chemical with registration
instructions and Taxpayer Identification Number
(if the Note is not to be registered to DTC or
its nominee).
C. Chemical will enter a pending deposit message
through DTC's Participant Terminal System
providing the following settlement information
to DTC (which shall route such information to
Standard &
<PAGE> 60
27
Poor's Corporation and Interactive Data
Corporation), the Presenting Agent and, upon
request, the Trustee:
1. The information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which
such date succeeds the related Record Date
(which, in the case of Floating Rate
Book-Entry Notes that reset daily or weekly,
shall be the DTC Record Date, which is the
date five calendar days immediately
preceding the applicable Interest Payment
Date and, in the case of all other Book-
Entry Notes, shall be the Record Date as
defined in such Notes) and amount of
interest payable on such Interest Payment
Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security
representing such Book- Entry Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
<PAGE> 61
28
7. Account numbers of participant accounts
maintained by DTC on behalf of the
Presenting Agent and the Trustee.
D. To the extent the Company has not already done
so, the Company will deliver to the Trustee a
Global Security in a form that has been
approved by the Company, the Agents and the
Trustee.
E. The Trustee will complete such Book-Entry Note,
stamp the appropriate legend, as instructed by
DTC, if not already set forth thereon, and
authenticate the Global Security representing
such Book-Entry Note in accordance with the
terms of the written order of the Company then
in effect.
F. DTC will credit such Book-Entry Note to
Chemical's participant account at DTC.
G. Chemical will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Book-Entry
Note to Chemical's participant account and
credit such Book-Entry Note to the Presenting
Agent's participant account and (ii) debit the
Presenting Agent's settlement account and
credit Chemical's settlement account for an
amount equal to the price of such Book-Entry
Note less the Presenting Agent's commission.
The entry of such a deliver order shall
constitute a representation
<PAGE> 62
29
and warranty by Chemical to DTC that (i) the
Global Security representing such Book-Entry
Note has been issued and authenticated and (ii)
Chemical is holding such Global Security
pursuant to the Medium-Term Note Certificate
Agreement between Chemical and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Book- Entry
Note to the Presenting Agent's participant
account and credit such Book-Entry Note to the
participant accounts of the Participants with
respect to such Book- Entry Note and (ii) to
debit the settlement accounts of such
Participants and credit the settlement account
of the Presenting Agent for an amount equal to
the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
J. Chemical will, upon receipt of funds from the
Presenting Agent in accordance with Settlement
Procedure "G", credit or wire transfer to an
account specified by the Company funds
available for immediate use in the amount
transferred to Chemical in
<PAGE> 63
30
accordance with Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase
of such Book-Entry Note to the purchaser either
by transmitting to the Participants with
respect to such Book-Entry Note a confirmation
order or orders through DTC's institutional
delivery system or by mailing a written
confirmation to such purchaser.
Settlement Procedures For orders of Book-Entry Notes solicited by an
Timetable: Agent and accepted by the Company for settlement on
the first Business Day after the sale date,
Settlement Procedures "A" through "K" set forth
above shall be completed as soon as possible but
not later than the respective times (New York City
time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
</TABLE>
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures "A",
"B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M. and 12:00
Noon on the first Business Day after the
<PAGE> 64
31
sale date and no later than 2:00 P.M. on the
Business Day before the settlement date,
respectively. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure
"A" is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been
determined but no later than 12:00 Noon and 2:00
P.M., respectively, on the Business Day before the
settlement date. Settlement Procedure "I" is
subject to extension in accordance with any
extension of Fedwire closing deadlines and in the
other events specified in SDFS operating procedures
in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled
or canceled, Chemical will, assuming timely notice
thereof, deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business
Day immediately preceding the scheduled settlement
date.
Failure to Settle: If Chemical fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", then, upon written
request of the Company (which may be by telecopy)
Chemical shall deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC
to debit such Book-Entry Note to Chemical's
participant account. DTC will process the
withdrawal message, provided that Chemical's
participant account contains a
<PAGE> 65
32
principal amount of the Global Security
representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global
Security, the Trustee will cancel such Global
Security in accordance with the Indenture and so
advise the Company and Chemical, and Chemical will
make appropriate entries in its records. The CUSIP
number assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If a
withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Notes
represented by a Global Security, Chemical will
exchange such Book-Entry Note for two Global
Securities, one of which shall represent such
Book-Entry Notes and shall be canceled immediately
after issuance and the other of which shall
represent the other Book-Entry Notes previously
represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book- Entry Note is
not timely paid to the Participants with respect to
such Note by the beneficial purchaser thereof (or a
Person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "H" and "G"
respectively.
<PAGE> 66
33
Thereafter Chemical will deliver the withdrawal
message and take the related actions described in
the preceding paragraph. If such failure shall have
occurred for any reason other than a default by the
Presenting Agent in the performance of its
obligations hereunder and under the Agency
Agreement, then the Company will reimburse the
Presenting Agent or Chemical, as applicable, on an
equitable basis for the loss of the use of funds
during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to one or more,
but not all, of the Book-Entry Notes to have been
represented by a Global Security, Chemical will
provide, in accordance with Settlement Procedure
"E", for the authentication and issuance of a
Global Security representing the other Book-Entry
Notes to have been represented by such Global
Security and will make appropriate entries in its
records.
Trustee and Chemical Nothing herein shall be deemed to require the
Not to Risk Funds: Trustee or Chemical to risk or expend its own funds
in connection with any payment to the Company, DTC,
the Agents or the purchaser, it being understood by
all parties that payments made by the Trustee or
Chemical to the Company, DTC, the Agents or the
purchaser shall be made only to the extent that
funds are provided to
<PAGE> 67
34
the Trustee or Chemical for such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who has been authorized by the
Trustee to authenticate Book-Entry Notes, but
neither Chemical nor any Agent will have any
obligation or liability to the Company or the
Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company or the Trustee on any Book-Entry Note.
Payment of Expenses: Each Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that month
that are reimbursable to it pursuant to the terms
of the Agency Agreement. The Company will remit
payment to the Agents currently on a monthly basis.
Periodic Statements Upon the request of the Company, Chemical will send
from Chemical: to the Company a statement setting forth the
principal amount of Book-Entry Notes Outstanding as
of that date and setting forth a brief description
of any sales of Book-Entry Notes of which the
Company has advised Chemical but which have not yet
been settled.
<PAGE> 68
35
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent and
authenticating and paying agent in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as
of the date of settlement and authenticated by the
Trustee. Each Certificated Note will bear an
Original Issue Date, which will be (i) with respect
to an original Certificated Note (or any portion
thereof), its original issuance date (which will be
the settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed, lost
or stolen Certificated Note, the Original Issue
Date of the predecessor Certificated Note,
regardless of the date of authentication of such
subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Transfer and Exchanges: A Certificated Note may be presented for transfer
or exchange at the office of the Trustee at
Attn: Chemical Bank
55 Water Street
North Building
2nd Floor, Room 234
New York, NY 10041
Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but
different authorized denominations without service
charge.
<PAGE> 69
36
Certificated Notes will not be exchangeable for
Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not
less than 9 months after the date of delivery by
the Company of such Certificated Note (the "Closing
Date").
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a minimum of
$1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
Interest: General. Interest, if any, on each Certificated
Note will accrue from the original issue date for
the first interest period or the last date to which
interest has been paid, if any, for each subsequent
interest period, and will be calculated and paid in
the manner described in such Note and in the
Prospectus, as supplemented by the applicable
Pricing Supplement. Unless otherwise specified
therein, each payment of interest on a Certificated
Note will include interest accrued to but excluding
the Interest Payment Date or to but excluding
Maturity, other than a Maturity of a Fixed Rate
Certificated Note occurring on the 31st day of a
month, in which case such payment of interest will
include interest accrued to but excluding the 30th
day of such month, or to but excluding the date of
Redemption.
Record Dates. The Record Date with respect to any
Interest Payment Date shall be the date 15 calendar
days immediately preceding such Interest Payment
Date whether or
<PAGE> 70
37
not such date shall be a Business Day.
Fixed Rate Certificated Notes. Unless otherwise
specified pursuant to Settlement Procedure "A"
below, interest payments on Fixed Rate Certificated
Notes will be made semiannually on May 1 and
November 1 of each year and at Maturity or upon
Redemption; provided, however, that in the case of
a Fixed Rate Certificated Note issued between a
Record Date and an Interest Payment Date, the first
interest payment will be made on the Interest
Payment Date following the next succeeding Record
Date. If any Interest Payment Date for or the date
of Maturity or Redemption of a Fixed Rate
Certificated Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Interest Payment Date or Maturity or
Redemption, as the case may be.
Floating Rate Certificated Notes. Interest payments
will be made on Floating Rate Certificated Notes
monthly, quarterly, semi-annually or annually or as
specified in the applicable Pricing Supplement.
Interest will be payable, in the case of Floating
Rate Certificated Notes with a monthly Interest
Payment Period, on the third Wednesday of each
month; with a quarterly interest Payment Period, on
the third Wednesday of March, June, September and
December of each year; with a semiannual Interest
Payment Period, on the third Wednesday of the two
months specified pursuant to Settlement Procedure
"A" below; and with an annual Interest Payment
Period, on the third Wednesday of the month
specified pursuant to Settlement
<PAGE> 71
38
Procedure "A" below; provided, however, that if any
Interest Payment Date for a Floating Rate
Certificated Note would otherwise be a day that is
not a Business Day with respect to such Floating
Rate Certificated Note, such Interest Payment Date
will be the next succeeding Business Day with
respect to such Floating Rate Certificated Note,
except in the case of a Floating Rate Certificated
Note for which the Base Rate is LIBOR, if such
Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding Business Day; and provided
further, that in the case of a Floating Rate
Certificated Note issued between a Record Date and
an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Record Date.
Calculation of Interest: Fixed Rate Certificated Notes. Interest on Fixed
Rate Certificated Notes (including interest for
partial periods) will be calculated on the basis of
a 360-day year or twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on
Floating Rate Certificated Notes will be determined
as set forth in the form of Notes. Interest on
Floating Rate Certificated Notes, except as
otherwise set forth therein, will be calculated on
the basis of actual days elapsed and a year of 360
days, except that in the case
<PAGE> 72
39
of a Floating Rate Certificated Note for which the
Base Rate is the Treasury Rate, interest will be
calculated on the basis of the actual number of
days in the year.
Payments of Principal
and Interest:
The Trustee or Paying Agent, as the case may be,
will pay the principal amount of each Certificated
Note at Maturity upon presentation of such
Certificated Note to the Trustee or Paying Agent,
as the case may be. Such payment, together with
payment of interest due at Maturity of such
Certificated Note, will be made in funds available
for immediate use by the Trustee and in turn by the
Holder of such Certificated Note. Certificated
Notes presented to the Trustee at Maturity for
payment will be canceled by the Trustee in
accordance with the Indenture. All interest
payments on a Certificated Note (other than
interest due at Maturity) will be made by check
drawn on the Trustee, the Paying Agent, as the case
may be, or another Person appointed by the Trustee,
mailed by the Trustee to the Person entitled
thereto as provided in such Note and the Indenture;
provided, however, that the holder of $10,000,000
or more of the Certificated Notes with similar
tenor and terms will be entitled to receive such
payment by wire transfer in U.S. dollars, but only
if the Trustee, or the Paying Agent, as the case
may be, shall have received appropriate payment
instructions in writing fifteen calendar days prior
to any Interest Payment Date. Within 10 days after
each Record Date, the Trustee will furnish the
Company with a list of interest payments to be made
on the following Interest Payment Date for each
Certificated Note and in total
<PAGE> 73
40
for all Certificated Notes to the extent
ascertainable. The Trustee will provide monthly to
the Company lists of principal and interest, to the
extent ascertainable, to be paid on Certificated
Notes maturing in the next month. The Company will
provide to the Trustee not later than any payment
date sufficient moneys to pay in full all principal
and interest payments due on the payment date. The
Trustee shall make all such payments in accordance
with the terms of the Notes.
The Trustee will be responsible for withholding
taxes on interest paid on Certificated Notes as
required by applicable law.
If the Maturity or Redemption of a Certificated
Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment
date for the period from and after such Maturity or
date of Redemption, as the case may be.
Procedures upon
Company's Exercise of
Optional Reset or
Optional Extension
of Maturity:
Company Notice to Trustee Regarding Exercise of
Optional Reset. Not less than 50 or more than 60
days before an Optional Reset Date as set forth in
a Certificated Note, the Company will notify the
Trustee whether it is exercising its option to
reset the Interest Rate or Spread or Spread
Multiplier, as the case may be, for such
Certificated Note, and if so, (i) the new Interest
Rate or Spread or Spread Multiplier, as the case
may be, for such Certificated Note during the
period from such Optional Reset Date to the next
Optional Reset Date as set forth in such
<PAGE> 74
41
Certificated Note or, if there is no such next
Optional Reset Date, to the Maturity Date of such
Certificated Note (the "Subsequent Interest
Period"); and (ii) the provisions, if any, for
redemption of such Certificated Note during such
Subsequent Interest Period, including the date or
dates on which or the period or periods during
which such redemption may occur during such
Subsequent Interest Period.
Company Notice to Trustee Regarding Exercise of
Optional Extension of Maturity. If the Company
elects to exercise an option, as set forth in a
Certificated Note, to extend the Maturity Date of
such Note, it will so notify the Trustee no less
than 50 or more than 60 days before the Maturity
Date of such Certificated Note, and will further
indicate (i) the new Maturity Date; (ii) the
Interest Rate or Spread or Spread Multiplier, as
the case may be applicable to such extension
period, and (iii) the provisions, if any, for
redemption of such Certificated Note during such
extension period, including the date or dates on
which or the period or periods during which such
redemption may occur during such extension period.
Trustee Notice to Holders Regarding Company's
Exercise of Optional Extension or Reset. Upon
receipt of notice from the Company regarding the
Company's exercise of either an optional extension
of maturity or an optional reset, the Trustee will
mail a notice, first class, postage prepaid, to the
Holder not less than 40 days before the Optional
Reset Date (in which
<PAGE> 75
42
case a "Reset Notice") or the old Maturity Date (in
which case an "Extension Notice"), as the case may
be, which Reset Notice or Extension Notice shall
contain the information required by the terms of
the Certificated Note.
Trustee Notice to Company Regarding Option to be
Repaid. If, after receipt of either a Reset Notice
or an Extension Notice, any Holder of a
Certificated Note exercises the option for
repayment by tendering the Certificated Note to be
repaid as set forth in the Certificated Note, the
Trustee shall give notice to the Company not less
than 22 days before the Optional Reset Date or the
old Maturity Date, as the case may be, of the
principal amount of Certificated Notes to be repaid
on such Optional Reset Date or old Maturity Date,
as the case may be.
Company Notice Regarding New Interest Rate or New
Spread or Spread Multiplier. If the Company elects
to revoke the Interest Rate or Spread or Spread
Multiplier and establish a higher interest rate or
Spread or Spread Multiplier for an Optional Reset
Period or extension period, as the case may be, it
shall, not less than 20 days before such Optional
Reset Date or old Maturity Date, so notify the
Trustee. The Trustee will immediately thereafter
notify the Holder of such Certificated Note, by
first class mail, postage prepaid of the new
Interest Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
Trustee Notice to Company Regarding
<PAGE> 76
43
Holders Revocation of Option to be Repaid. If,
after the Holder has tendered any Certificated
Notes for repayment pursuant to an Extension Notice
or an Optional Reset Notice, such Holder then
revokes such tender for repayment, the Trustee
shall give notice to the Company not less than five
days prior to the old Maturity Date or Optional
Reset Date, as the case may be, of such revocation
and of the principal amount of Certificated Notes
for which tender for repayment has been revoked.
Deposit of Repayment Price. On or before any old
Maturity Date where the Maturity has been extended,
and on or before an Optional Reset Date, the
Company shall deposit with the Trustee an amount of
money sufficient to pay the principal amount, plus
interest accrued to such old Maturity Date or
Optional Reset Date, as the case may be, for all
the Certificated Notes or portions thereof which
are to be repaid on such old Maturity Date or
Optional Reset Date, as the case may be. Such
Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth
in such Notes.
Procedures upon Company Notice to Trustee Regarding Exercise of
Company's Exercise Optional Redemption. At least 45 days prior to the
of Optional date on which it intends to redeem a Certificated
Redemption: Note, the Company will notify the Trustee that it
is exercising such option with respect to such
Certificated Note on such date.
Trustee Notice to Holders Regarding Company's
Exercise of Optional Redemption. After receipt of
<PAGE> 77
44
notice that the Company is exercising its option to
redeem a Certificated Note, the Trustee will, at
least 30 days before the redemption date for such
Certificated Note, mail a notice, first class,
postage prepaid, to the Holder of such Certificated
Note informing such Holder of the Company's
exercise of such option with respect to such
Certificated Note.
Deposit of Redemption Price. On or before any
redemption date, the Company shall deposit with
such Trustee an amount of money sufficient to pay
the redemption price, plus interest accrued to such
redemption date, for all the Certificated Notes or
portions thereof which are to be repaid on such
redemption date. Such Trustee will use such money
to repay such Certificated Notes pursuant to the
terms set forth in such Notes.
Payments of Principal Trustee Notice to Company of Option to be Repaid.
and Interest Upon Upon receipt of notice of exercise of the option
Exercise of Optional for repayment and the Certificated Notes so to be
Repayment (Except repaid as set forth in such Notes, the Trustee
Pursuant to Company's shall (unless such notice was received pursuant to
Exercise of Optional the Company's exercise of an optional reset or an
Reset or Optional optional extension of maturity, in each of which
Extension): cases the relevant procedures set forth above are
to be followed) give notice to the Company not less
than 20 days prior to each Optional Repayment Date
of such Optional Repayment Date and of the
principal amount of Certificated Notes to be repaid
on such Optional Repayment Date.
Deposit of Repayment Price. On or
<PAGE> 78
45
prior to any Optional Repayment Date, the Company
shall deposit with such Trustee an amount of money
sufficient to pay the optional repayment price, and
accrued interest thereon to such date, of all the
Certificated Notes or portions thereof which are to
be repaid on such date. Such Trustee will use such
money to repay such Certificated Notes pursuant to
the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time
Setting and Posting: to time the aggregate principal amount of, the
issuance price of, and the interest rates to be
borne by Certificated Notes that may be sold as a
result of the solicitation of offers by the Agents.
If the Company decides to set prices of, and rates
borne by, any Notes in respect of which the Agents
are to solicit orders (the setting of such prices
and rates to be referred to herein as "posting") or
if the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance and Each Agent will promptly advise the Company of any
Rejection of Offers: offers to purchase Certificated Notes received by
such Agent.
The Company will have the sole right to accept any
such offer to purchase Certificated Notes. The
Company may reject any such offer in whole or in
part.
Each Agent may, in its discretion reasonably
exercised, reject any offer to purchase
Certificated Notes received by it in whole or in
part.
<PAGE> 79
46
Preparation of If any offer to purchase a Certificated Note is
Pricing Supplement: accepted by the Company, the Company, with the
approval of the Presenting Agent, will prepare a
Pricing Supplement reflecting the terms of such
Certificated Note and will arrange to have 10
copies thereof filed with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act and will supply at least 10
copies thereof (or additional copies if requested)
to the Presenting Agent and one copy to the
Trustee. The Presenting Agent will cause a Pricing
Supplement to be delivered to the purchaser of the
Certificated Note.
The copies of the Pricing Supplement to be sent to
the Presenting Agent shall be sent by telecopy or
overnight courier to arrive no later than 11:00
a.m., New York City time, on the business day
following the sale date and shall be sent to:
(a) if to Salomon Brothers Inc, to it at:
Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, Florida 33167
Attn: Enrique Castro
Tel: 813-558-7165
Telecopy: 813-558-4123
(b) if to Merrill Lynch & Co., to it at:
(i) for overnight, express or special delivery
packages:
<PAGE> 80
47
Tritech Services
40 Colonial Drive
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
(ii) for all other types of deliveries:
Tritech Services
#4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Prospectus Operations/
Nachman Kimerling
Tel: 908-885-2769
Telecopy: 908-885-2775/2776
and, in each case, please send a copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Financial Center
North Tower
10th Floor
New York, NY 10281
Attn: MTN Product Management
Tel: 212-449-7476
Telecopy: 212-449-2234
<PAGE> 81
48
or to such other address as the Presenting Agent
may specify. Receipt of all telecopy transmissions
shall be confirmed by telephone.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements and the
Prospectuses to which they are attached (other than
those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole
Solicitation; discretion, to instruct the Agents to suspend at
Amendment or any time, for any period of time or permanently,
Supplement of the solicitation of offers to purchase Certificated
Prospectus: Notes. Upon receipt of such instructions from the
Company, the Agents will forthwith suspend
solicitation of offers to purchase Certificated
Notes from the Company until such time as the
Company has advised them that such solicitation may
be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus (except
for a supplement relating to an offering of
securities other than the Notes), it will promptly
advise the Agents and the Trustee and will furnish
the Agents and the Trustee with the proposed
amendment or supplement and with such certificates
and opinions as are required, all to the extent
required by and in accordance with the terms of the
Agency Agreement. Subject to the provisions of the
Agency Agreement, the Company will mail to the
Commission for filing
<PAGE> 82
49
therewith any supplement to the Prospectus relating
to the Notes, provide the Agents and the Trustee
with copies of any such supplement and confirm to
the Agents that such supplement has been filed with
the Commission pursuant to the applicable paragraph
of Rule 424(b).
In the event that at the time the Company suspends
solicitation of offers to purchase Certificated
Notes there shall be any outstanding offers to
purchase Certificated Notes that have been accepted
by the Company but for which settlement has not yet
occurred, the Company will promptly advise the
Agents and the Trustee whether such sales may be
settled and whether copies of the Prospectus as
supplemented to the time of the suspension may be
delivered in connection with the settlement of such
sales. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that
the Company determines that such sales may not be
settled or that copies of such Prospectus may not
be so delivered.
Procedure for Rate When the Company has determined to change the
Changes: interest rates of Certificated Notes being offered,
it will promptly advise the Agents and the Agents
will forthwith suspend solicitation of orders. The
Agents will telephone the Company with
recommendations as to the changed interest rates.
At such time as the Company has advised the Agents
of the new interest rates, the Agents may resume
solicitation of orders.
<PAGE> 83
50
Until such time, only "indication of interest" may
be recorded.
Delivery of Prospectus: A copy of the Prospectus and Pricing Supplement
relating to a Certificated Note must accompany or
precede the earliest of any written offer of such
Certificated Note, confirmation of the purchase of
such Certificated Note and payment for such
Certificated Note by its purchaser. If notice of a
change in the terms of the Certificated Notes is
received by the Agents between the time an order
for a Certificated Note is placed and the time
written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement as
herein described with respect to each Certificated
Note sold by it. The Company will make such
delivery of such Certificated Note if sold directly
by the Company to a purchaser (other than an
Agent).
Confirmation: For each offer to purchase a Certificated Note
solicited by an Agent and accepted by the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth below and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available
funds in exchange for an authenticated
<PAGE> 84
51
Certificated Note delivered to the Presenting Agent
and the Presenting Agent's delivery of such
Certificated Note against receipt of immediately
available funds shall, with respect to such
Certificated Note, constitute "settlement". The
Closing Date with respect to any offer to purchase
Certificated Notes accepted by the Company will be
a date on or before the third Business Day next
succeeding the date of acceptance unless otherwise
agreed by the purchaser and the Company and shall
be specified upon acceptance of such offer (but
shall be no earlier than the next Business Day
following the date of acceptance). The Company will
instruct the Trustee to effect delivery of each
Certificated Note no later than 1:00 P.M., New York
City time, on the Closing Date to the Presenting
Agent for delivery to the purchaser.
Details for Settlement: For each offer to purchase a Certificated Note that
is accepted by the Company, the Presenting Agent
will provide (unless provided by the purchaser
directly to the Company) by telephone the following
information to the Company:
1. Exact name of registered owner.
2. Exact address of registered owner and
address for payment of principal and
interest.
3. Taxpayer identification number of registered
owner.
4. Principal amount of the Certificated Note.
5. In the case of a Fixed Rate Certificated
Note,
<PAGE> 85
52
the interest rate or, in the case of a
Floating Rate Certificated Note, the initial
interest rate (if known at such time), Base
Rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate
(if any) and maximum interest rate (if any).
6. Issuance price (including currency) of the
Certificated Note.
7. Trade or Settlement dates.
8. Maturity Date and, if applicable, the
Extension Period and Final Maturity Date.
9. Interest Payment Dates and the Interest
Payment Period.
10.Whether such Certificated Note is issued at
an original issue discount and, if so, the
total amount of OID, the yield to maturity
and the initial accrual period OID.
11.Optional Reset Dates, if any.
12.Redemption provisions, if any.
13.Repayment or sinking fund provisions, if
any.
14.Presenting Agent's commission, determined
as provided in Section 2 of the Agency
Agreement, to be paid in the form of a
discount upon settlement.
15.Any other applicable terms.
<PAGE> 86
53
The Presenting Agent will advise the Company by
telephone, confirmed in writing of the foregoing
information (unless provided by the purchaser
directly to the Company) for each offer to purchase
a Certificated Note solicited by such Agent and
accepted by the Company in time for the Trustee to
prepare and authenticate the required Certificated
Note. Before accepting any offer to purchase a
Certificated Note to be settled in less than three
Business Days, the Company shall verify that the
Trustee will have adequate time to prepare and
authenticate such Certificated Note.
After receiving from the Presenting Agent the
detail for each offer to purchase a Certificated
Note that has been accepted by the Company, the
Company will, after recording the details and any
necessary calculations, provide appropriate
documentation to the Trustee, including the
information provided by the Presenting Agent
necessary for the preparation and authentication of
such Certificated Note by no later than 10:00 A.M.
on the Business Day next preceding the Closing
Date. Prior to preparing the Certificated Note for
delivery (but in any case no later than 10:00 A.M.
on the Business Day next preceding the Closing Date
therefor), the Trustee will confirm the details of
such issue with the Presenting Agent by telephone.
Note Deliveries and Upon receipt of appropriate documentation and
Cash Payment: instructions, the Company will cause the Trustee to
prepare and authenticate the pre-printed 4-ply
Certificated Note packet containing the following
<PAGE> 87
54
documents in forms approved by the Company, the
Presenting Agent and the Trustee:
1. Certificated Note with customer receipt.
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Trustee.
Each Certificated Note shall be authenticated on
the Closing Date therefor. The Trustee will
authenticate each Certificated Note and deliver it
to the Presenting Agent (and deliver the stubs as
indicated above), all in accordance with written
instructions (or oral instructions confirmed in
writing (which may be given by telex or telecopy)
on the next Business Day) from the Company.
Delivery by the Trustee of each Certificated Note
will be made upon confirmation from the Company
that it has received payment therefor (provided
that the Company shall have previously notified the
Presenting Agent that delivery will not occur until
such confirmation).
Upon verification ("Verification") by the
Presenting Agent that a Note has been prepared and
properly authenticated by the Trustee and
registered in the name of the purchaser in the
proper principal amount and other terms in
accordance with the aforementioned written
instructions or confirmation, payment will be made
to the Company by the Presenting Agent the same day
as the Presenting Agent's receipt of the
Certificated Note in immediately available funds.
Such payment shall be made by the Presenting
<PAGE> 88
55
Agent (i) only upon prior receipt by the Presenting
Agent of immediately available funds from or on
behalf of the purchaser unless the Presenting Agent
decides, at its option, to advance its own funds
for such payment against subsequent receipt of
funds from the purchaser and (ii) only after the
Trustee has made the Certificated Note available
for inspection by the Presenting Agent.
Upon delivery of a Certificated Note to the
Presenting Agent, Verification by the Presenting
Agent and the giving of instructions for payment,
the Presenting Agent shall promptly deliver such
Note to the purchaser.
In the event any Certificated Note is incorrectly
prepared, the Trustee shall promptly issue a
replacement Certificated Note in exchange for the
incorrectly prepared Certificated Note.
Failure to Settle: If the Presenting Agent, at its own option, has
advanced its own funds for payment against
subsequent receipt of funds from the purchaser, and
if the purchaser shall fail to make payment for the
Certificated Note on the Closing Date therefor, the
Presenting Agent will promptly notify the Trustee
and the Company by telephone, promptly confirmed in
writing (but no later than the next Business Day).
In such event, the Company shall promptly provide
the Trustee with appropriate documentation and
instructions consistent with these procedures for
the return of the Certificated Note to the Trustee
and the Presenting Agent will promptly return such
Note to the
<PAGE> 89
56
Trustee. Upon (i) confirmation from the Trustee in
writing (which may be given by telex or telecopy)
that the Trustee has received such Note and (ii)
confirmation from the Presenting Agent in writing
(which may be given by telex or telecopy) that the
Presenting Agent has not received payment from the
purchaser (the matters referred to in clauses (i)
and (ii) are referred to hereinafter as the
"Confirmations"), the Company will promptly pay to
the Presenting Agent an amount in immediately
available funds equal to the amount previously paid
by the Presenting Agent in respect of such
Certificated Note. Assuming receipt of the
Certificated Note by the Trustee and of the
Confirmations by the Company, such payment will be
made on the Closing Date, if reasonably practical,
and in any event not later than the Business Day
following the date of receipt of the Certificated
Note and Confirmations. If a purchaser shall fail
to make payment for the Certificated Note for any
reason other than the failure of the Presenting
Agent to provide the necessary information to the
Company as described above for settlement or to
provide a confirmation to the purchaser within a
reasonable period of time as described above or
otherwise to satisfy its obligation hereunder or in
the Agency Agreement, and if the Presenting Agent
shall have otherwise complied with its obligations
hereunder and in the Agency Agreement, the Company
will reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during the
period
<PAGE> 90
57
when they were credited to the account of the
Company.
Immediately upon receipt of the Certificated Note
in respect of which the failure occurred, the
Trustee will cancel such Certificated Note, make
appropriate entries in its records and dispose of
the Certificated Note in accordance with its
customary procedures; and upon such action, the
Certificated Note will be deemed not to have been
issued, authenticated and delivered.
Trustee Not to Risk Nothing herein shall be deemed to require the
Funds: Trustee to risk or expend its own funds in
connection with any payment to the Company, the
Agents or the purchaser, it being understood by all
parties that payments made by the Trustee to either
the Company or the Agents shall be made only to the
extent that funds are provided to the Trustee for
such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who has been authorized by the
Trustee to authenticate Certificated Notes but the
Agents will have no obligation or liability to the
Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Certificated Note.
Payment of Expenses: Each Agent shall forward to the Company, on a
monthly basis, a statement of the out-of-pocket
expenses incurred by such Agent during that month
which are
<PAGE> 91
58
reimbursable to it pursuant to the terms of the
Agency Agreement. The Company will remit payment to
the Agents currently on a monthly basis.
Periodic Statements Upon the request of the Company, the Trustee will
from Chemical: send to the Company a statement setting forth the
principal amount of Certificated Notes Outstanding
as of that date and setting forth a brief
description of any sales of Certificated Notes of
which the Company has advised the Trustee but which
have not yet been settled.
<PAGE> 92
EXHIBIT B
The Sherwin-Williams Company
Medium Term Notes, Series A
Due 9 Months or More From Date of Issue
TERMS AGREEMENT
, 199
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Attention:
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated February , 1996, among
Salomon Brothers Inc, Merrill Lynch & Co. and you, the undersigned agrees to
purchase the following Notes of The Sherwin-Williams Company:
Principal Amount of each Note:
Aggregate Principal Amount of all Notes:
Specified Currency and Minimum Denominations (if Specified Currency is other
than U.S. dollars):
Maturity Date:
Interest Payment Dates:
Interest Rate or Method of Determining:
Record Date:
Interest Reset Dates:
Total Amount of OID:
Initial Redemption Date:
Purchase Price: % of Principal Amount [plus accrued
interest from , 19 ]
<PAGE> 93
2
Closing Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
Registration Statements: $
of such Notes are registered under
Registration Statement No. 33-22705 and
$ of such Notes are
registered under Registration Statement
No. 333-[ ].
Salomon Brothers Inc
By:
--------------------------
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By:
--------------------------
Accepted:
The Sherwin-Williams Company
By:
-------------------------
Title:
<PAGE> 1
================================================================================
EXHIBIT 4(a)
THE SHERWIN-WILLIAMS COMPANY
and
CHEMICAL BANK, as Trustee
----------
Indenture
Dated as of February 1, 1996
-----------
Debt Securities
================================================================================
<PAGE> 2
TABLE OF CONTENTS*/
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY..................................................... 1
ARTICLE I
Definitions
-----------
SECTION 1.01. Certain Terms Defined..................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act......... 15
SECTION 1.03. Rules of Construction..................................... 16
ARTICLE II
Debt Securities
---------------
SECTION 2.01. Forms Generally........................................... 17
SECTION 2.02. Form of Trustee's Certificate of Authentication........... 17
SECTION 2.03. Principal Amount; Issuable in Series...................... 18
SECTION 2.04. Execution of Debt Securities.............................. 22
SECTION 2.05. Authentication and Delivery of Debt Securities............ 22
SECTION 2.06. Denomination of Debt Securities........................... 24
SECTION 2.07. Registration of Transfer and Exchange..................... 24
SECTION 2.08. Temporary Debt Securities................................. 26
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Debt Securities...... 27
SECTION 2.10. Cancellation of Surrendered Debt Securities............... 28
SECTION 2.11. Provisions of the Indenture and Debt Securities for the
Sole Benefit of the Parties and the Holders............. 28
SECTION 2.12. Payment of Interest; Interest Rights Preserved............ 28
SECTION 2.13. Securities Denominated in Foreign Currencies.............. 29
SECTION 2.14. Wire Transfers............................................ 30
</TABLE>
- --------------
*/ The Table of Contents is not part of the Indenture.
<PAGE> 3
Contents, p. 2
<TABLE>
<S> <C>
SECTION 2.15. Securities Issuable in the Form of a Global Security...... 30
SECTION 2.16. Medium Term Securities.................................... 33
SECTION 2.17. Defaulted Interest........................................ 34
SECTION 2.18. Judgments................................................. 35
ARTICLE III
Redemption of Debt Securities
-----------------------------
SECTION 3.01. Applicability of Article.................................. 36
SECTION 3.02. [Reserved]................................................ 36
SECTION 3.03. Notice of Redemption; Selection of Debt Securities........ 36
SECTION 3.04. Payment of Debt Securities Called for Redemption.......... 38
SECTION 3.05. Mandatory and Optional Sinking Funds...................... 39
SECTION 3.06. Redemption of Debt Securities for Sinking Fund............ 40
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01. Payment of Principal of, and Premium, If Any, and
Interest on, Debt Securities............................ 42
SECTION 4.02. Maintenance of Offices or Agencies for Registration
of Transfer, Exchange and Payment of Debt Securities.... 43
SECTION 4.03. Appointment to Fill a Vacancy in the Office of Trustee.... 43
SECTION 4.04. Duties of Paying Agents, etc.............................. 43
SECTION 4.05. Statement by Officers as to Default....................... 45
SECTION 4.06. Existence................................................. 45
SECTION 4.07. Limitation on Liens....................................... 45
SECTION 4.08. Limitation on Sale/Leaseback Transactions................. 46
</TABLE>
<PAGE> 4
Contents, p. 3
<TABLE>
<S> <C>
ARTICLE V
Holders' Lists and Reports by the Company and the Trustee
---------------------------------------------------------
SECTION 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Holders; Preservation of Information ...... 47
SECTION 5.02. Communications to Holders................................. 47
SECTION 5.03. Reports by Company........................................ 47
SECTION 5.04. Reports by Trustee........................................ 48
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
-------------------------------------------------------
SECTION 6.01. Events of Default......................................... 49
SECTION 6.02. Collection of Indebtedness by Trustee, etc................ 52
SECTION 6.03. Application of Moneys Collected by Trustee................ 54
SECTION 6.04. Limitation on Suits by Holders............................ 55
SECTION 6.05. Remedies Cumulative; Delay or Omission in Exercise
of Rights Not a Waiver of Default....................... 56
SECTION 6.06. Rights of Holders of Majority in Principal Amount of
Debt Securities to Direct Trustee and to Waive
Default................................................. 57
SECTION 6.07. Trustee to Give Notice of Defaults Known to It, but
May Withhold Such Notice in Certain Circumstances....... 58
SECTION 6.08. Requirement of an Undertaking to Pay Costs in
Certain Suits Under the Indenture or Against the
Trustee................................................. 58
ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. Certain Duties and Responsibilities....................... 59
SECTION 7.02. Certain Rights of Trustee................................. 60
SECTION 7.03. Trustee Not Liable for Recitals in Indenture or in
Debt Securities......................................... 62
</TABLE>
<PAGE> 5
Contents, p. 4
<TABLE>
<S> <C>
SECTION 7.04. Trustee, Paying Agent or Registrar May Own Debt
Securities.............................................. 62
SECTION 7.05. Moneys Received by Trustee to be Held in Trust............ 63
SECTION 7.06. Compensation and Reimbursement............................ 63
SECTION 7.07. Right of Trustee to Rely on an Officers'
Certificate Where No Other Evidence
Specifically Prescribed................................. 64
SECTION 7.08. Separate Trustee; Replacement of Trustee.................. 64
SECTION 7.09. Successor Trustee by Merger............................... 66
SECTION 7.10. Eligibility; Disqualification............................. 66
SECTION 7.11. Preferential Collection of Claims Against Company......... 67
SECTION 7.12. Compliance with Tax Laws.................................. 67
ARTICLE VIII
Concerning the Holders
----------------------
SECTION 8.01. Evidence of Action by Holders............................. 68
SECTION 8.02. Proof of Execution of Instruments and of Holding
of Debt Securities...................................... 68
SECTION 8.03. Who May Be Deemed Owner of Debt Securities................ 68
SECTION 8.04. Instruments Executed by Holders Bind Future
Holders; Record Dates................................... 69
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Purposes for Which Supplemental Indenture May
Be Entered into Without Consent of Holders.............. 70
SECTION 9.02. Modification of Indenture with Consent of
Holders of Debt Securities.............................. 72
SECTION 9.03. Effect of Supplemental Indentures......................... 74
SECTION 9.04. Debt Securities May Bear Notation of Changes by
Supplemental Indentures................................... 74
</TABLE>
<PAGE> 6
Contents, p. 5
<TABLE>
<S> <C>
ARTICLE X
Consolidation, Merger, Sale or Conveyance
-----------------------------------------
SECTION 10.01. Consolidations and Mergers of the Company................. 75
SECTION 10.02. Rights and Duties of Successor Corporation................ 75
ARTICLE XI
Satisfaction and Discharge of Indenture;
----------------------------------------
Defeasance; Unclaimed Moneys
----------------------------
SECTION 11.01. Applicability of Article.................................. 76
SECTION 11.02. Satisfaction and Discharge of Indenture; Defeasance....... 76
SECTION 11.03. Conditions to Defeasance.................................. 78
SECTION 11.04. Application of Trust Money................................ 80
SECTION 11.05. Repayment to Company...................................... 80
SECTION 11.06. Indemnity for U.S. Government Obligations................. 80
SECTION 11.07. Reinstatement............................................. 80
ARTICLE XII
Miscellaneous Provisions
------------------------
SECTION 12.01. Successors and Assigns of Company Bound by Indenture...... 81
SECTION 12.02. Acts of Board, Committee or Officer of Successor
Company Valid........................................... 81
SECTION 12.03. Required Notices or Demands............................... 81
SECTION 12.04. Indenture and Debt Securities to Be Construed in
Accordance with the Laws of the State of New York....... 82
SECTION 12.05. Officers' Certificate and Opinion of Counsel to Be
Furnished upon Application or Demand by the
Company................................................. 82
SECTION 12.06. Payments Due on Legal Holidays............................ 83
SECTION 12.07. Provisions Required by Trust Indenture Act to Control..... 83
SECTION 12.08. Computation of Interest on Debt Securities................ 83
SECTION 12.09. Rules by Trustee, Paying Agent and Registrar.............. 83
SECTION 12.10. No Recourse Against Others................................ 83
</TABLE>
<PAGE> 7
Contents, p. 6
<TABLE>
<S> <C>
SECTION 12.11. Severability.............................................. 84
SECTION 12.12. Effect of Headings........................................ 84
SECTION 12.13. Indenture May Be Executed in Counterparts................. 84
SIGNATURES .......................................................... 84
</TABLE>
<PAGE> 8
THE SHERWIN-WILLIAMS COMPANY
Debt Securities
CROSS REFERENCE SHEET*
This Cross Reference Sheet shows the location in the Indenture of the provisions
inserted pursuant to Sections 310-318(a), inclusive of the Trust Indenture Act
of 1939.
<TABLE>
<CAPTION>
INDENTURE
TIA SECTION SECTION
----------- ---------
<S> <C>
310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. 7.10
(a)(4).................................................. 7.10
(a)(5).................................................. 7.10
(b) .................................................... 7.10
(c) ................................................... N.A.**
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a) .................................................... 5.01
(b)..................................................... 5.02
(c) .................................................... 5.02
313(a)..................................................... 5.04
(b)(1).................................................. 5.04
(b)(2).................................................. 5.04
(c) .................................................... 12.03
(d) .................................................... 5.04
</TABLE>
- --------
* The Cross Reference Sheet is not part of the Indenture.
** N.A. means "Not Applicable."
<PAGE> 9
2
<TABLE>
<CAPTION>
INDENTURE
TIA SECTION SECTION
----------- ---------
<S> <C>
314(a)(1).................................................. 5.03(a)
(a)(2).................................................. 5.03(b)
(a)(3).................................................. 5.03(a)
(b)
(a)(4).................................................. 12.03
(b) .................................................. 4.05
(c)(1).................................................. N.A.
(c)(2).................................................. 12.05
(c)(3).................................................. 12.05
(d)..................................................... N.A.
(e)..................................................... N.A.
(f)..................................................... 12.05
315(a)..................................................... 7.01(a)
(b)..................................................... 6.07
12.03
(c)..................................................... 7.01
(d)..................................................... 7.01
(e)..................................................... 6.08
316(a)(last sentence)...................................... 1.01
(a)(1)(A)............................................... 6.06
(a)(1)(B)............................................... 6.06
(a)(2).................................................. 9.01(d)
(b)..................................................... 6.04
(c)..................................................... 5.05
317(a)(1).................................................. 6.02
(a)(2).................................................. 6.02
(b)..................................................... 4.04
318(a)..................................................... 12.07
</TABLE>
<PAGE> 10
INDENTURE dated as of February 1, 1996,
between THE SHERWIN-WILLIAMS COMPANY, a corporation
duly organized and existing under the laws of the
State of Ohio (hereinafter sometimes called the
"Company"), and CHEMICAL BANK, a New York banking
corporation (hereinafter sometimes called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which
the Debt Securities are authenticated, issued and delivered, and in
consideration of the premises, and of the purchase and acceptance of the Debt
Securities by the holders thereof, the Company and the Trustee covenant and
agree with each other, for the benefit of the respective Holders from time to
time of the Debt Securities or any series thereof, as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Terms Defined. The terms defined in
this Section 1.01 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
Indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act or which are by reference therein defined in the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in
the Trust Indenture Act and in the
<PAGE> 11
2
Securities Act as in force as of the date of execution of this
Indenture.
"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 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 Indebtedness" in respect of a Sale/Leaseback
Transaction means, as of the time of determination, (i) if the obligation in
respect of such Sale/Leaseback Transaction is a Capitalized Lease Obligation,
the amount of such obligation determined in accordance with GAAP and included
in the financial statements of the lessee or (ii) if the obligation in respect
of such Sale/Leaseback Transaction is not a Capitalized Lease Obligation, the
total Net Amount of Rent required to be paid by the lessee under such lease
during the remaining term thereof (including any period for which the lease has
been extended), discounted from the respective due dates thereof to such
determination date at the rate per annum borne by the Debt Securities
compounded semiannually.
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee or subcommittee of such Board,
except as the context may otherwise require.
"Business Day" means, when used with respect to any Place of
Payment specified pursuant to Section 2.03, any day that is not a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies in such Place of Payment are authorized or obligated by law to close,
except as otherwise specified pursuant to Section 2.03.
"Capitalized Lease Obligation" means an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP; and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of
such obligation determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such
<PAGE> 12
3
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (including partnership interests) in (however
designated) the equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.
"Commodity Price Protection Agreement" means, in respect of
any Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Common Stock" means the common stock, par value $1.00 per
share, of the Company, which stock is currently listed on the New York Stock
Exchange.
"Company" means The Sherwin-Williams Company, an Ohio
corporation, and, subject to the provisions of Article X, shall also include
its successors and assigns.
"Company Order" means a written order of the Company, signed
by its Chairman of the Board, Vice Chairman, the President or any Vice
President (or any other officer performing similar functions) and by its
Treasurer, Secretary, any Assistant Treasurer or any Assistant Secretary (or
any other officer performing similar functions).
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its Subsidiaries for the total assets (less
accumulated depletion, depreciation or amortization, allowances for doubtful
receivables, other applicable reserves and other properly deductible items) of
the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, after giving effect to purchase accounting and after
deducting therefrom, to the extent included in total assets, in each case as
determined on a consolidated basis in accordance with GAAP (without
duplication): (i) the aggregate amount of liabilities of the Company and its
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated); (ii) current Indebtedness and current maturities
of long- term Indebtedness; (iii) minority
<PAGE> 13
4
interests in the Company's Subsidiaries held by Persons other than the Company
or a Wholly Owned Subsidiary of the Company; and (iv) unamortized debt discount
and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items.
"Corporate Trust Office of the Trustee" or other similar term
means the office of the Trustee at which the corporate trust business of the
Trustee shall, at any particular time, be principally administered in the
United States of America, except that with respect to the presentation of Debt
Securities for payment or for registration of transfer and exchange, such term
shall also mean the office of the Trustee or the Trustee's agent in the Borough
of Manhattan, the city and state of New York, at which at any particular time
its corporate agency business shall be conducted.
"Currency" means Dollars or Foreign Currency.
"Currency Exchange Protection Agreement" means, in respect of
any Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such
Person against fluctuations in currency exchange rates.
"Debt Security" or "Debt Securities" has the meaning stated in
the first recital of this Indenture and more particularly means any debt
security or debt securities, as the case may be of any series authenticated and
delivered under this Indenture.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company
pursuant to either Section 2.03 or 2.15, with respect to Registered Securities
of any series issuable or issued in whole or in part in the form of one or more
Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulations.
"Dollar" or "$" means such currency of the United States as at
the time of payment is legal tender for the payment of public and private
debts.
<PAGE> 14
5
"Dollar Equivalent" means, with respect to any monetary amount
in a Foreign Currency, at any time for the determination thereof, the amount of
Dollars obtained by converting such Foreign Currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable Foreign Currency as quoted by Chemical Bank (unless another
comparable financial institution is designated by the Company) in New York, New
York at approximately 11:00 a.m. (New York time) on the date two Business Days
prior to such determination.
"European Currency Units" has the meaning assigned to it from
time to time by the Council of the European Communities.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Floating Rate Security" means a Debt Security that provides
for the payment of interest at a variable rate determined periodically by
reference to an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency issued by the government
of any country other than the United States or a composite currency (including
European Currency Units) the value of which is determined by reference to the
values of the currencies of any group of countries.
"GAAP" means generally accepted accounting principles in the
United States as in effect from time to time, including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP consistently applied.
"Global Security" means with respect to any series of Debt
Securities issued hereunder, a Debt Security which
<PAGE> 15
6
is executed by the Company and authenticated and delivered by the Trustee to
the Depositary or its custodian or pursuant to the Depositary's instruction,
all in accordance with this Indenture and any Indentures supplemental hereto,
or resolution of the Board of Directors and set forth in an Officers'
Certificate, which shall be registered in the name of the Depositary or its
nominee and which shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all the Outstanding Debt Securities of
such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due and interest rate or method of determining interest.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Protection Agreement, Currency
Exchange Protection Agreement, Commodity Price Protection Agreement or other
similar agreement.
"Holder," "Holder of Debt Securities" or other similar terms
means a Registered Holder.
"incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time it becomes a Subsidiary. The terms "incurred",
"incurrence" and "incurring" shall each have a correlative meaning.
<PAGE> 16
7
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication),
(i) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(iii) all Capitalized Lease Obligations of such Person;
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables);
(v) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or credit
transactions (including reimbursement obligations with respect
thereto), other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i) through
(iv) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than
the third Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit;
(vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed
by such Person; provided, however, that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such
asset at such date of determination and (B) the amount of such
Indebtedness of such other Persons;
(vii) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and
(viii) to the extent not otherwise included in this definition,
obligations in respect of Hedging Obligations.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability,
<PAGE> 17
8
upon the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date. Notwithstanding the foregoing, the term
"Indebtedness" excludes (i) any indebtedness of the Company or any Subsidiary to
the Company or another Subsidiary and (ii) any Guarantee by the Company or any
Subsidiary of indebtedness of the Company or another Subsidiary.
"Indenture" means this instrument as originally executed, or,
if amended or supplemented as herein provided, as so amended or supplemented
and shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.
"Interest Rate Protection Agreement" means, in respect of any
Person, any interest rate swap agreement, interest rate option agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
floor agreement or other similar agreement or arrangement designed to protect
such Person against fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"Net Amount of Rent" as to any lease for any period means the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In
the case of any lease that is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as payable under such lease subsequent to the first
date upon which it may be so terminated.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President or any Vice President
(or other officers performing similar functions) and by the Treasurer, the
Secretary or any Assistant Treasurer or Assistant Secretary of the Company (or
other officers performing similar functions). Each such certificate shall
include the statements provided for in Section 12.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel for the Company (which counsel may
<PAGE> 18
9
be an employee of the Company), or outside counsel for the Company, in each
case acceptable to the Trustee. Each such opinion shall include the statements
provided for in Section 12.05, if applicable.
"Original Issue Discount Debt Security" means any Debt
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 6.01.
"Outstanding", when used with respect to any series of Debt
Securities, means, as of the date of determination, all Debt Securities of that
series theretofore authenticated and delivered under this Indenture, except:
(i) Debt Securities of that series theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation;
(ii) Debt Securities of that series for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any paying agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent) for the Holders of such Debt
Securities; provided, that, if such Debt 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) Debt Securities of that series which have been paid
pursuant to Section 2.09 or in exchange for or in lieu of which other
Debt Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Debt Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Debt Securities are held by a bona fide purchaser in whose
hands such Debt Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and
<PAGE> 19
10
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 Debt Securities which the Trustee
knows to be so owned shall be so disregarded. Debt 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 Debt Securities and that the pledgee is not the Company or
any other obligor upon the Debt Securities or an Affiliate of the Company or of
such other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Debt Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01. In
determining whether the Holders of the requisite principal amount of the
Outstanding Debt Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of a Debt Security denominated in one or more Foreign Currencies that
shall be deemed to be Outstanding for such purposes shall be the Dollar
Equivalent, determined in the manner provided as contemplated by Section 2.03 on
the date of original issuance of such Debt Security, of the principal amount
(or, in the case of any Original Issue Discount Security, the Dollar Equivalent
on the date of original issuance of such Security of the amount determined as
provided in the preceding sentence above) of such Debt Security.
"pari passu", as applied to the ranking of any Indebtedness of
a Person in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of payment to the same
Indebtedness as is the other, and is so subordinate to the same extent, and is
not subordinate in right of payment to each other or to any Indebtedness as to
which the other is not so subordinate.
"Permitted Liens" means, with respect to any Person, (a)
pledges or deposits by such Person under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (including government
<PAGE> 20
11
contracts, but excluding contracts for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government
bonds to secure performance, surety or appeal bonds to which such Person is a
party or which are otherwise required of such Person, or deposits as security
for contested taxes or import duties or for the payment of rent or other
obligations of like nature, in each case incurred in the ordinary course of
business; (b) Liens imposed by law, such as carriers', warehousemen's,
laborers', materialmen's, landlords', vendors', workmen's, operators',
producers' and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings; (c) Liens for property
taxes, assessments and other governmental charges or levies not yet delinquent
or which are being contested in good faith by appropriate proceedings; (d)
survey exceptions, encumbrances, easements, defects, irregularities or
deficiencies in title to easements, or reservations of or with respect to, or
rights of others for or with respect to, licenses, rights-of-way, sewers,
electric and other utility lines and usages, telegraph and telephone lines,
pipelines, surface use, operation of equipment, permits, servitudes and other
similar matters, or zoning or other restrictions as to the use of real property
or Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which, in all such cases, were not incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person; (e) Liens existing on or provided
for under the terms of agreements existing on the date of this Indenture; (f)
Liens on property at the time the Company or any of its Subsidiaries acquired
the property or the entity owning such property, including any acquisition by
means of a merger or consolidation with or into the Company; provided, however,
that any such Lien may not extend to any other property owned by the Company or
any of its Subsidiaries; (g) Liens securing a Hedging Obligation so long as
such Hedging Obligation is of the type customarily entered into in connection
with, and is entered into for the purpose of, limiting risk; (h) Liens on
accounts receivable or inventory to secure working capital or revolving credit
indebtedness incurred in the ordinary course of business; (i) Purchase Money
Liens; (j) Liens securing only Indebtedness of a Wholly Owned Subsidiary of the
Company to the Company or one or more Wholly Owned Subsidiaries of the Company;
(k) Liens on property or shares of stock of another Person at the time such
other Person
<PAGE> 21
12
becomes a Subsidiary of such Person; provided, however, that such Liens are not
created, incurred or assumed in connection with, or in contemplation of, such
other Person becoming such a Subsidiary of such Person; (l) Liens created,
assumed or existing in connection with a tax-free financing; (m) Liens
resulting from the deposit of funds or evidences of Indebtedness in trust for
the purpose of defeasing Indebtedness of the Company or any of its
Subsidiaries; (n) legal or equitable encumbrances deemed to exist by reason of
negative pledges or the existence of any litigation or other legal proceeding
and any related lis pendens filing (excluding any attachment prior to judgment,
judgment lien or attachment lien in aid of execution on a judgment); (o) rights
of a common owner of any interest in property held by such Person; (p) Liens
placed upon any real property now owned or hereafter acquired by the Company or
any of its Subsidiaries securing Indebtedness in an amount up to 80% of the
fair market value of such real property; and (q) Liens to secure any
refinancing, refunding, extension, renewal or replacement (or successive
refinancings, refundings, extensions, renewals or replacements), as a whole, or
in part, of any Indebtedness secured by any Lien referred to in the foregoing
clauses (e) through (l) and (p); provided, however, that (i) such new Lien
shall be limited to all or part of the same property that secured the original
Lien (plus improvements on such property) and (ii) the Indebtedness secured by
such Lien at such time is not increased to any amount greater than the sum of
(A) the outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (e) through (l) and (p) at the time the
original Lien became a Permitted Lien under this Indenture and (B) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Place of Payment" means, when used with respect to the Debt
Securities of any series, the place or places where the principal of, and
premium, if any, and interest on, the Debt Securities of that series are
payable as specified pursuant to Section 2.03.
<PAGE> 22
13
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal Property" means any manufacturing plant or
manufacturing facility, located within the United States of America (other than
its territories and possessions), owned or leased by the Company or any
Restricted Subsidiary, unless, in the opinion of the Board of Directors, such
plant, facility or property is not of material importance to the total business
conducted by the Company and its Restricted Subsidiaries as an entirety.
"Purchase Money Lien" means a Lien on property securing
Indebtedness incurred by the Company or any of its Subsidiaries to provide
funds for all or any portion of the cost of acquiring, constructing, altering,
expanding, improving or repairing such property or assets used in connection
with such property.
"Registered Holder" means the Person in whose name a
Registered Security is registered in the Debt Security Register (as defined in
Section 2.07(a)).
"Registered Security" means any Debt Security registered as to
principal and interest in the Debt Security Register (as defined in Section
2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
"Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trustee Administration Department of the
Trustee, including any vice president, any senior trust officer, any trust
officer or any other officer of the Trustee performing functions similar to
those performed by the persons who at the time shall be such officers, and any
other officer of the Trustee to whom corporate trust matters are referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means at any time any Subsidiary of
the Company (i) substantially all the property of which is located, or
substantially all of the business of which is carried on, within the United
States of America (other than its territories or possessions) and (ii) which
<PAGE> 23
14
owns or leases a Principal Property or which, in the event of a Sale/Leaseback
Transaction, will own or lease a Principal Property.
"Sale/Leaseback Transaction" means an arrangement relating to
Principal Property owned on the date of this Indenture or thereafter acquired
whereby the Company or any of its Restricted Subsidiaries transfers such
Principal Property to a Person and the Company or any of its Restricted
Subsidiaries leases it from such Person.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means a Subsidiary of any Person that
would be a "significant subsidiary" as defined in Rule 405 under the Securities
Act as in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of the Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by (i) such Person, (ii) such Person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
"Trade Payables" means, with respect to any Person, any
accounts payable or any Indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business of such Person in connection with the acquisition of goods or
services.
<PAGE> 24
15
"Trustee" initially means Chemical Bank and any other Person
or Persons appointed as such from time to time pursuant to Section 7.08, and,
subject to the provisions of Article VII, includes its or their successors and
assigns. If at any time there is more than one such Person, "Trustee" as used
with respect to the Debt Securities of any series shall mean the Trustee with
respect to the Debt Securities of that series.
"Trust Indenture Act" (except as herein otherwise expressly
provided) means the Trust Indenture Act of 1939 as in force at the date of this
Indenture as originally executed and, to the extent required by law, as
amended.
"United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more members of which is, for United States Federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means securities that are (x)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or one or more Wholly Owned Subsidiaries.
"Yield to Maturity" means the yield to maturity, calculated at
the time of issuance of a series of Debt Securities, or, if applicable, at the
most recent redetermination of interest on such series and calculated in
accordance with accepted financial practice.
<PAGE> 25
16
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the Trust
Indenture Act which are incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms have the following
meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture
that are defined by the Trust Indenture Act, reference to another statute or
defined by rules of the Securities and Exchange Commission have the meanings
assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) except as provided in the final proviso to the definition
of "Outstanding" contained in Section 1.01, the principal
amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP; and
<PAGE> 26
17
(7) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock or
(ii) the maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock.
ARTICLE II
Debt Securities
SECTION 2.01. Forms Generally. The Debt Securities of each
series shall be in substantially the form established without the approval of
any Holder by or pursuant to a resolution of the Board of Directors or in one
or more Indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as the
Company may deem appropriate (and, if not contained in a supplemental Indenture
entered into in accordance with Article IX, as are not prohibited by the
provisions of this Indenture) or as may be required or appropriate to comply
with any law or with any rules made pursuant thereto or with any rules of any
securities exchange on which such series of Debt Securities may be listed, or
to conform to general usage, or as may, consistently herewith, be determined by
the officers executing such Debt Securities, as evidenced by their execution of
the Debt Securities.
The definitive Debt Securities of each series, if any, 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
Debt Securities, as evidenced by their execution of such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of Authentication.
The Trustee's Certificate of Authentication
<PAGE> 27
18
on all Debt Securities authenticated by the Trustee shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
As Trustee
By
------------------
Authorized Officer
SECTION 2.03. Principal Amount; Issuable in Series. The
aggregate principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series.
There shall be established, without the approval of any Holders, in or pursuant
to a resolution of the Board of Directors and set forth in an Officers'
Certificate, or established in one or more Indentures supplemental hereto,
prior to the issuance of Debt Securities of any series any or all of the
following:
(1) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of the series from all other
Debt Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered
under this Indenture (except for Debt Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Debt Securities of the series pursuant to this Article
II);
(3) the date or dates on which the principal and premium, if
any, of the Debt Securities of the series are payable;
(4) the rate or rates (which may be fixed or variable) at
which the Debt Securities of the series shall bear interest, if any,
or the method of determining such rate or rates, the date or dates
from
<PAGE> 28
19
which such interest shall accrue, the interest payment dates on which
such interest shall be payable, or the method by which such date will
be determined, in the case of Registered Securities, the record dates
for the determination of Holders thereof to whom such interest is
payable, and the basis upon which interest will be calculated if other
than that of a 360-day year of twelve thirty-day months;
(5) the place or places, if any, in addition to or instead of
the Corporate Trust Office of the Trustee, where the principal of, and
premium, if any, and interest on, Debt Securities of the series shall
be payable;
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the
Company or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase
or repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the
price or prices at which and the period or periods within which and the
terms and conditions upon which Debt Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligations;
(8) the terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Stock, Preferred
Stock (which may be represented by depositary shares), other Debt
Securities or warrants for Common Stock, Preferred Stock or
Indebtedness or other securities of any kind of the Company or any
other obligor and the terms and conditions upon which such conversion
or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
provision in addition to or in lieu of those described herein;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the
series shall be issuable;
(10) if the amount of principal, premium, if any, or interest
on Debt Securities of the series may be determined with reference to an
index or pursuant to a
<PAGE> 29
20
formula, the manner in which such amounts will be determined;
(11) if the principal amount payable at the Stated Maturity of
Debt Securities of the series will not be determinable as of any one
or more dates prior to such Stated Maturity, the amount which will be
deemed to be such principal amount as of any such date for any
purpose, including the principal amount thereof which will be due and
payable upon any maturity other than the Stated Maturity or which will
be deemed to be Outstanding as of any such date (or, in any such case,
the manner in which such deemed principal amount is to be determined);
(12) the applicability of Section 11.02(b) and any changes or
additions to Article XI, including the addition of additional
covenants that may be subject to the covenant defeasance option
pursuant to Section 11.02(b)(ii);
(13) if other than such coin or Currency of the United States
as at the time of payment is legal tender for payment of public and
private debts, the coin or Currency or Currencies or units of two or
more Currencies in which payment of the principal of, and premium, if
any, and interest on, Debt Securities of the series shall be payable;
and the manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition of
Dollar Equivalent;
(14) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of the series which shall
be payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.01 or provable in bankruptcy pursuant to Section
6.02;
(15) any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in the
right of the Trustee or the Holders to declare the principal of, and
premium and interest on, such Debt Securities due and payable;
(16) if the Debt Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities, the
terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual
<PAGE> 30
21
Debt Securities in definitive registered form if other than as
provided for in Section 2.15; and the Depositary for such Global
Security or Securities and the form of any legend or legends to be
borne by any such Global Security or Securities in addition to or in
lieu of the legend referred to in Section 2.15;
(17) any trustees, authenticating or paying agents, transfer
agents or registrars;
(18) the applicability of, and any addition to or change in
the covenants and definitions currently set forth in this Indenture or
in the terms currently set forth in Article X, including conditioning
any merger, conveyance, transfer or lease permitted by Article X upon
the satisfaction of an Indebtedness coverage standard by the Company
and Successor Company (as defined in Article X);
(19) the terms, if any, of any Guarantee of the payment of
principal of, and premium, if any, and interest on, Debt Securities of
the series and any corresponding changes to the provisions of this
Indenture as currently in effect;
(20) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of this
Indenture as currently in effect;
(21) with regard to Debt Securities of the series that do not
bear interest, the dates for certain required reports to the Trustee;
and
(22) any other terms of the Debt Securities of the series
(which terms shall not be prohibited by the provisions of this
Indenture).
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such resolution of the Board of Directors and as set forth in
such Officers' Certificate or in any such Indenture supplemental hereto.
<PAGE> 31
22
SECTION 2.04. Execution of Debt Securities. The Debt
Securities shall be signed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its President or a Vice President (or any other
officer performing similar functions) and by its Treasurer, Secretary, an
Assistant Treasurer or an Assistant Secretary (or any other officer performing
similar functions). Such signatures upon the Debt Securities may be the manual
or facsimile signatures of the present or any future such authorized officers
and may be imprinted or otherwise reproduced on the Debt Securities. The seal
of the Company, if any, may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities.
Only such Debt Securities as shall bear thereon a certificate
of authentication substantially in the form hereinbefore recited, signed
manually by an authorized officer of the Trustee, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Debt Security executed by the Company shall
be conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any
of the Debt Securities shall cease to be such officer before the Debt
Securities so signed shall have been authenticated and delivered by the
Trustee, or disposed of by the Company, such Debt Securities nevertheless may
be authenticated and delivered or disposed of as though the Person who signed
such Debt Securities had not ceased to be such officer of the Company; and any
Debt Security may be signed on behalf of the Company by such Persons as, at the
actual date of the execution of such Debt Security, shall be the proper
officers of the Company, although at the date of such Debt Security or of the
execution of this Indenture any such Person was not such officer.
SECTION 2.05. Authentication and Delivery of Debt Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series executed by
the Company to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debt Securities in accordance with a Company
Order. In authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to
<PAGE> 32
23
receive, and (subject to Section 7.01) shall be fully protected in relying
upon:
(1) a copy of any resolution or resolutions of the Board of
Directors, certified by the Secretary or Assistant Secretary of the
Company, authorizing the terms of issuance of any series of Debt
Securities;
(2) an executed supplemental Indenture, if any;
(3) an Officers' Certificate pursuant to Sections 2.03 and
12.05; and
(4) an Opinion of Counsel prepared in accordance with Section
12.05 which shall also state:
(a) that the form of such Debt Securities has been
established in conformity with the provisions of this
Indenture;
(b) that the terms of such Debt Securities have been
established in conformity with the provisions of this
Indenture;
(c) that such Debt Securities, 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, enforceable in accordance with
their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting the enforcement of creditors' rights
generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(d) that the Company has the corporate power to issue
such Debt Securities and has duly taken all necessary
corporate action with respect to such issuance;
(e) that the issuance of such Debt Securities will
not contravene the Amended Articles of Incorporation or Code
of Regulations, as amended, of the Company; and
<PAGE> 33
24
(f) that authentication and delivery of such Debt
Securities and the execution and delivery of any supplemental
Indenture will not violate the terms of this Indenture.
Such Opinion of Counsel need express no opinion as to whether
a court in the United States would render a money judgment in a currency other
than that of the United States.
The Trustee shall have the right to decline to authenticate
and deliver any Debt Securities under this Section 2.05 if the Trustee, being
advised by counsel, determines that such action may not lawfully be taken or if
the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors, trustees or vice presidents, and
being advised by counsel, shall determine that such action would expose the
Trustee to personal liability to existing Holders.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Debt Securities of any series.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Debt Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar, paying
agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any
series, each Debt Security shall be dated the date of its authentication.
SECTION 2.06. Denomination of Debt Securities. Unless
otherwise provided in the form of Debt Security for any series, the Debt
Securities of each series shall be issuable only as Registered Securities in
such denominations as shall be specified or contemplated by Section 2.03. In
the absence of any such specification with respect to the Debt Securities of
any series, the Debt Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.07. Registration of Transfer and Exchange. (a)
The Company shall keep or cause to be kept a register for each series of
Registered Securities issued hereunder (hereinafter referred to as the "Debt
Security Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the transfer of
<PAGE> 34
25
Registered Securities as in this Article II provided. At all reasonable times
the Debt Security Register shall be open for inspection by the Trustee. Subject
to Section 2.15, upon due presentment for registration of transfer of any
Registered Security at any office or agency to be maintained by the Company in
accordance with the provisions of Section 4.02, the Company shall execute and
the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securities of authorized
denominations for a like aggregate principal amount and tenor.
Unless and until otherwise determined by the Company by
resolution of the Board of Directors, the register of the Company for the
purpose of registration, exchange or registration of transfer of the Registered
Securities shall be kept at the Corporate Trust Office of the Trustee and, for
this purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global
Security, except as set forth below) may be exchanged for a like aggregate
principal amount of Registered Securities of the same series and tenor of other
authorized denominations. Subject to Section 2.15, Registered Securities to be
exchanged shall be surrendered at the office or agency to be maintained by the
Company as provided in Section 4.02, and the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor the Registered
Security or Registered Securities which the Holder making the exchange shall be
entitled to receive.
Whenever any Debt Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Debt Securities that the Holder making the exchange is entitled to receive.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Registered Holder
or his attorney duly authorized in writing.
All Debt Securities issued in exchange for or upon transfer of
Debt Securities shall be the valid obligations of the Company, evidencing the
same debt, and (except as expressly provided otherwise herein) entitled to the
same
<PAGE> 35
26
benefits under this Indenture as the Debt Securities surrendered for such
exchange or transfer.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities (except as provided by Section
2.09), but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto, other
than those expressly provided in this Indenture to be made at the Company's own
expense or without expense or without charge to the Holders.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Debt Securities for a period of 15 days before the
day of any mailing of notice of redemption of Debt Securities of such series or
(b) to register the transfer of or exchange any Debt Securities selected,
called or being called for redemption (except the unredeemed portion of Debt
Securities called for redemption in part).
SECTION 2.08. Temporary Debt Securities. Pending the
preparation of definitive Debt Securities of any series, the Company may
execute and the Trustee shall authenticate and deliver temporary Debt
Securities (printed, lithographed, photocopied, typewritten or otherwise
produced) of any authorized denomination, and substantially in the form of the
definitive Debt Securities in lieu of which they are issued, in registered
form, and with such omissions, insertions and variations as may be appropriate
for temporary Debt Securities, all as may be determined by the Company with the
concurrence of the Trustee. Temporary Debt Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Debt Security shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the
Company will cause definitive Debt Securities of such series to be prepared
without unreasonable delay. After the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series may be
exchangeable for definitive Debt Securities of such series upon surrender of
the temporary Debt Securities of such series at the office or agency of the
Company at a Place of Payment for such series, without charge to the Holder
thereof, except as provided in Section 2.07 in connection with a transfer. In
addition, upon surrender for
<PAGE> 36
27
cancellation of any one or more temporary Debt Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debt Securities of the
same series of authorized denominations and of like tenor. Until so exchanged,
temporary Debt Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as definitive Debt Securities of such
series.
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Debt
Securities. If (i) any mutilated Debt Security is surrendered to the Trustee
at the Corporate Trust Office or (ii) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any Debt
Security, and there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them and any paying
agent harmless, and neither the Company nor the Trustee receives notice that
such Debt Security has been acquired by a bona fide purchaser, then the Company
shall execute and, upon a Company Order, the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Debt Security, a new Debt Security of the same series of like tenor,
form, terms and principal amount, bearing a number not contemporaneously
Outstanding. Upon the issuance of any substituted Debt Security, 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 connected therewith. In case any Debt Security which has matured or
is about to mature or which has been called for redemption shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
a substituted Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish the Company and the Trustee with such
security or indemnity as either may require to save it harmless from all risk,
however remote, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Debt Security and of the ownership thereof.
Every substituted Debt Security of any series issued pursuant
to the provisions of this Section 2.09 by virtue of the fact that any Debt
Security is destroyed, lost or stolen shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other
<PAGE> 37
28
Debt Securities of that series duly issued hereunder. All Debt Securities
shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities, and shall preclude any
and all other rights or remedies, notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
SECTION 2.10. Cancellation of Surrendered Debt Securities.
All Debt Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to the Company or any paying agent
or a Registrar, be delivered to the Trustee for cancellation by it, or if
surrendered to the Trustee, shall be cancelled by it, and no Debt Securities
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. All cancelled Debt Securities held by the
Trustee may be destroyed by the Trustee unless otherwise directed by a Company
Order delivered within five Business Days after such cancellation. If the
Company shall acquire any of the Debt Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented thereby unless and until the same are delivered or surrendered to
the Trustee for cancellation.
SECTION 2.11. Provisions of the Indenture and Debt Securities
for the Sole Benefit of the Parties and the Holders. Nothing in this Indenture
or in the Debt Securities, expressed or implied, shall give or be construed to
give to any Person, other than the parties hereto, the Holders or any Registrar
or paying agent, any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein
contained; all its covenants, conditions and provisions being for the sole
benefit of the parties hereto, the Holders and any Registrar and paying agents.
SECTION 2.12. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered Security that is payable and is punctually paid
or duly provided for on any interest payment date shall be paid to the Person
in whose name such Registered Security is registered at the close of business
on the regular record date for such interest notwithstanding the cancellation
of such Registered Security upon any transfer or exchange subsequent to the
regular record date. Payment of interest on Registered
<PAGE> 38
29
Securities shall be made at the Corporate Trust Office of the Trustee (except
as otherwise specified pursuant to Section 2.03), or at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address shall appear in the Debt Security Register or, if provided pursuant to
Section 2.03 and in accordance with arrangements satisfactory to the Trustee,
at the option of the Registered Holder by wire transfer to an account
designated by the Registered Holder.
(b) Subject to the foregoing provisions of this Section 2.12
and Section 2.17, each Debt Security of a particular series delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debt Security.
SECTION 2.13. Securities Denominated in Foreign Currencies.
(a) Except as otherwise specified pursuant to Section 2.03 for Registered
Securities of any series, payment of the principal of, and premium, if any, and
interest on, Registered Securities of such series will be made in Dollars.
(b) For the purposes of calculating the principal amount of
Debt Securities of any series denominated in a Foreign Currency for any purpose
under this Indenture, the principal amount of such Debt Securities at any time
Outstanding shall be deemed to be the Dollar Equivalent of such principal
amount as of the date of any such calculation.
In the event any Foreign Currency in which any payment with
respect to any series of Debt Securities may be made ceases to be a freely
convertible Currency on United States Currency markets, for any date thereafter
on which payment of principal of, or premium, if any, or interest on, the Debt
Securities of a series is due, the Company shall select the Currency of payment
for use on such date, all as provided in the Debt Securities of such series.
In such event, the Company shall, as provided in the Debt Securities of such
series, notify the Trustee of the Currency which it has selected to constitute
the funds necessary to meet the Company's obligations on such payment date and
of the amount of such Currency to be paid. Such amount shall be determined as
provided in the Debt Securities of such series. The payment to the Trustee
with respect to such payment date shall be made by the Company solely in the
Currency so selected.
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SECTION 2.14. Wire Transfers. Notwithstanding any other
provision to the contrary in this Indenture, the Company may make any payment
of monies required to be deposited with the Trustee on account of principal of,
or premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the
Trustee on or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
SECTION 2.15. Securities Issuable in the Form of a Global
Security. (a) If the Company shall establish pursuant to Sections 2.01 and
2.03 that the Debt Securities of a particular series are to be issued in whole
or in part in the form of one or more Global Securities, then the Company shall
execute and the Trustee or its agent shall, in accordance with Section 2.05,
authenticate and deliver, such Global Security or Securities, which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Debt Securities of such series to be
represented by such Global Security or Securities, or such portion thereof as
the Company shall specify in an Officers' Certificate, (ii) shall be registered
in the name of the Depositary for such Global Security or Securities or its
nominee, (iii) shall be delivered by the Trustee or its agent to the Depositary
or pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary", or such
other legend as may then be required by the Depositary for such Global Security
or Securities.
(b) Notwithstanding any other provision of this Section 2.15
or of Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for definitive Debt Securities in
registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee
of the Depositary for such Global Security, or by a nominee of the Depositary
to the Depositary or another
<PAGE> 40
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nominee of the Depositary, or by the Depositary or a nominee of the Depositary
to a successor Depositary for such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security
or Securities notifies the Company that it is unwilling or unable to continue
as Depositary for such Global Security or Securities or if at any time the
Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security or Securities. If a successor Depositary for such Global
Security or Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the
Company shall execute, and the Trustee or its agent, upon receipt of a Company
Order for the authentication and delivery of such individual Debt Securities of
such series in exchange for such Global Security or Securities, will
authenticate and deliver, individual Debt Securities of such series of like
tenor and terms in definitive form in an aggregate principal amount equal to
the principal amount of the Global Security or Securities in exchange for such
Global Security or Securities.
(ii) The Company may at any time and in its sole discretion
determine that the Debt Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Debt Securities of such series in
exchange in whole or in part for such Global Security or Securities, will
authenticate and deliver individual Debt Securities of such series of like
tenor and terms in definitive form in an aggregate principal amount equal to
the principal amount of such series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.01
and 2.03 with respect to Debt Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Debt Securities
of such series of like tenor and terms in definitive form on such terms as are
acceptable to the Company, the Trustee and such Depositary. Thereupon the
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Company shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, (1) to each
Person specified by such Depositary a new Debt Security or Securities of the
same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Debt
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Debt Securities. Upon the exchange of the
entire principal amount of a Global Security for individual Debt Securities,
such Global Security shall be cancelled by the Trustee or its agent. Except as
provided in the preceding paragraph, Registered Securities issued in exchange
for a Global Security pursuant to this Section 2.15 shall be registered in such
names and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or the Registrar. The Trustee or the
Registrar shall deliver such Registered Securities to the Persons in whose
names such Registered Securities are so registered.
(v) Payments in respect of the principal of and interest on
any Debt Securities registered in the name of the Depositary or its nominee
will be payable to the Depositary or such nominee in its capacity as the
registered owner of such Global Security. The Company and the Trustee may
treat the Person in whose names the Debt Securities, including the Global
Security, are registered as the owner thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. None of the Company,
the Trustee, any Registrar, the paying agent or any agent of the Company or the
Trustee will have any responsibility or liability for (a) any aspect of the
records relating to or payments made on account of the beneficial ownership
interests of the Global Security by the Depositary or its nominee or any of the
Depositary's direct or indirect participants, or for maintaining, supervising
or reviewing any records of the Depositary, its nominee or any of its direct or
indirect participants relating to the beneficial
<PAGE> 42
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ownership interests of the Global Security, (b) the payments to the beneficial
owners of the Global Security of amounts paid to the Depositary or its nominee,
or (c) any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants. None of
the Company, the Trustee or any such agent will be liable for any delay by the
Depositary, its nominee, or any of its direct or indirect participants in
identifying the beneficial owners of the Debt Securities, and the Company and
the Trustee may conclusively rely on, and will be protected in relying on,
instructions from the Depositary or its nominee for all purposes (including
with respect to the registration and delivery, and the respective principal
amounts, of the Debt Securities to be issued).
SECTION 2.16. Medium Term Securities. Notwithstanding any
contrary provision herein, if all Debt Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, resolutions of the Board of
Directors, supplemental Indenture, Opinion of Counsel or Company Order or any
other document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 12.05
at or prior to the time of authentication of each Debt Security of such series
if such documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security of such
series to be issued; provided, however, that any subsequent request by the
Company to the Trustee to authenticate Debt Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
that, as of the date of such request, the statements made in the Officers'
Certificate delivered pursuant to Section 2.05 or 12.05 shall be true and
correct as if made on such date; provided further, however, that, with respect
to Debt Securities of a series which are not to be issued at one time, the
Trustee shall be entitled to such Opinion of Counsel only once at or prior to
the time of the first authentication of Debt Securities of such series and the
Opinion of Counsel described above shall state:
(a) that, when the terms of such Debt 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,
such terms will have been established in conformity with the
provisions of this Indenture;
(b) that such Debt Securities, when (i) executed by the
Company, (ii) completed, authenticated and made
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available for delivery by the Trustee in accordance with this
Indenture, (iii) issued and delivered by the Company and (iv) paid
for, all as contemplated by and in accordance with the aforesaid
Company Order or specified procedures, as the case may be, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting the enforcement of
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability; and
(c) and the other matters required by Section 2.05(4)(a), (d),
(e) and (f).
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities which are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the
telephonic or written order of Persons designated in such written order (any
such telephonic instructions to be promptly confirmed in writing by such
Person) and that such Persons are authorized to determine, consistent with the
Officers' Certificate, supplemental Indenture or resolution of the Board of
Directors relating to such written order, such terms and conditions of such
Debt Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
Notwithstanding any contrary provision herein, if all Debt
Securities of a series are not to be originally issued at one time, any
Officers' Certificate required to be delivered pursuant to Section 2.03 need
not set forth all of the terms of the Debt Securities required to be
established pursuant to Section 2.03, but need set forth only the manner in
which such terms shall be established.
SECTION 2.17. Defaulted Interest. Any interest on any Debt
Security of a particular series which is payable, but is not punctually paid or
duly provided for, on the dates and in the manner provided in the Debt
Securities of such series and in this Indenture (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Registered Holder thereof
on the relevant record date by virtue of having been such Registered Holder,
and such Defaulted Interest may be paid by the Company, at its
<PAGE> 44
35
election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series 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 such Registered 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 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 pre-paid, to
each Holder thereof at its 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 Registered
Securities of such series are registered at the close of business on
such special record date.
(ii) The Company may make payment of any Defaulted Interest
on the Registered Securities of such series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which the Registered Securities of such series may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this clause, such
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manner of payment shall be deemed practicable by the Trustee.
SECTION 2.18. Judgments. The Company may provide pursuant to
Section 2.03 for Debt Securities of any series that (a) the obligation, if any,
of the Company to pay the principal of, and premium, if any, and interest on,
the Debt Securities of such series in a Foreign Currency or Dollars (the
"Designated Currency") as may be specified pursuant to Section 2.03 is of the
essence and agrees that, to the fullest extent possible under applicable law,
judgments in respect of Debt Securities of such series shall be given in the
Designated Currency; (b) the obligation of the Company to make payments in the
Designated Currency of the principal of, and premium, if any, and interest on,
such Debt Securities shall, notwithstanding any payment in any other Currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the Designated Currency that the Holder receiving such payment
may, in accordance with normal banking procedures, purchase with the sum paid
in such other Currency (after any premium and cost of exchange) on the Business
Day in the country of issue of the Designated Currency or in the international
banking community (in the case of a composite currency) immediately following
the day on which such Holder receives such payment; (c) if the amount in the
Designated Currency that may be so purchased for any reason falls short of the
amount originally due, the Company shall pay such additional amounts as may be
necessary to compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
ARTICLE III
Redemption of Debt Securities
SECTION 3.01. Applicability of Article. The provisions of
this Article shall be applicable to the Debt Securities of any series which are
redeemable before their Stated Maturity except as otherwise specified as
contemplated by Section 2.03 for Debt Securities of such series.
SECTION 3.02. [Reserved.]
SECTION 3.03. Notice of Redemption; Selection of Debt
Securities. In case the Company shall desire to
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exercise the right to redeem all or, as the case may be, any part of the Debt
Securities of any series in accordance with their terms, the Company shall fix
a date for redemption and shall, in the manner provided in Section 12.03, give
notice of such redemption at least 30 and not more than 60 days prior to the
date fixed for redemption to the Holders of Debt Securities of such series so
to be redeemed as a whole or in part. The notice if given in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice. In any case, failure to give such notice or
any defect in the notice to the Holder of any Debt Security of a series
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Debt Security of such
series.
Each such notice of redemption shall specify (i) the date
fixed for redemption; (ii) the redemption price at which Debt Securities of
such series are to be redeemed; (iii) the Place or Places of Payment that
payment will be made upon presentation and surrender of such Debt Securities;
(iv) that any interest accrued to the date fixed for redemption will be paid as
specified in said notice; (v) that the redemption is for a sinking fund payment
(if applicable); (vi) that, unless the Company defaults in making such
redemption payment, on and after said date any interest thereon or on the
portions thereof to be redeemed will cease to accrue and in the case of
Original Issue Discount Securities original issue discount will cease to
accrue; (vii) the terms of the Debt Securities of that series pursuant to which
the Debt Securities of that series are being redeemed and that no
representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Debt Securities of that series;
and (viii) if less than all the Outstanding Debt Securities of any series and
tenor are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debt Securities to be
redeemed. If less than all the Debt Securities of a series are to be redeemed
the notice of redemption shall specify the CUSIP numbers of the Debt Securities
of that series to be redeemed. In case any Debt Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debt Security, a new Debt
Security or Debt Securities of that series in principal amount equal to the
unredeemed portion thereof will be issued.
<PAGE> 47
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At least 60 days before the redemption date, unless the
Trustee consents to a shorter period, the Company shall give notice to the
Trustee of the redemption date, the principal amount of Debt Securities to be
redeemed and the series and terms of the Debt Securities pursuant to which such
redemption will occur. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
On or prior to the redemption date for any Registered
Securities, 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) an amount of money in the Currency in which such Debt Securities are
denominated (except as provided pursuant to Section 2.03) sufficient to pay the
redemption price of such Registered Securities or any portions thereof that are
to be redeemed on that date.
If less than all the Debt Securities of a series are to be
redeemed (other than pursuant to sinking fund redemptions) the Trustee shall
select the Debt Securities of that series or portions thereof (in multiples of
$1,000) to be redeemed by lot or by such other method as the Trustee considers
fair and appropriate. In any case where more than one Registered Security of
such series is registered in the same name, the Trustee in its discretion may
treat the aggregate principal amount so registered as if it were represented by
one Registered Security of such series. The Trustee shall promptly notify the
Company in writing of the Debt Securities selected for redemption and, in the
case of any Debt Securities selected for partial redemption, the principal
amount thereof to be redeemed. If any Debt Security called for redemption
shall not be so paid upon surrender thereof on such redemption date, the
principal, premium, if any, and interest shall bear interest until paid from
the redemption date at the rate borne or provided for by the Debt Securities of
that series. Provisions of this Indenture that apply to Debt Securities called
for redemption also apply to portions of Debt Securities called for redemption.
SECTION 3.04. Payment of Debt Securities Called for
Redemption. If notice of redemption has been given as provided in Section
3.03, the Debt Securities or portions of Debt Securities of the series with
respect to which such notice has been given shall become due and payable on the
date and at the Place or Places of Payment stated in such notice at the
applicable redemption price, together with any
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interest accrued to the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Debt Securities at the
applicable redemption price, together with any interest accrued to said date)
any interest on such Debt Securities or portions of such Debt Securities so
called for redemption shall cease to accrue and any original issue discount in
the case of Original Issue Discount Securities shall cease to accrue. On
presentation and surrender of such Debt Securities at the Place or Places of
Payment in said notice specified, the said Debt Securities or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with any interest accrued thereon to the date fixed
for redemption.
Any Debt Security that is to be redeemed only in part shall be
surrendered at the Corporate Trust Office of the Trustee or such other office
or agency of the Company as is specified pursuant to Section 2.03 with, if the
Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar 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 Debt Security without
service charge, a new Debt Security or Debt Securities of the same series, of
like tenor and form, 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 Debt Security so surrendered; except that, if a
Global Security is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Security,
without service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Security so
surrendered.
SECTION 3.05. Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of Debt
Securities of any series, resolution of the Board of Directors or a
supplemental Indenture 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 Debt Securities of any series, resolution of the Board of Directors or
a supplemental Indenture is herein referred to as an "optional sinking fund
payment".
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In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Debt Securities of a series in cash, the
Company may at its option (a) deliver to the Trustee Debt Securities of that
series theretofore purchased or otherwise acquired by the Company or (b)
receive credit for the principal amount of Debt Securities of that series which
have been redeemed either at the election of the Company pursuant to the terms
of such Debt Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debt Securities, resolution
or supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited
for such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
SECTION 3.06. Redemption of Debt Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of
Debt 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, any resolution or
supplemental Indenture, the portion thereof, if any, which is to be satisfied
by payment of cash in the Currency in which the Debt Securities of such series
are denominated (except as provided pursuant to Section 2.03) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Debt
Securities of that series pursuant to this Section 3.06 (which Debt Securities,
if not previously redeemed, will accompany such certificate), the basis for
such credit, that such Debt Securities have not previously been so credited and
whether the Company intends to exercise its right to make any permitted
optional sinking fund payment with respect to such series. Such certificate
shall also state that no Event of Default has occurred and is continuing with
respect to such series. Such certificate shall be irrevocable and upon its
delivery the Company shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Company to deliver such certificate (or to
deliver the Debt Securities specified in this paragraph) shall not constitute a
Default, but such failure shall require that the sinking fund payment due on
the next succeeding sinking fund payment date for that series shall be paid
entirely in cash and shall be sufficient to redeem the principal amount of such
Debt Securities subject to a
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mandatory sinking fund payment without the option to deliver or credit Debt
Securities as provided in this Section 3.06 and without the right to make any
optional sinking fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional)
made in cash plus any unused balance of any preceding sinking fund payments
made in cash which shall equal or exceed $100,000 (or a lesser sum if the
Company shall so request) with respect to the Debt Securities of any particular
series shall be applied by the Trustee on the sinking fund payment date on
which such payment is made (or, if such payment is made before a sinking fund
payment date, on the sinking fund payment date following the date of such
payment) to the redemption of such Debt Securities at the Redemption Price
specified in such Debt Securities, resolution or supplemental Indenture for
operation of the sinking fund together with any accrued interest to the date
fixed for redemption. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Debt Securities shall be added to the next
cash sinking fund payment received by the Trustee for such series and, together
with such payment, shall be applied in accordance with the provisions of this
Section 3.06. Any and all sinking fund moneys with respect to the Debt
Securities of any particular series held by the Trustee on the last sinking
fund payment date with respect to Debt Securities of such series and not held
for the payment or redemption of particular Debt Securities shall be applied by
the Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the Debt
Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed
upon such sinking fund payment date in the manner specified in the last
paragraph of Section 3.03 and the Company shall cause notice of the redemption
thereof to be given in the manner provided in Section 3.03 except that the
notice of redemption shall also state that the Debt Securities are being
redeemed by operation of the sinking fund. Such notice having been duly given,
the redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.04.
On or prior to each sinking fund payment date, the Company
shall pay to the Trustee (or, if the Company is acting as its own paying agent,
the Company shall segregate and hold in trust) in cash a sum in the Currency in
which the Debt Securities of such series are denominated (except
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as provided pursuant to Section 2.03) equal to any interest accrued to the date
fixed for redemption of Debt Securities or portions thereof to be redeemed on
such sinking fund payment date pursuant to this Section 3.06.
The Trustee shall not redeem any Debt Securities of a series
with sinking fund moneys or mail any notice of redemption of such Debt
Securities by operation of the sinking fund for such series during the
continuance of a Default in payment of interest on such Debt Securities or of
any Event of Default (other than an Event of Default occurring as a consequence
of this paragraph) with respect to such Debt Securities, except that if the
notice of redemption of any such Debt Securities shall theretofore have been
mailed in accordance with the provisions hereof, the Trustee shall redeem such
Debt Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
provided, however, that in case such Event of Default or Default shall have
been cured or waived as provided herein, such moneys shall thereafter be
applied on the next sinking fund payment date for such Debt Securities on which
such moneys may be applied pursuant to the provisions of this Section 3.06.
ARTICLE IV
Particular Covenants of the Company
SECTION 4.01. Payment of Principal of, and Premium, if any,
and Interest on, Debt Securities. The Company, for the benefit of each series
of Debt Securities, will duly and punctually pay or cause to be paid the
principal of, and premium, if any, and interest on, each of the Debt Securities
at the place, at the respective times and in the manner provided herein and in
the Debt Securities. Each installment of interest on the Debt Securities may
at the Company's option be paid by mailing checks for such interest payable to
the Person entitled thereto pursuant to Section 2.07(a) to the address of such
Person as it appears on the Debt Security Register or, if provided pursuant to
Section 2.03 and in accordance with arrangements satisfactory to the Trustee,
at the option of
<PAGE> 52
43
the Registered Holder by wire transfer to an account designated by the
Registered Holder.
Principal, premium and interest of Debt Securities of any
series shall be considered paid on the date due if on such date the Trustee or
any paying agent holds in accordance with this Indenture money sufficient to
pay in the Currency in which the Debt Securities of such series are denominated
(except as provided pursuant to Section 2.03) all principal, premium and
interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Debt Securities and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Offices or Agencies for
Registration of Transfer, Exchange and Payment of Debt Securities. The Company
will maintain in each Place of Payment for any series of Debt Securities an
office or agency where Debt Securities of such series may be presented or
surrendered for payment, where Debt Securities of such series may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities of such series and this Indenture
may be served. 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 presentations, surrenders, notices and
demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or
outside of such Place of Payment), and may from time to time rescind any such
designation; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
SECTION 4.03. Appointment to Fill a Vacancy in the Office of
Trustee. The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will
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44
appoint, in the manner provided in Section 7.08, a Trustee, so that there shall
at all times be a Trustee hereunder with respect to each series of Debt
Securities.
SECTION 4.04. Duties of Paying Agents, etc. (a) The Company
shall cause each paying agent, if any, other than the Trustee, to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such agent for
the payment of the principal of, and premium, if any, or interest on,
the Debt Securities of any series (whether such sums have been paid to
it by the Company or by any other obligor on the Debt Securities of
such series) in trust for the benefit of the Holders of the Debt
Securities of such series;
(ii) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debt Securities of such
series) to make any payment of the principal of, and premium, if any,
or interest on, the Debt Securities of such series when the same shall
be due and payable; and
(iii) that it will at any time during the continuance of an
Event of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held by it as such agent.
(b) If the Company shall act as its own paying agent with
respect to any series of Debt Securities, it will, on or before each due date
of the principal of, and premium, if any, or interest on, the Debt Securities
of such series, set aside, segregate and hold in trust for the benefit of the
Holders of the Debt Securities of such series a sum sufficient to pay such
principal, premium, if any, or interest so becoming due. The Company will
promptly notify the Trustee of any failure by the Company to take such action
or the failure by any other obligor on such Debt Securities to make any payment
of the principal of, and premium, if any, or interest on, such Debt Securities
when the same shall be due and payable.
(c) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be
<PAGE> 54
45
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.
(d) Whenever the Company shall have one or more paying agents
with respect to any series of Debt Securities, it will, on each due date of the
principal of, and premium, if any, or interest on, any Debt Securities of such
series, deposit with any such paying agent a sum sufficient to pay the
principal, premium or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled thereto, and (unless any such paying agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
4.04 is subject to the provisions of Section 11.05.
SECTION 4.05. Statement by Officers as to Default. The
Company will deliver to the Trustee, on or before a date not more than four
months after the end of each fiscal year of the Company (currently on a
calendar year basis) ending after the date hereof, an Officers' Certificate
(which need not comply with the requirements of Section 12.05) stating, as to
each officer signing such certificate (one of which officers shall be the
principal executive officer, principal financial officer or principal
accounting officer of the Company), that (i) in the course of his performance
of his duties as an officer of the Company he would normally have knowledge of
any Default, (ii) whether or not to the best of his knowledge any Default
occurred during such year and (iii) if to the best of his knowledge the Company
is in Default, specifying all such Defaults and what action the Company is
taking or proposes to take with respect thereto. The Company also shall comply
with Section 314(a)(4) of the Trust Indenture Act.
SECTION 4.06. Existence. Subject to Article X, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and
<PAGE> 55
46
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 4.07. Limitation on Liens. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or permit to exist any Lien on any Principal Property, or
shares of capital stock of any Restricted Subsidiary, whether owned on the date
of this Indenture or thereafter acquired, securing any obligation unless the
Company contemporaneously secures the Debt Securities equally and ratably with
(or prior to) such obligation. The preceding sentence shall not require the
Company to secure the Debt Securities if the Lien consists of the following:
(i) Permitted Liens; or
(ii) Liens other than those permitted in Section 4.07(i)
above, provided that the aggregate amount of all obligations secured
by Liens permitted by this Section 4.07(ii) shall not exceed 15% of
Consolidated Net Tangible Assets.
SECTION 4.08. Limitation on Sale/Leaseback Transactions. The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
enter into any Sale/Leaseback Transaction with respect to any Principal
Property unless (i) the Company or such Restricted Subsidiary would be entitled
to create a Lien on such Principal Property securing Indebtedness in an amount
equal to the Attributable Indebtedness with respect to such Sale/Leaseback
Transaction without securing the Debt Securities pursuant to Section 4.07 or
(ii) the Company, within six months from the effective date of such
Sale/Leaseback Transaction, applies to the voluntary defeasance or retirement
(excluding retirements of Debt Securities and other Indebtedness ranking pari
passu with the Debt Securities as a result of conversions or pursuant to
mandatory sinking fund or mandatory prepayment provisions or by payment at
maturity) of Debt Securities or other Indebtedness ranking pari passu with the
Debt Securities an amount equal to the Attributable Indebtedness in respect of
such Sale/Leaseback Transaction; provided that the foregoing will not prevent
the Company or any Restricted Subsidiary from (x) entering into any
Sale/Leaseback Transaction involving a lease with a term of less than three
years or (y) entering into any Sale/Leaseback Transaction between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries.
<PAGE> 56
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ARTICLE V
Holders' Lists and Reports
by the Company and the Trustee
SECTION 5.01. Company to Furnish Trustee Information as to
Names and Addresses of Holders; Preservation of Information. The Company
covenants and agrees that it will furnish or cause to be furnished to the
Trustee with respect to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect
to the payment of interest, if any, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Registered Holders as of such record date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and contents 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 shall be the Registrar, such
lists shall not be required to be furnished.
The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders (1) contained in the most recent list furnished to it as provided in
this Section 5.01 or (2) received by it in the capacity of paying agent or
Registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it as provided
in this Section 5.01 upon receipt of a new list so furnished.
SECTION 5.02. Communications to Holders. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the Debt
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the Trust Indenture Act.
SECTION 5.03. Reports by Company. (a) The Company covenants
and agrees to file with the Trustee, within 15 days after the Company is
required to file the same with the Securities and Exchange Commission, copies
of
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the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as said Commission may from time
to time by rules and regulations prescribe) which the Company may be required to
file with said Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information, documents
or reports pursuant to either of such Sections, then to file with the Trustee
and said Commission, in accordance with rules and regulations prescribed from
time to time by said Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Securities and Exchange Commission, in accordance with the rules and
regulations prescribed from time to time by said Commission, such additional
information, documents, and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
(c) Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 5.04. Reports by Trustee. As promptly as practicable
after each May 15 beginning with the May 15 following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of such May 15 that complies with
Section 313(a) of the Trust Indenture Act if and to the extent required by such
section. The Trustee also shall comply with Section 313(b) of the Trust
Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of
such Holders appear in the Debt Security Register;
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(2) except in the case of reports under Section 313(b)(2) of
the Trust Indenture Act, to each Holder of a Debt Security of any
series whose name and address appear in the information preserved at
the time by the Trustee in accordance with Section 5.02.
A copy of each report at the time of its mailing to Holders
shall be filed with the Securities and Exchange Commission and each stock
exchange (if any) on which the Debt Securities of any series are listed. The
Company agrees to notify promptly the Trustee whenever the Debt Securities of
any series become listed on any stock exchange and of any delisting thereof.
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
SECTION 6.01. Events of Default. If any one or more of the
following shall have occurred and be continuing with respect to Debt Securities
of any series (each of the following, an "Event of Default"):
(a) default in the payment of any installment of interest upon
any Debt Securities of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of the principal of or premium, if
any, on any Debt Securities of that series, as and when the same shall
become due and payable, whether at maturity, upon redemption, by
declaration, upon required repurchase or otherwise; or
(c) default in the payment of any sinking fund payment with
respect to any Debt Securities of that series, as and when the same
shall become due and payable, and continuance of such default for a
period of 30 days; or
(d) failure on the part of the Company to comply with Article
X; or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debt Securities of that series, in this Indenture with
respect to such series or in any supplemental Indenture with respect
to such series (other than covenants or
<PAGE> 59
50
agreements included solely by or for the benefit of a series of Debt
Securities thereunder other than that Series), continuing for a period
of 90 days after the date on which written notice specifying such
failure and requiring the Company to remedy the same and stating that
such notice is a "Notice of Default" hereunder 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
aggregate principal amount of the Debt Securities of that series at
the time Outstanding; or
(f) the Company or any of its Significant Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other Federal
or State bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert within the time and in the
manner prescribed by law, any such proceeding or the filing of any
such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the
Company or any such Significant Subsidiary or for a substantial part
of its property, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) admit in
writing its inability or fail generally to pay its debts as they
become due, (vii) take corporate action for the purpose of effecting
any of the foregoing, or (viii) take any comparable action under any
foreign laws relating to insolvency of the Company or any Significant
Subsidiary; or
(g) the entry of an order or decree by a court having
competent jurisdiction in the premises for (i) relief in respect of
the Company or any of its Significant Subsidiaries or a substantial
part of any of their property under Title 11 of the United States Code
or any other Federal or State bankruptcy, insolvency or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Company or any such Significant Subsidiary
or for a substantial part of any of their property (except any decree
or order appointing such official of any Significant Subsidiary
pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another
Subsidiary or Subsidiaries of the Company
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51
or to the Company) or (iii) the winding-up or liquidation of the
Company or any such Significant Subsidiary (except any decree or order
approving or ordering the winding up or liquidation of the affairs of
a Significant Subsidiary pursuant to a plan under which the assets and
operations of such Significant Subsidiary are transferred to or
combined with another Subsidiary or Subsidiaries of the Company or to
the Company); and such order or decree shall continue unstayed and in
effect for 60 consecutive days; or any similar relief is granted under
any foreign laws and the order or decree stays in effect for 60
consecutive days; or
(h) any other Event of Default provided with respect to Debt
Securities of that series;
then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d), (e), (f) (other than with respect to the Company), (g)
(other than with respect to the Company) or (h) with respect to Debt Securities
of that series at the time Outstanding occurs and is continuing, unless the
principal of and interest on all the Debt Securities of that series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Debt Securities of that series
(each such series voting as a separate class) then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by Holders), may
declare the principal of (or, if the Debt Securities of that series are
Original Issue Discount Debt Securities, such portion of the principal amount
as may be specified in the terms of that series) and interest on all the Debt
Securities of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debt Securities of that series contained
to the contrary notwithstanding. If an Event of Default described in clause
(f) or (g) (in each case with respect to the Company) occurs, then and in each
and every such case, unless the principal of and interest on all the Debt
Securities shall have become due and payable, the principal of (or, if any Debt
Securities are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms thereto) and interest on all
the Debt Securities then Outstanding hereunder shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders, anything in this Indenture or in
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the Debt Securities contained to the contrary notwithstanding.
The Holders of a majority in principal amount of the Debt
Securities of a particular series by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree already rendered and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. Upon any such rescission, the parties
hereto shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the parties hereto shall
continue as though no such proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee or such
Holder, then and in every such case the parties hereto shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the parties hereto shall continue as though no such
proceeding had been taken.
The foregoing Events of Default shall constitute Events of
Default whatever the reason for any such Event of Default and whether it is
voluntary or involuntary or is 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.
The Company shall deliver to the Trustee promptly after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (d), (e) or (h), its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Collection of Indebtedness by Trustee, etc. If
an Event of Default occurs and is continuing, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection of the sums so
due and unpaid or enforce the performance of any provision of the Debt
Securities of the affected series or this Indenture, and may prosecute any
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such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor upon the
Debt Securities of such series (and collect in the manner provided by law out
of the property of the Company or any other obligor upon the Debt Securities of
such series wherever situated the moneys adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor upon the Debt
Securities of any series under Title 11 of the United States Code or any other
Federal or State bankruptcy, insolvency or similar law, or in case a receiver,
trustee or other similar official shall have been appointed for its property,
or in case of any other similar judicial proceedings relative to the Company
upon the Debt Securities of any series, its creditors or its property, the
Trustee, irrespective of whether the principal of Debt Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 6.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove
a claim or claims for the whole amount of principal, premium, if any, and
interest (or, if the Debt Securities of such series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in
the terms of such series) owing and unpaid in respect of the Debt Securities of
such series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith) and of
the Holders thereof allowed in any such judicial proceedings relative to the
Company upon the Debt Securities of such series, its creditors or its property,
and to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute all amounts received with respect to the
claims of such Holders and of the Trustee on their behalf, and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by
each of such Holders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to such Holders,
to pay to the Trustee such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents, attorneys and counsel, and all other
reasonable expenses and
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54
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith.
All rights of action and of asserting claims under this
Indenture, or under any of the Debt Securities of any series, may be enforced
by the Trustee without the possession of any such Debt Securities, or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment (except
for any amounts payable to the Trustee pursuant to Section 7.06) shall be for
the ratable benefit of the Holders of all the Debt Securities in respect of
which such action was taken.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 6.03. Application of Moneys Collected by Trustee.
Any moneys or other property collected by the Trustee pursuant to Section 6.02
with respect to Debt Securities of any series shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys or other property, upon presentation of the several Debt Securities
of such series in respect of which moneys or other property have been
collected, and the notation thereon of the payment, if only partially paid, and
upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant
to Section 7.06;
SECOND: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall
not have become due, to the payment of interest on the Debt Securities
of such series in the order of the maturity of the installments of
such interest, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue installments of
interest at the rate or Yield to Maturity (in the case of Original
Issue
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Discount Debt Securities) borne by the Debt Securities of such series,
such payments to be made ratably to the Persons entitled thereto,
without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall
have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Debt Securities of such
series for principal and premium, if any, and interest, with interest
on the overdue principal and premium, if any, and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest at the rate or Yield to Maturity (in the case
of Original Issue Discount Debt Securities) borne by the Debt
Securities of such series; and, in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon
the Debt Securities of such series, then to the payment of such
principal and premium, if any, and interest, without preference or
priority of principal and premium, if any, over interest, or of
interest over principal and premium, if any, or of any installment of
interest over any other installment of interest, or of any Debt
Security of such series over any Debt Security of such series, ratably
to the aggregate of such principal and premium, if any, and interest;
and
FOURTH: The remainder, if any, shall be paid to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled
to receive the same, or as a court of competent jurisdiction may
direct.
The Trustee may, but shall not be obligated to, fix a record
date and payment date for any payment to Holders pursuant to this Section 6.03.
At least 15 days before such record date, the Company shall mail to each Holder
and the Trustee a notice that states the record date, the payment date and
amount to be paid.
SECTION 6.04. Limitation on Suits by Holders. No Holder of
any Debt Security of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at law
or in equity or in bankruptcy or otherwise, upon or under or with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
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Trustee written notice of an Event of Default with respect to Debt Securities of
that same series and of the continuance thereof and unless the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
of that series (each such series voting as a separate class) shall have made
written request upon the Trustee to institute such action or proceedings in
respect of such Event of Default in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceedings and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 6.06; it being understood and intended, and being
expressly covenanted by the Holder of every Debt Security with every other
Holder and the Trustee, that no one or more Holders shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any Holders, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all such Holders. For the protection and
enforcement of the provisions of this Section 6.04, each and every Holder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provision in this Indenture,
however, the right of any Holder of any Debt Security to receive payment of the
principal of, and premium, if any, and (subject to Section 2.12) interest on,
such Debt Security, on or after the respective due dates expressed or provided
for in such Debt Security, and to institute suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.05. Remedies Cumulative; Delay or Omission in
Exercise of Rights Not a Waiver of Default. All powers and remedies given by
this Article VI to the Trustee or to the Holders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the Holders, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any Holder to exercise any
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57
right or power accruing upon any Default occurring and continuing as aforesaid,
shall impair any such right or power, or shall be construed to be a waiver of
any such Default or an acquiescence therein; and, subject to the provisions of
Section 6.04, every power and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.
SECTION 6.06. Rights of Holders of Majority in Principal
Amount of Debt Securities to Direct Trustee and to Waive Default. The Holders
of a majority in aggregate principal amount of the Debt Securities of any
series at the time Outstanding shall have the right to direct the time, method,
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture, and that subject to the provisions of Section 7.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel shall determine that the action so directed may not
lawfully be taken, or if the Trustee shall by a Responsible Officer or officers
determine that the action so directed would involve it in personal liability or
would be unjustly prejudicial to Holders of Debt Securities of such series not
taking part in such direction; and provided further, however, that nothing in
this Indenture contained shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by such Holders. Prior to the acceleration of the maturity of the
Debt Securities of any series, as provided in Section 6.01, the Holders of a
majority in aggregate principal amount of the Debt Securities of that series at
the time Outstanding may on behalf of the Holders of all the Debt Securities of
that series waive any past Default or Event of Default and its consequences for
that series specified in the terms thereof as contemplated by Section 2.03,
except (i) a Default in the payment of the principal of, and premium, if any,
or interest on, any of the Debt Securities or in the making of any sinking fund
payment and (ii) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Holder affected thereby. In case
of any such waiver, such Default shall cease to exist, any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture, and the Company, the Trustee and the Holders of the Debt Securities
of that series shall be restored to their former positions and
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rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.07. Trustee to Give Notice of Defaults Known to It, but May
Withhold Such Notice in Certain Circumstances. The Trustee shall, within 90 days
after the occurrence of a Default known to it with respect to a series of Debt
Securities, give to the Holders thereof, in the manner provided in Section
12.03, notice of all Defaults with respect to such series known to the Trustee,
unless such Defaults shall have been cured or waived before the giving of such
notice; provided that, except in the case of Default in the payment of the
principal of, or premium, if any, or interest on, any of the Debt Securities of
such series or in the making of any sinking fund payment with respect to the
Debt 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 committee of directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
thereof.
SECTION 6.08. Requirement of an Undertaking To Pay Costs in Certain
Suits under the Indenture or Against the Trustee. All parties to this Indenture
agree, and each Holder of any Debt 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 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 in the manner and to the extent provided in the Trust Indenture Act, 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 6.08 shall not
apply 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 Debt Securities of that 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 Debt Security on or after the due date
for such payment expressed in such Debt Security.
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ARTICLE VII
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that:
(a) this subsection shall not be construed to limit the effect of the
first paragraph of this Section 7.01;
(b) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all Events
of Default with respect to such series which may have occurred:
(1) the duties and obligations of the Trustee with respect to
Debt Securities of any series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations with
respect to such series as are specifically set forth in this
Indenture, and no implied covenants or obligations with respect to
such series shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
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
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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;
(c) the Trustee shall not be liable for an 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; and
(d) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it with respect to Debt Securities of any series
in good faith in accordance with the direction of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Debt
Securities of that series 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 Debt Securities of such series.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 7.02. Certain Rights of Trustee. Except as otherwise provided
in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note 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, direction, order or demand of the Company mentioned
herein shall be sufficiently
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evidenced by a Company Order (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified by
the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection, and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Debt Securities of any series pursuant
to the provisions of this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, 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, approval or other paper or
document, unless requested in writing to do so by the Holders of a majority
in aggregate principal amount of the then Outstanding Debt Securities of a
series affected by such matter; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is not, in the opinion of the Trustee, reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as
a condition to so proceeding. The reasonable expense of every such
investigation shall be paid by the Company
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or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder;
(h) if any property other than cash shall at any time be subject to a
Lien in favor of the Holders, the Trustee, if and to the extent authorized
by a receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such lien, shall be
entitled, but not required, to make advances for the purpose of preserving
such property or of discharging tax Liens or other prior Liens or
encumbrances thereon; and
(i) The Trustee shall not be charged with knowledge of any Event of
Default under Section 6.01(e) or of the identity of any Significant
Subsidiary unless either (a) a Responsible Officer of the Trustee assigned
to its Corporate Trustee Administration Department shall have actual
knowledge thereof or (b) the Trustee shall have received written notice
thereof in accordance with Section 12.03 from the Company or any Registered
Holder.
SECTION 7.03. Trustee Not Liable for Recitals in Indenture or in Debt
Securities. The recitals contained herein, in the Debt Securities (except the
Trustee's certificate of authentication) shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Debt Securities of any series, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Debt Securities and perform its obligations hereunder, and that
the statements made by it or to be made by it in a Statement of Eligibility on
Form T-1 supplied to the Company are true and accurate. The Trustee shall not be
accountable for the use or application by the Company of any of the Debt
Securities or of the proceeds thereof.
SECTION 7.04. Trustee, Paying Agent or Registrar May Own Debt
Securities. The Trustee or any paying agent or
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63
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debt Securities and subject to the provisions of the Trust Indenture
Act relating to conflicts of interest and preferential claims may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
paying agent or Registrar.
SECTION 7.05. Moneys Received by Trustee to Be Held in Trust. Subject
to the provisions of Section 11.05, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any moneys received by it hereunder. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such moneys shall
be paid from time to time to the Company upon a Company Order.
SECTION 7.06. Compensation and Reimbursement. The Company covenants
and agrees to pay in Dollars to the Trustee such compensation as the Company and
the Trustee from time to time agree in writing for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and, except as otherwise
expressly provided herein, the Company will pay or reimburse in Dollars the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents, attorneys and counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advances as
may arise from its negligence, willful misconduct or bad faith. The Company also
covenants to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, wilful
misconduct or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this trust or trusts
hereunder, including the reasonable costs and expenses of defending itself
against any claim of liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligations of the Company under this
Section 7.06 to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture. The Company and the Holders agree that such additional indebtedness
shall be
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secured by a Lien prior to that of the Debt 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, and premium, if any, or interest on, particular
Debt Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other similar
law.
SECTION 7.07. Right of Trustee to Rely on an Officers' Certificate
Where No Other Evidence Specifically Prescribed. Except as otherwise provided in
Section 7.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
SECTION 7.08. Separate Trustee; Replacement of Trustee. The Company
may, but need not, appoint a separate Trustee for any one or more series of Debt
Securities. The Trustee may resign with respect to one or more or all series of
Debt Securities at any time by giving notice to the Company. The Holders of a
majority in principal amount of the Debt Securities of a particular series may
remove the Trustee for such series and only such series by so notifying the
Trustee and may appoint a successor Trustee. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property;
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(4) the Trustee otherwise becomes incapable of acting; or
(5) the Trustee consolidates, merges or converts, or transfers its
assets as set forth in Section 7.09; provided that (a) the Company delivers
written notice of its intention to replace the Trustee to the resulting,
surviving or transferee corporation within five calendar days after the
Company receives notice from the Trustee pursuant to Section 7.09 of the
occurrence of such consolidation, merger or conversion, or transfer and (b)
during the period of time from and including the effective date of such
consolidation, merger or conversion, or transfer through and including the
date that the Company delivers written notice pursuant to clause (a) above
and removes the Trustee, there exists no Event of Default or Default.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Debt Securities of a particular series
and, in the latter case, such Holders do not reasonably promptly appoint a
successor Trustee, or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Company shall promptly appoint a successor Trustee. No resignation
or removal of the Trustee and no appointment of a successor Trustee shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Debt Securities of each applicable series. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided for in Section 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring Trustee
or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.
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If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series permitted to do so pursuant to the Trust
Indenture Act may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee for the Debt
Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.06 shall continue for
the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor
trustee with respect to the Debt Securities of one or more series, the Company,
any retiring Trustee and each successor or separate Trustee with respect to the
Debt Securities of any applicable series shall execute and deliver an Indenture
supplemental hereto (1) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of any retiring Trustee with respect to the Debt Securities of any series as to
which any such retiring Trustee is not retiring shall continue to be vested in
such retiring Trustee and (2) that 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 same trust and that each such
separate, retiring or successor Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee unless the
Company provides written notice to and removes such resulting, surviving or
transferee corporation in accordance with Section 7.08(5). The Trustee shall
provide written notice to the Company of such consolidation, merger or
conversion, or transfer promptly after the occurrence thereof, but in no event
later than five calendar days thereafter. Such notice shall include the
effective date of such consolidation, merger or conversion, or transfer.
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In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such Debt
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debt Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the Trust Indenture Act. The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. No obligor upon
the Debt Securities of a particular series or Person directly or indirectly
controlling, controlled by or under common control with such obligor shall serve
as Trustee upon the Debt Securities of such series. The Trustee shall comply
with Section 310(b) of the Trust Indenture Act, subject to the penultimate
paragraph thereof; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act this Indenture or any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
SECTION 7.12. Compliance with Tax Laws. The Trustee hereby agrees to
comply with all United States Federal income tax information reporting and
withholding requirements applicable to it with respect to payments of premium
(if any) and interest on the Debt Securities,
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whether acting as Trustee, Security Registrar, paying agent or otherwise with
respect to the Debt Securities.
ARTICLE VIII
Concerning the Holders
SECTION 8.01. Evidence of Action by Holders. Whenever in this
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Debt Securities of any or all series may take action
(including the making of any demand or request, the giving of any direction,
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the Holders of such specified percentage have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by Holders in Person or by agent or proxy appointed in
writing.
SECTION 8.02. Proof of Execution of Instruments and of Holding of Debt
Securities. Subject to the provisions of Sections 7.01, 7.02 and 12.09, proof of
the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with the provisions of this Article VIII.
The fact and date of the execution of any such instrument or proxy, or
the authority of the Person executing the same, may be proved in any manner
which the Trustee deems sufficient.
The ownership of Registered Securities of any series shall be proved
by the Debt Security Register or by a certificate of the Registrar for such
series.
SECTION 8.03. Who May Be Deemed Owner of Debt Securities. Prior to due
presentment for registration of transfer of any Registered Security, the
Company, the Trustee, any paying agent and any Registrar may deem and treat the
Person in whose name any Registered Security shall be registered upon the books
of the Company as the absolute owner of such Registered Security (whether or not
such Registered Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of and premium, if any, and (subject to Section
2.12) interest on such Registered Security and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Registrar shall
be affected by
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any notice to the contrary; and all such payments so made to any such Holder for
the time being, or upon his order, shall be valid and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Registered Security.
SECTION 8.04. Instruments Executed by Holders Bind Future Holders;
Record Dates. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any action by the Holders
of the percentage in aggregate principal amount of the Debt Securities of any
series specified in this Indenture in connection with such action and subject to
the following paragraph, any Holder of a Debt Security which is shown by the
evidence to be included in the Debt Securities the Holders of which have
consented to such action may, by filing written notice with the Trustee at its
Corporate Trust Office and upon proof of holding as provided in Section 8.02,
revoke such action so far as concerns such Debt Security. Except as aforesaid
any such action taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such Debt
Security and of any Debt Security issued upon registration of transfer thereof
or in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Debt Security or such other Debt
Securities. Any action taken by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the Holders of all the Securities of such series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Registered Securities of any series
entitled to give their consent or take any other action required or permitted to
be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders of Registered Securities at the close of business on such record date
(or their duly designated proxies), and only those Persons, (i) shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders of
Registered Securities after such record date and (ii) shall be taken into
account for the purpose of determining whether Holders of the requisite
proportion of Debt Securities of such series Outstanding have authorized or
agreed or consented to such action, and for that purpose the Debt Securities of
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such series Outstanding shall be computed as of such record date. No such
consent shall be valid or effective for more than 120 days after such record
date unless the consent of the Holders of the percentage in aggregate principal
amount of the Debt Securities of such series specified in this Indenture shall
have been received within such 120-day period.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Purposes for Which Supplemental Indenture May Be Entered
into Without Consent of Holders. The Company, when authorized by a resolution of
the Board of Directors, and the Trustee may from time to time and at any time,
without the consent of Holders, enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof) for one or more
of the following purposes:
(a) to evidence the succession pursuant to Article X of another Person
to the Company, or successive successions, and the assumption by the
Successor Company (as defined in Section 10.01) of the covenants,
agreements and obligations of the Company in this Indenture and in the Debt
Securities;
(b) to surrender any right or power herein conferred upon the Company,
to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of
all or any series of Debt Securities (and if such covenants are to be for
the benefit of less than all series of Debt Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) as the Board of Directors shall consider to be for the protection
of the Holders of such Debt Securities, and to make the occurrence, or the
occurrence and continuance, of a Default in any of such additional
covenants, restrictions, conditions or provisions a Default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
Indenture may provide for a particular period of grace after Default (which
period may be shorter or longer than that allowed in
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the case of other Defaults) or may provide for an immediate enforcement
upon such Default or may limit the remedies available to the Trustee upon
such Default or may limit the right of the Holders of a majority in
aggregate principal amount of any or all series of Debt Securities to waive
such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein, in any supplemental Indenture or in any Debt Securities
of any series that may be defective or inconsistent with any other
provision contained herein, in any supplemental Indenture or in the Debt
Securities of such series;
(d) to modify or amend this Indenture in such a manner as to permit
the qualification of this Indenture or any Indenture supplemental hereto
under the Trust Indenture Act as then in effect, except that nothing herein
contained shall permit or authorize the inclusion in any Indenture
supplemental hereto of the provisions referred to in Section 316(a)(2) of
the Trust Indenture Act;
(e) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not adversely affect the
interests of any Holders of Debt Securities of any series;
(f) to add Guarantees with respect to the Debt Securities or to secure
the Debt Securities;
(g) to make any change that does not adversely affect the rights of
any Holder;
(h) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise
permitted under this Section 9.01 shall (i) neither (A) apply to any Debt
Security of any series created prior to the execution of such supplemental
Indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Debt Security with respect to such
provision or (ii) shall become effective only when there is no such Debt
Security Outstanding;
<PAGE> 81
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(i) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
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; and
(j) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.03.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental Indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
Indenture which adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the consent
of the Holders of any of the Debt Securities at the time Outstanding,
notwithstanding any of the provisions of Section 9.02.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected thereby
a notice briefly describing such amendment. The failure to give such notice to
all such Holders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.01.
SECTION 9.02. Modification of Indenture with Consent of Holders of
Debt Securities. Without notice to any Holder but with the consent (evidenced as
provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture, the Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental
<PAGE> 82
73
Indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of such series; provided, that no such supplemental Indenture,
without the consent of the Holders of each Debt Security so affected, shall (i)
reduce the percentage in principal amount of Debt Securities of any series whose
Holders must consent to an amendment; (ii) reduce the rate of or extend the time
for payment of interest on any Debt Security; (iii) reduce the principal of or
extend the Stated Maturity of any Debt Security; (iv) reduce the premium payable
upon the redemption of any Debt Security or change the time at which any Debt
Security may or shall be redeemed in accordance with Article III; (v) make any
Debt Security payable in Currency other than that stated in the Debt Security;
(vi) release any security that may have been granted in respect of the Debt
Securities; or (vii) make any change in Section 6.06 or this Section 9.02.
A supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of Debt Securities or which
modifies the rights of the Holders of Debt 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 Debt Securities of any other
series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors authorizing the execution of any such supplemental
Indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental Indenture unless such supplemental Indenture adversely
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected thereby
a notice briefly describing such amendment. The failure to give such notice
<PAGE> 83
74
to all such Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.02.
SECTION 9.03. Effect of Supplemental Indentures. Upon the execution of
any supplemental Indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.
SECTION 9.04. Debt Securities May Bear Notation of Changes by
Supplemental Indentures. Debt Securities of any series authenticated and
delivered after the execution of any supplemental Indenture pursuant to the
provisions of this Article IX 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. New Debt Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental Indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Debt Securities of such series then Outstanding.
Failure to make the appropriate notation or to issue a new Debt Security of such
series shall not affect the validity of such amendment.
<PAGE> 84
75
ARTICLE X
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Consolidations and Mergers of the Company. The Company
shall not consolidate with or merge with or into any Person, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all its assets (in
one transaction or a series of related transactions), unless: (i) either (a) the
Company shall be the continuing Person in the case of a merger or (b) the
resulting, surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing under the
laws of the United States, any State thereof or the District of Columbia and the
Successor Company shall expressly assume, by an Indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Debt Securities according to their
tenor, and this Indenture; (ii) immediately after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary of the Company as a result of such
transaction as having been incurred by the Successor Company or such Subsidiary
at the time of such transaction), no Default or Event of Default would occur or
be continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer, lease or other disposition and such
supplemental Indenture (if any) comply with this Indenture.
SECTION 10.02. Rights and Duties of Successor Corporation. In case of
any consolidation or merger, or conveyance or transfer (other than by way of
lease) of all or substantially all the assets of the Company in accordance with
Section 10.01, the Successor Company shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the Company, and
the predecessor corporation shall be relieved of any further obligation under
the Indenture and the Debt Securities. The Successor Company thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of the Successor Company, instead of the Company, and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Debt Securities which
previously shall have been signed
<PAGE> 85
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and delivered by the officers of the Company to the Trustee for authentication,
and any Debt Securities which the Successor Company thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Debt Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all such Debt Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities thereafter to be issued as may be appropriate.
ARTICLE XI
Satisfaction and Discharge of Indenture; Defeasance;
Unclaimed Moneys
SECTION 11.01. Applicability of Article. If, pursuant to Section 2.03,
provision is made for the defeasance of Debt Securities of a series and if the
Debt Securities of such series are denominated and payable only in Dollars
(except as provided pursuant to Section 2.03), then the provisions of this
Article XI relating to defeasance of Debt Securities shall be applicable except
as otherwise specified pursuant to Section 2.03 for Debt Securities of such
series. Defeasance provisions, if any, for Debt Securities denominated in a
Foreign Currency may be specified pursuant to Section 2.03.
SECTION 11.02. Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancellation all Debt Securities of any series theretofore authenticated and
delivered (other than (1) any Debt Securities of such series which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.09 and (2) Debt Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 11.05) or (ii) all Debt Securities of such series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
<PAGE> 86
77
deposit with the Trustee as trust funds the entire amount in the Currency in
which such Debt Securities are denominated (except as otherwise provided
pursuant to Section 2.03) sufficient (in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee) without consideration of any reinvestment and
after payment of all taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay at maturity or upon redemption all Debt
Securities of such series not theretofore delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due on such date of maturity or redemption date, as the case may be, no
default with respect to the Debt Securities has occurred and is continuing on
the date of such deposit, such deposit does 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 and the Company delivers an Officers'
Certificate and an Opinion of Counsel each stating that such conditions have
been complied with and if in either case the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of such Debt Securities herein expressly
provided for and rights to receive payments of principal of, and premium, if
any, and interest on, such Debt Securities) with respect to the Debt Securities
of such series, and the Trustee, on demand of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Company at any
time may terminate, with respect to Debt Securities of a particular series, (i)
all its obligations under the Debt Securities of such series and this Indenture
with respect to the Debt Securities of such series ("legal defeasance option")
or (ii) its obligations with respect to the Debt Securities of such series under
Sections 4.07 and 4.08 and clause (iii) of Section 10.01 and the related
operation of Section 6.01(d) (to the extent Section 6.01(d) requires the
delivery by the Company to the Trustee of the Officers' Certificate and Opinion
of Counsel described in Section 10.01(iii)) and the operation of Sections
6.01(e) (to the extent it relates to Section 4.07 or 4.08), (f) (with respect to
Significant Subsidiaries only) and (g) (with respect to Significant Subsidiaries
only) ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
<PAGE> 87
78
If the Company exercises its legal defeasance option, payment of the
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Sections 6.01(d) (to the extent
Section 6.01(d) requires the delivery by the Company to the Trustee of the
Officers' Certificate and Opinion of Counsel described in Section 10.01(iii)),
(e) (to the extent it relates to Section 4.07 or 4.08), (f) (with respect to
Significant Subsidiaries only) and (g) (with respect to Significant Subsidiaries
only).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's obligations in Sections
2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05, 11.06 and 11.07 shall survive
until the Debt Securities of the defeased series have been paid in full.
Thereafter, the Company's obligations in Sections 7.06, 11.05 and 11.06 shall
survive.
SECTION 11.03. Conditions of Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to Debt
Securities of a particular series only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of, and
premium, if any, and interest on, the Debt Securities of such series to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay the principal, premium, if any,
and interest when due on all the Debt Securities of such series to maturity
or redemption, as the case may be;
<PAGE> 88
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(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.01(f) or (g) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the event of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of Debt
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(8) in the event of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Debt Securities of such series will not recognize income, gain
or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Debt Securities of such series as
contemplated by this Article XI have been complied with.
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Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of such series
at a future date in accordance with Article III.
SECTION 11.04. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities of the defeased series.
SECTION 11.05. Repayment to Company. The Trustee and any paying agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors and all liability of the Trustee or such paying
agent with respect to such money shall thereupon cease.
SECTION 11.06. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 11.07. Reinstatement. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
<PAGE> 90
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ARTICLE XII
Miscellaneous Provisions
SECTION 12.01. Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company or the Trustee shall bind its
successors and assigns, whether so expressed or not.
SECTION 12.02. Acts of Board, Committee or Officer of Successor
Company Valid. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any Successor Company.
SECTION 12.03. Required Notices or Demands. Except as otherwise
expressly provided in this Indenture, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on the Company may be given or served by
being deposited postage prepaid in a post office letter box in the United States
addressed (until another address is filed by the Company with the Trustee) as
follows: The Sherwin-Williams Company, 101 Prospect Avenue, N.W., Cleveland,
Ohio 44115, Attention: Chief Financial Officer. Except as otherwise expressly
provided in this Indenture, any notice, direction, request or demand by the
Company or by any Holder to or upon the Trustee may be given or made, for all
purposes, by being deposited postage prepaid in a post office letter box in the
United States addressed to the Corporate Trust Office of the Trustee initially
at 450 West 33rd Street, New York, New York 10001. The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice required or permitted to a Registered Holder by the Company
or the Trustee pursuant to the provisions of this Indenture shall be deemed to
be properly mailed by being deposited postage prepaid in a post office letter
box in the United States addressed to such Holder at the address of such Holder
as shown on the Debt Security Register. Any report pursuant to Section 313 of
the Trust Indenture Act shall be transmitted in compliance with subsection (c)
therein.
<PAGE> 91
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Any notice to Holders of Floating Rate Debt Securities regarding the
determination of a periodic rate of interest, if such notice is required
pursuant to Section 2.03, shall be sufficiently given if given in the manner
specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect the sufficiency of such notice with respect to other
Holders. If a notice or communication is mailed in the manner provided above, it
is conclusively presumed duly given.
SECTION 12.04. Indenture and Debt Securities to Be Construed in
Accordance with the Laws of the State of New York. This Indenture and each Debt
Security shall be deemed to be New York contracts, and for all purposes shall be
construed in accordance with the laws of said State (without reference to
principles of conflicts of law).
SECTION 12.05. Officers' Certificate and Opinion of Counsel to be
Furnished upon Application or Demand by the Company. Upon any application or
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition, (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (3) a statement that, in the opinion of
<PAGE> 92
83
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (4) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
SECTION 12.06. Payments Due on Legal Holidays. In any case where the
date of maturity of interest on or principal of and premium, if any, on the Debt
Securities of a series or the date fixed for redemption or repayment of any Debt
Security or the making of any sinking fund payment shall not be a Business Day
at any Place of Payment for the Debt Securities of such series, then payment of
interest or principal and premium, if any, or the making of such sinking fund
payment need not be made on such date at such Place of Payment, 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 date of maturity or the date fixed for redemption
or repayment or for the making of any sinking fund payment, and no interest
shall accrue for the period after such date. If a record date is not a Business
Day, the record date shall not be affected.
SECTION 12.07. Provisions Required by Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture which is required to
be included in this Indenture by any of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such required provision shall control.
SECTION 12.08. Computation of Interest on Debt Securities. Interest,
if any, on the Debt Securities shall be computed on the basis of a 360-day year
of twelve 30-day months, except as may otherwise be provided pursuant to Section
2.03.
SECTION 12.09. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.
SECTION 12.10. No Recourse Against Others. An incorporator or any
past, present or future director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Debt Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Debt
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Security, each Holder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Debt Securities.
SECTION 12.11. Severability. In case any provision in this Indenture
or the Debt Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.12. Effect of Headings. The article and section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 12.13. Indenture May Be Executed in Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
The Trustee hereby accepts the trusts in this Indenture upon the terms
and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed as of the date first written above.
THE SHERWIN-WILLIAMS COMPANY,
by
------------------------------
Name:
Title:
CHEMICAL BANK,
by
------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(b)-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Registered THE SHERWIN-WILLIAMS COMPANY Registered
No. MEDIUM-TERM NOTE, Series A CUSIP
(Fixed Rate Note)
Original Issue Date: Total Amount of OID:
Principal Amount: Yield to Maturity:
Issue Price: Initial Accrual Period OID:
Maturity Date:
Optional Extension
of Maturity Date:
Manner in which Interest Specified Currency:
Rate may be changed
prior to Maturity Date:
Interest Rate: Interest Payment Dates:
Regular Record Date:
Repayment at Option Redemption at Option
of Holders: of the Company:
Repayment Date(s) Redemption Date(s)
Repayment Price(s) Redemption Price(s)
Other Provisions:
If applicable, the "Total Amount of OID", "Yield to Maturity" and
"Initial Accrual Period OID" (computed under the appropriate method) below will
be completed solely for the purposes of applying the United States Federal
income tax original issue discount ("OID") rules.
<PAGE> 2
2
This Note is a registered Note of THE SHERWIN- WILLIAMS COMPANY, an
Ohio corporation (together with its successors, if any, the "Company"). This
Note is one of a series of Securities (as defined on the reverse hereof) issued
under the Indenture referred to on the reverse hereof designated as Medium-Term
Notes, Series A (the "Notes"). Subject to the provisions hereof, the Company,
for value received, hereby promises to pay to
, or registered assigns, the Principal Amount set forth on the
face hereof on the Maturity Date shown above and to pay the premium, if any, and
interest, if any, thereon, as described on the reverse hereof.
The principal of (and premium, if any) and interest, if any, on this
Note are payable by the Company in such coin or currency specified on the face
hereof as at the time of payment shall be legal tender for the payment of public
and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE 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 manually
executed by or on behalf of the Trustee under the Indenture, this Note shall not
be entitled to any benefits under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, THE SHERWIN-WILLIAMS COMPANY has caused this Note
to be signed in its name by its Chairman of the Board, its Vice Chairman, its
President or a Vice President (or any other officer performing similar
functions), and by its Treasurer, Secretary, an Assistant Treasurer or an
Assistant Secretary (or any other officer performing similar functions), or by
facsimiles of any of their signatures, and its corporate seal, or a facsimile
thereof, to be hereto affixed.
THE SHERWIN-WILLIAMS COMPANY
Dated: By:
----------------------- ----------------------------
[Seal] By:
----------------------------
<PAGE> 3
3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHEMICAL BANK,
as Trustee
By:
Authorized Officer
<PAGE> 4
4
[REVERSE OF FIXED RATE MEDIUM-TERM NOTE, Series A]
THE SHERWIN-WILLIAMS COMPANY
Medium-Term Note, Series A
1. This Note is one of the duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness (hereinafter called the "Securities")
of the Company, of the series hereinafter specified, all issued or to be issued
under and pursuant to the Indenture dated as of February 1, 1996 (the
"Indenture"), between the Company and Chemical Bank (the "Trustee"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, obligations and
duties thereunder of the Trustee and any agent of the Trustee, any Paying Agent
for this Note, the Company and the Holders of the Securities and the terms upon
which the Securities are issued and are to be authenticated and delivered.
The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as provided or permitted
in the Indenture. This Note is one of the series of Securities of the Company
issued pursuant to the Indenture designated as the Medium-Term Notes, Series A
(herein called the "Notes"), limited in aggregate principal amount to
$450,000,000. The Notes of this series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, and may otherwise vary, all as provided in the
Indenture.
2. A. The regular record date ("Regular Record Date") with respect to
any Interest Payment Date (as defined below) shall be the applicable date
specified as such on the face hereof (whether or not such date shall be a
Business Day (as defined below)) immediately preceding such Interest Payment
Date. Interest 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 a Note is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date; provided,
<PAGE> 5
5
however, that interest payable on the Maturity Date (as set forth on the face
hereof) or upon redemption or repayment will be paid to the Person to whom
principal shall be payable; provided further that the first payment of interest
on any Note with an Original Issue Date (as set forth on the face hereof)
between a Regular Record Date and an Interest Payment Date or on an Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered owner of said Note on such next
succeeding Regular Record Date. "Business Day" means any day, other than a
Saturday or Sunday, that is not a legal holiday or a day on which banking
institutions are authorized or required by law, regulation or executive order to
be closed in (a) The City of New York or (b) if the Specified Currency (as set
forth on the face hereof) is other than U.S. dollars, the financial center of
the country issuing such Specified Currency (which, in the case of ECU, shall be
Brussels, Belgium).
In connection with any calculations of the rate of interest hereon,
all percentages will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001) (with five one-millionths of a percentage point being rounded upward)
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).
B. The Company promises to pay interest on the principal amount at the
rate per annum shown on the face hereof until the principal amount hereof is
paid or made available for payment or upon earlier redemption or repayment. The
Company will pay interest semiannually on the Interest Payment Dates set forth
on the face hereof (each such date an "Interest Payment Date"), commencing with
the first Interest Payment Date following the Original Issue Date shown on the
face hereof and on the Maturity Date; provided, however, that the first payment
of interest on any Note originally issued between a Regular Record Date and an
Interest Payment Date or on an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered owner on such next Regular Record Date. Interest shall accrue from
and including the most recent Interest Payment Date or, if no interest has been
paid or duly provided for, from and including the Original Issue Date shown on
the face hereof, to but excluding the Interest Payment Date. The amount of such
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. If an Interest Payment Date with respect
to a Note
<PAGE> 6
6
would otherwise be a day that is not a Business Day, such Interest Payment Date
shall not be postponed; provided, however, that any payment required to be made
in respect of such Note on a date (including the day of Stated Maturity) that is
not a Business Day for such Note need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
such date, and no additional interest shall accrue as a result of such delayed
payment.
3. A. The principal of and any premium and interest on a Note are
payable by the Company in the Specified Currency for such Note. If the Specified
Currency for a Note is other than U.S. dollars, the Company will (unless
otherwise specified on the face hereof) arrange to convert all payments in
respect of such Note into U.S. dollars in the manner set forth on the face
hereof.
B. Unless otherwise specified on the face hereof, U.S. dollar payments
of interest on Notes (other than interest payable at Stated Maturity, on
redemption or on repayment) will be made, except as provided below, by check
mailed to the Holders of such Notes (which, in the case of Global Securities,
will be a nominee of the Depositary); provided, however, that, in the case of a
Note issued between a Regular Record Date and the related Interest Payment Date,
unless otherwise specified on the face hereof, interest for the period beginning
on the Original Issue Date for such Note and ending on such Interest Payment
Date shall be paid on the next succeeding Interest Payment Date to the Holder of
such Note on the related Regular Record Date. A Holder of $10,000,000 (or the
equivalent thereof in a Specified Currency other than U.S. dollars) or more in
aggregate principal amount of Notes of like tenor and terms shall be entitled to
receive such U.S. dollar interest payments by wire transfer of immediately
available funds, but only if appropriate wire transfer instructions have been
received in writing by the Paying Agent not later than 15 calendar days prior to
the applicable Interest Payment Date. Simultaneously with the election by any
Holder provided on the face hereof to receive payments in a Specified Currency
other than U.S. dollars, such Holder shall provide appropriate wire transfer
instructions to the Trustee. Unless otherwise specified on the face hereof,
principal and any premium and interest payable at the Stated Maturity, on
redemption or repayment of a Note will be paid in immediately available funds
upon surrender of such Note at the corporate trust office or agency of the
Paying Agent in
<PAGE> 7
7
The City of New York, such interest being paid to the person to whom principal
is payable.
C. Initially, Chemical Bank will be the Paying Agent and the Registrar
with respect to the Notes. The Company reserves the right at any time to vary or
terminate the appointment of any Paying Agent or Registrar and to appoint
additional or other Paying Agents and additional or other Registrars and to
approve any change in the office through which any Paying Agent or Registrar
acts, provided that there will at all times be a Paying Agent and Registrar in
The City of New York.
4. If specified on the face hereof, this Note may be redeemed, as a
whole or from time to time in part, at the option of the Company, on not less
than 30 nor more than 60 days' notice given as provided in the Indenture, on any
redemption date(s) and at the related redemption price(s) set forth on the face
hereof, together with any accrued interest to the date of redemption. The
redemption price(s) are expressed as a percentage of the principal amount of
this Note. If no such redemption date is set forth on the face hereof, this Note
may not be so redeemed pursuant to this Section 4. If less than all the Notes
are to be redeemed, the Trustee shall select the Notes or portions thereof (in
multiples of $1,000) to be redeemed by lot or by such other method as the
Trustee considers fair and appropriate. In any case where more than one Note is
registered in the same name, the Trustee, in its discretion, may treat the
aggregate principal amount so registered as if it were represented by one Note.
The Trustee shall promptly notify the Company in writing of the Notes selected
for redemption and, in the case of any Notes selected for partial redemption,
the principal amount thereof to be redeemed. If any Note called for redemption
shall not be so paid upon surrender thereof on such redemption date, the
principal, premium, if any, and interest shall bear interest until paid from the
redemption date at the rate borne or provided for by such Notes.
5. If specified on the face hereof, this Note will be subject to
repayment at the option of the Holder hereof on the repayment date(s) and at the
related repayment price(s) set forth on the face hereof. The repayment price(s)
are expressed as a percentage of the principal amount of this Note. If no such
repayment date is set forth on the face hereof, this Note may not be so repaid.
On each repayment date, if any, this Note shall be repayable in whole or in part
at the option of the Holder hereof at the
<PAGE> 8
8
applicable repayment price set forth on the face hereof, together with interest
thereon to the date of repayment. For this Note to be repaid in whole or in part
at the option of the Holder hereof, the Trustee must receive not less than 30
nor more than 45 days prior to the repayment date (i) the Note with the form
entitled "Option to Elect Repayment" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States of America setting forth the name
of the Holder of the Note, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number of the Note or a
description of the tenor and terms of the Note to be repaid, a statement that
the option to elect repayment is being exercised thereby and a guarantee that
the Note to be repaid with the form entitled "Option to Elect Repayment" on the
reverse of the Note duly completed will be received by the Trustee not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and such Note and form duly completed are received by the
Trustee by such fifth Business Day. Exercise of such repayment option shall be
irrevocable. Such option may be exercised by the Holder for less than the entire
principal amount provided that the principal amount remaining outstanding after
repayment is an authorized denomination.
6. If an Event of Default with respect to the Notes shall occur and be
continuing, the principal (or, if the Note is an Original Issue Discount Note,
such portion of the principal amount as may be specified on the face hereof) and
interest thereon of all of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
7. The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee to enter into supplemental indentures 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 the Securities of each series under the
Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of each
series to be affected thereby on behalf of the Holders of all Securities of such
series. In addition, the Indenture permits the Company and the Trustee to enter
into supplemental indentures to the Indenture,
<PAGE> 9
9
without the consent of Holders, for certain purposes, including to cure any
ambiguity or to correct or supplement any provision contained in the Indenture
and to make changes that do not adversely affect the rights of any Holder. The
Indenture also permits the Holders of a majority in aggregate principal amount
of the Securities at the time outstanding of each series on behalf of the
Holders of all Securities of such series, to waive certain past defaults and
their consequences with respect to such series under the Indenture. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note 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 Note
or such other Notes.
8. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal and any premium of and any
interest on this Note at the place, rate and respective times and in the coin or
currency herein and in the Indenture prescribed.
9. The authorized denominations of Notes are $1,000 and any larger
amount that is an integral multiple of $1,000. As provided in the Indenture and
except as provided therein and herein, the Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
10. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of a Note is registerable in the register, upon
surrender of such Note for registration of transfer at the office of the
Registrar for this series or at the offices of any transfer agent designated by
the Company for such purpose. Every Note presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Holder or its
attorney duly authorized in writing.
Prior to due presentment for registration of transfer, the Company,
the Trustee, any paying agent and any
<PAGE> 10
10
Registrar may treat the Person in whose name a Note is registered as the
absolute owner thereof for all purposes, whether or not such Note is overdue and
notwithstanding any notation of ownership or other writing thereon, and neither
the Company nor the Trustee nor any paying agent nor any Registrar shall be
affected by notice to the contrary.
No service charge shall be made for any exchange or registration of
transfer of any Note, with certain exceptions, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
11. This Note is a global security. Accordingly, unless the terms on
the face hereof expressly permit this global security to be exchanged in whole
or in part for definitive Securities in registered form, this Note may not be
transferred except as a whole by The Depository Trust Company (the "Depositary")
to a nominee of such Depositary or by a nominee of such Depositary to the
Depositary or another nominee of the Depositary, or by the Depositary or any
nominee to a successor Depositary selected or approved by the Company or to any
nominee of such successor Depositary. Ownership of beneficial interests in this
Note will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interest of participants) and the records of participants (with
respect to interests of persons other than participants). The laws of some
states 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 this Note. Except as provided below,
owners of beneficial interests in this Note will not be entitled to have any
individual certificates and will not be considered the owners or Holders thereof
under the Indenture.
None of the Company, the Trustee, any Registrar, the paying agent or
any agent of the Company or the Trustee will have any responsibility or
liability for (a) any aspect of the records relating to or payments made on
account of beneficial ownership interests in this Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests, (b) the payments to the beneficial owners of this Note of amounts
paid to the Depositary or its nominee or (c) any other matter relating to the
actions or practices of the Depositary, its nominee or any of its direct or
indirect participants.
<PAGE> 11
11
Subject to Section 2.15(c)(i) and (ii) of the Indenture, if the
Depositary is at any time unwilling, unable or ineligible to continue as
depository and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual certificates of such series of like
tenor and terms evidencing the Notes represented hereby in definitive form in an
aggregate principal amount equal to the principal amount of the global Note or
Notes in exchange for this Note. In addition, the Company may at any time and in
its sole discretion determine not to have any Notes represented by one or more
global securities and, in such event, will issue individual certificates of such
series of like tenor and terms evidencing Notes in definitive form in an
aggregate principal amount equal to the principal amount of the global Note or
Notes in exchange for this Note.
12. Unless otherwise defined herein, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
13. The Indenture and the Notes shall be construed in accordance with
and governed by the laws of the State of New York.
14. An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under this Note or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting this Note, each Holder waives and releases all such
liability and acknowledges that this waiver and release is part of the
consideration for the issue hereof.
<PAGE> 12
12
------------------------------------
REGISTRAR AND PAYING AGENT
(subject to change)
BY HAND:
Chemical Bank
55 Water Street - North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
BY MAIL:
Chemical Bank
55 Water Street - North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
------------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable Repayment Price thereof together with
interest to the Repayment Date specified below, to the undersigned
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid
; and specify the denomination or denominations (which shall be in
authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
- --------------------------------------------------------------------------------
Repayment Date:
---------------------------
Date:
--------------------------- -------------------------
(Signature)
<PAGE> 13
EXHIBIT 4(b)-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Registered THE SHERWIN-WILLIAMS COMPANY Registered
No. MEDIUM-TERM NOTE, Series A CUSIP
(Floating Rate Note)
Original Issue Date: Base Rate:
Initial Interest Rate:
Interest Rate Basis:
Index Maturity:
Spread (plus or minus);
Principal Amount: Spread Multiplier:
Issue Price: Maximum Interest Rate:
Maturity Date: Minimum Interest Rate:
Optional Extension of Total Amount of OID:
Maturity Date:
Interest Payment Dates: Yield to Maturity:
Regular Record Dates:
Redemption at Option of the Initial Accrual Period OID:
Company:
Redemption Redemption Interest Reset Dates:
Date(s) Price(s)
Interest Payment Period:
Repayment at Option of Calculation Agent:
Holders:
Repayment Repayment Specified Currency:
Date(s) Price(s) Designated CMT Telerate
Page:
Other Designated CMT Maturity
Provisions: Index:
Reporting Service:
LIBOR Reuters
LIBOR Telerate
If applicable, the "Total Amount of OID", "Yield to Maturity" and
"Initial Accrual Period OID" (computed under the appropriate method) below will
be completed solely for the purposes of applying the United States Federal
income tax original issue discount ("OID") rules.
<PAGE> 14
2
This Note is a registered Note of THE SHERWIN- WILLIAMS COMPANY, an
Ohio corporation (together with its successors, if any, the "Company"). This
Note is one of a series of Securities (as defined on the reverse hereof) issued
under the Indenture referred to on the reverse hereof designated as Medium-Term
Notes, Series A (the "Notes"). Subject to the provisions hereof, the Company,
for value received, hereby promises to pay to , or registered assigns,
the Principal Amount set forth on the face hereof on the Maturity Date shown
above and to pay the premium, if any, and interest, if any, thereon, as
described on the reverse hereof.
The principal of (and premium, if any) and interest, if any, on this
Note are payable by the Company in such coin or currency specified on the face
hereof as at the time of payment shall be legal tender for the payment of public
and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE 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 manually
executed by or on behalf of the Trustee under the Indenture, this Note shall not
be entitled to any benefits under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, THE SHERWIN-WILLIAMS COMPANY has caused this Note
to be signed in its name by its Chairman of the Board, its Vice Chairman, its
President or a Vice President (or any other officer performing similar
functions), and by its Treasurer, Secretary, an Assistant Treasurer or an
Assistant Secretary (or any other officer performing similar functions), or by
facsimiles of any of their signatures, and its corporate seal, or a facsimile
thereof, to be hereto affixed.
THE SHERWIN-WILLIAMS COMPANY
Dated:___________________ By: _________________________
[Seal] By: _________________________
<PAGE> 15
3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
CHEMICAL BANK,
as Trustee
By:
Authorized Officer
<PAGE> 16
4
[REVERSE OF FLOATING RATE MEDIUM-TERM NOTE, Series A]
THE SHERWIN-WILLIAMS COMPANY
Medium-Term Note, Series A
1. This Note is one of the duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness (hereinafter called the "Securities")
of the Company, of the series hereinafter specified, all issued or to be issued
under and pursuant to the Indenture dated as of February 1, 1996 (the
"Indenture"), between the Company and Chemical Bank (the "Trustee"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, obligations and
duties thereunder of the Trustee and any agent of the Trustee, any Paying Agent
for this Note, the Company and the Holders of the Securities and the terms upon
which the Securities are issued and are to be authenticated and delivered.
The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as provided or permitted
in the Indenture. This Note is one of the series of Securities of the Company
issued pursuant to the Indenture designated as the Medium-Term Notes, Series A
(herein called the "Notes"), limited in aggregate principal amount to
$450,000,000. The Notes of this series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, and may otherwise vary, all as provided in the
Indenture.
2. A. The regular record date ("Regular Record Date") with respect to
any Interest Payment Date (as defined below) shall be the applicable date
specified as such on the face hereof (whether or not such date shall be a
Business Day (as defined below)) immediately preceding such Interest Payment
Date. Interest 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 a Note is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date; provided,
<PAGE> 17
5
however, that interest payable on the Maturity Date (as set forth on the face
hereof) or upon redemption or repayment will be paid to the Person to whom
principal shall be payable; provided further that the first payment of interest
on any Note with an Original Issue Date (as set forth on the face hereof)
between a Regular Record Date and an Interest Payment Date or on an Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered owner of said Note on such next
succeeding Regular Record Date. "Business Day" means any day, other than a
Saturday or Sunday, that is (i) not a legal holiday or a day on which banking
institutions are authorized or required by law, regulation or executive order to
be closed in (a) The City of New York or (b) if the Specified Currency (as set
forth on the face hereof) is other than U.S. dollars, the financial center of
the country issuing such Specified Currency (which, in the case of ECU, shall be
Brussels, Belgium) and (ii) with respect to Notes having as the Base Rate,
LIBOR, a London Banking Day. "London Banking Day" means, with respect to a Note,
any day on which dealings in deposits in the Specified Currency of such Note are
transacted in the London interbank market.
In connection with any calculations of the rate of interest hereon, all
percentages will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001) (with five one-millionths of a percentage point being rounded upward)
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).
B. The Company promises to pay interest on the principal amount at the
rate per annum equal to the Initial Interest Rate shown on the face hereof until
the first Interest Reset Date shown on the face hereof following the Original
Issue Date specified on the face hereof and thereafter at a rate determined in
accordance with the provisions below under the heading "CD Rate Notes",
"Commercial Paper Rate Notes", "Federal Funds Rate Notes", "LIBOR Notes",
"Treasury Rate Notes", "Prime Rate Notes", "CMT Rate Notes" or "Eleventh
District Cost of Fund Rate Notes" depending upon whether the Base Rate specified
on the face hereof is CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR,
Treasury Rate, Prime Rate, CMT Rate, Eleventh District Cost of Fund Rate until
the principal hereof is paid or duly made available for payment or upon earlier
redemption or repayment; provided, however, in no event will the interest rate
on this Note be higher than the maximum
<PAGE> 18
6
rate permitted by applicable law, as the same may be modified by United States
law of general application. The Company will pay interest monthly, quarterly,
semiannually or annually as specified on the face hereof opposite "Interest
Payment Period", commencing with the first Interest Payment Date specified on
the face hereof next succeeding the Original Issue Date (except as provided in
the second proviso in paragraph 2.A. hereof), and on the Maturity Date. Unless
otherwise provided on the face hereof, the dates on which interest will be
payable (each an "Interest Payment Date") shall be, in the case of a Note with a
daily, weekly or monthly Interest Reset Date, the third Wednesday of each month
or the third Wednesday of March, June, September and December; in the case of a
Note with a quarterly Interest Reset Date, the third Wednesday of March, June,
September and December; in the case of a Note with a semiannual Interest Reset
Date, the third Wednesday of the two months specified on the face hereof; and in
the case of a Note with an annual Interest Reset Date, the third Wednesday of
the month specified on the face hereof; provided, however, that if an Interest
Payment Date would fall on a day that is not a Business Day, such Interest
Payment Date shall be postponed to the next succeeding Business Day, except
that, if the Base Rate is LIBOR and such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day.
The interest payable on this Note on each Interest Payment Date shall
be the amount of interest accrued from and including the Original Issue Date
shown on the face hereof or from and including the last date in respect of which
interest has been paid or duly provided for, as the case may be, to, but
excluding, such Interest Payment Date. Such accrued interest will be calculated
by multiplying the principal amount hereof by an accrued interest factor. Such
accrued interest factor shall be computed by adding the interest factors
calculated for each day in the period for which accrued interest is being
calculated. Unless otherwise specified on the face hereof, the interest factor
(expressed as a decimal calculated to seven decimal places without rounding) for
each such day shall be computed by dividing the interest rate applicable to such
day by 360 if the Base Rate specified on the face hereof is not Treasury Rate or
CMT Rate, and by the actual number of days in the year if the Base Rate
specified on the face hereof is Treasury Rate or CMT Rate.
<PAGE> 19
7
The interest rate in effect on each day will be (a) if such day is an
Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to such Interest Reset Date or (b) if such day is
not an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date, subject
in either case to any adjustment by a Spread or Spread Multiplier as set forth
on the face hereof and to any Maximum or Minimum Interest Rate limitation as
specified on the face hereof. Notwithstanding the foregoing, the interest rate
hereon shall not be greater than the Maximum Interest Rate, if any, or less than
the Minimum Interest Rate, if any, shown on the face hereof. In addition, the
interest rate hereon shall in no event be higher than the maximum rate, if any,
permitted by New York law as the same may be modified by United States law of
general application. Commencing with the first Interest Reset Date specified on
the face hereof following the Original Issue Date and thereafter upon each
succeeding Interest Reset Date specified on the face hereof, the rate at which
interest on this Note is payable shall be adjusted in accordance with the Base
Rate as specified on the face hereof; provided, however, that if any Interest
Reset Date would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding Business Day, except that
if the Base Rate is LIBOR and such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
The rate of interest in this Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or otherwise (such period being the "Interest
Reset Period", and the first day of each Interest Reset Period being an
"Interest Reset Date"), as specified on the face hereof, based on certain facts
and circumstances set forth below occurring on a specified date (each an
"Interest Determination Date") shortly prior thereto. Except as provided below
or on the face hereof, the Interest Reset Date will be, if the interest rate on
this Note resets daily, each Business Day; if the interest rate on this Note
(other than Treasury Rate) resets weekly, the Wednesday of each week; if the
Base Rate specified on the face hereof is Treasury Rate and the interest rate on
this Note resets weekly, the Tuesday of each week (except as otherwise provided
herein); if the interest rate on this Note resets monthly, the third Wednesday
of each month; if the interest rate on this Note resets quarterly, the third
Wednesday of March, June, September and December; if the interest rate on
<PAGE> 20
8
this Note resets semiannually, the third Wednesday of two months of each year,
as specified on the face hereof; and if the interest rate on this Note resets
annually, the third Wednesday of one month of each year, as specified on the
face hereof.
Subject to applicable provisions of law and except as specified herein,
on each Interest Reset Date the rate of interest shall be the rate determined in
accordance with the provisions of the applicable heading below.
CD Rate Notes
Each CD Rate Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to the CD Rate and the Spread or
Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "CD Rate" for each
Interest Reset Period shall be the rate as of the second Business Day prior to
the Interest Reset Date for such Interest Reset Period (a "CD Rate Determination
Date") for negotiable certificates of deposit having the Index Maturity
designated on the face hereof as published in H.15(519) (as defined below) under
the heading "CDs (Secondary Market)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such CD Rate Determination Date, then the "CD Rate" for such
Interest Reset Period will be the rate on such CD Rate Determination Date for
negotiable certificates of deposit of the Index Maturity designated on the face
hereof as published in Composite Quotations (as defined below) under the heading
"Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "CD Rate" for such Interest Reset Period will be calculated
by the Calculation Agent for such CD Rate Note and will be the arithmetic mean
of the secondary market offered rates as of 10:00 a.m., New York City time, on
such CD Rate Determination Date of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for such CD Rate Note for negotiable certificates of deposit
of major United States money center banks of the highest credit standing (in the
market for negotiable certificates of deposit) with a remaining maturity closest
to the Index Maturity designated on the face hereof in a denomination of
<PAGE> 21
9
$5,000,000; provided, however, that if the dealers selected as aforesaid by such
Calculation Agent are not quoting offered rates as mentioned in this sentence,
the "CD Rate" for such Interest Reset Period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate). "H.15(519)" means the
publication entitled "Statistical Release H.15(519), 'Selected Interest Rates'",
or any successor publication, published by the Board of Governors of the Federal
Reserve System. "Composite Quotations" means the daily statistical release
entitled "Composite 3:30 p.m. Quotations for U.S. Government Securities"
published by the Federal Reserve Bank of New York.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any, specified on the face
hereof.
Unless otherwise specified on the face hereof, the "Commercial Paper
Rate" for each Interest Reset Period will be determined by the Calculation Agent
for such Commercial Paper Rate Note as of the second Business Day prior to the
Interest Reset Date for such Interest Reset Period (a "Commercial Paper Rate
Determination Date") and shall be the Money Market Yield (as defined below) on
such Commercial Paper Rate Determination Date of the rate for commercial paper
having the Index Maturity specified on the face hereof, as such rate shall be
published in H.15(519) under the heading "Commercial Paper". In the event that
such rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Commercial Paper Rate Determination Date,
then the "Commercial Paper Rate" for such Interest Reset Period shall be the
Money Market Yield on such Commercial Paper Rate Determination Date of the rate
for commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three
<PAGE> 22
10
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for such Commercial Paper Rate Note for commercial paper of
the specified Index Maturity placed for an industrial issuer whose bonds are
rated "AA" or the equivalent by a nationally recognized rating agency; provided,
however, that if the dealers selected as aforesaid by such Calculation Agent are
not quoting offered rates as mentioned in this sentence, the "Commercial Paper
Rate" for such Interest Reset Period will be the same as the Commercial Paper
Rate for the immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D X 360
-------------
Money Market Yield = 360 - (D X M) X 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "Federal Funds Rate"
for each Interest Reset Period shall be the effective rate on the Interest Reset
Date for such Interest Reset Period (a "Federal Funds Rate Determination Date")
for Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)". In the event that such rate is not published prior to 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Federal Funds
Rate Determination Date, the "Federal Funds Rate" for such Interest Reset Period
shall be the rate on such Federal Funds Rate Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate". If by
3:00 p.m., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "Federal Funds
Rate" for such
<PAGE> 23
11
Interest Reset Period shall be the rate on such Federal Funds Rate Determination
Date made publicly available by the Federal Reserve Bank of New York which is
equivalent to the rate which appears in H.15(519) under the heading "Federal
Funds (Effective)"; provided, however, that if such rate is not made publicly
available by the Federal Reserve Bank of New York by 3:00 p.m., New York City
time, on such Calculation Date, the "Federal Funds Rate" for such Interest Reset
Period will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the Initial Interest Rate).
LIBOR Notes
Each LIBOR Note will bear interest for each Interest Reset Period at
the interest rate calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any, specified on the face hereof.
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Note will determine (a) in the case of
LIBOR Telerate (as defined below), the offered rate, and (b) in the case of
LIBOR Reuters (as defined below), the arithmetic mean of the offered rates,
for deposits in the Specified Currency for the period of the Index Maturity
specified on the face hereof, commencing on such Interest Reset Date, which
appear on the Designated LIBOR Page (as defined below) at approximately
11:00 a.m., London time, on such LIBOR Determination Date. "Designated
LIBOR Page" means "LIBOR Telerate", which shall be the display designated
as page "3750" on the Dow Jones Telerate Service (or such other page as may
replace page "3750" on such service or such other service as may be
nominated by the British Bankers' Association for the purpose of displaying
the London interbank offered rates of major banks), unless "LIBOR Reuters"
is designated on the face hereof, in which case "Designated LIBOR Page"
means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBO page on such
service or such
<PAGE> 24
12
other service as may be nominated by the British Bankers' Association for
the purpose of displaying London interbank offered rates of major banks).
In the case of LIBOR Reuters, if at least two such offered rates appear on
the Designated LIBOR Page, "LIBOR" for such Interest Reset Period will be
the arithmetic mean of such offered rates as determined by the Calculation
Agent for such LIBOR Note.
(ii) In the case of LIBOR Telerate, if no rate appears, or in the case
of LIBOR Reuters, if fewer than two offered rates appear on the Designated
LIBOR Page on such LIBOR Determination Date, the Calculation Agent for such
LIBOR Note will request the principal London offices of each of four major
banks in the London interbank market selected by such Calculation Agent to
provide such Calculation Agent with its offered quotations for deposits in
U.S. dollars for the period of the specified Index Maturity, commencing on
such Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Determination Date and
in a principal amount equal to an amount of not less than $1,000,000 that
is representative of a single transaction in such market at such time. If
at least two such quotations are provided, "LIBOR" for such Interest Reset
Period will be the arithmetic mean of such quotations. If fewer than two
such quotations are provided, "LIBOR" for such Interest Reset Period will
be the arithmetic mean of rates quoted by three major banks in The City of
New York selected by the Calculation Agent for such LIBOR Note at
approximately 11:00 a.m., New York City time, on such LIBOR Determination
Date for loans in U.S. dollars to leading European banks, for the period of
the specified Index Maturity, commencing on such Interest Reset Date, and
in a principal amount equal to an amount of not less than $1,000,000 that
is representative of a single transaction in such market at such time;
provided, however, that if fewer than three banks selected as aforesaid by
such Calculation Agent are quoting rates as mentioned in this sentence,
"LIBOR" for such Interest Reset Period will be the same as LIBOR for the
immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate).
<PAGE> 25
13
Treasury Rate Notes
Each Treasury Rate Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to the Treasury Rate and
the Spread or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, the "Treasury Rate" for
each Interest Reset Period will be the rate for the auction held on the Treasury
Rate Determination Date (as defined below) for such Interest Reset Period of
direct obligations of the United States ("Treasury securities") having the Index
Maturity specified on the face hereof, as such rate shall be published in
H.15(519) under the heading "U.S. Government Securities-Treasury bills- auction
average (investment)" or, in the event that such rate is not published prior to
3:00 p.m., New York City time, on the Calculation Date pertaining to such
Treasury Rate Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) on such Treasury Rate Determination Date as otherwise
announced by the United States Department of the Treasury. In the event that the
results of the auction of Treasury securities having the specified Index
Maturity are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, then the "Treasury Rate" for such Interest
Reset Period shall be calculated by the Calculation Agent for such Treasury Rate
Note and shall be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Treasury Rate Determination Date, of
three leading primary United States government securities dealers selected by
such Calculation Agent for the issue of Treasury securities with a remaining
maturity closest to the specified Index Maturity; provided, however, that if the
dealers selected as aforesaid by such Calculation Agent are not quoting bid
rates as mentioned in this sentence, then the "Treasury Rate" for such Interest
Reset Period will be the same as the Treasury Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset Period
will be the day of the week in which
<PAGE> 26
14
the Interest Reset Date for such Interest Reset Period falls on which Treasury
securities would normally be auctioned. Treasury securities are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Rate Determination Date pertaining to the Interest Reset Period
commencing in the next succeeding week. If an auction date shall fall on any day
that would otherwise be an Interest Reset Date for a Treasury Rate Note, then
such Interest Reset Date shall instead be the Business Day immediately following
such auction date.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate calculated
with reference to the Prime Rate and the Spread or Spread multiplier, if any
specified on the face hereof.
Unless otherwise specified on the face hereof, the "Prime Rate" for
each Interest Reset Period will be determined by the Calculation Agent for such
Prime Rate Note as of the second Business Day prior to the Interest Reset Date
for such Interest Reset Period (a "Prime Rate Determination Date") and shall be
the rate on such date as published in H.15(519) under the heading "Bank Prime
Loan." In the event that such rate is not published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Prime Rate Determination Date,
then the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Determination
Date. "Reuters Screen USPRIME1" means the display designated as page "USPRIME1"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service or such other service as may be nominated by
the British Bankers' Association for the purpose of displaying prime rates or
base lending rates of major United States banks). If fewer than four such rates
but more than one such rate appear on the Reuters Screen USPRIME1 Page for such
Prime Rate Determination Date, the Prime Rate shall be determined by the
Calculation Agent and will be the arithmetic mean of the prime rates quoted on
the
<PAGE> 27
15
basis of actual number of days in the year divided by 360 as of the close of
business on such Prime Rate Determination Date by at least two major money
center banks in New York City selected by the Calculation Agent (after
consulting with the Company). If fewer than two such rates appear on the Reuters
Screen USPRIME1 Page, the Prime Rate will be determined by the Calculation Agent
and will be the arithmetic mean of the prime rates furnished in New York City by
three substitute banks or trust companies organized and doing business under the
laws of the United States, or any State thereof, in each case having total
equity capital of at least U.S. $500,000,000 and being subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent
(after consulting with the Company) to provide such rate or rates; provided,
however, that if the banks selected as aforesaid are not quoting as mentioned in
this sentence, the Prime Rate will remain the Prime Rate in effect on such Prime
Rate Determination Date (or, if there is no preceding Interest Reset Period, the
Initial Interest Rate).
CMT Rate Notes
Each CMT Rate Note will bear interest at the rate (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified on the face hereof.
Unless otherwise specified on the face hereof, the "CMT Rate" for each
Interest Reset Period will be determined by the Calculation Agent for such CMT
Rate Note as of the second Business Day prior to the Interest Reset Date for
such Interest Reset Period (a "CMT Rate Interest Determination Date") and shall
be the rate displayed on the Designated CMT Telerate Page (as defined below)
under the caption "...Treasury Constant Maturities...Federal Reserve Board
release H.15... Mondays approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page, or if not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
<PAGE> 28
16
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index ) for the CMT Rate Interest Determination Date
with respect to the related Interest Reset Date as may then be published by
either the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing side offer prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in the City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on the CMT Rate Interest Determination Date of
three Reference Dealers in the City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for such Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index in an
<PAGE> 29
17
amount of at least U.S. $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided however, that
if fewer than three Reference Dealers selected by the Calculation Agent are
quoting as described herein, the CMT Rate will be the CMT Rate in effect on such
CMT Rate Interest Determination Date (or, if there is no preceding Interest
Reset Period, the Initial Interest Rate). If two Treasury Notes with an original
maturity as described in the third preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for the
CMT Rate Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service designated on the face hereof for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519) (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)). If no such page is specified on
the face hereof, the Designated CMT Telerate Page shall be 7052 for the most
recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
Eleventh District Cost of Funds Rate Notes
Each Eleventh District Cost of Funds Rate Note will bear interest at
interest rates calculated with reference to the Eleventh District Cost of Funds
Rate and the Spread or Spread Multiplier, if any, specified on the face hereof.
Unless otherwise specified on the face hereof, "Eleventh District Cost
of Funds Rate" for each Interest Reset Period shall be determined by the
Calculation Agent on the "Eleventh District Cost of Funds Rate Determination
Date" (as defined below) as the rate equal to the monthly weighted average cost
of funds for the calendar month immediately preceding the month in which such
Eleventh
<PAGE> 30
18
District Cost of Funds Rate Determination Date falls, as set forth under the
caption "11th district" on Telerate Page 7058 (as defined below) as of 11:00 A.
M., San Francisco time, on such Eleventh District Cost of Funds Rate
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Determination Date, then the Eleventh
District Cost of Funds Rate on such Eleventh District Cost of Funds Rate
Determination Date will be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced (the "Index") by the FHLB of San Francisco as such cost
of funds for the calendar month immediately preceding the date of such
announcement. If the FHLB of San Francisco fails to announce such rate for the
calendar month immediately preceding such Eleventh District Cost of Funds Rate
Determination Date, then the Eleventh District Cost of Funds Rate determined as
of such Eleventh District Cost of Funds Rate Determination Date will be the
Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of
Funds Rate Determination Date (or, if there is no preceding Interest Reset
Period, the Initial Interest Rate).
The "Eleventh District Cost of Funds Rate Determination Date" will be
the last working day of the month on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the Index (as defined above)
immediately preceding the Interest Reset Date. "Telerate Page 7058" means the
display designated as page "7058" on the Dow Jones Telerate Service (or such
other page as may replace the 7058 page on that service or such other service as
may be nominated by the British Bankers' Association for the purpose of
displaying the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District).
The Calculation Date pertaining to an Interest Determination Date shall
be the first to occur of either (a) the tenth calendar day after such Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (b) the Business Day preceding the date any payment is required
to be made for any period following the applicable Interest Reset Date or
Maturity Date (or the date of redemption or repayment). Initially, Chemical Bank
shall be the Calculation Agent. The Calculation Agent shall calculate the
interest rate hereon in accordance with the foregoing and shall confirm in
writing such calculation to the Trustee and any Paying Agent immediately after
each determination. Neither the Trustee
<PAGE> 31
19
nor any Paying Agent shall be responsible for any such Calculation. At the
request of the Holder hereof the Calculation Agent shall provide to the Holder
hereof the interest rate hereon then in effect, and if determined, the interest
rate that shall become effective as of the next Interest Reset Date.
3. A. The principal of and any premium and interest on a Note are
payable by the Company in the Specified Currency for such Note. If the Specified
Currency for a Note is other than U.S. dollars, the Company will (unless
otherwise specified on the face hereof) arrange to convert all payments in
respect of such Note into U.S. dollars in the manner set forth on the face
hereof.
B. Unless otherwise specified on the face hereof, U.S. dollar payments
of interest on Notes (other than interest payable at Stated Maturity, on
redemption or on repayment) will be made, except as provided below, by check
mailed to the Holders of such Notes as of the preceding Regular Record Date
(which, in the case of Global Securities, will be a nominee of the Depositary);
provided, however, that, in the case of a Note issued between a Regular Record
Date and the related Interest Payment Date, unless otherwise specified on the
face hereof, interest for the period beginning on the Original Issue Date for
such Note and ending on such Interest Payment Date shall be paid on the next
succeeding Interest Payment Date to the Holder of such Note on the related
Regular Record Date. A Holder of $10,000,000 (or the equivalent thereof in a
Specified Currency other than U.S. dollars) or more in aggregate principal
amount of Notes of like tenor and terms shall be entitled to receive such U.S.
dollar interest payments by wire transfer of immediately available funds, but
only if appropriate wire transfer instructions have been received in writing by
the Paying Agent not later than 15 calendar days prior to the applicable
Interest Payment Date. Simultaneously with the election by any Holder provided
on the face hereof to receive payments in a Specified Currency other than U.S.
dollars, such Holder shall provide appropriate wire transfer instructions to the
Trustee. Unless otherwise specified on the face hereof, principal and any
premium and interest payable at the Stated Maturity, on redemption or repayment
of a Note will be paid in immediately available funds upon surrender of such
Note at the corporate trust office or agency of the Paying Agent in The City of
New York, such interest being paid to the person to whom principal is payable.
<PAGE> 32
20
C. Initially, Chemical Bank will be the Paying Agent and the Registrar
with respect to the Notes. The Company reserves the right at any time to vary or
terminate the appointment of any Paying Agent or Registrar and to appoint
additional or other Paying Agents and additional or other Registrars and to
approve any change in the office through which any Paying Agent or Registrar
acts, provided that there will at all times be a Paying Agent and Registrar in
The City of New York.
4. If specified on the face hereof, this Note may be redeemed, as a
whole or from time to time in part, at the option of the Company, on not less
than 30 nor more than 60 days' notice given as provided in the Indenture, on any
redemption date(s) and at the related redemption price(s) set forth on the face
hereof, together with any accrued interest to the date of redemption. The
redemption price(s) are expressed as a percentage of the principal amount of
this Note. If no such redemption date is set forth on the face hereof, this Note
may not be so redeemed pursuant to this Section 4. If less than all the Notes
are to be redeemed, the Trustee shall select the Notes or portions thereof (in
multiples of $1,000) to be redeemed by lot or by such other method as the
Trustee considers fair and appropriate. In any case where more than one Note is
registered in the same name, the Trustee, in its discretion, may treat the
aggregate principal amount so registered as if it were represented by one Note.
The Trustee shall promptly notify the Company in writing of the Notes selected
for redemption and, in the case of any Notes selected for partial redemption,
the principal amount thereof to be redeemed. If any Note called for redemption
shall not be so paid upon surrender thereof on such redemption date, the
principal, premium, if any, and interest shall bear interest until paid from the
redemption date at the rate borne or provided for by such Notes.
5. If specified on the face hereof, this Note will be subject to
repayment at the option of the Holder hereof on the repayment date(s) and at the
related repayment price(s) set forth on the face hereof. The repayment price(s)
are expressed as a percentage of the principal amount of this Note. If no such
repayment date is set forth on the face hereof, this Note may not be so repaid.
On each repayment date, if any, this Note shall be repayable in whole or in part
at the option of the Holder hereof at the applicable repayment price set forth
on the face hereof, together with interest thereon to the date of repayment. For
this Note to be repaid in whole or in part at the option
<PAGE> 33
21
of the Holder hereof, the Trustee must receive not less than 30 nor more than 45
days prior to the repayment date (i) the Note with the form entitled "Option to
Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth the name of the Holder of
the Note, the principal amount of the Note, the principal amount of the Note to
be repaid, the certificate number of the Note or a description of the tenor and
terms of the Note to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Note to be repaid with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed will be received by the Trustee not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter and
such Note and form duly completed are received by the Trustee by such fifth
Business Day. Exercise of such repayment option shall be irrevocable. Such
option may be exercised by the Holder for less than the entire principal amount
provided that the principal amount remaining outstanding after repayment is an
authorized denomination.
6. If an Event of Default with respect to the Notes shall occur and be
continuing, the principal (or, if the Note is an Original Issue Discount Note,
such portion of the principal amount as may be specified on the face hereof) and
interest thereon of all of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
7. The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee to enter into supplemental indentures 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 the Securities of each series under the
Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of each
series to be affected thereby on behalf of the Holders of all Securities of such
series. In addition, the Indenture permits the Company and the Trustee to enter
into supplemental indentures to the Indenture, without the consent of Holders,
for certain purposes, including to cure any ambiguity or to correct or
supplement any provision contained in the Indenture and to make changes
<PAGE> 34
22
that do not adversely affect the rights of any Holder. The Indenture also
permits the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding of each series on behalf of the Holders of
all Securities of such series, to waive certain past defaults and their
consequences with respect to such series under the Indenture. Any such consent
or waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note 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 Note or such other
Notes.
8. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal and any premium of and any
interest on this Note at the place, rates and respective times and in the coin
or currency herein and in the Indenture prescribed.
9. The authorized denominations of Notes are $1,000 and any larger
amount that is an integral multiple of $1,000. As provided in the Indenture and
except as provided therein and herein, the Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
10. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of a Note is registerable in the register, upon
surrender of such Note for registration of transfer at the office of the
Registrar for this series or at the offices of any transfer agent designated by
the Company for such purpose. Every Note presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, the Trustee and the Registrar, duly executed by the Holder or its
attorney duly authorized in writing.
Prior to due presentment for registration of transfer, the Company, the
Trustee, any paying agent and any Registrar may treat the Person in whose name a
Note is registered as the absolute owner thereof for all purposes, whether or
not such Note is overdue and notwithstanding any
<PAGE> 35
23
notation of ownership or other writing thereon, and neither the Company nor the
Trustee nor any paying agent nor any Registrar shall be affected by notice to
the contrary.
No service charge shall be made for any exchange or registration of
transfer of any Note, with certain exceptions, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
11. This Note is a global security. Accordingly, unless the terms on the
face hereof expressly permit this global security to be exchanged in whole or in
part for definitive Securities in registered form, this Note may not be
transferred except as a whole by The Depository Trust Company (the "Depositary")
to a nominee of such Depositary or by a nominee of such Depositary to the
Depositary or another nominee of the Depositary, or by the Depositary or any
nominee to a successor Depositary selected or approved by the Company or to any
nominee of such successor Depositary. Ownership of beneficial interests in this
Note will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interest of participants) and the records of participants (with
respect to interests of persons other than participants). The laws of some
states 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 this Note. Except as provided below,
owners of beneficial interests in this Note will not be entitled to have any
individual certificates and will not be considered the owners or Holders thereof
under the Indenture.
None of the Company, the Trustee, any Registrar, the paying agent or
any agent of the Company or the Trustee will have any responsibility or
liability for (a) any aspect of the records relating to or payments made on
account of beneficial ownership interests in this Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests, (b) the payments to the beneficial owners of this Note of amounts
paid to the Depositary or its nominee or (c) any other matter relating to the
actions or practices of the Depositary, its nominee or any of its direct or
indirect participants.
Subject to Section 2.15(c)(i) and (ii) of the Indenture, if the
Depositary is at any time unwilling,
<PAGE> 36
24
unable or ineligible to continue as depository and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
certificates of such series of like tenor and terms evidencing the Notes
represented hereby in definitive form in an aggregate principal amount equal to
the principal amount of the global Note or Notes in exchange for this Note. In
addition, the Company may at any time and in its sole discretion determine not
to have any Notes represented by one or more global securities and, in such
event, will issue individual certificates of such series of like tenor and terms
evidencing Notes in definitive form in an aggregate principal amount equal to
the principal amount of the global Note or Notes in exchange for this Note.
12. Unless otherwise defined herein, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
13. The Indenture and the Notes shall be construed in accordance with
and governed by the laws of the State of New York.
14. An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under this Note or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting this Note, each Holder waives and releases all such
liability and acknowledges that this waiver and release is part of the
consideration for the issue hereof.
<PAGE> 37
25
------------------------------------
REGISTRAR AND PAYING AGENT
(subject to change)
BY HAND:
Chemical Bank
55 Water Street--North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
BY MAIL:
Chemical Bank
55 Water Street--North Building
2nd Floor, Room 234
New York, NY 10041
Attention: Money Market Operations
------------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion hereof specified below) pursuant to
its terms at a price equal to the applicable Repayment Price thereof together
with interest to the Repayment Date specified below, to the undersigned
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid
___________; and specify the denomination or denominations (which shall be in
authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
- --------------------------------------------------------------------------------
Repayment Date:
----------------------------
Date:
---------------------------- ----------------------------
(Signature)
<PAGE> 1
EXHIBIT 5
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Phone: (216) 566-2200
February 20, 1996
Louis E. Steilato
Vice President, General Counsel
and Secretary
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
Gentlemen:
As General Counsel for The Sherwin-Williams Company ("Company"), I am
delivering this opinion for use as an exhibit to Form S-3 Registration
Statement ("Registration Statement") filed with the Securities and Exchange
Commission on February 20, 1996, and relating to the registration of debt
securities ("Securities") under the Securities Act of 1933 in accordance with
the shelf registration rules as outlined in Rule 415.
It is my opinion that the Securities will, upon issuance and sale thereof
in the manner described in the Registration Statement, be legally and validly
issued and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the use of my name in such registration statement
under the caption "Legal Opinion". In giving this consent, I do not admit that
I am in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Sincerely,
LES:amm
<PAGE> 1
EXHIBIT 12
THE SHERWIN-WILLIAMS COMPANY
CALCULATION OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Year Ended December 31,
Nine Months Ended -------------------------------------------------------------------------
September 30, 1995 1994 1993 1992 1991 1990
----------------------- ----------------------- --------- --------- --------- ---------
Historical Pro Forma Historical Pro Forma
---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income
taxes and cumulative
effect of accounting
changes 265 268 299 294 264 226 199 187
Fixed charges 73 87 97 117 98 96 96 92
--- --- --- --- --- --- --- ---
Earnings (1) 338 355 395 411 363 322 294 279
=== === === === === === === ===
Fixed Charges:
Interest expense 2 12 3 19 6 9 12 11
Gross rent expense 71 74 94 97 92 87 83 81
--- --- --- --- --- --- --- ---
Fixed charges (2) 73 87 97 117 98 96 96 92
=== === === === === === === ===
Ratio of earnings to
fixed charges (1)/(2) 4.6 4.1 4.1 3.5 3.7 3.4 3.1 3.0
=== === === === === === === ===
</TABLE>
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of The
Sherwin-Williams Company for the registration of debt securities and to the
incorporation by reference therein of our report dated January 19, 1995, with
respect to the consolidated financial statements and schedule of The
Sherwin-Williams Company included in its Annual Report (Form 10-K) for the year
ended December 31, 1994, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
- ---------------------
February 16, 1996
<PAGE> 1
EXHIBIT 23(c)
DELOITTE &
TOUCHE LLP
Suite 250 Telephone (716) 843-7200
Key Bank Tower Facsimile (716) 856-7760
50 Fountain Plaza
Buffalo, New York 14202
INDEPENDENT AUDITORS' REPORT
We consent to the incorporation by reference in this Registration Statement of
the Sherwin-Williams Company on Form S-3 of our report dated February 23, 1995
appearing in and incorporated by reference in the Annual Report on Form 10-K of
Pratt & lambert United, Inc. for the years ended December 31, 1994 and 1993 and
for each of the three years in the period ended December 31, 1994 and to the
reference to us under the heading "Experts" in the prospectus, which is part of
this registration statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
February 16, 1996
- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- ---------------
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the
Company of up to $450,000,000 aggregate principal amount (at stated maturity)
of debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be
filed with the Securities and Exchange Commission or any national securities
exchange pertaining to such securities or to such registration, with full power
and authority to do and perform any and all acts and things whatsoever required
and necessary to be done in the premises, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ J.L. Ault
---------------------------------
J.L. Ault
Vice President - Corporate
Controller
<PAGE> 2
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer and director of The Sherwin-Williams Company,
an Ohio corporation ("Company"), hereby constitutes and appoints T. A.
Commes, L. J. Pitorak and L.E. Stellato, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney to sign for me and
in my name, as a director of the Company, any and all documents,
registrations and other papers necessary in connection with the filing by
the Company, with the Securities and Exchange Commission under the provisions
of the Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 25, 1996
/s/ J. G. Breen
---------------------------------
J. G. Breen
Chairman and Chief Executive
Officer, Director
<PAGE> 3
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer and director of The Sherwin-Williams Company,
an Ohio corporation ("Company"), hereby constitutes and appoints J.G. Breen,
L. J. Pitorak and L.E. Stellato, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney to sign for me
and in my name, as a director of the Company, any and all documents,
registrations and other papers necessary in connection with the filing by
the Company, with the Securities and Exchange Commission under the provisions
of the Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with
respect to the issuance by the Company of up to $450,000,000 aggregate
principal amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 25, 1996
/s/ T.A. Commes
---------------------------------
T.A. Commes
President and Chief Operating
Officer, Director
<PAGE> 4
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned officer of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for me and in my
name, as a director of the Company, any and all documents, registrations
and other papers necessary in connection with the filing by the Company,
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ L.J. Pitorak
---------------------------------
L.J. Pitorak
Senior Vice President - Finance,
Treasurer and Chief Financial
Officer
<PAGE> 5
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the
Company of up to $450,000,000 aggregate principal amount (at stated maturity)
of debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be
filed with the Securities and Exchange Commission or any national securities
exchange pertaining to such securities or to such registration, with full power
and authority to do and perform any and all acts and things whatsoever required
and necessary to be done in the premises, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ J.M. Biggar
---------------------------------
J.M. Biggar
Director
<PAGE> 6
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A.
Commes and L.E. Stellato, or any of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for me and in my
name, as a director of the Company, any and all documents, registrations
and other papers necessary in connection with the filing by the Company,
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and any rules and regulations of the
Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ D.E. Collins
---------------------------------
D.E. Collins
Director
<PAGE> 7
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen,
T.A. Commes and L.E. Stellato, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney to sign for me
and in my name, as a director of the Company, any and all documents,
registrations and other papers necessary in connection with the filing by
the Company, with the Securities and Exchange Commission under the provisions
of the Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with
respect to the issuance by the Company of up to $450,000,000 aggregate
principal amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ L. Carter
---------------------------------
L. Carter
Director
<PAGE> 8
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A.
Commes and L.E. Stellato, or any of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for me and in my
name, as a director of the Company, any and all documents, registrations
and other papers necessary in connection with the filing by the Company,
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ D.E. Evans
---------------------------------
D.E. Evans
Director
<PAGE> 9
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T. A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the
Company of up to $450,000,000 aggregate principal amount (at stated maturity)
of debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commissions any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be
filed with the Securities and Exchange Commission or any national securities
exchange pertaining to such securities or to such registration, with full power
and authority to do and perform any and all acts and things whatsoever required
and necessary to be done in the premises, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ R. W. Mahoney
---------------------------------
R. W. Mahoney
Director
<PAGE> 10
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A.
Commes, and L.E. Stellato, or any of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for me and in my
name, as a director of the Company, any and all documents, registrations
and other papers necessary in connection with the filing by the Company,
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ W.G. Mitchell
---------------------------------
W.G. Mitchell
Director
<PAGE> 11
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen,
T.A. Commes and L.E. Stellato, or any of them, with full power of
substitution and resubstitution, as attorneys or attorney to sign for me
and in my name, as a director of the Company, any and all documents,
registrations and other papers necessary in connection with the filing by
the Company, with the Securities and Exchange Commission under the provisions
of the Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with
respect to the issuance by the Company of up to $450,000,000 aggregate
principal amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ A.M. Mixon, III
---------------------------------
A.M. Mixon, III
Director
<PAGE> 12
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A.
Commes and L.E. Stellato, or any of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for me and in my
name, as a director of the Company, any and all documents, registrations
and other papers necessary in connection with the filing by the Company,
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and any rules and regulations of
the Securities and Exchange Commission, a Registration Statement with respect
to the issuance by the Company of up to $450,000,000 aggregate principal
amount (at stated maturity) of debentures, notes and/or other debt
obligations and/or any rights and/or warrants to purchase any of the
foregoing, and to file with the Securities and Exchange Commission any and
all post-effective amendments to any such Registration Statement with all
exhibits thereto, and any and all documents in connection therewith and any
and all applications or other documents to be filed with the Securities and
Exchange Commission or any national securities exchange pertaining to such
securities or to such registration, with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, hereby ratifying and approving the acts of said
attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ H.O. Petrauskas
---------------------------------
H.O. Petrauskas
Director
<PAGE> 13
POWER OF ATTORNEY
THE SHERWIN-WILLIAMS COMPANY
The undersigned director of The Sherwin-Williams Company, an Ohio
corporation ("Company"), hereby constitutes and appoints J.G. Breen, T.A.
Commes and L.E. Stellato, or any of them, with full power of substitution and
resubstitution, as attorneys or attorney to sign for me and in my name, as a
director of the Company, any and all documents, registrations and other papers
necessary in connection with the filing by the Company, with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended, and any rules and regulations of the Securities and Exchange
Commission, a Registration Statement with respect to the issuance by the
Company of up to $450,000,000 aggregate principal amount (at stated maturity)
of debentures, notes and/or other debt obligations and/or any rights and/or
warrants to purchase any of the foregoing, and to file with the Securities and
Exchange Commission any and all post-effective amendments to any such
Registration Statement with all exhibits thereto, and any and all documents in
connection therewith and any and all applications or other documents to be
filed with the Securities and Exchange Commission or any national securities
exchange pertaining to such securities or to such registration, with full power
and authority to do and perform any and all acts and things whatsoever required
and necessary to be done in the premises, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Executed the date set opposite my name.
January 24, 1996
/s/ R.K. Smucker
---------------------------------
R.K. Smucker
Director
<PAGE> 1
EXHIBIT 25
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
--------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------
THE SHERWIN-WILLIAMS COMPANY
(Exact name of obligor as specified in its charter)
OHIO 34-0526850
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
101 PROSPECT AVENUE, N.W.
CLEVELAND, OH 44115
(Address of principal executive offices) (Zip Code)
--------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985 and December 2, 1991 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 33-50010, which
is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 8TH day of FEBRUARY, 1996.
CHEMICAL BANK
By /s/ Michaael A Smith
----------------------------------
Michael A. Smith
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................. $ 5,319
Interest-bearing balances ......................... 3,591
Securities: ..........................................
Held to maturity securities............................ 6,402
Available for sale securities.......................... 22,966
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................ 1,088
Securities purchased under agreements to resell ... 1,015
Loans and lease financing receivables:
Loans and leases, net of unearned income $76,064
Less: Allowance for loan and lease losses 1,878
Less: Allocated transfer risk reserve ... 104
------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 74,082
Trading Assets ....................................... 28,967
Premises and fixed assets (including capitalized
leases)............................................ 1,380
Other real estate owned ............................... 65
Investments in unconsolidated subsidiaries and
associated companies............................... 160
Customer's liability to this bank on acceptances
outstanding ....................................... 1,187
Intangible assets ..................................... 467
Other assets .......................................... 6,418
--------
TOTAL ASSETS .......................................... $153,107
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits
In domestic offices ................................ $ 44,067
Noninterest-bearing .........................$14,227
Interest-bearing ............................ 29,840
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................... 37,004
Noninterest-bearing .........................$ 173
Interest-bearing ............................ 36,831
------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................ 16,136
Securities sold under agreements to repurchase ..... 1,274
Demand notes issued to the U.S. Treasury .............. 903
Trading liabilities ................................... 22,513
Other Borrowed money:
With original maturity of one year or less ......... 11,674
With original maturity of more than one year ....... 613
Mortgage indebtedness and obligations under capitalized
leases ............................................. 16
Bank's liability on acceptances executed and outstanding 1,190
Subordinated notes and debentures ..................... 3,411
Other liabilities ..................................... 6,333
TOTAL LIABILITIES ..................................... 145,134
--------
EQUITY CAPITAL
Common stock .......................................... 620
Surplus ............................................... 4,611
Undivided profits and capital reserves ................ 2,890
Net unrealized holding gains (Losses)
on available-for-sale securities ...................... (156)
Cumulative foreign currency translation adjustments ... 8
TOTAL EQUITY CAPITAL .................................. 7,973
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................... $153,107
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
in- structions issued by the appropriate Federal regulatory authority and is
true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the in- structions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
