<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 1998
REGISTRATION NO. 333-45929
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
SOLA INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3189941
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2420 SAND HILL ROAD, SUITE 200
MENLO PARK, CALIFORNIA 94025
(650) 324-6868
(ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
JOHN E. HEINE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2420 SAND HILL ROAD, SUITE 200
MENLO PARK, CALIFORNIA 94025
(650) 324-6868
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------
COPY TO:
FREDERICK H. FOGEL
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
(212) 859-8000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED(1) AGGREGATE OFFERING PRICE(2)(3) REGISTRATION FEE(4)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities and Common
Stock, $.01 par value...... $250,000,000 $73,750
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Also includes such indeterminate number of shares of Common Stock and Debt
Securities as may be issued upon conversion of or exchange for any other
Debt Securities that provide for conversion or exchange into other
Securities.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457.
(3) In U.S. dollars or the equivalent thereof in foreign currencies, currency
units or composite currencies.
(4) Previously paid.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS +
+SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY +
+NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH +
+OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR +
+QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED MARCH 5, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1998)
$100,000,000
SOLA INTERNATIONAL INC.
% NOTES DUE 2008
-----------
Interest on the % Notes due 2008 (the "Notes") is payable semiannually on
March and September of each year, commencing September , 1998. The Notes
will mature on March , 2008. The Notes will not be subject to any sinking
fund. The Notes will be redeemable, as a whole or from time to time in part, at
the option of the Company on any date at a redemption price equal to the
greater of (i) 100% of the principal amount of the Notes to be redeemed and
(ii) the sum of the present values of the Remaining Scheduled Payments (as
defined herein) thereon discounted to such redemption date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined herein) plus basis points, plus in either case
accrued interest on the principal amount being redeemed to such redemption
date.
The Notes will be issued in the form of one or more global Notes (the "Global
Securities") registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Global Securities will be shown on,
and transfers will be effected only through, records maintained by DTC and its
participants. Except as described herein, Notes in definitive form will not be
issued. See "Description of Debt Securities--Book-Entry Debt Securities" in the
accompanying Prospectus.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THE ACCOMPANYING PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE NOTES OFFERED HEREBY.
-----------
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 SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note..................................... % % %
- --------------------------------------------------------------------------------
Total........................................ $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from March , 1998.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $500,000.
-----------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and to certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify such offer and
to reject orders in whole or in part. It is expected that delivery of the Notes
will be made through the book-entry facilities of DTC on or about March ,
1998.
-----------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
BANCAMERICA ROBERTSON STEPHENS
-----------
The date of this Prospectus Supplement is March , 1998.
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference herein and in the
accompanying Prospectus constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and are subject to a number of risks and
uncertainties. Any such forward-looking statements contained or incorporated
by reference herein or in the accompanying Prospectus should not be relied
upon as predictions of future events. Such forward-looking statements are
necessarily dependent on assumptions, data or methods that may be incorrect or
imprecise and they may be incapable of being realized. In that regard, the
following factors, among others and in addition to the matters discussed
elsewhere in this Prospectus Supplement, the accompanying Prospectus and the
documents incorporated or deemed to be incorporated by reference herein, could
cause actual results or other matters to differ materially from those in such
forward-looking statements: highly competitive conditions in the eyeglass lens
and coating industry and the effect of new products on results, risks
associated with international operations, risks associated with currency
fluctuations, restrictions on payment of dividends from the Company's
subsidiaries, effect of the Company's indebtedness on operations and
liquidity, reliance on key management and risk of liability under
environmental laws. As a result of the foregoing, no assurance can be given as
to future results of operations or financial condition, and the Company wishes
to caution prospective investors not to rely on any such forward-looking
statements. The Company does not undertake, and specifically disclaims any
obligation, to update any forward-looking statements, which speak only as of
the date made. For a discussion of certain of these risks and uncertainties,
see "Risk Factors" in the accompanying Prospectus and Exhibit 99.1, Factors
Affecting Future Operating Results, included in the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997, which is incorporated by
reference in the accompanying Prospectus and may be obtained as described
therein under "Available Information."
----------------
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Notes. Such
transactions may include stabilizing, the purchase of Notes to cover syndicate
short positions and the imposition of penalty bids. For a description of these
activities, see "Underwriting."
S-2
<PAGE>
THE COMPANY
Unless otherwise expressly stated or the context otherwise requires, all
references to the "Company" or "Sola" herein refer to Sola International Inc.
(or its predecessors) and consolidated subsidiaries. References herein to
fiscal years are to the Company's fiscal year which ends on March 31 of each
year. For example, the twelve months ended March 31, 1997 are referred to
herein as fiscal 1997. Data included and incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus regarding the size,
growth and factors affecting markets for lenses, Sola's market position,
demographic and other trends (including changes in age of the population,
wealth, literacy, need for vision correction and similar matters), changes in
consumer preferences, plastic lens sales as a proportion of total lens sales
in specific markets, market share, competitive position and other similar
matters are approximations based on the Company's estimates. Although the
Company believes that such data are generally indicative of the matters
reflected therein, such data are inherently imprecise and investors are
cautioned not to place undue reliance on any such data. Unless the context
otherwise requires, the data relating to sales of lenses is based on unit,
rather than dollar sales.
Sola designs, manufactures and distributes a broad range of eyeglass lenses,
primarily focusing on the plastic lens segment of the global lens market. Sola
has manufacturing and distribution sites in three major regions--North
America, Europe and Rest of World (comprised primarily of Australia, Asia and
South America). The Company believes it is one of the leaders in plastic
eyeglass lens sales in each of these geographic regions (if the Japanese
market is excluded from Rest of World).
Sola believes its principal strengths lie in value-added lens designs,
materials and coatings, which are product categories that the Company believes
are experiencing faster growth than the overall global lens market. Sola has
successfully pursued a strategy of building one of the leading positions in
categories such as progressive lenses, anti-reflection lens coatings, plastic
photochromic lenses and thinner and lighter plastic lenses, which typically
generate higher gross profit margins. Sola has also developed an innovative
lens delivery system, Matrix(TM), which is currently being launched in the
United States and overseas.
The Company's historical growth in sales and operating income (before non-
recurring charges) reflects the global market growth for plastic lenses and
Sola's success in capturing strong positions in a number of worldwide markets,
as well as in certain key geographic regions and product categories. From
fiscal 1993 to fiscal 1997, the Company's net sales grew from $281.5 million
to $488.7 million and operating income grew from $30.3 million to $57.3
million. Net sales and operating income for the nine months ended December 31,
1997 were $402.6 million and $64.1 million, respectively. Fiscal 1997 and the
nine months ended December 31, 1997 include results of the Worldwide
Ophthalmic Group of American Optical Corporation, which the Company acquired
in June 1996.
The global market for plastic lenses is relatively young and has emerged
principally in the past 20 years. The Company estimates that sales in this
market are approaching $2 billion annually (based on wholesale prices). The
Company believes that the factors driving market growth in developed markets
differ from the factors driving growth in developing markets. The Company
believes that the growth in developed markets is driven by the increasing
average age of the population and consumer preference for higher value-added
products while the growth in developing markets is driven by increasing usage
of eyeglasses and a substitution of plastic lenses for glass lenses. The
Company believes that the following trends are likely to be significant
factors contributing to the growth in the eyeglass lens market:
The increasing average age of the population, primarily in the Company's two
largest markets--the United States and Europe. Sola believes that demographic
trends in the United States and Europe are quite favorable for future revenue
and margin growth in the lens industry. The aging of the population increases
the number of consumers who are likely to require vision correction and the
Company believes that the increasing population group over the age of 45 is
more likely to use higher value-added lenses such as progressives and
bifocals. Industry sources estimate that over 90% of the U.S. population over
the age of 45 requires vision correction. In the United States, this age group
is estimated to be increasing by approximately 2 million individuals per year.
The Company believes similar demographic trends are evident in other developed
countries.
S-3
<PAGE>
A shift in consumer preference from lower-value plastic lenses toward
higher-value plastic lenses. Sola believes that eyeglass wearers in the
Company's most significant markets, such as the United States and Europe, are
replacing their lower-value lenses with higher-value lenses due to the
availability of thinner, lighter plastic lenses, lens coatings and improved
lens designs. For example, enhanced coatings have permitted the introduction
of eyeglasses that offer improved durability, increased light transmission and
better cosmetics.
Increases in wealth and literacy and, therefore, eyeglass use, in less
developed markets. The Company believes that many first time purchasers of
eyeglasses, particularly in developing markets, are entering the market due to
growth in income, a population shift from rural to urban areas, higher
literacy rates, the spread of television and computers, and increasing
employment in office or industrial settings where vision correction is
necessary.
The substitution of plastic for glass lenses. The Company estimates that in
the past 25 years, the penetration of plastic lenses has grown from an
insignificant amount to a substantial majority of all eyeglass lenses sold in
North America and a majority of all eyeglass lenses sold in Western Europe.
This trend can be attributed largely to the lighter weight, greater impact
resistance and tinting flexibility of plastic as compared with glass lenses.
The Company believes that this trend will continue in these and other markets,
particularly where the percentage of plastic lens users is small. For example,
the Company believes that the plastic lens market in certain developing
markets is experiencing rapid growth, particularly when compared to the United
States and Western European markets.
BUSINESS STRATEGY
The Company has successfully implemented a business strategy that has
enabled it to achieve its strong market position and consistent growth in
sales and operating income (before non-recurring items). The Company intends
to continue to pursue this strategy to capitalize on the favorable industry
trends discussed above. This strategy includes the following:
Continual Introduction of Higher Value-Added, Technologically Advanced
Products. The Company believes that it is one of the technology leaders in the
plastic lens industry, especially with respect to the development of new lens
materials, and continues to devote significant resources to the development of
new products and technology. Over the last ten years, the Company has
successfully developed and marketed a number of innovative products. The
Company is a frequent winner of Optical Laboratory Association awards for its
products and, most recently, won an award for its new Percepta(R) progressive
lens. Sola also has developed its own major proprietary lens material,
Spectralite(R). Sola has developed and successfully marketed proprietary
progressive lenses made from Spectralite(R), including VIP Gold(R) and
Percepta(R). Sola's proprietary Matrix(TM) delivery system, which allows the
rapid delivery of lenses with anti-reflection coating, is also being installed
at an increasing number of United States and foreign locations. These new
products incorporate more complex design features and new materials and
coatings that differentiate them from competitors' products. Sales of these
new products generally have experienced a higher growth rate and generated an
above average gross profit per pair compared to other plastic lenses sold by
the Company.
Expansion of Global Distribution Capabilities. Since its inception, the
Company has selectively expanded its global distribution capabilities. The
Company has 50 major distribution centers in 20 countries and its products are
currently sold to customers in over 50 countries worldwide.
Commitment to Customer Service and Product Quality. The Company continually
seeks to differentiate itself by providing its customers with improved
delivery timeliness, a wide range of product offerings, and a commitment to
product quality, technical support and product education. With manufacturing
and distribution facilities in each of its three regions, the Company seeks to
customize its product mix to reflect local demands and to deliver products at
a lower cost and on a more timely basis than its competitors.
Emphasis on Efficient and Low Cost Manufacturing. Sola's manufacturing
strategy is to balance the benefits of local manufacturing with those of
least-cost sourcing. Each of the Company's three regions has its
S-4
<PAGE>
own manufacturing facilities and is largely self-sufficient. The Company
directs production of some high volume, standard products to lower cost sites
and produces newer, more complex products at more experienced manufacturing
sites located near the Company's research and development centers.
The Company has implemented an on-going management program to reduce
manufacturing costs through (i) centralized purchase of certain raw materials
and improved supplies procurement, (ii) increased Company-wide use of best
internal demonstrated manufacturing practices and (iii) increased use of
automation at sites located in higher labor cost countries. This program
provides for a continual review of costs on a plant by plant basis and a
sharing of information and ideas across all of the Company's manufacturing
units. The Company believes that the program has been responsible for
identifying significant cost saving opportunities, primarily as a result of
yield improvements, savings in the cost of supplies and raw materials and
higher asset utilization rates.
USE OF PROCEEDS
The proceeds to the Company from the sale of the Notes offered hereby (net
of underwriting discounts and commissions and the estimated expenses of the
offering) are estimated to be approximately $98.9 million. The Company plans
to use the proceeds of the offering to repay indebtedness outstanding under
its bank credit agreement (the "Credit Agreement"). Amounts repaid under the
Credit Agreement from the proceeds of the offering may, subject to the terms
and conditions of the Credit Agreement, be reborrowed from time to time.
Indebtedness under the Credit Agreement accrues interest at either a base
rate or a LIBOR rate (or the foreign jurisdiction equivalent under Tranche A)
plus a margin. Tranche A of the Credit Agreement permits borrowings of up to
$30 million (or foreign currency equivalent) and matures in October 2000 and
may be extended to May 2001. Tranche B permits borrowings of up to $270
million and matures in May 2001. Indebtedness currently outstanding under the
Credit Agreement was incurred in connection with the Company's repurchase of
all of its senior subordinated notes, the Company's acquisition (the "AO
Acquisition") of the worldwide ophthalmic lens business of American Optical
Corporation, the Company's acquisition of Neolens, Inc. and for general
corporate purposes. As of February 20, 1998, approximately $208 million was
outstanding under the Credit Agreement, and the weighted average interest rate
was approximately 6.1%.
S-5
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited short-term debt and the
unaudited capitalization of the Company and its consolidated subsidiaries as
of December 31, 1997 and as adjusted to give effect to the offering made
hereby and the application of the estimated net proceeds therefrom as if they
had occurred as of December 31, 1997. The information presented below should
be read in conjunction with the Consolidated Condensed Financial Statements
and the related notes thereto and "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" included in the Company's Form
10-Q for the quarter ended December 31, 1997.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
---------------------------
ACTUAL AS ADJUSTED
----------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Short-term debt, including current maturities of
long-term debt..................................... $ 20,791 $ 20,791
=========== ===========
Long-term debt:
Credit Agreement(1)............................... $ 190,000 $ 91,150
Notes offered hereby.............................. -- 100,000
Other long-term debt.............................. 1,689 1,689
----------- -----------
Total long-term debt............................ 191,689 192,839
----------- -----------
Shareholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares
authorized; no shares issued..................... -- --
Common stock, $.01 par value; 50,000,000 shares
authorized, 24,491,086 shares issued and
outstanding(2)................................... 245 245
Additional paid-in capital........................ 273,369 273,369
Equity participation loans........................ (230) (230)
Retained earnings................................. 41,082 41,082
Cumulative foreign currency adjustments........... (10,673) (10,673)
----------- -----------
Total shareholders' equity...................... 303,793 303,793
----------- -----------
Total capitalization............................ $ 495,482 $ 496,632
=========== ===========
</TABLE>
- --------
(1) At December 31, 1997, the Company had $104.4 million of unused borrowing
capacity under the Credit Agreement.
(2) Excludes 2,353,641 shares that may be issued upon the exercise of options
previously granted pursuant to the Company's stock option plan as of
December 31, 1997.
S-6
<PAGE>
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The selected financial data set forth below as of March 31, 1997 and 1996
and for the fiscal years ended March 31, 1997, 1996 and 1995 (other than
certain information set forth under Other Financial Data) are derived from,
and should be read in conjunction with, the audited financial statements and
the notes thereto included in the Company's Form 10-K for the fiscal year
ended March 31, 1997. The financial statements for the year ended March 31,
1997 reflect the consolidated operations of the Company after accounting for
the AO Acquisition on June 19, 1996, using the purchase method of accounting.
The selected financial information set forth below at December 31, 1997 and
for the nine months ended December 31, 1997 and 1996 is derived from unaudited
financial statements of the Company. In the opinion of the Company, such
unaudited financial statements reflect all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the
Company's results of operations for those periods and financial position at
those dates. The results for the nine months ended December 31, 1997 are not
necessarily indicative of the results for any future period. The selected
financial data as of March 31, 1995 and 1994 and for the four and eight months
ended March 31, 1994 and November 30, 1993, respectively (other than certain
information set forth under Other Financial Data), are derived from the
audited financial statements for such periods. The selected financial data set
forth below as of March 31, 1993 and for the fiscal year ended March 31, 1993
(other than certain information set forth under Other Financial Data) are
derived from the audited combined financial statements for such fiscal year.
The financial information for all periods prior to December 1, 1993, the date
of the Company's purchase of the Sola business unit (the "Predecessor
Business") of Pilkington plc, are those of the Predecessor Business. The
historical data of the Predecessor Business and the Company are not comparable
in all respects.
<TABLE>
<CAPTION>
SOLA INTERNATIONAL INC. PREDECESSOR BUSINESS
------------------------------------------------------------------------ ----------------------
FOUR EIGHT FISCAL
MONTHS MONTHS YEAR
NINE MONTHS ENDED FISCAL YEAR ENDED ENDED ENDED ENDED
DECEMBER 31, MARCH 31, MARCH 31, NOV. 30, MARCH 31,
--------------------- --------------------------------- --------- ---------- ----------
1997 1996 1997 1996 1995 1994 1993 1993
-------- -------- -------- -------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA
Net sales............... $402,624 $357,451 $488,689 $387,709 $345,631 $106,030 $ 200,025 $ 281,494
Cost of sales........... 211,591 195,731(3) 264,535(3) 201,991 185,626 93,428(1) 115,319 157,159
-------- -------- -------- -------- -------- -------- ---------- ----------
Gross profit............ 191,033 161,720 224,154 185,718 160,005 12,602 84,706 124,335
-------- -------- -------- -------- -------- -------- ---------- ----------
Research and development
expenses............... 13,744 12,767 17,539 13,329 14,051 3,877 7,246 10,785
Selling and marketing
expenses............... 72,529 67,133 92,387 66,345 61,143 19,146 33,483 51,183
General and
administrative
expenses............... 40,637 37,002 47,381 45,291 45,067(2) 10,584 23,438 32,041
In-process research and
development expense.... -- 9,500(3) 9,500(3) -- -- 40,000(1) -- --
-------- -------- -------- -------- -------- -------- ---------- ----------
Operating expenses...... 126,910 126,402 166,807 124,965 120,261 73,607 64,167 94,009
-------- -------- -------- -------- -------- -------- ---------- ----------
Operating income
(loss)................. 64,123 35,318 57,347 60,753 39,744 (61,005) 20,539 30,326
Interest expense, net... (13,387) (11,692) (15,961) (12,141) (18,522) (6,160) (3,071) (4,490)
Foreign currency
adjustments............ -- -- -- -- -- (167) (478) (814)
-------- -------- -------- -------- -------- -------- ---------- ----------
Income (loss) before
provision (benefit) for
income taxes, minority
interest and
extraordinary item..... 50,736 23,626 41,386 48,612 21,222 (67,332) 16,990 25,022
Provision (benefit) for
income taxes........... 16,946 6,655 10,737 13,623 6,649 (6,194) 5,833 8,507
Minority interest....... 312 -- 248 (401) (933) (256) (408) --
-------- -------- -------- -------- -------- -------- ---------- ----------
Income (loss) before
extraordinary item..... 34,102 16,971 30,897 34,588 13,640 (61,394) 10,749 16,515
Extraordinary items, net
of tax................. (5,923)(4) -- -- (912)(4) (3,915)(2) -- -- --
-------- -------- -------- -------- -------- -------- ---------- ----------
Net income (loss)....... $ 28,179 $ 16,971 $ 30,897 $ 33,676 $ 9,725 $(61,394) $ 10,749 $ 16,515
======== ======== ======== ======== ======== ======== ========== ==========
</TABLE>
S-7
<PAGE>
<TABLE>
<CAPTION>
SOLA INTERNATIONAL INC. PREDECESSOR BUSINESS
--------------------------------------------------- ----------------------
FOUR EIGHT FISCAL
MONTHS MONTHS YEAR
NINE MONTHS ENDED FISCAL YEAR ENDED ENDED ENDED ENDED
DECEMBER 31 MARCH 31, MARCH 31, NOV. 30, MARCH 31,
----------------- ----------------------- --------- ---------- ----------
1997 1996 1997(3) 1996 1995 1994 1993 1993
-------- -------- ------- ------- ------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA
EBITDA(5).............. $ 79,487 $ 48,853 $75,754 $75,075 $53,604 $(56,297) $ 27,556 $ 39,261
Ratio of EBITDA to
interest expense,
net................... 5.94 4.18 4.75 6.18 2.89 -- (6) (10) (10)
Ratio of earnings to
fixed charges(8)...... 4.30 2.75 3.24 4.36 2.03 -- (7) 4.86 4.86
Ratio of long-term debt
to capitalization (at
period end)(9)........ 0.39 0.36 0.36 0.34 0.40 0.75 (10) (10)
</TABLE>
<TABLE>
<CAPTION>
PREDECESSOR
SOLA INTERNATIONAL INC. BUSINESS
------------------------------------------------ -----------
AS OF AS OF MARCH 31,
DECEMBER 31, -----------------------------------------------
1997 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets........... $644,798 $605,508 $416,849 $383,457 $360,631 $246,944
Long-term debt......... 191,689 162,797 97,890 107,407 186,740 9,744
Parent company
investment............ -- -- -- -- -- 117,129
Total shareholders'
equity................ 303,793 284,298 192,241 159,443 63,495 --
</TABLE>
- --------
(1) For the four months ended March 31, 1994, the Company recorded two non-
recurring, non-cash charges associated with the Company's purchase of the
Predecessor Business in December 1993: (i) a $32.9 million charge for the
amortization associated with an inventory write-up to fair value that was
reflected in cost of sales; and (ii) a $40.0 million charge for the
write-off of in-process research and development that was reflected in
in-process research and development expense.
(2) For fiscal 1995, the Company recorded two non-recurring charges in
connection with the Company's initial public offering of the Company's
Common Stock in March 1995 (the "IPO"): (i) a $3.0 million charge for the
termination of the AEA management agreement with the Company that was
reflected in general and administrative expenses; and (ii) a $3.9 million
write-off of debt issuance costs that was reflected in the historical
financial statements as an extraordinary item.
(3) For fiscal 1997, the Company recorded two non-recurring charges in
connection with the Company's acquisition of the worldwide ophthalmic
lens business of American Optical Corporation in June 1996: (i) a $7.2
million charge for the amortization associated with an inventory write-up
to fair value that was reflected in cost of sales; and (ii) a $9.5
million charge for the write-off of in-process research and development
expense that was reflected in in-process research and development
expense.
(4) For fiscal 1996 and the nine months ended December 31, 1997, the
extraordinary items comprise losses due to the repurchase of senior
subordinated notes, net of tax.
(5) "EBITDA" represents, for any period, income (loss) before interest
(including amortization of original issue discount and debt issuance
costs), income taxes, depreciation and amortization. EBITDA is presented
because it is an accepted financial indicator of a company's ability to
service and/or incur indebtedness and management believes that its
presentation is helpful to investors. However, the EBITDA measure should
not be considered as an alternative to net income as a measure of the
Company's operating results or to cash flows as a measure of liquidity.
Because EBITDA is not calculated identically by all companies, the
presentation herein may not be comparable to other similarly titled
measures of other companies.
(6) EBITDA was insufficient to cover interest expense, net by $56.3 million
due to the Company recording two non-recurring, noncash charges. See Note
1 above.
(7) Earnings were insufficient to cover fixed charges by $60.4 million due to
the Company recording two non-recurring, noncash charges. See Note 1
above.
(8) See "Ratio of Earnings to Fixed Charges" in the accompanying Prospectus
for information regarding the computation of the ratio of earnings to
fixed charges.
(9) For purposes of this ratio, capitalization is defined as the sum of long-
term debt plus total shareholders' equity.
(10) The ratios for the Predecessor Business are not comparable to those of
the Company.
S-8
<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
The % Notes due 2008 (the "Notes") offered hereby are a series of "Debt
Securities" as defined and described in the accompanying Prospectus, and the
following description of the 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 accompanying Prospectus.
The following statements relating to the Notes and the Indenture (as defined
below) are summaries of certain provisions of the Notes and the Indenture and
do not purport to be complete. Such statements are qualified by reference to
the provisions of the Notes and the Indenture, copies of which have been or
will be filed as exhibits to or incorporated by reference in the Registration
Statement (as defined in the accompanying Prospectus) and may be obtained as
described under "Available Information" in the accompanying Prospectus. Unless
otherwise expressly stated or the context otherwise requires, all references
to the "Company" or "Sola" appearing under this caption "Description of the
Notes" and under the caption "Description of Debt Securities" in the
accompanying Prospectus mean Sola International Inc. excluding its
subsidiaries. Other capitalized terms used herein but not defined shall have
the meanings given to them in the accompanying Prospectus or, if not defined
in the Prospectus, in the Indenture.
The Notes will be senior unsecured obligations of the Company. The Notes
will be issued pursuant to the provisions of an Indenture (the "Indenture"),
entered into between the Company and State Street Bank and Trust Company of
California, N.A., as trustee (the "Trustee").
The Notes will mature on March , 2008. The Notes will bear interest from
March , 1998 (at the rate of interest referred to above) payable on March
and September of each year, commencing on September 30, 1998. Subject to
certain exceptions therein set forth, the Indenture provides for the payment
of interest on any interest payment date only to persons in whose names the
Notes are registered at the close of business on the corresponding regular
record date, which is the March or September , as the case may be
(whether or not a Business Day), next preceding such interest payment date.
Interest payments on the Notes will include interest accrued to, but
excluding, the applicable interest payment date, redemption date or maturity
date. Interest on the Notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
The Notes will be a separate series of Debt Securities under the Indenture,
limited initially in aggregate principal amount to $100 million. However, the
Company may from time to time, without the consent of the holders of the
Notes, provide for the issuance of additional Notes (which may constitute part
of the same series of Debt Securities as the Notes offered hereby) or other
Debt Securities under the Indenture in addition to the Notes offered hereby.
The Indenture will not limit the amount of other indebtedness that may be
issued by the Company or any of its subsidiaries. The Notes are not subject to
any sinking fund.
The Notes will be issued only in fully registered form without coupons, in
denominations of $1,000 and integral multiples thereof. The Notes will be
evidenced by one or more global Notes (the "Global Securities") in book-entry
form, except under the limited circumstances described in the accompanying
Prospectus under "Description of Debt Securities--Book-Entry Debt Securities."
The Global Securities will be registered in the name of a nominee of The
Depository Trust Company, as depositary for the Notes. Notices or demands to
or upon the Company in respect of the Notes and the Indenture may be served
and, in the event that Notes are issued in definitive certificated form, Notes
may be surrendered for payment, registration of transfer or exchange, at the
office or agency of the Company maintained for such purpose in the Borough of
Manhattan, The City of New York, which shall initially be the office of an
affiliate of the Trustee, which on the date of this Prospectus Supplement is
located at 61 Broadway, 15th Floor, New York, New York 10006.
OPTIONAL REDEMPTION
The Notes will be redeemable, as a whole or from time to time in part, at
the option of the Company on any date (a "Redemption Date") at a redemption
price equal to the greater of (i) 100% of the principal amount of the Notes to
be redeemed and (ii) the sum of the present values of the Remaining Scheduled
Payments (as
S-9
<PAGE>
hereinafter defined) thereon discounted to such Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as hereinafter defined) plus basis points, plus in
either case accrued interest on the principal amount being redeemed to such
Redemption Date; provided that installments of interest on Notes which are due
and payable on an interest payment date falling on or prior to the relevant
Redemption Date shall be payable to the Holders of such Notes, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant regular record date according to their terms and the provisions of
the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the Notes,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption Date for
the Notes, the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
Notes. "Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date for
the Notes, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third Business Day preceding such Redemption Date, as set forth
in the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, the average of the Reference Treasury Dealer Quotations actually
obtained by the Trustee for such Redemption Date. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third
Business Day preceding such Redemption Date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and BancAmerica
Robertson Stephens and their respective successors; provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any Note to be
redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
interest payment date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the Redemption Date, interest will cease to accrue on the Notes or portions
thereof called for redemption.
Except as described under "--Certain Covenants" below and under "Description
of Debt Securities-- Consolidation, Merger or Transfer of Assets" in the
accompanying Prospectus, the Indenture does not contain any provisions that
would afford holders of the Notes protection in the event of (i) a highly
leveraged or similar transaction involving the Company, (ii) a change in
control or (iii) a reorganization, restructuring, merger or similar
transaction involving the Company that may adversely affect the holders of the
Notes.
S-10
<PAGE>
CERTAIN COVENANTS
The Indenture will contain, among others, the following covenants:
Limitation on Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or guarantee any Debt secured by a Lien
on any Principal Property or by a Lien on any Debt or shares of capital stock
of, or other ownership interests in, any Restricted Subsidiary ("Secured
Debt") (whether such Principal Property, Debt, shares of capital stock or
ownership interests are owned or outstanding on the Original Issuance Date or
thereafter acquired or issued, as the case may be) if, immediately after
giving effect thereto, the sum, without duplication, of (a) the aggregate
principal amount of all Secured Debt (other than Excluded Debt (as defined
below)) and (b) the aggregate amount of all Attributable Debt in respect of
Sale and Leaseback Transactions (other than Excluded Transactions (as defined
below)) would exceed 15% of the Company's Consolidated Net Tangible Assets as
of the date of determination, unless the Company provides, concurrently with
or prior to the creation, incurrence, assumption or guarantee of such Secured
Debt, that the Notes shall be secured equally and ratably with (or, at the
option of the Company, prior to) such Secured Debt (for so long only as such
Secured Debt is so secured).
The provisions set forth in the immediately preceding paragraph shall not
apply to Debt secured by the following Liens ("Excluded Debt"):
(i) Liens existing on the Original Issuance Date;
(ii) Liens on any Principal Property, Debt, shares of capital stock or
other ownership interests existing at the time of acquisition thereof
(whether by merger, acquisition of stock or assets or otherwise) by the
Company or any of its Subsidiaries (whether or not the obligations secured
by such Liens are assumed by the Company or a Restricted Subsidiary),
provided that such Liens were not created in contemplation of or in
connection with such acquisition;
(iii) Liens upon or with respect to any Principal Property acquired,
constructed, improved, developed or expanded by the Company or any of its
Subsidiaries after the Original Issuance Date which (A) are created,
incurred or assumed contemporaneously with, or not later than 270 days
after, the latest to occur of the acquisition (whether by merger,
acquisition of stock or assets or otherwise), or the completion of
construction, improvement, development or expansion, as the case may be, of
such Principal Property, and (B) secure Debt incurred or assumed to finance
all or any part of the purchase price of such Principal Property or the
cost of such construction, improvement, development or expansion, as the
case may be;
(iv) Liens on shares of capital stock of or other ownership interests in
or property of a Restricted Subsidiary to secure Debt incurred or assumed
to finance all or any part of the acquisition cost of such Restricted
Subsidiary, provided that such Debt is incurred or assumed and the related
Liens are created not later than 270 days after such Restricted Subsidiary
first becomes a Subsidiary;
(v) Liens on the property of any Subsidiary securing Debt owing by such
Subsidiary to the Company or to any other Subsidiary;
(vi) Liens in favor of domestic or foreign governments or governmental
bodies to secure partial, advance, progress or other payments pursuant to
any contract or statute and Liens in favor of any domestic or foreign
government or governmental body incurred in connection with industrial
revenue, pollution control, private activity bond or similar financing;
(vii) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(viii) Liens for taxes, assessments or governmental charges or levies not
yet due or which are being contested by the Company in good faith and for
which appropriate reserves have been established in accordance with GAAP;
(ix) Permitted Liens; and
S-11
<PAGE>
(x) Liens for the sole purpose of extending, renewing or replacing in
whole or in part the Debt secured thereby referred to in the foregoing
clauses (i) through (ix), inclusive, or in this clause (x); provided,
however, that the Debt excluded pursuant to this clause (x) shall be
excluded only in an amount not to exceed the principal amount of Debt so
secured at the time of such extension, renewal or replacement (together
with any premium, fee or expense payable in connection with any such
replacement, extension or renewal), and that such extension, renewal or
replacement shall be limited to all or part of the Principal Property,
Debt, shares of capital stock or other ownership interests, as the case may
be, subject to the Lien so extended, renewed or replaced.
Limitation on Sale and Leaseback Transactions. The Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into, assume,
guarantee or otherwise become liable with respect to any Sale and Leaseback
Transaction involving any Principal Property or a significant portion thereof
(whether such Principal Property is owned on the Original Issuance Date or
thereafter acquired), if, immediately after giving effect thereto, the sum,
without duplication, of (a) the aggregate principal amount of all Secured Debt
(other than Excluded Debt) and (b) the aggregate amount of all Attributable
Debt in respect of Sale and Leaseback Transactions (other than Excluded
Transactions) would exceed 15% of the Company's Consolidated Net Tangible
Assets as of the date of determination.
The provisions set forth in the immediately preceding paragraph shall not
apply to any Sale and Leaseback Transaction (an "Excluded Transaction") if:
(i) not later than 270 days from the date of such Sale and Leaseback
Transaction, the Company or such Subsidiary applies an amount not less than
the greater of (A) the net proceeds of the sale of the Principal Property
(or portion thereof) sold pursuant to such Sale and Leaseback Transaction
and (B) the fair value (as determined by the Board of Directors by Board
Resolution) of such Principal Property (or portion thereof) to retire
Funded Debt of the Company or any Subsidiary, or to purchase other property
having a fair value (as determined by the Board of Directors by Board
Resolution) at least equal to the fair value (as determined by the Board of
Directors by Board Resolution) of the Principal Property (or portion
thereof) sold in such Sale and Leaseback Transaction and which other
property constitutes a Principal Property (or portion thereof);
(ii) such Sale and Leaseback Transaction occurs not later than 270 days
after the latest to occur of the date of acquisition by the Company or such
Subsidiary or the completion of construction of the Principal Property (or
portion thereof) sold pursuant to such transaction;
(iii) such Sale and Leaseback Transaction is between the Company and any
Subsidiary or between any Subsidiaries;
(iv) at the time such Sale and Leaseback Transaction is entered into, the
term of the related lease to the Company or such Subsidiary of the
Principal Property (or portion thereof) sold pursuant to such transaction
is three years or less;
(v) such Sale and Leaseback Transaction is a transaction in which the
relevant Principal Property (or significant portion thereof) is sold to and
leased back from any domestic or foreign government or governmental body in
connection with pollution control, industrial revenue, private activity
bond or similar financing;
(vi) such Sale and Leaseback Transaction involves the extension, renewal
or replacement (or successive extensions, renewals or replacements) in
whole or in part of a lease pursuant to a Sale and Leaseback Transaction
referred to in the above clauses (i) through (v); provided, however, that
such lease extension, renewal or replacement shall be limited to all or any
part of the same property leased under the lease so extended, renewed or
replaced (plus improvements to such property).
The Indenture does not restrict (i) the incurrence of unsecured debt by the
Company or any of its Subsidiaries or (ii) except as described under
"Description of Debt Securities--Consolidation, Merger and Transfer of Assets"
in the accompanying Prospectus, the transfer of a Principal Property to a
Subsidiary or any third party.
S-12
<PAGE>
CERTAIN DEFINITIONS
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, as
of the time of determination, the present value (discounted at a rate per
annum equal to the rate per annum at which, at the inception of the lease
involved in such Sale and Leaseback Transaction, the lessee would have been
able to borrow monies in an amount equal to the proceeds of the Principal
Property (or portion thereof) sold pursuant to such Sale and Leaseback
Transaction and for a term substantially similar to the term of such lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended)) of the obligation of the lessee thereunder
for rental payments (excluding, however, any amounts required to be paid by
such lessee, whether or not designated as rent or additional rent, on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges or any amounts required to be paid by such lessee thereunder
contingent upon the amount of sales or similar contingent amounts) during the
remaining term of such lease (including any period for which such lease has
been extended or may, at the option of the lessor, be extended). In the case
of any lease which is terminable by the lessee upon the payment of a penalty,
such rental payments shall also include the lesser of (i) the total amount of
rental payments required to be paid under such lease from the later of the
first date upon which such lease may be so terminated and the date of the
determination of such Attributable Debt, through the remaining term of such
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended) and (ii) the amount of such penalty.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Consolidated Net Tangible Assets" means, with respect to the Company and as
of any date of determination, the total assets of the Company and its
consolidated Subsidiaries determined in accordance with GAAP as they appear on
the then most recently prepared consolidated balance sheet of the Company as
of the end of a fiscal quarter, less (i) all liabilities shown on such
consolidated balance sheet that are classified and accounted for as current
liabilities or, in the event that such consolidated balance sheet does not
separately classify current liabilities, that otherwise would be considered
current liabilities under GAAP (excluding current maturities of long-term debt
and current maturities of capitalized lease obligations) and (ii) all assets
shown on such consolidated balance sheet that are classified and accounted for
as intangible assets and all other assets reflected in such consolidated
balance sheet which, although not identified as intangible assets, would be
considered intangible assets under GAAP, including, without limitation,
franchises, patents and patent applications, trademarks, brand names and
goodwill.
"Debt" means indebtedness for borrowed money or indebtedness evidenced by
bonds, notes, debentures or other similar instruments given to finance the
acquisition of any businesses, properties or assets of any kind (including,
without limitation, capital stock or other equity interests in any Person).
"Funded Debt" means, as of any date of determination, any Debt of the
Company or any of its Subsidiaries which, under GAAP, would appear as
indebtedness on a consolidated balance sheet of the Company as of such date
and which matures (or by its terms is extendable or renewable at the option of
the Company or such Subsidiary for a period ending) more than 12 months from
such date.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the date of application thereof.
"Lien" means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement or other encumbrance of
any nature whatsoever.
"Original Issuance Date" means March , 1998, the date on which the Notes
were originally issued.
"Permitted Lien" means (i) statutory liens or landlords', carriers',
warehousemens', mechanics', suppliers', materialmens', repairmens' or other
like Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other
S-13
<PAGE>
appropriate provisions, if any, required by GAAP shall have been made
therefor, (ii) pledges or deposits to secure surety, stay, appeal, indemnity,
customs or performance bonds which do not involve indebtedness for borrowed
money and (iii) Liens incurred in connection with repurchase, swap or other
similar agreements entered into for hedging purposes and not for speculation.
"Person" means any individual, corporation, business trust, partnership,
joint venture, joint-stock company, limited liability company, association,
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Principal Property" means any manufacturing, processing, distribution,
research, research and development, warehousing or principal administration
facility (including, without limitation, land, fixtures and equipment) owned
or leased by the Company or any Subsidiary (including any of the foregoing
acquired or leased after the Original Issuance Date) and located within the
United States of America, the gross book value of which exceeds 1% of the
Company's Consolidated Net Tangible Assets at the date of determination, in
each case other than any of the foregoing which the Board of Directors by
Board Resolution determines, together with all other manufacturing,
processing, distribution, research, research and development, warehousing and
principal administration facilities (including, without limitation, land,
fixtures and equipment) previously so determined, are not of material
importance to the business conducted by the Company and its Subsidiaries taken
as an entirety.
"Restricted Subsidiary" means any Subsidiary of the Company which (i) owns
or leases a Principal Property (or portion thereof) and (ii) (A) substantially
all of the property of which is located, or substantially all of the business
of which is carried on, within the United States of America or (B) which is
incorporated or organized under the laws of the United States of America, any
state thereof or the District of Columbia.
"Sale and Leaseback Transaction" means any direct or indirect arrangement,
in one transaction or a series of related transactions, with any Person
providing for the leasing to the Company or a Subsidiary of any Principal
Property (or significant portion thereof), whether owned on the Original
Issuance Date or thereafter acquired, which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person with the
intention of taking back a lease of such Principal Property (or significant
portion thereof).
"Subsidiary" means (i) any corporation at least a majority of the total
voting power of whose outstanding Voting Stock is owned, directly or
indirectly, at the date of determination by the Company and/or one or more
other Subsidiaries of the Company, (ii) any partnership in which the Company
and/or one or more other Subsidiaries of the Company owns, directly or
indirectly, at the date of determination at least a majority interest in the
equity capital or profits of such partnership, or (iii) any other Person in
which the Company and/or one or more other Subsidiaries of the Company,
directly or indirectly, at the date of determination, (x) owns at least a
majority ownership interest or (y) has the power to elect or direct the
election of at least a majority of the directors or other governing body of
such Person.
"Voting Stock" means, with respect to any corporation, securities of any
class or series of such corporation, the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of directors
of the corporation.
DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE
The Notes will be subject to defeasance and covenant defeasance as described
in the accompanying Prospectus under "Description of Debt Securities--
Satisfaction, Discharge and Defeasance--Defeasance and Covenant Defeasance."
In that regard, the covenants described above under "--Certain Covenants" and
certain other covenants in the Indenture, will be subject to such covenant
defeasance. If the Company elects to effect defeasance or covenant defeasance
with respect to the Notes, the Company will be required to effect such
defeasance or covenant defeasance, as the case may be, with respect to all of
the Notes then Outstanding. The provisions described in the accompanying
Prospectus under "Description of Debt Securities--Satisfaction, Discharge and
Defeasance--Satisfaction and Discharge" will also be applicable with respect
to the Notes.
S-14
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Company has agreed to sell to the Underwriters
named below (the "Underwriters"), and the Underwriters have severally agreed
to purchase, the principal amount of Notes set forth opposite their respective
names below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
------------ ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................... $
Morgan Stanley & Co. Incorporated..............................
BancAmerica Robertson Stephens.................................
------------
Total..................................................... $100,000,000
============
</TABLE>
In the Purchase Agreement, the several Underwriters named therein have
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Notes being sold pursuant to the Purchase Agreement if any such Notes
are purchased. The Purchase Agreement provides that, in the event of a default
by an Underwriter named therein, the purchase commitments of the non-
defaulting Underwriters named therein may in certain circumstances be
increased.
The Underwriters have advised the Company that they propose initially to
offer the Notes offered hereby to the public at the public offering price set
forth on the cover page of this Prospectus Supplement and to certain dealers
at such price less a concession not in excess of % of the principal amount
thereof. The Underwriters may allow, and such dealers may reallow, a discount
not in excess of % of the principal amount thereof on sales to certain other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The Notes constitute a new issue of securities with no established trading
market. The Company does not intend to apply for listing of the Notes on a
national securities exchange. The Company has been advised by the Underwriters
that the Underwriters intend to make a market in the Notes, but the
Underwriters are not obligated to do so and may discontinue market-making at
any time without notice. No assurance can be given as to whether or not a
trading market for the Notes will develop or as to the liquidity of any
trading market for the Notes which may develop.
Until the distribution of the Notes is completed, rules of the Securities
and Exchange Commission may limit the ability of the Underwriters and certain
selling group members, if any, to bid for and purchase the Notes. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the Notes. Such transactions consist
of bids or purchases for the purpose of pegging, fixing or maintaining the
price of the Notes.
If the Underwriters create a short position in the Notes in connection with
this offering (i.e., they sell more Notes than are set forth on the cover page
of this Prospectus Supplement), the Underwriters may reduce that short
position by purchasing Notes in the open market.
The Underwriters may also impose a penalty bid on certain Underwriters and
selling group members, if any. This means that if the Underwriters purchase
Notes in the open market to reduce the Underwriters' short position or to
stabilize the price of the Notes, they may reclaim the amount of the selling
concession from any Underwriter or selling group member who sold those Notes
as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security.
S-15
<PAGE>
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Notes. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
As described above under "Use of Proceeds," the Company intends to apply the
net proceeds from the offering made hereby to repay borrowings under the
Credit Agreement. Bank of America National Trust and Savings Association
("BofA") is a lender and agent for the other lenders under the Credit
Agreement. Because BofA is an affiliate of one of the Underwriters, and
because more than 10% of the net proceeds from the offering made hereby will
be used to repay loans made by BofA under the Credit Agreement, this offering
is being made pursuant to Conduct Rule 2710(c)(8) of the National Association
of Securities Dealers, Inc.
LEGAL MATTERS
The validity of the Notes will be passed upon by Fried, Frank, Harris,
Shriver & Jacobson (a partnership including professional corporations), New
York, New York. Brown & Wood LLP, San Francisco, California, will act as
counsel to the Underwriters.
EXPERTS
The consolidated financial statements of Sola International Inc. appearing
in Sola International Inc.'s Annual Report (Form 10-K) for the year ended
March 31, 1997, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The combined financial statements of the Worldwide Ophthalmic Group of
American Optical Corporation appearing in Exhibit 99.2 of Sola International
Inc.'s Current Report (Form 8-K/A) dated as of May 6, 1996, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such combined
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
S-16
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE +
+WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES +
+LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED MARCH 5, 1998
PROSPECTUS
$250,000,000
SOLA INTERNATIONAL INC.
DEBT SECURITIES AND COMMON STOCK
-----------
Sola International Inc. (the "Company" or "Sola") may offer, issue and sell
from time to time, together or separately, (i) senior, senior subordinated or
subordinated debt securities (the "Debt Securities"), consisting of debentures,
notes and/or other evidences of indebtedness, and (ii) shares of its common
stock, $.01 par value per share (the "Common Stock"), in each case, in amounts,
at prices and on such terms to be determined at the time of the offering. The
Common Stock and the Debt Securities are collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be issued in one or
more series and/or issuances and will have an aggregate public offering price
of up to $250,000,000 (or the equivalent thereof, based on the applicable
exchange rate at the time of sale, in one or more foreign currencies, currency
units or composite currencies as shall be designated by the Company). Certain
specific terms of the particular Securities in respect of which this Prospectus
is being delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, (i) in the case of Debt
Securities, the specific title, the aggregate principal amount, the aggregate
offering price, ranking as senior debt or subordinated debt, the denomination,
the maturity, the premium, if any, the interest rate (which may be fixed,
floating or adjustable), if any, the time and method of calculating payment of
interest, if any, the place or places where principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable, the currency in
which principal of, premium, if any, and interest, if any, on such Debt
Securities will be payable, any terms of redemption at the option of the
Company or repayment at the option of the holder thereof, any sinking fund
provisions, the terms, if any, for conversion or exchange into other
securities, listing, if any, on a securities exchange, any other special terms
and the public offering price and any other terms of the offering and sale
thereof and (ii) in the case of Common Stock, the aggregate number of shares
offered, the public offering price and other terms of the offering and sale
thereof. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities.
Unless otherwise specified in a Prospectus Supplement, the Debt Securities,
when issued, will be unsecured and unsubordinated obligations of the Company
and will rank pari passu in right of payment with all other unsecured and
unsubordinated indebtedness of the Company. The Common Stock is listed on the
New York Stock Exchange (the "NYSE") under the trading symbol "SOL." Any Common
Stock sold pursuant to a Prospectus Supplement will be listed on such exchange,
subject to official notice of issuance. This Prospectus may not be used to
consummate sales of Securities unless accompanied by a Prospectus Supplement.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED
HEREBY.
-----------
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 Securities may be sold to or through underwriters or dealers as
designated from time to time, to other purchasers directly or through agents
designated from time to time or through a combination of such methods. If
agents of the Company or any dealers or underwriters are involved in the sale
of the Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts will be set forth in or may be calculated from the Prospectus
Supplement with respect to such Securities. See "Plan of Distribution."
-----------
The date of this Prospectus is , 1998.
<PAGE>
Certain persons, including any underwriters, participating in this offering
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Securities. Such transactions may include stabilizing, the
purchase of Securities to cover syndicate short positions and the imposition
of penalty bids. For a description of these activities, see "Plan of
Distribution."
----------------
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"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Commission also maintains a Web site
(http://www.sec.gov) from which such reports, proxy statements and other
information may be obtained. In addition, reports, proxy statements and other
information concerning the Company may be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), of which this Prospectus constitutes a part. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which were omitted in accordance with
the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement and to the schedules
and exhibits filed therewith. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission are not necessarily complete, and in
each instance reference is made to the copy of such document so filed. Each
such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant to
the Exchange Act are incorporated herein by reference:
1. the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997 (the "Form 10-K");
2. the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
3. the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
4. the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1997;
5. the Company's Current Report on Form 8-K, dated as of February 23,
1998; and
6. Exhibit 99.2 to the Company's Current Report on Form 8-K/A, dated as
of May 6, 1996.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of the filing of such documents.
2
<PAGE>
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein, in the accompanying Prospectus Supplement
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including a
beneficial owner of the Securities, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the documents incorporated by reference in this Prospectus, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should
be directed to: Corporate Secretary, Sola International Inc., 2420 Sand Hill
Road, Suite 200, Menlo Park, California 94025; telephone number: (650) 324-
6868.
THE COMPANY
Sola designs, manufactures and distributes a broad range of eyeglass lenses,
primarily focusing on the plastic lens segment of the global lens market. Sola
has manufacturing and distribution sites in three major regions--North
America, Europe and Rest of World (comprised primarily of Australia, Asia and
South America).
The Company's principal executive offices are located at 2420 Sand Hill
Road, Suite 200, Menlo Park, California 94025 and its telephone number at that
location is (650) 324-6868.
3
<PAGE>
RISK FACTORS
In addition to the other information contained and incorporated by reference
in this Prospectus, prospective investors should carefully consider the
following risk factors before making an investment in the Notes offered
hereby.
HIGHLY COMPETITIVE INDUSTRY AND EFFECT OF NEW PRODUCTS ON RESULTS
The eyeglass lens and coating industry is highly competitive. The Company
competes principally on the basis of customer service, the quality and breadth
of product offerings, and price. The eyeglass lens and coating industry is
characterized by price competition, which can be severe in certain markets,
particularly for standard products. Sola attempts, to the extent possible, to
counter competition on the basis of price by focusing on providing a rapid
response to orders, maintaining high fill rates, developing differentiated new
products, and educating processing laboratories and eyecare practitioners on
the benefits of Sola lenses and coatings. There can be no assurance, however,
that the Company's competitors will not develop products or services that are
more effective or less expensive than the Company's products or which could
render certain of the Company's products less competitive. Since recently-
developed products comprise a substantial portion of the Company's sales, the
Company's performance and future growth are dependent upon its continuing
ability to develop and market new products. The Company's quarterly results
can be affected by the ability to generate sales from new products as
anticipated and the costs of such introductions.
Some of the Company's competitors have significantly greater financial
resources than the Company to fund expansion and research and development. See
"--Substantial Indebtedness" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources" included in the Company's Form 10-K. Within a particular market,
certain of the Company's competitors may enjoy a "home-country" advantage over
foreign competition. In addition, in certain markets (primarily Europe), the
Company also faces competition from a number of its principal competitors
which are vertically integrated with processing centers to a greater extent
than the Company, enabling them to customize prescription lenses. This limits
the number of independent lens processing customers to which the Company can
market its products.
RESTRICTIONS ON PAYMENT OF DIVIDENDS FROM SUBSIDIARIES
The Company's foreign operations are conducted through its subsidiaries.
These operations contribute significantly to the Company's sales and
profitability. The payment of dividends and the making of loans and advances
to the Company by its subsidiaries may be subject to statutory restrictions,
are contingent upon the results of operations of those subsidiaries and are
subject to various business considerations. Dividends and other payments to
the Company from subsidiaries in certain jurisdictions are subject to legal
restrictions and may have adverse tax consequences to the Company. Management
reviews the need for cash distributions to the Company from its foreign
subsidiaries on a case by case basis. If the need for cash distributions from
the subsidiaries should arise in the future, there can be no assurance that
the subsidiaries will be permitted to make such cash distributions without
legal restrictions or adverse tax consequences to the Company.
INTERNATIONAL OPERATIONS
The Company operates manufacturing and distribution sites in three major
regions of the world--North America (including Mexico), Europe and Rest of
World (comprising primarily Australia, Asia and South America)--and derived
approximately half of its net sales in the fiscal year ended March 31, 1997
from the sale of products outside the United States. As a result, a
significant portion of the Company's sales and operations are subject to
certain risks, including adverse developments in the foreign political and
economic environment, exchange rates, tariffs and other trade barriers,
staffing and managing foreign operations and potentially adverse tax
consequences. Although the Company and its predecessors have been successfully
conducting business outside of the United States since its inception in 1960,
there can be no assurance that any of these factors will not have a material
adverse effect on the Company's financial condition or results of operations
in the future.
4
<PAGE>
The Company's interest expense is denominated predominantly in U.S. dollars;
its cash flow, however, is comprised of a variety of currencies. Although the
Company may enter into currency swap agreements with financial institutions to
reduce its exposure to fluctuations in foreign currency values relative to its
debt obligations, such hedging transactions, if entered into, will not
eliminate that risk entirely. As a result of the Company's worldwide
operations, currency exchange rate fluctuations tend to affect the Company's
results of operations and financial position. The Company has significant
operations in Brazil, which has, until recently, experienced a hyper-
inflationary environment and whose currency risk may not be effectively
hedged. The functional currency of the Company's operations in Brazil is the
U.S. dollar. Under U.S. generally accepted accounting principles for hyper-
inflationary countries, all translation and transaction adjustments of foreign
operations are reflected in the Company's statements of operations. The
Company's historical statements of operations reflect significant charges to
income primarily attributable to significant devaluations of the Brazilian
currency. There can be no assurance that hyper-inflationary conditions will
not return to Brazil or be present in other countries in which the Company has
significant operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Currency Exchange Rates" and "--
Inflation" included in the Company's Form 10-K.
RELIANCE ON KEY MANAGEMENT
The operation of the Company requires managerial and operational expertise.
Although all of the key management employees have employment contracts with
the Company, there can be no assurance that such individuals will remain with
the Company. If, for any reason, such key personnel do not continue to be
active in the Company's management, operations could be adversely affected.
DIVIDEND POLICY; RESTRICTIONS ON PAYMENT OF DIVIDENDS
The Company has not declared or paid any cash dividends on any class of its
capital stock, and does not intend to pay dividends on its Common Stock in the
foreseeable future. The Company's Credit Agreement with Bank of America
National Trust and Savings Association restricts and limits the payment of
dividends on the Common Stock. See "Market for the Registrant's Common Equity
and Related Stockholder Matters" in the Company's Form 10-K.
ANTITAKEOVER PROVISIONS
The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated By-Laws contain certain provisions that could make more difficult
the acquisition of the Company by means of a tender offer, a proxy contest or
otherwise. These provisions include advance notice procedures for stockholders
to nominate candidates for election as directors of the Company and for
stockholders to submit proposals for consideration at stockholders' meetings.
In addition, the Company is subject to Section 203 of the Delaware General
Corporation Law, which limits transactions between a publicly held company and
"interested stockholders" (generally, those stockholders who, together with
their affiliates and associates, own 15% or more of a company's outstanding
capital stock). This provision of Delaware law also may have the effect of
deterring certain potential acquisitions of the Company.
5
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in any accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include capital expenditures, the
repayment of indebtedness, working capital and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated. The ratios for the periods ended prior to December 1,
1993, the date of the Company's purchase of the Sola business unit (the
"Predecessor Business") of Pilkington plc, are those of the Predecessor
Business. The historical financial data, including the ratios set forth below,
of the Predecessor Business and the Company are not comparable in all
respects.
<TABLE>
<CAPTION>
PREDECESSOR
SOLA INTERNATIONAL INC. BUSINESS
-------------------------------------------- -----------------
NINE FOUR EIGHT FISCAL
MONTHS MONTHS MONTHS YEAR
ENDED ENDED ENDED ENDED
DEC. 31, FISCAL YEAR ENDED MAR. 31, MAR. 31, NOV. 30, MAR. 31,
-------- -------------------------- -------- -------- --------
1997 1997 1996 1995 1994(2) 1993 1993
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges(1)....... 4.30 3.24 4.36 2.03 -- 4.86 4.86
</TABLE>
- --------
(1) In calculating this ratio, earnings consist of income (loss) before income
taxes plus fixed charges. Fixed charges consist of interest expense, and
amortization of deferred financing fees, whether expensed or capitalized,
plus the portion of rental expense under operating leases which has been
deemed by the Company to be representative of the interest factor.
(2) Earnings were insufficient to cover fixed charges by $60.4 million due to
the Company recording two non-recurring, noncash charges associated with
the acquisition by the Company of the Sola business unit of Pilkington plc
on December 1, 1993: (i) a $32.9 million charge for the amortization
associated with an inventory write up to fair value and (ii) a $40.0
million charge for the write-off of in-process research and development.
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 a Prospectus Supplement (the "Offered Debt Securities") will be
described in the applicable Prospectus Supplement. To the extent that any
particular terms of the Debt Securities described in a Prospectus Supplement
differ from any of the terms described herein, then such terms described
herein shall be deemed to have been superseded by such Prospectus Supplement.
The Offered Debt Securities are to be issued in one or more series under an
Indenture as amended or supplemented from time to time (the "Indenture")
between the Company and State Street Bank and Trust Company of California,
N.A., as Trustee. The term "Trustee," as used herein shall mean State Street
Bank and Trust Company of California, N.A.; if at any time there is more than
one Trustee acting under the Indenture, the term "Trustee" as used herein with
respect to Debt Securities of any particular series shall mean the Trustee
with respect to the Offered Debt Securities of such series. The Indenture has
been filed as an exhibit to the Registration Statement of which this
Prospectus is a part and is subject to and governed by the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The following summaries of
certain provisions of the Indenture and the Offered Debt Securities do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture, including the definitions
therein of certain terms and of those terms made a part thereof by the Trust
Indenture Act. Wherever particular provisions or defined terms of the
Indenture are referred to, such provisions or defined terms are incorporated
herein by reference.
6
<PAGE>
GENERAL
The Debt Securities will be unsecured obligations of the Company. Unless
otherwise stated in a Prospectus Supplement, the Debt Securities will be
unsubordinated obligations of the Company and will rank pari passu in right of
payment with all other unsecured and unsubordinated indebtedness of the
Company. The Company may also issue Debt Securities ("Subordinated Debt
Securities") which are subordinated in right of payment, in the manner and to
the extent described in the applicable Prospectus Supplement, to all existing
and future Senior Indebtedness (as defined in the applicable Prospectus
Supplement) of the Company.
The Company conducts a significant portion of its business through its
direct and indirect, domestic and foreign subsidiaries. Accordingly, the cash
flow of the Company and the consequent ability to service its debt, including
the Debt Securities, are partially dependent on the earnings of such
subsidiaries and the Debt Securities will be effectively subordinated to all
existing and future indebtedness, guarantees and other liabilities of such
subsidiaries.
The Debt Securities to be offered by this Prospectus are limited to
$250,000,000 in aggregate public offering price. The Indenture does not limit
the amount of Debt Securities that may be issued thereunder and provides that
Debt Securities may be issued thereunder from time to time in one or more
series. All Debt Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent
of any Holder, for issuances of additional Debt Securities of such series.
(Section 301) The Indenture provides that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities.
Reference is made to the Prospectus Supplement relating to the Offered Debt
Securities for the following terms, where applicable, of the Offered Debt
Securities: (1) the title of the Offered Debt Securities or series of which
they are a part; (2) the aggregate principal amount of the Offered Debt
Securities and any limit on the aggregate principal amount of the Offered Debt
Securities; (3) the Person to whom any interest on an Offered Debt Security of
the series shall be payable, if other than the Person in whose name that
Offered Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the Regular Record Date for such
series, (4) the date or dates, or the method or methods, if any, by which such
date or dates shall be determined, on which the principal of (and premium, if
any, on) such Offered Debt Securities will be payable; (5) the rate or rates
(which may be fixed, floating or adjustable) or the method of determination
thereof, at which the Offered Debt Securities will bear interest, if any, the
date or dates from which such interest will accrue or method by which such
date or dates shall be determined, the Interest Payment Dates on which any
such interest will be payable, the Regular Record Date, if any, for any such
interest payable on any Interest Payment Date, or the method by which such
date or dates shall be determined, whether and under what circumstances
Additional Amounts on such Offered Debt Securities will be payable and the
basis upon which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months; (6) the place or places where the principal of
and any premium and interest on such Offered Debt Securities will be payable;
(7) the period or periods within which, the price or prices at which, the
currencies, currency units or composite currencies in which, and the other
terms and conditions upon which such Offered Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (8) the obligation, if any,
of the Company to redeem, repay or purchase any of such Offered Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof, and the period or periods within which, the price
or prices at which and the other terms and conditions upon which any of such
Offered Debt Securities will be redeemed, repaid or purchased, in whole or in
part, pursuant to any such obligation; (9) the denominations in which such
Offered Debt Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (10) if other than the currency of
the United States of America, the foreign currencies, currency units or
composite currencies in which the principal of or any premium or interest on
such Offered Debt Securities will be payable (and the manner in which the
equivalent of the principal amount thereof in the currency of the United
States of America is to be determined for any purpose, including for the
purpose of determining the principal amount deemed to be outstanding at any
time); (11) if the amount of payments of principal of or any premium or
interest on such Offered Debt Securities ("Indexed Debt Securities") may be
determined with reference to an index, pursuant to a formula, or pursuant to
other methods,
7
<PAGE>
the manner in which such amounts will be determined; (12) if the principal of
or any premium or interest on such Offered Debt Securities is to be payable,
at the election of the Company or a Holder thereof, in one or more currencies,
currency units or composite currencies other than those in which the Offered
Debt Securities are stated to be payable, the currencies, currency units or
composite currencies in which payment of any such amount as to which such
election is made will be payable, and the periods within which and the terms
and conditions upon which such election is to be made; (13) if other than the
entire principal amount thereof, the portion of the principal amount of such
Offered Debt Securities which will be payable upon declaration of acceleration
of the Maturity thereof pursuant to the Indenture or, if applicable, the
portion of the principal amount of Offered Debt Securities that is convertible
into or exchangeable for other securities or the method by which such portion
will be determined; (14) if applicable, that such Offered Debt Securities are
subject to defeasance or covenant defeasance (each as hereinafter defined) as
provided in the Indenture; (15) whether such Offered Debt Securities are
convertible into or exchangeable for Common Stock or other securities and the
terms and conditions upon which such conversion or exchange may be effected;
(16) whether any of the Offered Debt Securities will be issued in whole or in
part in book-entry form and, in such case, the depositary for such book-entry
security or securities and the circumstances, if any, in addition to the
circumstances (if applicable) described below under "--Book-Entry Debt
Securities," under which any such book-entry Debt Securities may be registered
in the name of a Person other than such depositary or its nominee; (17)
whether Offered Debt Securities are to be issuable as registered securities,
as bearer securities or alternatively as bearer and registered securities and
whether the bearer securities are to be issuable with coupons, without coupons
or both, and any restrictions applicable to the offer, sale or delivery of the
bearer securities and the terms, if any, upon which bearer securities of the
series may be exchanged for registered securities of the series and vice
versa; (18) if any of the Offered Debt Securities are to be issuable as bearer
securities, the date as of which any such bearer securities shall be dated, if
other than the date of original issuance of the first of such bearer
securities to be issued; (19) provisions, if any, granting special rights to
the Holders of such Offered Debt Securities upon the occurrence of such events
as may be specified; (20) any addition to, or modification or deletion of, any
Events of Default or covenants provided for with respect to the Offered Debt
Securities; (21) the terms, if any, pursuant to which the Offered Debt
Securities will be made subordinate in right of payment to all Senior
Indebtedness of the Company, and the definition of any such Senior
Indebtedness; (22) whether the payment of principal, premium and interest, if
any, Additional Amounts, if any, and other amounts due under the Indenture,
and performance of the Company's other obligations under the Indenture, will
be guaranteed by one or more guarantors, including subsidiaries of the
Company; and (23) any other terms of such Offered Debt Securities, whether or
not consistent with the provisions of the Indenture. (Section 301)
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, the principal of, premium, if any, or interest, if any, on
the Debt Securities initially will be payable, and the Debt Securities
initially will be exchangeable and transfers thereof initially will be
registrable, at the office of the Trustee specified under "--Concerning the
Trustee," provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register or by wire transfer to an account located in
the United States maintained by the Person entitled thereto. (Sections 305,
307 and 1002). Any payment of principal and any premium or interest required
to be made on an Interest Payment Date, Redemption Date or at Maturity which
is not a Business Day at any Place of Payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date or at
Maturity, as the case may be, and no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Maturity. (Section
113)
All monies paid by the Company to the Trustee for the payment of principal
of (and premium, if any) or interest, if any, on any Debt Security that remain
unclaimed by the Holder of such Debt Security at the end of two years after
such principal, premium or interest shall become due and payable will be
repaid by the Trustee to the Company upon Company Request, and such Holder
will thereafter look only to the Company for payment thereof. (Section 1003)
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, the Debt Securities will be issued only in fully registered
form, without coupons, in denominations of $1,000 or any
8
<PAGE>
integral multiple thereof. (Section 302). No service charge will be made for
registration of any transfer or exchange of the Debt Securities, but the
Company may, subject to certain exceptions, require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities (as defined below) to be offered and sold at a substantial discount
from their stated principal amount. In addition, under Treasury Regulations it
is possible that Debt Securities which are offered and sold at their stated
principal amount would, under certain circumstances, be treated as issued at
an original issue discount for federal income tax purposes. Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities (or other Debt Securities treated as issued at an
original issue discount) will be described in the Prospectus Supplement
relating thereto. "Original Issue Discount Security" means a security,
including any security that does not provide for the payment of interest prior
to Maturity, which is issued at a price lower than the principal amount
thereof and which provides that upon redemption or acceleration of the Stated
Maturity thereof an amount less than the principal amount thereof shall become
due and payable. (Section 101)
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (a) failure to pay principal of or premium, if any,
on any Debt Security of that series when due; (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (e)
default under any bond, debenture, note, mortgage, indenture or other
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (or by a
Significant Subsidiary of the Company, the repayment of which the Company has
guaranteed or for which the Company is directly responsible or liable as
obligor or guarantor), having an aggregate principal amount outstanding of at
least $20,000,000, whether such indebtedness exists at the date of the
Indenture or shall thereafter be created, which default shall have resulted in
such indebtedness being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness being
discharged or such acceleration having been rescinded or annulled within 30
days after written notice as provided in the Indenture; (f) certain events in
bankruptcy, insolvency or reorganization of the Company; and (g) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501). No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities issued thereunder.
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series may declare the principal of (or, if any of the Debt Securities of
that series are Original Issue Discount Securities or Indexed Debt Securities,
such portion of the principal amount as may be specified in the terms of that
series) and accrued interest on all the Debt Securities of that series to be
due and payable immediately by notice in writing to the Company (and to the
Trustee, if given by the Holders). At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, and
before a judgment or decree based on acceleration has been obtained, the
Holders of a majority in principal amount of the Outstanding Debt Securities
of that series may, under certain circumstances, rescind and annul such
acceleration by written notice. (Section 502). For information as to waiver of
defaults, see "--Modification and Waiver."
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities or
Indexed Debt Securities for the particular provisions relating to acceleration
of the Maturity of a portion of the principal amount of such Original Issue
Discount Securities or Indexed Debt Securities upon the occurrence of an Event
of Default and the continuation thereof.
9
<PAGE>
The Trustee shall, within 90 days after the occurrence of a default with
respect to Debt Securities of any series, give all Holders of Debt Securities
of such series then Outstanding notice of all uncured defaults known to it
(the term default to mean the events specified above without grace periods),
provided that, except in the case of a default in the payment of principal of
or any premium or interest on any Debt Security of any series, or in the
payment of any sinking fund installment with respect to Debt Securities of any
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 all Holders of Debt Securities of such series then outstanding. (Trust
Indenture Act of 1939)
The Indenture provides that the Trustee will be under no obligation, subject
to the duty of the Trustee during a default to act with the required standard
of care, to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders of the Debt Securities of any
series, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against costs, expenses and liabilities which might be
incurred by it in compliance with such request. (Section 601). Subject to such
provisions for indemnification of the Trustee and to certain other conditions,
the Holders of a majority in principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of that series. (Section 512)
Under the Indenture, the Company is required to furnish to the Trustee
annually a statement by certain officers of the Company to the effect that to
the best of their knowledge the Company is not in default in the fulfillment
of any of its obligations under the Indenture or, if there has been a default
in the fulfillment of any such obligation, specifying the nature and status of
such default. (Section 1005)
COVENANTS
The particular covenants, if any, relating to any series of Debt Securities
will be described in the Prospectus Supplement relating to such series. If any
such covenants are described, the Prospectus Supplement will also state
whether the "covenant defeasance" provisions described below also apply.
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
Under the Indenture, the Company may not consolidate with or merge with or
into any other Person, and the Company may not sell, lease or convey all or
substantially all of its assets to another Person, unless (i) (a) in the case
of a merger, the Company is the surviving corporation in the merger, or (b)
the Person (if other than the Company) surviving the merger, formed by such
consolidation or which acquires such assets is an entity organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and expressly assumes payment of the principal of and
any premium and interest on the Debt Securities and the performance and
observance of all of the covenants and conditions of the Indenture to be
performed or observed by the Company and (ii) immediately thereafter, no Event
of Default or event which, with notice or lapse of time or both, would
constitute an Event of Default shall have occurred and shall be continuing.
(Article Eight)
In the event of any transaction described in and complying with the
conditions listed in the immediately preceding paragraph in which the Company
is not the surviving company, the successor entity would be substituted for,
and may exercise every right and power of the Company and, except in the case
of a lease, the Company would be relieved of any obligations and covenants
under the Indenture and the Debt Securities.
SATISFACTION, DISCHARGE AND DEFEASANCE
Satisfaction and Discharge. The Indenture, with respect to any series of
Debt Securities (except for certain specified surviving obligations, including
(A) any rights of registration of transfer or exchange and (B) rights to
receive the principal, premium, if any, and interest, if any, on the Debt
Securities) will be discharged and canceled upon the satisfaction of certain
conditions, including the following: (i) all Debt Securities of such series
10
<PAGE>
that have been theretofore authenticated and delivered shall have been
delivered to the Trustee for cancellation or (ii) (a) all Debt Securities of
such series not theretofore delivered to the Trustee for cancellation have
become due or payable, will become due and payable at their Stated Maturity
within one year or are to be called for redemption within one year and (b) the
deposit with such Trustee of an amount sufficient to pay the principal,
premium, if any, and interest, if any, to the Stated Maturity or Redemption
Date, as the case may be, of all Debt Securities of such series. (Section 401)
Defeasance and Covenant Defeasance. If so specified in the Prospectus
Supplement with respect to Debt Securities of any series, the Company at its
option, (i) will be discharged from any and all obligations in respect of the
Debt Securities of or any Debt Securities within such series (except for
certain obligations to register the transfer or exchange of Debt Securities of
such series, replace stolen, lost or mutilated Debt Securities of such series,
maintain certain offices or agencies in each Place of Payment and hold moneys
for payment in trust) ("defeasance"), or (ii) will not be subject to certain
restrictive covenants included in the Indenture and, if applicable, the
applicable Prospectus Supplement with respect to the Debt Securities of or any
Debt Securities within such series ("covenant defeasance"), in each case if
the Company irrevocably deposits with the Trustee, in trust, money or
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an
amount sufficient (in the opinion of independent public accountants or an
independent investment banking firm) to pay all the principal (including any
mandatory sinking fund payments) of, and premium, if any, and interest, if
any, on, the Debt Securities of such series on the dates such payments are due
in accordance with the terms of such Debt Securities. To exercise either
defeasance or covenant defeasance, among other things, (1) in the case of
defeasance, the Company shall have delivered to the Trustee an opinion of
independent counsel stating that (a) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (b) since the
date of the Indenture, there has been a change in the applicable federal
income tax law or the judicial interpretation thereof by a U.S. federal court
of competent jurisdiction, in either case to the effect that, and based
thereon such opinion of independent counsel shall confirm that, the Holders of
the Outstanding 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, (2) in the case of covenant defeasance, the Company shall have
delivered to the Trustee an opinion of independent counsel to the effect that
the Holders of the Outstanding 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 (3) no Event of Default, or
event which with notice or lapse of time or both would become an Event of
Default, with respect to the Debt Securities of such series shall have
occurred and shall be continuing on the date of such deposit or, insofar as
Events of Default of the type described in clause (f) of the first paragraph
under "Events of Default" above are concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being understood
that the condition contained in this clause (3) shall not be deemed satisfied
until the expiration of such period). Unless otherwise indicated in the
Prospectus Supplement relating to the Offered Debt Securities, the provisions
for subordination of Subordinated Debt Securities are subject to the
provisions for satisfaction and discharge, defeasance and covenant defeasance.
(Article Fourteen)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of
(or premium, if any) or any installment of principal of or interest on any
Debt Security or the date, if any, on which any Debt Security is subject to
repayment at the option of the Holder, (b) reduce the principal amount of, or
any premium or interest on, or the rate of interest on, any Debt Security, (c)
reduce the amount of principal of an Original Issue Discount Security or other
Debt Security payable upon acceleration of the Maturity thereof, (d) change
the place or currency of payment of principal of, or any premium
11
<PAGE>
or interest on, any Debt Security, (e) impair the right to institute suit for
the enforcement of any payment on or after the Maturity thereof, (f) reduce
the percentage in principal amount of Outstanding Debt Securities of any
series, the consent of whose Holders is required for modification or amendment
of the Indenture, (g) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
any waiver (of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) provided for in the Indenture or
(h) modify any of the provisions relating to supplemental indentures, waiver
of past defaults or waiver of certain covenants, except to increase any such
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the Holder of each outstanding
Debt Security affected thereby or, in the case of the Subordinated Debt
Securities, modify any of the provisions of the Indenture relating to the
subordination or to the applicable definition of "Senior Indebtedness" in a
manner adverse to the Holders of such Subordinated Debt Securities. (Section
902)
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of any Holder of Debt Securities for, among
other things, any of the following purposes: (i) to evidence the succession of
another Person to the Company and the assumption by any such successor of the
covenants of the Company in the Indenture and in the Debt Securities as
obligor under the Indenture; (ii) to add to the covenants of the Company for
the benefit of the Holders of all or any series of Debt Securities or to
surrender any right or power conferred upon the Company in the Indenture;
(iii) to add additional Events of Default; (iv) to add to or change any
provisions of the Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Debt Securities in bearer form, registrable or not
registrable as to principal, and with or without coupons, to change or
eliminate any restrictions on the payment of principal of, or any premium or
interest on, bearer securities, to permit bearer securities to be issued in
exchange for registered securities, to permit bearer securities to be
exchanged for bearer securities of other authorized denominations, or to
permit or facilitate the issuance of Debt Securities in uncertificated form,
provided that any such action shall not adversely affect the interests of the
Holders of Debt Securities of any series in any material respect; (v) to add
to, change or eliminate any of the provisions of the Indenture in respect of
one or more series of Debt Securities, provided that, any such addition,
change or elimination (1) shall 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 (2) shall
become effective only when there is no such Debt Security outstanding; (vi) to
evidence and provide for the acceptance of appointment under the Indenture by
a successor 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 trusts under
the Indenture by more than one Trustee; (vii) to secure the Debt Securities;
(viii) to supplement any of the provisions of the Indenture to such extent as
shall be necessary to permit or facilitate the defeasance, covenant defeasance
or satisfaction and discharge of any series of Debt Securities pursuant to the
Indenture; provided, that any such action shall not adversely affect the
interests of the Holders of Debt Securities of such series or any other series
of Debt Securities in any material respect; (ix) to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision in the Indenture, or to make any other provisions
with respect to matters or questions arising under the Indenture, provided
that such action shall not adversely affect the interests of the Holders of
Debt Securities of any series in any material respect; (x) to add a guarantor
or guarantors for any or all series of Debt Securities; (xi) to comply with
the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act of 1939; and
(xii) to establish the form or terms of any series of Debt Securities.
(Section 901)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of or
premium, if any, or interest on any Debt Security of that series or in respect
of a covenant or provision which under the Indenture cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
that series affected. (Section 513)
12
<PAGE>
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or any other security will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or any other
security, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the Holders or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Debt Securities.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York, but without regard to
principles of conflicts of law. (Section 112)
CONCERNING THE TRUSTEE
State Street Bank and Trust Company of California, N.A., through its
affiliate's corporate trust office currently located at 61 Broadway, 15th
Floor, New York, New York 10006, will act as Trustee for the benefit of the
Holders of the Debt Securities under the Indenture.
The Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect
to such series. (Section 610). In the event that two or more Persons are
acting as Trustee with respect to different series of Debt Securities under
the Indenture, each such Trustee shall be a Trustee of a trust thereunder
separate and apart from the trust administered by any other such Trustee
(Section 611), and any action described herein to be taken by the "Trustee"
may then be taken by each such Trustee with respect to, and only with respect
to, the one or more series of Debt Securities for which it is Trustee.
BOOK-ENTRY DEBT SECURITIES
Debt Securities of a series may be issued in whole or in part in global form
that will be deposited with, or on behalf of, a depository identified in the
applicable Prospectus Supplement. Global Debt Securities may be issued in
either registered or bearer form and in either temporary or permanent form
(each a "Global Security"). Unless otherwise provided in the applicable
Prospectus Supplement, Debt Securities that are represented by a Global
Security will be issued in denominations of $1,000 and any integral multiple
thereof, and will be issued in registered form only, without coupons. Payments
of principal of (and premium, if any) and interest, if any, on Debt Securities
represented by a Global Security will be made by the Company to the Trustee,
and then by such Trustee to the depository.
The Company anticipates that any Global Securities will be deposited with,
or on behalf of, The Depository Trust Company ("DTC"), New York, New York,
that such Global Securities will be registered in the name of DTC's nominee,
and that the following provisions will apply to the depository arrangements
with respect to any such Global Securities. Additional or differing terms of
the depository arrangement will be described in the Prospectus Supplement.
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole Holder of
the Debt Securities represented by such Global Security for all purposes under
the Indenture. Except as provided below, owners of beneficial interests in a
Global Security will not be entitled to have Debt Securities represented by
such Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities in certificated form
and will not be considered the owners or Holders thereof under the Indenture.
The laws of some states may require that certain purchasers of securities take
physical delivery of such securities in certificated form; such laws may limit
the transferability of beneficial interests in a Global Security.
If (i) DTC is at any time unwilling, unable or ineligible to continue as
depository for the Debt Securities of any series and a successor depository is
not appointed by the Company within 90 days following notice to the
13
<PAGE>
Company; (ii) the Company determines, in its sole discretion, not to have the
Debt Securities of any series represented by one or more Global Securities, or
(iii) an Event of Default under the Indenture has occurred and is continuing
with respect to the Debt Securities of any series, then the Company will issue
individual Debt Securities of such series in certificated form in exchange for
the relevant Global Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities of such series in certificated form of like tenor
and rank, equal in principal amount to such beneficial interest and to have
such Debt Securities in certificated form registered in its name. Unless
otherwise provided in the applicable Prospectus Supplement, Debt Securities so
issued in certificated form will be issued in denominations of $1,000 or any
integral multiple thereof and will be issued in registered form only, without
coupons.
The following is based on information furnished by DTC:
In the event that DTC acts as securities depository for any Debt
Securities, such Debt Securities will be issued as fully registered
securities registered in the name of Cede & Co. (DTC's nominee). One fully
registered Debt Security certificate may be issued with respect to up to
$200 million aggregate principal amount of the Debt Securities of a series,
and an additional certificate will be issued with respect to any remaining
principal amount of such series.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on
file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Security ("Beneficial Owner") is in turn recorded on
the Direct and Indirect Participants' records. A Beneficial Owner does not
receive written confirmation from DTC of its purchase, but such Beneficial
Owner is expected to receive a written confirmation providing details of
the transaction, as well as periodic statements of its holdings, from the
Direct or Indirect Participant through which such Beneficial Owner entered
into the transaction. Transfers of ownership interests in Debt Securities
are accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Debt Securities,
except in the limited circumstances described above.
To facilitate subsequent transfers, the Debt Securities are registered in
the name of DTC's nominee, Cede & Co. The deposit of the Debt Securities
with DTC and their registration in the name of Cede & Co. effects no change
in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Debt Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts Debt Securities are credited,
which may or may not be the Beneficial Owners. The Participants remain
responsible for keeping account of their holdings on behalf of their
customers.
Delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial owners are
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
14
<PAGE>
Redemption notices shall be sent to Cede & Co. If less than all of the
Debt Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of interest of each Direct Participant in such
issue to be redeemed.
Neither DTC nor Cede & Co. consents or votes with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Debt Securities are credited on
the record date (identified on a list attached to the Omnibus Proxy).
Payments of principal of (and premium, if any) and interest on the Debt
Securities will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the payable date in accordance with their
respective holdings as shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such Participant and not of DTC, any Paying
Agent or the Company, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal (and premium,
if any) and interest, if any, to DTC will be the responsibility of the
Company or the applicable Paying Agent, disbursement of such payments to
Direct Participants will be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners will be the responsibility of Direct
and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Debt Securities at any time by giving reasonable notice to
the Company or the applicable Paying Agent. Under such circumstances, in
the event that a successor securities depository is not appointed, Debt
Securities in certificated form are required to be prepared and delivered
as described above.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that
event, Debt Securities in certificated form will be prepared and delivered
as described above.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but neither the Company nor any underwriter or agent takes any
responsibility for the accuracy thereof.
None of the Company, any underwriter or agent, the Trustee or any applicable
Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial interests in a
Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
DESCRIPTION OF COMMON STOCK
GENERAL
The following summary of the Company's capital stock does not purport to be
complete and is subject in all respects to applicable Delaware law and to the
provisions of the Company's Amended and Restated Certificate of Incorporation
(the "Amended and Restated Certificate of Incorporation") and the Company's
Amended and Restated By-Laws (the "Amended and Restated By-Laws"), copies of
which have been filed with the Commission and may be obtained as described
under "Available Information."
The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, par value $.01 per share, and 5,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). As of January 30,
1998, 24,542,703 shares of Common Stock were issued and outstanding and no
shares of Preferred Stock were issued and outstanding. All outstanding shares
of Common Stock are fully paid and non-assessable.
The Common Stock is traded on the NYSE under the symbol "SOL."
15
<PAGE>
DIVIDEND RIGHTS
Holders of the Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors of the Company out of
funds legally available therefor, after payment of dividends required to be
paid on outstanding Preferred Stock, if any.
VOTING RIGHTS
Holders of the Common Stock are entitled to one vote per share on all
matters to be voted upon by the Company's stockholders, including the election
of directors. The Amended and Restated Certificate of Incorporation does not
provide for cumulative voting in the election of directors. The issuance of
any shares of Preferred Stock may result in dilution of voting power.
LIQUIDATION RIGHTS
In the event of the liquidation, dissolution or winding up of the Company,
holders of Common Stock are entitled to share ratably in all assets remaining
after payment of liabilities, subject to prior distribution rights of
Preferred Stock then outstanding, if any.
PREEMPTIVE RIGHTS
The Common Stock has no preemptive, conversion or redemption rights.
CERTAIN CHARTER AND BY-LAW PROVISIONS
The Amended and Restated Certificate of Incorporation, the Amended and
Restated By-Laws and Delaware law contain certain provisions that could make
more difficult the acquisition of the Company by means of a tender offer, a
proxy contest or otherwise.
Preferred Stock. The Board of Directors of the Company is authorized without
further stockholder action to provide for the issuance from time to time of up
to 5,000,000 shares of Preferred Stock, in one or more classes or series. The
issuance of Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, under certain
circumstances, make it more difficult for a third party to gain control of the
Company, discourage bids for the Common Stock at a premium, or otherwise
adversely affect the market price of the Common Stock.
Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals. The Amended and Restated By-Laws establish an advance notice
procedure for stockholders to make nominations of candidates for election as
directors, or to bring other business before an annual meeting of stockholders
of the Company (the "Stockholder Notice Procedure").
The Stockholder Notice Procedure provides that only persons who are
nominated by, or at the direction of, the Company's Board of Directors, or by
a stockholder who has given timely written notice to the Secretary of the
Company prior to the meeting at which directors are to be elected, will be
eligible for election as directors of the Company. The Stockholder Notice
Procedure provides that at an annual meeting only such business may be
conducted as has been specified in the notice of the meeting given by, or at
the direction of, the Company's Board of Directors (or any duly authorized
committee thereof) or by a stockholder who has given timely written notice to
the Secretary of the Company of such stockholder's intention to bring such
business before such meeting.
Section 203 of Delaware Law. Section 203 of the General Corporation Law of
the State of Delaware (the "DGCL") prevents an "interested stockholder"
(defined as a person who, together with affiliates and associates,
beneficially owns (or within three years, did beneficially own) 15% or more of
a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined) with a Delaware corporation for three years
following the date such person became an interested stockholder unless upon
consummation of such transaction
16
<PAGE>
the interested stockholder owns 85% of the voting stock of the corporation
outstanding at the time the transaction commenced or unless the business
combination is, or the transaction in which such person became an interested
stockholder was, approved in a prescribed manner. A "business combination"
generally includes mergers, stock or asset sales and other transactions
resulting in a financial benefit to the "interested stockholder."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is Boston Equiserve
L.P.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through one or more underwriters or
dealers, directly to institutional investors or other purchasers, through
agents, or through a combination of such or other methods. The distribution of
the Securities may be effected from time to time in one or more transactions
at a fixed price or prices, which may be changed, or at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
If underwriters are used in the sale, the 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
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 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, the obligations of the underwriters to purchase the
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Securities if any are
purchased.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will
be set forth, in the 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 Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of 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 Securities by them may be deemed to be underwriting discounts
and commissions, under the Securities Act. Any such underwriter or agent will
be identified, and any such compensation received from the Company will be
described, in the related Prospectus Supplement.
If so indicated in the related Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in the Prospectus Supplement pursuant
to contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but in all cases such
institutions must be approved by the Company. The
17
<PAGE>
obligations of any purchaser under any such contract will be subject to the
condition that the purchase of the Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act, or to contribution by the Company with
respect to payments they may be required to make in respect thereof.
Certain of the underwriters or agents and their affiliates may engage in
transactions with and perform services for the Company or its affiliates in
the ordinary course of their respective businesses.
If underwriters or dealers are used in the sale, until the distribution of
the Securities is completed, rules of the Securities and Exchange Commission
may limit the ability of any such underwriters and certain selling group
members, if any, to bid for and purchase the Securities. As an exception to
these rules, representatives of any underwriters are permitted to engage in
certain transactions that stabilize the price of the Securities. Such
transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the Securities.
If the underwriters create a short position in the Securities in connection
with the offerings, i.e., if they sell more Securities than are set forth on
the cover page of the Prospectus Supplement, the representatives of the
underwriters may reduce that short position by purchasing Securities in the
open market. The representatives of the underwriters may also elect to reduce
any short position by exercising all or part of any over-allotment option, if
any, described in the Prospectus Supplement.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. Neither the Company nor any
underwriter or agent makes any representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the Securities. In addition, neither the Company nor any
underwriter or agent makes any representation that the representatives of any
underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
The representatives of the underwriters may also impose a penalty bid on
certain underwriters and selling group members, if any. This means that if the
representatives of the underwriters purchase Securities in the open market to
reduce the underwriters' short position or to stabilize the price of the
Securities, they may reclaim the amount of the selling concession from the
underwriters and selling group members who sold those Securities as part of
the offering. The imposition of a penalty bid might also have an effect on the
price of the Securities to the extent that it discourages resales of the
Securities.
The Debt Securities may or may not be listed on a national securities
exchange or traded in the over-the-counter market. Any Common Stock sold
pursuant to a Prospectus Supplement will be listed on the NYSE, subject to
official notice of issuance. No assurances can be given as to the liquidity of
the trading market for any of such securities.
18
<PAGE>
LEGAL MATTERS
The validity of the Debt Securities and the Common Stock will be passed upon
for the Company by Fried, Frank, Harris, Shriver & Jacobson (a partnership
including professional corporations), New York, New York.
EXPERTS
The consolidated financial statements and schedule of Sola International
Inc. appearing in Sola International Inc.'s Annual Report (Form 10-K) for the
year ended March 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The combined financial statements of the Worldwide Ophthalmic Group of
American Optical Corporation appearing in Exhibit 99.2 of Sola International
Inc.'s Current Report (Form 8-K/A) dated as of May 6, 1996, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such combined
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
19
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM,
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, AT ANY TIME OR UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Forward-Looking Statements................................................. S-2
The Company................................................................ S-3
Use of Proceeds............................................................ S-5
Capitalization............................................................. S-6
Selected Financial Information............................................. S-7
Description of the Notes................................................... S-9
Underwriting............................................................... S-15
Legal Matters.............................................................. S-16
Experts.................................................................... S-16
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 6
Ratio of Earnings to Fixed Charges......................................... 6
Description of Debt Securities............................................. 6
Description of Common Stock................................................ 15
Plan of Distribution....................................................... 17
Legal Matters.............................................................. 19
Experts.................................................................... 19
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$100,000,000
SOLA INTERNATIONAL INC.
% NOTES DUE 2008
---------------
PROSPECTUS SUPPLEMENT
---------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
BANCAMERICA ROBERTSON STEPHENS
MARCH , 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 73,750
Printing expenses.................................................. 75,000
Rating agency fees................................................. 40,000
Trustee's acceptance fees.......................................... 4,000
Legal fees and expenses............................................ 150,000
Accounting expenses................................................ 130,000
Blue Sky fees and expenses......................................... 10,000
Other.............................................................. 17,250
--------
Total............................................................ $500,000
========
</TABLE>
- --------
* Except for the Securities and Exchange Commission registration fee, all of
the foregoing expenses have been estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, as a Delaware corporation, is empowered by Section 145 of
the General Corporation Law of the State of Delaware (the "DGCL"), subject to
the procedures and limitations stated therein, to indemnify any person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding in which such
person is made or threatened to be made a party by reason of his being or
having been a director, officer, employee or agent of the Registrant or his
serving at the request of the Registrant as a director, officer, employee or
agent of another company or other entity. The statute provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise. The
Registrant's Amended and Restated Certificate of Incorporation provides for
indemnification by the Registrant of its directors and officers to the full
extent permitted by the DGCL. Pursuant to Section 145 of the DGCL, the
Registrant has purchased insurance on behalf of its present and former
directors and officers against any liability asserted against or incurred by
them in such capacity or arising out of their status as such.
Pursuant to specific authority granted by Section 102 of the DGCL, the
Registrant's Amended and Restated Certificate of Incorporation contains the
following provision regarding limitation of liability of directors and
officers:
"To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a Director of the
Corporation shall not be liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a Director."
In addition, the Company's Amended and Restated By-Laws provide for
indemnification of directors and officers, including indemnification of
directors and officers that are a party to a proceeding in whole or in part
attributable to (a) the fact that he is or was a director or officer of the
Company or was serving at the request of the Company or (b) anything done or
not done by such person in any such capacity against losses if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Company, and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful.
The undersigned Registrant has entered into agreements to provide
indemnification for its directors and executive officers in addition to the
indemnification provided for in the Registrant's Amended and Restated
Certificate of Incorporation and Amended and Restated By-laws. These
agreements, among other things,
II-1
<PAGE>
indemnify the directors, to the fullest extent provided by Delaware law, for
certain expenses (including attorneys' fees), losses, claims, liabilities,
judgments, fines and settlement amounts incurred by such indemnitee in any
action or proceeding, including any action by or in the right of the
Registrant, on account of services as a director or officer of any affiliate
of the Registrant, or as a director or officer of any other company or
enterprise that the indemnitee provides services to at the request of the
Registrant.
ITEM 16. EXHIBITS
Set forth below is a list of the exhibits included as part of this
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement (debt securities)
1.2* Form of Underwriting Agreement (equity securities)
4.1 Specimen Form of Company's Common Stock Certificate (Filed as
Exhibit 4.1 to the Registration Statement, as amended, on Form S-1
of the Company (File No. 33-87892) and incorporated herein by
reference)
4.2 Amended and Restated Certificate of Incorporation of the Company
(Filed as Exhibit 3.1 to the Annual Report on Form 10-K of the
Company, dated June 7, 1995, and incorporated herein by reference)
4.3 Amended and Restated By-Laws of the Company (Filed as Exhibit 3.1
to the Quarterly Report on Form 10-Q of the Company for the
quarter ended September 30, 1995 and incorporated herein by
reference)
4.4* Form of Indenture, relating to the Debt Securities
4.5* Form of Debt Security
4.6*** Form of Delayed Delivery Contract
5.1* Opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel to
the Company, as to the validity of the Securities being registered
10.1* Amendment No. 3 to the Multicurrency Credit Agreement, dated as of
June 14, 1996, among Sola International Inc., and the other
Borrowers as the Borrowers, the Subsidiary Guarantors, The Bank of
America National Trust and Savings Association, as Agent and
Letter of Credit Issuing Bank, The First National Bank of Boston
and The Bank of Nova Scotia, as Co-Agents, and the Other Financial
Institutions Party Thereto
10.2* Employment Agreement between Sola International Inc. and Steven M.
Neil
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 5.1)
23.2* Consent of Ernst & Young LLP, independent auditors
23.3* Consent of Ernst & Young LLP, independent auditors
24.1* Powers of Attorney
25.1* Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939
</TABLE>
- --------
* Filed herewith
** Previously filed
*** To be filed in an amendment or as an exhibit to a document to be
incorporated or deemed to be incorporated by reference in the Registration
Statement.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this 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) under the Securities Act of
1933 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 this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(ii) above 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 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the Securities offered therein, and the offering of such
Securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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 questions whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, SOLA
INTERNATIONAL INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MENLO PARK, STATE
OF CALIFORNIA, ON MARCH 5, 1998.
Sola International Inc.
/s/ Steven M. Neil
By: _________________________________
STEVEN M. NEIL CHIEF FINANCIAL
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
Chairman of the Board
* March 5,
_____________________________________ 1998
IRVING S. SHAPIRO
* President and Chief
_____________________________________ Executive Officer March 5,
JOHN E. HEINE (Principal Executive 1998
Officer), Director
/s/ Steven M. Neil Executive Vice
_____________________________________ President, Chief March 5,
STEVEN M. NEIL Financial Officer, 1998
Treasurer and Secretary
(Principal Financial
and Accounting Officer)
* Director
_____________________________________ March 5,
MAURICE J. CUNNIFFE 1998
* Director
_____________________________________ March 5,
DOUGLAS D. DANFORTH 1998
* Director
_____________________________________ March 5,
A. WILLIAM HAMILL 1998
* Director
_____________________________________ March 5,
HAMISH MAXWELL 1998
* Director
_____________________________________ March 5,
JACKSON L. SCHULTZ 1998
/s/ Steven M. Neil
*By: ________________________________
STEVEN M. NEIL ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement (debt securities)
1.2* Form of Underwriting Agreement (equity securities)
4.1 Specimen Form of Company's Common Stock Certificate (Filed as Exhibit
4.1 to the Registration Statement, as amended, on Form S-1 of the
Company (File No. 33-87892) and incorporated herein by reference)
4.2 Amended and Restated Certificate of Incorporation of the Company
(Filed as Exhibit 3.1 to the Annual Report on Form 10-K of the
Company, dated June 7, 1995, and incorporated herein by reference)
4.3 Amended and Restated By-Laws of the Company (Filed as Exhibit 3.1 to
the Quarterly Report on Form 10-Q of the Company for the quarter
ended September 30, 1995 and incorporated herein by reference)
4.4* Form of Indenture, relating to the Debt Securities
4.5* Form of Debt Security
4.6*** Form of Delayed Delivery Contract
5.1* Opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel to the
Company, as to the validity of the Securities being registered
10.1* Amendment No. 3 to the Multicurrency Credit Agreement, dated as of
June 14, 1996, among Sola International Inc., and the other Borrowers
as the Borrowers, the Subsidiary Guarantors, The Bank of America
National Trust and Savings Association, as Agent and Letter of Credit
Issuing Bank, The First National Bank of Boston and The Bank of Nova
Scotia, as Co-Agents, and the Other Financial Institutions Party
Thereto
10.2* Employment Agreement between Sola International Inc. and Steven M.
Neil
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 5.1)
23.2* Consent of Ernst & Young LLP, independent auditors
23.3* Consent of Ernst & Young LLP, independent auditors
24.1* Powers of Attorney
25.1* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939
</TABLE>
- --------
* Filed herewith
**Previously filed
*** To be filed in an amendment or as an exhibit to a document to be
incorporated or deemed to be incorporated by reference in the Registration
Statement.
<PAGE>
EXHIBIT 1.1
================================================================================
SOLA INTERNATIONAL INC.
(a Delaware corporation)
. Notes due .
FORM OF PURCHASE AGREEMENT
Dated: ., 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
PURCHASE AGREEMENT......................................................... 1
SECTION 1. Representations and Warranties......................... 3
------------------------------
(a) Representations and Warranties by the Company.......... 3
(b) Officer's Certificates................................. 8
SECTION 2. Sale and Delivery to Underwriters; Closing............. 8
------------------------------------------
(a) Securities............................................. 8
(b) Payment................................................ 8
(c) Denominations; Registration............................ 9
SECTION 3. Covenants of the Company............................... 9
------------------------
(a) Compliance with Securities Regulations and Commission
Requests............................................... 9
(b) Filing of Amendments................................... 9
(c) Delivery of Registration Statements.................... 9
(d) Delivery of Prospectuses............................... 10
(e) Continued Compliance with Securities Laws.............. 10
(f) Blue Sky Qualifications................................ 10
(g) Rule 158............................................... 11
(h) Use of Proceeds........................................ 11
(i) Restriction on Sale of Securities...................... 11
(j) Reporting Requirements................................. 11
SECTION 4. Payment of Expenses.................................... 11
-------------------
(a) Expenses.................................................. 11
(b) Termination of Agreement............................... 12
SECTION 5. Conditions of Underwriters' Obligations................ 12
---------------------------------------
(a) Effectiveness of Registration Statement................ 12
(b) Opinion of Counsel for Company......................... 12
(c) Opinion of Counsel for Underwriters.................... 12
(d) Officers' Certificate.................................. 13
(e) Accountant's Comfort Letter............................ 13
(f) Bring-down Comfort Letter.............................. 13
(g) Rating Requirement..................................... 13
(h) Additional Documents................................... 13
(i) Termination of Agreement.................................. 14
SECTION 6. Indemnification........................................ 14
---------------
(a) Indemnification of Underwriters........................ 14
(b) Indemnification of Company, Directors and Officers..... 15
(c) Actions against Parties; Notification.................. 15
(d) Settlement without Consent if Failure to Reimburse..... 16
SECTION 7. Contribution........................................... 16
------------
SECTION 8. Representations, Warranties and Agreements to Survive
------------------------------------------------------
Delivery....................................................... 17
--------
SECTION 9. Termination of Agreement............................... 18
------------------------
(a) Termination; General................................... 18
(b) Liabilities............................................ 18
i
<PAGE>
SECTION 10. Default by One or More of the Underwriters............... 18
------------------------------------------
SECTION 11. Notices................................................. 19
-------
SECTION 12. Parties................................................. 19
-------
SECTION 13. GOVERNING LAW AND TIME.................................. 19
----------------------
SECTION 14. Effect of Headings and Table of Contents................ 19
----------------------------------------
SCHEDULES
Schedule A - List of Underwriters........................Sch A-1
Schedule B - Pricing Information.........................Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...............A-1
ii
<PAGE>
SOLA INTERNATIONAL INC.
(a Delaware corporation)
$.,000,000
. Notes due .
PURCHASE AGREEMENT
------------------
., 1998
[Name of Underwriters]
Ladies and Gentlemen:
Sola International Inc., a Delaware corporation (the "Company"), confirms
its agreement with [Name of Managing Underwriter] ("[Name of Underwriter]") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom and . are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in said
Schedule A of $.,000,000 aggregate principal amount of the Company's . Notes due
. (the "Securities"). The Securities are to be issued pursuant to an indenture
dated as of . (the "Indenture") between the Company and ., as trustee (the
"Trustee"). The term "Indenture," as used herein, includes the Officers'
Certificate (as defined in the Indenture) establishing the form and terms of the
Securities pursuant to Sections 201 and 301 of the Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
<PAGE>
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-45929) and Amendment
Nos. 1 and . thereto covering the registration of, among other things, the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), in
each case including the related preliminary prospectus or prospectuses and, if
applicable, the related preliminary prospectus supplement or supplements.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus supplement and prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b) or (iii) if the Company has elected to rely upon Rule 415
("Rule 415") of the 1933 Act Regulations, prepare and file a prospectus
supplement and prospectus in accordance with the provisions of Rule 415 and
424(b). The information included in the prospectus and prospectus supplement
referred to in clause (i) of the preceding sentence or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each prospectus, together with
any related prospectus supplement, used before such registration statement
became effective, and any prospectus, together with any related prospectus
supplement, that omitted, as applicable, the Rule 430A Information or the Rule
434 Information or that was captioned "Subject to Completion" that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called, together with the documents incorporated or deemed
to be incorporated by reference therein pursuant to Item 12 of Form S-3 under
the 1933 Act, a "preliminary prospectus." Such registration statement, as
amended (if applicable), including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Original Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term the
"Original Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus and final prospectus supplement relating to the
Securities, including the documents incorporated or deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities, are herein called, collectively, the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to, collectively, the
preliminary prospectus supplement dated ., 1998 together with the prospectus
dated ., 1998 and the Term Sheet and all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of S-3, and all references
in this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
2
<PAGE>
All references in this Agreement to financial statements and schedules and
other information which is "contained," "described," "disclosed," "included" or
"stated" in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated or deemed to be incorporated by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated or
deemed to be incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) The Company meets the requirements for use of Form S-3 under
the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the
time the Prospectus or any such amendment or supplement was issued and at
the Closing Time, included or will include an untrue statement of a
material fact or omitted or will 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. If Rule 434 is used, the
Company will comply with the requirements of Rule 434. The representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any Underwriter through [Name of Underwriter] expressly for use in the
Registration Statement or
3
<PAGE>
Prospectus, or to that part of the Registration Statement that constitutes
the Trustee's Statement of Eligibility on Form T-1 (the "Form T-1").
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(iv) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware,
has the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so
qualified or be in good standing would not result in a Material Adverse
Effect.
(v) As used herein, the "Material Subsidiaries" of the Company
are American Optical Lens Company, a Delaware Corporation ("AO"), Sola
Optical Holding Aus. Ltd., a Delaware corporation, Sola Optical Partners,
an Australian limited partnership, Sola Optical Holdings Pty. Ltd., an
Australian corporation, Sola Corporation Limited, an Australian
corporation, Sola International Holdings Ltd., an Australian corporation,
Sola Optical Italia SpA, an Italian corporation, Sola Brazil Industria
Optica
4
<PAGE>
Ltda., a Brazilian corporation, and Sola ADC Lenses Limited, an Irish
corporation, and no other subsidiary of the Company had, at December 31,
1997, assets in excess of 5% of the consolidated assets of the Company and
its subsidiaries in each case excluding intangibles as at that date or had,
for the nine months then ended, net sales (excluding internal intercompany
sales) in excess of 5% of the consolidated net sales of the Company and its
subsidiaries for such period. In making this determination, any subsidiary
acquired after December 31, 1997 shall be deemed to have been acquired as
of such date. Each Material Subsidiary of the Company has been duly
organized, is validly existing as a corporation or partnership, as the case
may be, in good standing under the laws of the jurisdiction of its
organization, has the power and authority as a corporation or partnership,
as the case may be, to own its property and to conduct its business as
described in the Prospectus and is, except to the extent that the following
may not be applicable under foreign law, duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not result in a Material Adverse Effect; and,
except for directors' qualifying shares, the Company beneficially owns,
directly or indirectly, 100% of the shares of capital stock and partnership
interests of its Material Subsidiaries and, with respect to such shares and
partnership interests, the Company has good and marketable title, free and
clear of all liens, charges, encumbrances or restrictions of any kind.
(vi) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus.
(vii) All the outstanding shares of common stock, par value $.01
per share ("Common Stock"), of the Company have been duly authorized and
validly issued and are fully paid and non-assessable.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities do not and will not contravene or conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any provision of applicable law or the
certificate of incorporation or by-laws of the Company, the Credit
Agreement (as defined below) or any other agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company or any of its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the issuance or sale of the Securities or the
performance by the Company of its obligations under this Agreement, the
Indenture or the Securities, except such as have been obtained under the
5
<PAGE>
1933 Act and the 1939 Act and as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Securities. As used herein, the term "Credit Agreement" means the
Multicurrency Credit Agreement dated as of June 14, 1996 among the Company,
the other borrowers and subsidiary guarantors, if any, referred to therein,
Bank of America National Trust and Savings Association, as agent, The First
National Bank of Boston and The Bank of Nova Scotia, as co-agents, and the
other financial institutions party thereto, including all amendments and
supplements thereto and guarantees, if any, entered into pursuant to or in
connection therewith.
(x) Except as described in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described, or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(xi) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license
and use its properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain, declare or file would not result in a Material Adverse Effect.
(xii) The Company is not an "investment company" nor an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiii) Ernst & Young LLP, who has reported on the audited financial
statements and schedules included in the Registration Statement, are
independent public accountants with respect to the Company and were, at all
relevant times, independent public accountants with respect to the
Worldwide Ophthalmic Group (the "WOG") of American Optical Corporation in
each case as required by the 1933 Act and the 1933 Act Regulations.
(xiv) The consolidated financial statements which are included in
the Registration Statement present fairly the consolidated or combined, as
the case may be, financial position and stockholders' equity and the
consolidated or combined, as the case may be, results of operations and
consolidated or combined, as the case may be, statements of cash flows of
the Company and of the WOG at the indicated dates and for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if any,
included in the Registration Statement present fairly the information
required to be stated therein. The selected
6
<PAGE>
financial data included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited consolidated financial statements included in the Registration
Statement. The pro forma financial statements, if any, and other pro forma
financial information, if any, included in the Prospectus present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(xv) Except as disclosed in the Prospectus, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, result in a Material
Adverse Effect.
(xvi) The Indenture has been duly authorized by the Company and
duly qualified under the 1939 Act and, at the Closing Time, the Indenture
will have been duly executed and delivered by the Company and will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xvii) The Securities have been duly authorized by the Company and,
at the Closing Time, will have been duly executed by the Company and, when
authenticated in the manner provided in the Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
7
<PAGE>
(xviii) The Securities and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xix) To the extent applicable, the Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the Representatives or to
counsel for the Underwriters pursuant to this Agreement or attached to the legal
opinion delivered pursuant to Section 5(b) hereof shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of ., or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to an account at a bank designated by the Company, against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. [Name of Underwriter] individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Securities to be purchased by any
Underwriter whose payment therefor has not been received by the Closing Time,
but such payment shall not relieve such Underwriter from its obligations
hereunder.
8
<PAGE>
(c) Denominations; Registration. Certificates for the Securities shall be
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A, Rule 434 or Rule 415, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement or any Rule
462(b) Registration Statement shall become effective, or any Prospectus,
any supplement to the Prospectus, any Term Sheet or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of
prospectus or term sheet, as the case may be, transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus or term sheet, as
the case may be. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus or
the prospectus supplement, if any, included in the Registration Statement
at the time it became effective or to the Prospectus, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters
shall promptly and reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, as many signed and conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and
9
<PAGE>
signed copies of all consents and certificates of experts, as the
Representatives and counsel to the Underwriters may reasonably request.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Securities as contemplated
in this Agreement and in the Prospectus. If at any time when a prospectus
is required by the 1933 Act or the 1934 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
any such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions as the Representatives may designate and to maintain
such qualifications in effect for a period of not less than one year from
the date hereof; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
In each jurisdiction in which the Securities have been so
10
<PAGE>
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date hereof.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Restriction on Sale of Securities. From the date of this
Agreement through and including the Closing Time, the Company will not,
without the prior written consent of [Name of Underwriter] directly or
indirectly, issue, sell, offer or contract to sell, grant any option for
the sale of, or otherwise transfer or dispose of, any debt securities of or
guaranteed by the Company.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, word processing, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement,
any Agreement among Underwriters, the Indenture and such other documents as
may be required in connection with the offering, purchase, sale, issuance
or delivery of the Securities, (iii) the preparation, issuance and delivery
of the certificates for the Securities to the Underwriters including any
transfer fees or duties payable upon the sale of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with
the preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectus and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of the Trustee, including the reasonable fees
and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, (ix) any fees payable in connection with the
rating of the Securities, and (x) the fees and expenses of any depositary
in connection with holding the Securities in book-entry form.
11
<PAGE>
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) or 9(a)(v) hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective not later than 5:30 P.M. on the date hereof and at Closing Time
no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has
elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 434 and Rule 424(b) or, if the Company
has elected to rely on Rule 415, the final prospectus supplement relating
to the Securities and, if required by Rule 424(b), the related final
prospectus shall have been filed with the Commission in accordance with
Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters to the effect set forth in Exhibit A hereto
and to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Brown & Wood LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (A)(i), (D),
(G), (J), (K), (L), (M) and (N) and the [penultimate] paragraph of Exhibit
A hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to
the Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to
12
<PAGE>
the extent they deem proper, upon certificates of officers of the Company
and its subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the Company signed
by the President or a Vice President of the Company and the chief financial
or chief accounting officer of the Company, dated as of Closing Time, to
the effect that (i) there has been no such material adverse change, (ii)
the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and as
of Closing Time, (iii) the Company has performed and complied with all
agreements and satisfied all conditions on its part to be performed,
complied with or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or, to their knowledge, are threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements of the Company and of
the WOG and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Rating Requirement. At Closing Time, the Securities shall be
rated at least . by Moody's Investor's Service Inc. and . by Standard &
Poor's Ratings Group, a division of McGraw-Hill, Inc., and the Company
shall have delivered to the Representatives a letter from each such rating
agency, or other evidence satisfactory to the Representatives, confirming
that the Securities have such ratings.
(h) Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
13
<PAGE>
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time, and such termination
shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by [Name of
Underwriter] reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
14
<PAGE>
furnished to the Company by any Underwriter through [Name of Underwriter]
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided further that this indemnity agreement with respect to any
-------- -------
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, liabilities, claims, damages or
expenses purchased Securities, or any person controlling such Underwriter, if
the Company sustains the burden of proving that (A) a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any such
amendments or supplements thereto in accordance with Section 3(d) hereof, but
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of such Underwriter to such
person, if such is required by law, at or prior to the written confirmation of
the sale of such Securities to such person and (B) the Prospectus (as so amended
or supplemented, if applicable) would have corrected the defect giving rise to
such loss, liability, claim, damage or expense, except that this proviso shall
not be applicable if such defect shall have been corrected in a document which
is incorporated or deemed to be incorporated by reference in the Prospectus.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by [Name of Underwriter]
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written
15
<PAGE>
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent such
indemnifying party considers such request to be reasonable and (ii) provides
written notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus (or, if Rule 434 is used, in the
corresponding location on the
16
<PAGE>
Term Sheet) bear to the aggregate initial public offering price of the
Securities as set forth on such cover (or corresponding location on the Term
Sheet, as the case may be).
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 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, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
17
<PAGE>
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, California or New York
authorities, or (v) if since the date of this Agreement, there has occurred a
downgrading in the rating assigned to the Securities or any of the Company's
other debt securities by any nationally recognized securities rating agency, or
such securities rating agency has publicly announced that it has under
surveillance or review, with possible negative implications, its rating of the
Securities or any of the Company's other debt securities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of the Defaulted Securities does
not exceed 10% of the aggregate principal amount of the Securities to be
purchased hereunder, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective
18
<PAGE>
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased hereunder, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o [Name of Underwriter],
and notices to the Company shall be directed to it at 2420 Sand Hill Road, Suite
200, Menlo Park, California 94025, attention of the Chief Financial Officer.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
19
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
SOLA INTERNATIONAL INC.
By
------------------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Name of Underwriter]
By: [Name of Underwriter]
By
---------------------------------------
Authorized Signatory
For themselves and as Representatives of the Underwriters named in Schedule A
hereto.
20
<PAGE>
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------- ----------
[Name of Lead Manager] ...................................... $
[Name(s) of Co-Representative(s)]............................
----------
Total.................................. $ .,000,000
==========
Sch A - 1
<PAGE>
SCHEDULE B
SOLA INTERNATIONAL INC.
$.,000,000 . Notes due .
1. The initial public offering price of the Securities shall be .% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be .% of the principal amount thereof.
3. The interest rate on the Securities shall be .% per annum.
4. [INCLUDE THE TERMS OF ANY OPTIONAL OR MANDATORY REDEMPTION AND OTHER
PRICE-RELATED TERMS.]
Sch B - 1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) (i) the Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, (ii) has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and (iii) is duly qualified to transact business and is in good
standing in each U.S. jurisdiction set forth in an Officer's Certificate
attached to the opinion (the "Officer's Certificate") (it being understood
that in giving such opinion with respect to jurisdictions other than Delaware
such counsel will rely solely upon certificates of public officials of such
jurisdictions);
(B) the authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization";
(C) all the outstanding shares of Common Stock have been duly authorized;
(D) the Purchase Agreement has been duly authorized, executed and
delivered by the Company;
(E) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement, the
Indenture and the Securities do not and will not (i) contravene any provision
of the Amended and Restated Certificate of Incorporation or Amended and
Restated Bylaws of the Company, (ii) contravene, result in a breach of or
constitute a default under the Credit Agreement or any other agreement or
instrument binding upon the Company (or any of its subsidiaries) (a) that is
listed as an exhibit to the Registration Statement or the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1997 (excluding
Exhibits 10.12 and 10.13) or (b) that is listed as an exhibit to any document
filed with the Commission subsequent to March 31, 1997 and prior to the date
of such opinion that is incorporated or deemed to be incorporated by reference
in the Registration Statement, or (iii) violate (x) any present statute, rule
or regulation of any governmental agency or authority of the United States of
America or the State of New York or any present provision of the General
Corporation Law of the State of Delaware (the "DGCL") applicable to the
Company or any Material Subsidiary, or (y) any judgment or decree or order of
any court or governmental agency or body of the United States of America or
the State of New York or of the State of Delaware pursuant to the DGCL set
forth in the Officer's Certificate; provided, however, that such counsel shall
-------- -------
express no opinion with respect to any violation, breach or default not
ascertainable from the face of any such agreement or order, or arising under
or based upon any cross-default provision insofar as such violation relates to
a default under an agreement that is not referred to in subclause (a) or (b)
of clause (ii) above or under the agreements set forth under Exhibits 10.12
and 10.13 to the Company's Annual Report on 10-K for the fiscal year ended
A-1
<PAGE>
March 31, 1997 or such violation arises under or is based upon any covenant of
a financial or numerical nature or which requires arithmetic computation;
(F) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency of the United States
of America or the State of New York or of the State of Delaware pursuant to
the DGCL is required for the issuance or sale of the Securities or the
performance by the Company of its obligations under the Purchase Agreement,
the Indenture or the Securities, except such as have been obtained under the
1933 Act or the 1939 Act or such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(G) the statements made in the Prospectus under the captions "Description
of Common Stock," "Description of Debt Securities," and "Description of the
Notes," to the extent such statements constitute summaries of legal matters or
of the Indenture, the Securities or other documents, or legal conclusions,
have been reviewed by such counsel and fairly present the information
disclosed therein in all material respects;
(H) such counsel does not have actual knowledge of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or any document incorporated or deemed to be
incorporated by reference therein which are not filed as required;
(I) the Company is not an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(J) the Indenture has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company;
(K) the Securities are in the form contemplated by the Indenture, have
been duly authorized and executed by the Company and, when duly authenticated
by the Trustee in the manner provided in the Indenture and delivered against
payment of the purchase price therefor specified in the Purchase Agreement,
will constitute valid and binding obligations of the Company and will be
entitled to the benefits of the Indenture;
(L) the Indenture has been duly qualified under the 1939 Act;
(M) the Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; to the best
knowledge of such counsel, 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); and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission;
(N) the Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, and the Prospectus (in each case excluding the documents
incorporated or deemed to be incorporated by reference therein),
A-2
<PAGE>
and each amendment or supplement to the Registration Statement or Prospectus,
as of their respective effective or issue dates (other than the financial
statements, the notes and schedules thereto and the other financial
information included therein or omitted therefrom and other than the Form T-1,
as to which such counsel need express no opinion) each appeared on its face to
be responsive as to form in all material respects to the requirements of the
1933 Act and the 1933 Act Regulations;
(O) the documents incorporated or deemed to be incorporated by reference
in the Prospectus (other than the financial statements, the notes and
schedules thereto and the other financial information included therein or
omitted therefrom, as to which such counsel need express no opinion), when
they were filed with the Commission, each appeared on its face to be
responsive as to form in all material respects to the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.
(P) to our knowledge, there is not pending or threatened any action, suit
or proceeding to which the Company or any of its domestic subsidiaries is a
party, or to which the property of the Company or any of its domestic
subsidiaries is subject, before or brought by any New York, Delaware or
federal court or any New York, Delaware or federal governmental agency or
body, which might reasonably be expected to result in a Material Adverse
Effect or which might reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated by the Purchase
Agreement or the performance by the Company of its obligations thereunder.
(Q) American Optical Lens Company, a Delaware corporation, is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus.
In addition, such counsel shall state that in the course of the preparation by
the Company of the Registration Statement and the Prospectus, such counsel
participated in conferences with certain of the officers and representatives of,
and the independent public accountants for, the Company, at which the contents
of the Registration Statement and the Prospectus were discussed and that,
between the date of effectiveness of the Registration Statement and the time of
delivery of such opinion, such counsel participated in additional conferences
with certain of the officers and representatives of, and independent public
accountants for, the Company, at which the contents of the Registration
Statement and the Prospectus were discussed to a limited extent. Such counsel
shall state that, given the limitations inherent in the independent verification
of factual matters and the character of determinations involved in the
registration process, they shall not pass upon or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except as set forth in paragraph (G)
above. Subject to the foregoing and on the basis of the information gained in
the performance of the services referred to above, including information
obtained from officers and other representatives of, and the independent public
accountants for, the Company, such counsel shall state that no facts have come
to their attention that have caused them to believe that the Registration
Statement, as of its effective date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein,
A-3
<PAGE>
in the light of the circumstances in which they were made, not misleading. Such
counsel may state that they express no view or belief, however, with respect to
financial statements, the notes or schedules thereto or other financial
information included in or omitted from the Registration Statement or the
Prospectus or the Form T-1.
Such opinion may state that for purposes of paragraphs (E) and (F) above, we
have reviewed only those statutes, rules and regulations that in our experience
are applicable to transactions of the type contemplated by the Purchase
Agreement or for the offering, issuance, sale or delivery of the Securities. In
rendering such opinion, such counsel may rely, as to matters of fact (but not as
to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials, and such counsel may
state that they express no opinion as to the laws of any jurisdiction other than
United States federal and New York law and the DGCL. Such counsel may state that
its opinions in paragraphs (J) and (K) above are subject to (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws of general
application affecting creditor's rights and remedies generally and (ii) general
equitable principles (including, without limitation, standards of materiality,
good faith, fair dealing and reasonableness, equitable defenses and limits on
the availability of equitable remedies), regardless of whether considered in a
proceeding in equity or at law. In addition, such counsel may assume that the
parties to all agreements other than the Company have the power to enter into
and perform their obligations under such agreements and to consummate the
transactions contemplated thereby and that such agreements have been duly
authorized, executed and delivered by, and constitute legal and binding
obligations of, such parties other than the Company. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-4
<PAGE>
EXHIBIT 1.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SOLA INTERNATIONAL INC.
(a Delaware corporation)
__ Shares of Common Stock
FORM OF PURCHASE AGREEMENT
Dated: __, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PURCHASE AGREEMENT.................................................... 1
SECTION 1. Representations and Warranties...................... 2
------------------------------
(a) Representations and Warranties by the Company....... 2
(b) Officer's Certificates.............................. 6
SECTION 2. Sale and Delivery to Underwriters; Closing.......... 6
------------------------------------------
(a) Initial Securities.................................. 6
(b) Option Securities................................... 7
(c) Payment............................................. 7
(d) Denominations; Registration......................... 7
SECTION 3. Covenants of the Company............................ 8
------------------------
(a) Compliance with Securities Regulations
and Commission Requests........................... 8
(b) Filing of Amendments................................ 8
(c) Delivery of Registration Statements................. 8
(d) Delivery of Prospectuses............................ 8
(e) Continued Compliance with Securities Laws........... 9
(f) Blue Sky Qualifications............................. 9
(g) Rule 158............................................ 9
(h) Use of Proceeds..................................... 9
(i) Restriction on Sale of Securities................... 9
(j) Reporting Requirements.............................. 10
(j) Listing............................................. 10
SECTION 4. Payment of Expenses................................. 10
-------------------
(a) Expenses 10
(b) Termination of Agreement............................ 10
SECTION 5. Conditions of Underwriters' Obligations............. 10
---------------------------------------
(a) Effectiveness of Registration Statement............. 10
(b) Opinion of Counsel for Company...................... 11
(c) Opinion of Counsel for Underwriters................. 11
(d) Officers' Certificate............................... 11
(e) Accountant's Comfort Letter......................... 11
(f) Bring-down Comfort Letter........................... 12
(g) Conditions to Purchase of Option Securities......... 12
(h) Additional Documents................................ 12
(i) Termination of Agreement............................ 13
SECTION 6. Indemnification..................................... 13
---------------
(a) Indemnification of Underwriters..................... 13
(b) Indemnification of Company, Directors and Officers.. 14
(c) Actions against Parties; Notification............... 14
(d) Settlement without Consent if Failure to Reimburse.. 14
SECTION 7. Contribution........................................ 15
------------
SECTION 8. Representations, Warranties and Agreements to
---------------------------------------------
Survive Delivery.................................. 16
----------------
SECTION 9. Termination of Agreement............................ 16
------------------------
(a) Termination; General................................ 16
(b) Liabilities......................................... 16
SECTION 10. Default by One or More of the Underwriters.......... 16
------------------------------------------
<PAGE>
SECTION 11. Notices............................................. 17
-------
SECTION 12. Parties............................................. 17
-------
SECTION 13. GOVERNING LAW AND TIME.............................. 17
----------------------
SECTION 14. Effect of Headings and Table of Contents............ 17
----------------------------------------
SCHEDULES
Schedule A - List of Underwriters...................... Sch A-1
Schedule B - Pricing Information....................... Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel......... A-1
<PAGE>
SOLA INTERNATIONAL INC.
(a Delaware corporation)
___ Shares of Common Stock
PURCHASE AGREEMENT
------------------
___, 1998
[Name of Underwriters]
Ladies and Gentlemen:
Sola International Inc., a Delaware corporation (the "Company"), confirms
its agreement with [Name of Managing Underwriter] ("[Name of Underwriter]") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ___ and ___ are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock") set forth in said
Schedule A, and with respect to the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of ___ additional shares of Common Stock to cover
over-allotments, if any. The aforesaid ___ shares of Common Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the ___
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-45929) and Amendment
Nos. 1 and ___ thereto covering the registration of, among other things, the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), in
each case including the related preliminary prospectus or prospectuses and, if
applicable, the related preliminary prospectus supplement or supplements.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus supplement and prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b) or (iii) if the Company has elected to rely upon Rule 415
("Rule 415") of the 1933 Act Regulations, prepare and file a prospectus
supplement and prospectus in accordance with the provisions of Rule 415 and
424(b). The information included in the prospectus and prospectus supplement
referred to in clause (i) of the preceding sentence or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration statement
at the time it became
<PAGE>
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus, together with any related prospectus
supplement, used before such registration statement became effective, and any
prospectus, together with any related prospectus supplement, that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information or that was
captioned "Subject to Completion" that was used after such effectiveness and
prior to the execution and delivery of this Agreement, is herein called,
together with the documents incorporated or deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, a
"preliminary prospectus." Such registration statement, as amended (if
applicable), including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Original Registration Statement." Any registration statement filed pursuant to
Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term the "Original
Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus and final prospectus supplement relating to the Securities,
including the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities, are herein called, collectively, the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to, collectively, the preliminary
prospectus supplement dated ___, 1998 together with the prospectus dated ___,
1998 and the Term Sheet and all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of S-3, and all references
in this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "described," "disclosed," "included" or
"stated" in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated or deemed to be incorporated by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated or
deemed to be incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the
2
<PAGE>
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations, and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will 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. If
Rule 434 is used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
any Underwriter through [Name of Underwriter] expressly for use in the
Registration Statement or Prospectus, or to that part of the Registration
Statement that constitutes the Trustee's Statement of Eligibility on Form T-1
(the "Form T-1").
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was issued
and at the Closing Time, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(iii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(iv) The Company has been duly incorporated, is validly existing as a
3
<PAGE>
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
result in a Material Adverse Effect.
(v) As used herein, the "Material Subsidiaries" of the Company are
American Optical Lens Company, a Delaware Corporation ("AO"), Sola Optical
Holding Aus. Ltd., a Delaware corporation, Sola Optical Partners, an Australian
limited partnership, Sola Optical Holdings Pty. Ltd., an Australian corporation,
Sola Corporation Limited, an Australian corporation, Sola International Holdings
Ltd., an Australian corporation, Sola Optical Italia SpA, an Italian
corporation, Sola Brazil Industria Optica Ltda., a Brazilian corporation, and
Sola ADC Lenses Limited, an Irish corporation, and no other subsidiary of the
Company had, at December 31, 1997, assets in excess of 5% of the consolidated
assets of the Company and its subsidiaries in each case excluding intangibles as
at that date or had, for the nine months then ended, net sales (excluding
internal intercompany sales) in excess of 5% of the consolidated net sales of
the Company and its subsidiaries for such period. In making this determination,
any subsidiary acquired after December 31, 1997 shall be deemed to have been
acquired as of such date. Each Material Subsidiary of the Company has been duly
organized, is validly existing as a corporation or partnership, as the case may
be, in good standing under the laws of the jurisdiction of its organization, has
the power and authority as a corporation or partnership, as the case may be, to
own its property and to conduct its business as described in the Prospectus and
is, except to the extent that the following may not be applicable under foreign
law, duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not result in a Material Adverse
Effect; and, except for directors' qualifying shares, the Company beneficially
owns, directly or indirectly, 100% of the shares of capital stock and
partnership interests of its Material Subsidiaries and, with respect to such
shares and partnership interests, the Company has good and marketable title,
free and clear of all liens, charges, encumbrances or restrictions of any kind.
(vi) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus.
(vii) All the outstanding shares Common Stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable.
The shares of Common Stock to be issued and sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Common Stock will not be subject to any preemptive or similar
rights of any stockholder of the Company arising by operation of law, under the
charter or by-laws of the Company or under any agreement to which the Company or
any subsidiary of the Company is a party.
(viii) This Agreement has been duly authorized, executed and delivered
by the Company.
(ix) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement do not and will not
contravene or conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or
4
<PAGE>
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to, any
provision of applicable law or the certificate of incorporation or by-laws of
the Company, the Credit Agreement (as defined below) or any other agreement or
other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any of its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the issuance or sale of the Securities or the performance
by the Company of its obligations under this Agreement, except such as have been
obtained under the 1933 Act and as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Securities. As used herein, the term "Credit Agreement" means the Multicurrency
Credit Agreement dated as of June 14, 1996 among the Company, the other
borrowers and subsidiary guarantors, if any, referred to therein, Bank of
America National Trust and Savings Association, as agent, The First National
Bank of Boston and The Bank of Nova Scotia, as co-agents, and the other
financial institutions party thereto, including all amendments and supplements
thereto and guarantees, if any, entered into pursuant to or in connection
therewith.
(x) Except as described in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company, threatened
to which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus and are
not so described, or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(xi) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to obtain, declare or file would not
result in a Material Adverse Effect.
(xii) The Company is not an "investment company" nor an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiii) Ernst & Young LLP, who has reported on the audited financial
statements and schedules included in the Registration Statement, are independent
public accountants with respect to the Company and were, at all relevant times,
independent public accountants with respect to the Worldwide Ophthalmic Group
(the "WOG") of American Optical Corporation in each case as required by the 1933
Act and the 1933 Act Regulations.
(xiv) The consolidated financial statements which are included in the
Registration Statement present fairly the consolidated or combined, as the case
may be, financial position and stockholders' equity and the consolidated or
combined, as the case may be, results of operations and consolidated or
combined, as the case maybe, statements of cash flows of the Company and of the
WOG at the indicated dates and for the periods specified. Such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved. The
financial statement
5
<PAGE>
schedules, if any, included in the Registration Statement present fairly
the information required to be stated therein. The selected financial data
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
consolidated financial statements included in the Registration Statement.
The pro forma financial statements, if any, and other pro forma financial
information, if any, included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(xv) Except as disclosed in the Prospectus, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, result in a Material
Adverse Effect.
(xvi) To the extent applicable, the Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(b) Officer's Certificates . Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the Representatives or to
counsel for the Underwriters pursuant to this Agreement or attached to the legal
opinion delivered pursuant to Section 5(b) hereof shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities . On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
6
<PAGE>
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional ___ shares of Common Stock at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ___, or
at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (New York City time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to an account at a bank designated by the Company, against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. [Name of Underwriter], individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose payment therefor has not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration . Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York
7
<PAGE>
not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests .
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A, Rule 434 or Rule 415, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement or any Rule
462(b) Registration Statement shall become effective, or any Prospectus,
any supplement to the Prospectus, any Term Sheet or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of
prospectus or term sheet, as the case may be, transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus or term sheet, as
the case may be. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus or
the prospectus supplement, if any, included in the Registration Statement
at the time it became effective or to the Prospectus, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters
shall promptly and reasonably object.
(c) Delivery of Registration Statements . The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, as many signed and conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and signed
copies of all consents and certificates of experts, as the Representatives
and counsel to the Underwriters may reasonably request. The copies of the
Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses . The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter,
8
<PAGE>
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws . The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of any such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications . The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the date
hereof; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date
hereof.
(g) Rule 158 . The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds . The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Restriction on Sale of Securities . From the date of this
Agreement through and including the Closing Time, the Company will not, without
the prior written consent of [Name of Underwriter], directly or indirectly,
issue, sell, offer or contract to sell, grant any
9
<PAGE>
option for the sale of, or otherwise transfer or dispose of, any equity
securities of the Company.
(j) Reporting Requirements . The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(k) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
-------------------
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, word processing, printing and filing
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters including any transfer fees or duties payable
upon the sale of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
(ix) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
(b) Termination of Agreement . If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters .
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement . The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective not later than 5:30 P.M. on the date hereof and at Closing Time no
stop order suspending the effectiveness of the Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term
10
<PAGE>
Sheet shall have been filed with the Commission in accordance with Rule 434 and
Rule 424(b) or, if the Company has elected to rely on Rule 415, the final
prospectus supplement relating to the Securities and, if required by Rule
424(b), the related final prospectus shall have been filed with the Commission
in accordance with Rule 424(b).
(b) Opinion of Counsel for Company . At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A hereto and to such further effect as counsel
to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters . At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of [name of counsel], counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters with
respect to the matters set forth in clauses (A)(i), (D), (G), (J), (K), (L), (M)
and (N) and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(d) Officers' Certificate . At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the Company signed by the
President or a Vice President of the Company and the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
performed and complied with all agreements and satisfied all conditions on its
part to be performed, complied with or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, are threatened by the
Commission.
(e) Accountant's Comfort Letter . At the time of the execution of
this Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements of the Company and of the WOG and certain
financial information contained in the Registration Statement and the Prospect
us.
(f) Bring-down Comfort Letter . At Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated as of
Closing Time, to the effect that
11
<PAGE>
they reaffirm the statements made in the letter furnished pursuant to subsection
(e) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.
(g) Approval of Listing . At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) Conditions to Purchase of Option Securities . In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
Fried, Frank, Harris, Shriver & Jacobson, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
-----------------------------------
opinion of [name of counsel], counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young LLP,
-------------------------
in form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the Representatives pursuant to Section 5(f)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(i) Additional Documents . At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Representatives and counsel
for the Underwriters.
(j) Termination of Agreement . If any condition specified in this
Section shall not have
12
<PAGE>
been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Representatives by notice to the Company at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by [Name of Underwriter]),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through [Name of Underwriter] expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided further that
-------- -------
this indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Securities, or any
person controlling such Underwriter, if the Company sustains the burden of
proving that (A) a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any such amendments or supplements thereto in
accordance with Section 3(d) hereof, but excluding documents incorporated or
deemed to be incorporated by reference therein) was not sent or given by or on
behalf of such Underwriter to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Securities
13
<PAGE>
to such person and (B) the Prospectus (as so amended or supplemented, if
applicable) would have corrected the defect giving rise to such loss, liability,
claim, damage or expense, except that this proviso shall not be applicable if
such defect shall have been corrected in a document which is incorporated or
deemed to be incorporated by reference in the Prospectus.
(b) Indemnification of Company, Directors and Officers . Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, of
its officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through [Name
of Underwriter] expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification . Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by [Name of Underwriter],
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse . If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have
14
<PAGE>
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party shall not be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
consent if such indemnifying party (i) reimburses such indemnified party in
accordance with such request to the extent such indemnifying party considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. Contribution . If the indemnification provided for in Section
------------
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus (or, if Rule 434 is used, in the
corresponding location on the Term Sheet) bear to the aggregate initial public
offering price of the Securities as set forth on such cover (or corresponding
location on the Term Sheet, as the case may be).
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the
15
<PAGE>
1933 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, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General . The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, California or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives
16
<PAGE>
shall not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of the Defaulted Securities does
not exceed 10% of the aggregate principal amount of the Securities to be
purchased hereunder, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased hereunder, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o [name of Underwriter];
and notices to the Company shall be directed to it at 2420 Sand Hill Road, Suite
200, Menlo Park, California 94025, attention of the Chief Financial Officer.
SECTION 12. Parties. This Agreement shall each inure to the benefit
-------
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
17
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
SOLA INTERNATIONAL INC.
By
----------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Name of Underwriter]
___
By: [Name of Underwriter]
By
---------------------------
Authorized Signatory
For themselves and as Representatives of the Underwriters named in Schedule A
hereto.
18
<PAGE>
SCHEDULE A
Name of Underwriter
Principal
Amount of
Securities
----------
[Name of Lead Manager]......................................
[Name(s) of Co-Representative(s)]...........................
-------
Total........................................................ $ __,000,000
===========
Sch A-1
<PAGE>
SCHEDULE B
SOLA INTERNATIONAL INC.
___ Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $______.
2. The purchase price per share for the Securities to be paid by the
several Underwriters to be paid by the several Underwriters shall be $
, being an amount equal to the initial public offering price set forth above
less $ per share; provided that the purchase price per share for any
Option Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities.
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) (i) the Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, (ii) has the corporate power
and authority to own its property and to conduct its business as described in
the Prospectus and (iii) is duly qualified to transact business and is in good
standing in each U.S. jurisdiction set forth in an Officer's Certificate
attached to the opinion (the "Officer's Certificate") (it being understood that
in giving such opinion with respect to jurisdictions other than Delaware such
counsel will rely solely upon certificates of public officials of such
jurisdictions);
(B) the authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization";
(C) all the outstanding shares of Common Stock have been duly
authorized; the issuance of the Securities issued and sold by the Company
pursuant to the Underwriting Agreement has been duly authorized and, when such
shares of Common Stock are issued and delivered in accordance with the terms of
the Underwriting Agreement, such shares of Common Stock will be validly issued,
fully paid and non-assessable, and the issuance of such shares of Common Stock
will not be subject to any preemptive or similar rights of stockholders arising
under the Delaware General Corporation Law, the charter or by-laws of the
Company, as amended and restated, or any of the agreements, contracts or
instruments that is listed as an exhibit to (a) the Registration Statement or
the Company's Annual Report on Form 10-K for the fiscal year ending March 31,
1997 or (b) any document filed with the Commission subsequent to March 31, 1997
and prior to the date of such opinion that is incorporated or deemed to be
incorporated by reference in the Registration Statement;
(D) the Purchase Agreement has been duly authorized, executed and
delivered by the Company;
(E) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement, does not
and will not (i) contravene any provision of the Amended and Restated
Certificate of Incorporation or Amended and Restated Bylaws of the Company, (ii)
contravene, result in a breach of or constitute a default under the Credit
Agreement or any other agreement or instrument binding upon the Company (or any
of its subsidiaries) (a) that is listed as an exhibit to the Registration
Statement or the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997 (excluding Exhibits 10.12 and 10.13) or (b) that is listed as an
exhibit to any document filed with the Commission subsequent to March 31, 1997
and prior to the date of such opinion that is incorporated or deemed to be
incorporated by reference in the Registration Statement, or (iii) violate (x)
any present statute, rule or regulation of any governmental agency or authority
of the United States of America or the State of New York or any present
provision of the General Corporation Law of the State of Delaware (the "DGCL")
applicable to the Company or any Material Subsidiary, or (y) any judgment or
decree or order of any court or governmental agency or body of the United States
of America or the State of New York or of the State of Delaware pursuant to the
DGCL set forth in the Officer's Certificate; provided, however, that such
-------- -------
counsel shall express no opinion with respect to any violation, breach or
default not ascertainable from the face of any such
A-1
<PAGE>
agreement or order, or arising under or based upon any cross-default provision
insofar as such violation relates to a default under an agreement that is not
referred to in subclause (a) or (b) of clause (ii) above or under the agreements
set forth under Exhibits 10.12 and 10.13 to the Company's Annual Report on 10-K
for the fiscal year ended March 31, 1997 or such violation arises under or is
based upon any covenant of a financial or numerical nature or which requires
arithmetic computation;
(F) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency of the United States
of America or the State of New York or of the State of Delaware pursuant to the
DGCL is required for the issuance or sale of the Securities or the performance
by the Company of its obligations under the Purchase Agreement, except such as
have been obtained under the 1933 Act or the 1939 Act or such as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(G) the statements made in the Prospectus under the captions
"Description of Common Stock," to the extent such statements constitute
summaries of legal matters or of the Securities or other documents, or legal
conclusions, have been reviewed by such counsel and fairly present the
information disclosed therein in all material respects;
(H) such counsel does not have actual knowledge of any contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or any document incorporated or deemed to be incorporated
by reference therein which are not filed as required;
(I) the Company is not an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended;
(J) the Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; to the best knowledge
of such counsel, 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);
and, to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or threatened by the Commission;
(K) the Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, and the Prospectus (in each case excluding the documents
incorporated or deemed to be incorporated by reference therein), and each
amendment or supplement to the Registration Statement or Prospectus, as of their
respective effective or issue dates (other than the financial statements, the
notes and schedules thereto and the other financial information included therein
or omitted therefrom and other than the Form T-1, as to which such counsel need
express no opinion) each appeared on its face to be responsive as to form in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations;
(L) the documents incorporated or deemed to be incorporated by
reference in the Prospectus (other than the financial statements, the notes and
schedules thereto and the other financial information included therein or
omitted therefrom, as to which such counsel need express no opinion), when they
were filed with the Commission, each appeared on its face to be responsive as to
form in all material respects to the requirements of the 1934 Act and the rules
and regulations of the Commission thereunder.
(M) to our knowledge, there is not pending or threatened any action,
suit or proceeding to which the Company or any of its domestic subsidiaries is a
party, or to which the property of the
A-2
<PAGE>
Company or any of its domestic subsidiaries is subject, before or
brought by any New York, Delaware or federal court or any New York,
Delaware or federal governmental agency or body, which might reasonably
be expected to result in a Material Adverse Effect or which might
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by the Purchase Agreement
or the performance by the Company of its obligations thereunder.
(N) American Optical Lens Company, a Delaware corporation, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus.
In addition, such counsel shall state that in the course of the
preparation by the Company of the Registration Statement and the Prospectus,
such counsel participated in conferences with certain of the officers and
representatives of, and the independent public accountants for, the Company, at
which the contents of the Registration Statement and the Prospectus were
discussed and that, between the date of effectiveness of the Registration
Statement and the time of delivery of such opinion, such counsel participated in
additional conferences with certain of the officers and representatives of, and
independent public accountants for, the Company, at which the contents of the
Registration Statement and the Prospectus were discussed to a limited extent.
Such counsel shall state that, given the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process, they shall not pass upon or assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except as set forth in paragraph (G)
above. Subject to the foregoing and on the basis of the information gained in
the performance of the services referred to above, including information
obtained from officers and other representatives of, and the independent public
accountants for, the Company, such counsel shall state that no facts have come
to their attention that have caused them to believe that the Registration
Statement, as of its effective date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading. Such counsel may state
that they express no view or belief, however, with respect to financial
statements, the notes or schedules thereto or other financial information
included in or omitted from the Registration Statement or the Prospectus or the
Form T-1.
Such opinion may state that for purposes of paragraphs (E) and (F)
above, we have reviewed only those statutes, rules and regulations that in our
experience are applicable to transactions of the type contemplated by the
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities. In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials, and
such counsel may state that they express no opinion as to the laws of any
jurisdiction other than United States federal and New York law and the DGCL. In
addition, such counsel may assume that the parties to all agreements other than
the Company have the power to enter into and perform their obligations under
such agreements and to consummate the transactions contemplated thereby and that
such agreements have been duly authorized, executed and delivered by, and
constitute legal and binding obligations of, such parties other than the
Company. Such opinion shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
A-3
<PAGE>
EXHIBIT 4.4
SOLA INTERNATIONAL INC., as Issuer
and
State Street Bank and Trust Company of California, N.A., as Trustee
__________________
INDENTURE
Dated as of March , 1998
__________________
<PAGE>
SOLA INTERNATIONAL INC.
Reconciliation and tie between Trust Indenture Act of
1939 and the Indenture, dated as of March __, 1998:
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
(S) 310(a)(1)............................................ 609
(a)(2)............................................ 609
(a)(3)............................................ Not Applicable
(a)(4)............................................ Not Applicable
(a)(5)............................................ 609
(b)............................................... 608, 610
(S) 311(a)............................................... 610, 613
(b)............................................... 613
(c)............................................... Not Applicable
(S) 312(a)............................................... 701, 702(a)
(b)............................................... 702(b)
(c)............................................... 702(c)
(S) 313(a)............................................... 703(a)
(b)............................................... 703(a)
(c)............................................... 703(a), 602
(d)............................................... 703(b)
(S) 314(a)............................................... 704
(a)(4)............................................ 101,1005
(b)............................................... Not Applicable
(c)(1)............................................ 102
(c)(2)............................................ 102
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 102
(S) 315(a)............................................... 601
(b)............................................... 602
(c)............................................... 601
(d)............................................... 601, 603
(e)............................................... 514
(S) 316(a)(last sentence)................................ 101
(a)(1)(A)......................................... 502, 512
(a)(1)(B)......................................... 513
(a)(2)............................................ Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
(b)............................................... 508
(c)............................................... 104(c)
(S) 317(a)(1)............................................ 503
(a)(2)............................................ 504
(b)............................................... 1003
(S) 318(a)............................................... 107
</TABLE>
_____________________
Note: This reconcilitation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES...................................................................... 1
RECITALS OF THE COMPANY...................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.................................................... 2
-----------
"Act"...................................................................... 2
"Additional Amounts"....................................................... 2
"Affiliate"................................................................ 2
"Authenticating Agent"..................................................... 3
"Authorized Newspaper"..................................................... 3
"Bearer Security".......................................................... 3
"Board of Directors"....................................................... 3
"Board Resolution"......................................................... 3
"Book-Entry Security"...................................................... 3
"Business Day"............................................................. 4
"Commission"............................................................... 4
"Common Stock"............................................................. 4
"Company".................................................................. 4
"Company Request" or "Company Order"....................................... 4
"Conversion Event"......................................................... 4
"Corporate Trust Office"................................................... 5
"corporation".............................................................. 5
"Coupon"................................................................... 5
"Currency"................................................................. 5
"CUSIP number"............................................................. 5
"Defaulted Interest"....................................................... 5
"Depositary"............................................................... 5
"Dollars" or "$"........................................................... 6
"ECU"...................................................................... 6
"Event of Default"......................................................... 6
"Exchange Act"............................................................. 6
"Foreign Currency"......................................................... 6
"GAAP"..................................................................... 6
"Government Obligations"................................................... 6
"Holder"................................................................... 7
</TABLE>
<PAGE>
<TABLE>
<S> <C>
"Indenture"............................................................... 7
"Indexed Security"........................................................ 7
"interest"................................................................ 8
"Interest Payment Date"................................................... 8
"Maturity"................................................................ 8
"Office or Agency"........................................................ 8
"Officers' Certificate"................................................... 8
"Opinion of Counsel"...................................................... 8
"Original Issue Discount Security"........................................ 8
"Outstanding"............................................................. 9
"Paying Agent"............................................................ 10
"Person".................................................................. 10
"Place of Payment"........................................................ 10
"Predecessor Security".................................................... 10
"Preferred Stock"......................................................... 11
"Repayment Date".......................................................... 11
"Repayment Price"......................................................... 11
"Redemption Date"......................................................... 11
"Redemption Price"........................................................ 11
"Registered Security"..................................................... 11
"Regular Record Date"..................................................... 11
"Responsible Officer"..................................................... 12
"Security"................................................................ 12
"Security Register"....................................................... 12
"Senior Indebtedness"..................................................... 12
"Significant Subsidiary".................................................. 12
"Special Record Date"..................................................... 12
"Stated Maturity"......................................................... 13
"Subordinated Securities"................................................. 13
"Subsidiary".............................................................. 13
"Trustee"................................................................. 13
"Trust Indenture Act"..................................................... 13
"United States"........................................................... 14
"United States Person".................................................... 14
"Voting Stock"............................................................ 11
Section 102. Compliance Certificates and Opinions.......................... 14
------------------------------------
Section 103. Form of Documents Delivered to Trustee........................ 15
--------------------------------------
Section 104. Acts of Holders; Record Dates................................. 15
-----------------------------
Section 105. Notices, Etc., to Trustee and Company......................... 17
-------------------------------------
Section 106. Notice to Holders; Waiver..................................... 18
-------------------------
Section 107. Conflict with Trust Indenture Act............................. 19
---------------------------------
Section 108. Effect of Headings and Table of Contents...................... 19
----------------------------------------
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
Section 109. Successors and Assigns....................................... 20
----------------------
Section 110. Separability Clause.......................................... 20
-------------------
Section 111. Benefits of Indenture........................................ 20
---------------------
Section 112. Governing Law................................................ 20
-------------
Section 113. Legal Holidays............................................... 20
--------------
Section 114. Immunity of Stockholders, Directors, Officers and Agents of
-----------------------------------------------------------
the Company................................................. 21
-----------
ARTICLE TWO
SECURITY FORMS
Section 201. Forms of Securities.......................................... 22
-------------------
Section 202. Securities in Book-Entry Form................................ 22
-----------------------------
Section 203. Form of Legend for Book-Entry Securities..................... 23
----------------------------------------
Section 204. Form of Trustee's Certificate of Authentication.............. 24
-----------------------------------------------
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series......................... 25
------------------------------------
Section 302. Currency; Denominations...................................... 29
-----------------------
Section 303. Execution, Authentication, Delivery and Dating............... 30
----------------------------------------------
Section 304. Temporary Securities......................................... 32
--------------------
Section 305. Registration, Registration of Transfer and Exchange.......... 33
---------------------------------------------------
Section 306. Mutilated, Destroyed, Lost and Stolen Securities............. 37
------------------------------------------------
Section 307. Payment of Interest; Interest Rights Preserved............... 38
-----------------------------------------------
Section 308. Persons Deemed Owners........................................ 40
---------------------
Section 309. Cancellation................................................. 41
------------
Section 310. Computation of Interest...................................... 42
-----------------------
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture...................... 43
---------------------------------------
Section 402. Application of Trust Money................................... 45
--------------------------
ARTICLE FIVE
REMEDIES
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
Section 501. Events of Default.............................................. 46
-----------------
Section 502. Acceleration of Maturity; Rescission and Annulment............. 49
--------------------------------------------------
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee....................................................... 49
-------
Section 504. Trustee May File Proofs of Claim............................... 50
--------------------------------
Section 505. Trustee May Enforce Claims Without Possession of Securities.... 50
-----------------------------------------------------------
Section 506. Application of Money Collected................................. 51
------------------------------
Section 507. Limitation on Suits............................................ 51
-------------------
Section 508. Unconditional Right of Holders to Receive Principal, Premium,
-------------------------------------------------------------
if any, and Interest and Additional Amounts, if any........... 52
---------------------------------------------------
Section 509. Restoration of Rights and Remedies............................. 52
----------------------------------
Section 510. Rights and Remedies Cumulative................................. 53
------------------------------
Section 511. Delay or Omission Not Waiver................................... 53
----------------------------
Section 512. Control by Holders............................................. 53
------------------
Section 513. Waiver of Past Defaults........................................ 53
-----------------------
Section 514. Undertaking for Costs.......................................... 54
---------------------
Section 515. Waiver of Usury, Stay or Extension Laws........................ 54
---------------------------------------
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities............................ 56
-----------------------------------
Section 602. Notice of Defaults............................................. 56
------------------
Section 603. Certain Rights of Trustee...................................... 57
-------------------------
Section 604. Not Responsible for Recitals or Issuance of Securities......... 59
------------------------------------------------------
Section 605. May Hold Securities............................................ 59
-------------------
Section 606. Money Held in Trust............................................ 59
-------------------
Section 607. Compensation and Reimbursement................................. 59
------------------------------
Section 608. Disqualification; Conflicting Interests........................ 60
---------------------------------------
Section 609. Corporate Trustee Required; Eligibility........................ 60
---------------------------------------
Section 610. Resignation and Removal; Appointment of Successor.............. 61
-------------------------------------------------
Section 611. Acceptance of Appointment by Successor......................... 62
--------------------------------------
Section 612. Merger, Conversion, Consolidation or Succession to Business.... 64
-----------------------------------------------------------
Section 613. Preferential Collection of Claims Against Company.............. 64
-------------------------------------------------
Section 614. Appointment of Authenticating Agent............................ 64
-----------------------------------
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders...... 68
---------------------------------------------------------
Section 702. Preservation of Information; Communications to Holders......... 68
------------------------------------------------------
</TABLE>
-iv-
<PAGE>
<TABLE>
<S> <C>
Section 703. Reports by Trustee............................................. 69
------------------
Section 704. Reports by Company............................................. 69
------------------
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms........... 70
----------------------------------------------------
Section 802. Rights and Duties of Successor Corporation..................... 70
------------------------------------------
Section 803. Officers' Certificate and Opinion of Counsel................... 71
--------------------------------------------
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders............. 72
--------------------------------------------------
Section 902. Supplemental Indentures with Consent of Holders................ 74
-----------------------------------------------
Section 903. Execution of Supplemental Indentures........................... 75
------------------------------------
Section 904. Effect of Supplemental Indentures.............................. 75
---------------------------------
Section 905. Conformity with Trust Indenture Act............................ 76
-----------------------------------
Section 906. Reference in Securities to Supplemental Indentures............. 76
--------------------------------------------------
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest..................... 77
------------------------------------------
Section 1002. Maintenance of Office or Agency................................ 77
-------------------------------
Section 1003. Money for Securities Payments to Be Held in Trust.............. 78
-------------------------------------------------
Section 1004. Corporate Existence............................................ 80
-------------------
Section 1005. Statement as to Compliance..................................... 80
--------------------------
Section 1006. Waiver of Certain Covenants.................................... 80
---------------------------
Section 1007. Additional Amounts............................................. 81
------------------
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article....................................... 83
------------------------
Section 1102. Election to Redeem; Notice to Trustee.......................... 83
-------------------------------------
Section 1103. Selection by Trustee of Securities to Be Redeemed.............. 83
-------------------------------------------------
Section 1104. Notice of Redemption........................................... 84
--------------------
</TABLE>
-v-
<PAGE>
<TABLE>
<S> <C>
Section 1105. Deposit of Redemption Price................................... 86
---------------------------
Section 1106. Securities Payable on Redemption Date......................... 86
-------------------------------------
Section 1107. Securities Redeemed in Part................................... 87
---------------------------
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article...................................... 88
------------------------
Section 1202. Satisfaction of Sinking Fund Payments with Securities......... 88
-----------------------------------------------------
Section 1203. Redemption of Securities for Sinking Fund..................... 88
-----------------------------------------
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article...................................... 90
------------------------
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1401. Applicability of the Article; Company's Obligation to Effect.. 91
------------------------------------------------------------
Defeasance or Covenant Defeasance.
---------------------------------
Section 1402. Defeasance and Discharge...................................... 91
------------------------
Section 1403. Covenant Defeasance........................................... 92
--------------------
Section 1404. Applicability of the Article; Company's Obligation to Effect
------------------------------------------------------------
Defeasance or Covenant Defeasance............................. 92
---------------------------------
Section 1405. Deposited Money and Government Obligations to Be Held in
--------------------------------------------------------
Trust; Other Miscellaneous Provisions......................... 94
--------------------------------------
Section 1406. Reinstatement................................................. 96
-------------
Section 1407. Effect on Subordination Provisions............................ 96
----------------------------------
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called..................... 97
-----------------------------------------
Section 1502. Call, Notice and Place of Meetings............................ 97
----------------------------------
Section 1503. Persons Entitled to Vote at Meetings.......................... 97
------------------------------------
Section 1504. Quorum; Action................................................ 98
--------------
</TABLE>
-vi-
<PAGE>
<TABLE>
<S> <C>
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.................................................... 99
--------
Section 1506. Counting Votes and Recording Action of Meetings............. 100
-----------------------------------------------
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Securities Subordinate to Senior Indebtedness............... 101
---------------------------------------------
ARTICLE SEVENTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1701. Applicability of Article.................................... 102
------------------------
</TABLE>
-vii-
<PAGE>
INDENTURE, dated as of March , 1998, between SOLA INTERNATIONAL INC., a
Delaware corporation (the "Company"), having its principal office at 2420 Sand
Hill Road, Suite 200, Menlo Park, California 94025, and State Street Bank and
Trust Company of California, N.A., as Trustee hereunder (the "Trustee"), having
a Corporate Trust Office at 633 West 5th Street, 12th Floor, Los Angeles,
California 90071.
RECITALS OF THE COMPANY
The Company deems it advisable to issue from time to time for its lawful
purposes its unsecured debentures, notes or other evidences of indebtedness
(hereinafter called the "Securities") in one or more series as in this Indenture
provided, and has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of the Securities, unlimited as to
principal amount, to bear interest at the rates or formulas, to mature at such
times and to have such other provisions as shall be fixed as hereinafter
provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act.
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:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have, when capitalized, the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "dollars", "$", "U.S. dollars", "United States
dollars" or "cash" shall refer to the lawful currency of the United States of
America; and
(f) the definitions included herein may be modified, expanded, deleted or
otherwise amended in a supplemental indenture after the date hereof or pursuant
to Section 301 hereof.
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required hereby
or by any Security or pursuant to a Board Resolution, under circumstances
specified herein or therein, to be paid by the Company in respect of certain
taxes, assessments or other governmental charges imposed on Holders specified
therein and which are owing to such Holders.
"Affiliate" means, with respect to any specified Person, any other Person
which, directly or indirectly, is in control of, is controlled by or is under
common control with such specified Person. For the purposes of this definition,
"control" when used with
-2-
<PAGE>
respect to any specified Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 614.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on a day that is a Business Day in the
place of publication.
"Bearer Security", means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted or consented
to by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security bearing the legend specified in
Section 203 evidencing all or part of a series of Securities, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.
"Business Day" when used with respect to any Place of Payment means, unless
otherwise specified with respect to any Securities pursuant to Section 301, each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in the Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of the Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
-3-
<PAGE>
"Common Stock" means, with respect to any Person, capital stock issued by
such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice Chairman, its Chief Executive Officer, its President, its Chief Financial
Officer or a Vice President (whether or not designated by a number or words
added before or after the title "Vice President"), and by any one of its
Treasurer, Assistant Treasurer, Secretary or Assistant Secretary and delivered
to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign Currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community, (ii)
the ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means either (A) the principal trust office of
the Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date of original execution of this
Indenture is located at 633 West 5th Street, 12th Floor, Los Angeles, California
90071, Attention: Corporate Trust Department, or (B) for purposes of Sections
105, 305 and 1002, "Corporate Trust Office" also means the office of an
affiliate of the Trustee in the Borough of Manhattan, The City of New York at
which at any particular time its corporate trust business shall be administered
in The City of New York, which office at the date of original execution of this
Indenture is located at c/o State Street Bank and Trust Co., 61 Broadway, 15th
Floor, New York, New York 10006, Attention: Corporate Trust Department; provided
that, for purposes of any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document or notice provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with, the Trustee, whether pursuant to Section 105 or otherwise, "Corporate
Trust Office" means any office referred to in clause (A) or (B) of this
paragraph.
"corporation" means a corporation, association, limited liability company,
joint-stock company or business trust, except that, as used in the definition of
the terms "Subsidiary" and "Voting Stock," the term "corporation" means solely a
corporation.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency", with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency, as
the case may be, in which such payment, deposit or other transfer is required to
be made by or pursuant to the terms hereof or such Security and, with respect to
any other payment, deposit or transfer pursuant to or contemplated by the terms
hereof or such Security, means Dollars.
"CUSIP number" means the alphanumeric designation assigned to a Security by
Standard & Poor's Corporation, CUSIP Service Bureau.
"Defaulted Interest" has the meaning specified in Section 307.
-4-
<PAGE>
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Book-Entry Securities,
The Depository Trust Company and its successors, or another Person designated as
Depositary by the Company pursuant to Section 301, which must be a clearing
agency registered under the Exchange Act, and if at any time there is more than
one such Person, "Depositary" shall mean the Depositary with respect to the
Securities of that series.
"Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Community.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any statute successor thereto.
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the date of the application thereof.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments in the
confederation which issued the Foreign Currency in which the principal of or any
premium or interest on the relevant Security or any Additional Amounts in
respect thereof shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of the United States of
America or such other government or governments, as the case may be, or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such other government or
governments, in each case where the timely payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, as the case may be,
and which, in the case of (i) or (ii), are not callable or redeemable at the
option of the issuer or issuers thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any
-5-
<PAGE>
amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of or other amount with respect
to the Government Obligation evidenced by such depository receipt.
"Holder" means in the case of any Registered Security, the Person in whose
name such Security is registered in the Security Register and, in the case of
any Bearer Security, the bearer thereof and, in the case of any Coupon, the
bearer thereof.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
-------- -------
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted.
"Indexed Security" has the meaning specified in Section 301(11).
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, repayment at the option of
the Holder or otherwise.
"Office or Agency" with respect to any Securities, means an office or
agency of the Company maintained or designated as a Place of Payment for such
Securities pursuant to Section 1002 or any other office or agency of the Company
maintained or designated for such Securities pursuant to Section 1002 or, to the
extent designated or required by Section 1002 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the Chief Executive Officer, the President, Chief
Financial Officer or a Vice President (whether or not designated by a number or
word or words added before or
-6-
<PAGE>
after the title "Vice President"), and by the Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or the Trustee, and who shall be
reasonably acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due an payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to any Securities means, as of the
date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any Coupons appertaining thereto except, in the case of
Securities as to which the Company had effected satisfaction and discharge
pursuant to Article Four, to the extent provided in Article Four; provided,
that if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor reasonably
satisfactory to the Trustee has been made; and Securities, except to the
extent provided in Section 1402 and 1403, with respect to which the Company
has effected defeasance and/or covenant defeasance, as provided in Article
Fourteen;
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
reasonably satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company; and
(iv) Securities converted or exchanged into Common Stock or other
securities pursuant to or in accordance with this Indenture if the terms of
such Securities provide for convertibility pursuant to Section 301;
-7-
<PAGE>
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by Section 313 of the Trust Indenture Act, (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount of any
Indexed Security of any series that may be counted in making such determination
or calculation and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise established as contemplated by Section 301 with
respect to such Security, (iii) the principal amount of a Security denominated
in Foreign Currency that shall be deemed outstanding for such purpose shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, business trust, partnership,
joint venture, joint-stock company, limited liability company, association,
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as established as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen Coupon appertains shall be
-8-
<PAGE>
deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security or the Security to which the mutilated, destroyed, lost or stolen
Coupon appertains.
"Preferred Stock" means, with respect to any Person, capital stock issued
by such Person that is entitled to a preference or priority over any other
capital stock issued by such Person upon any distribution of such Person's
assets, whether by dividend or upon liquidation.
"Repayment Date" when used with respect to any Security to be repaid at the
option of the Holder, means the date fixed for such repayment by or pursuant to
this Indenture.
"Repayment Price" when used with respect to any Security to be repaid at
the option of the Holder, means the price at which it is to be repaid by or
pursuant to this Indenture.
"Redemption Date", when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on any Registered Security of any series means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date."
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Department (or any successor department)
including, without limitation, any vice president (whether or not designated by
a number or a word or words added before or after the title "vice president"),
any trust officer, any assistant secretary, the controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer or employee to whom such
matter is referred because of such officer's or employee's knowledge of and
familiarity with the particular subject.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
-------- -------
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to such Person shall mean
-9-
<PAGE>
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" has the meaning determined pursuant to Section
301(21).
"Significant Subsidiary" means, with respect to any Person, any Subsidiary
of such Person which is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X promulgated under the Securities Act of 1933, as amended (as in
effect on the date of the Indenture).
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a Coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is, or such Additional Amounts are, due and payable.
"Subordinated Securities" means any Securities which, pursuant to Section
301, are by their terms expressly subordinated in right of payment to Senior
Indebtedness.
"Subsidiary" means (i) any corporation at least a majority of the total
voting power of whose outstanding Voting Stock is owned, directly or indirectly,
at the date of determination by the Company and/or one or more other
Subsidiaries of the Company, (ii) any partnership in which the Company and/or
one or more other Subsidiaries of the Company owns, directly or indirectly, at
the date of determination at least a majority interest in the equity capital or
profits of such partnership, or (iii) any other Person in which the Company
and/or one or more other Subsidiaries of the Company, directly or indirectly, at
the date of determination, (x) owns at least a majority ownership interest or
(y) has the power to elect or direct the election of at least a majority of the
directors or other governing body of such Person.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
-10-
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
-------- -------
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"United States", except as otherwise provided in or pursuant to this
Indenture or any Security, means the United States of America (including the
states thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to
any Debt Securities pursuant to Section 301, any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States, any estate the income of which is
subject to United States federal income taxation regardless of its source, or
any trust whose administration is subject to the primary supervision of a United
States court and which has one or more United States fiduciaries who have the
authority to control all substantial decisions of the trust.
"Voting Stock" means, with respect to any corporation, securities of any
class or series of such corporation, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors of the
corporation.
Section 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 1005)
shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
-11-
<PAGE>
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided in or pursuant to this Indenture to be given or taken
by Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to
-12-
<PAGE>
this Indenture to be made, given or taken by Holders of Securities of such
series may, alternatively, be embodied in and evidenced by the record of Holders
of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and (subject to Section 601) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any date not more than 60 days nor less than 5 days prior to the date
of any of the following actions as the record date for the purpose of
determining the Holders of Registered Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Registered Securities of such series. If not set by the
Company prior to the first solicitation of a Holder of Registered Securities of
such series made by any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any action to be taken
by the Holders of one or more series of Registered Securities, only the Holders
of Registered Securities of such series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
-13-
<PAGE>
(d) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of commencement and the date of
termination of holding the same, shall be proved by the Security Register.
(e) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of commencement and the date of
termination of holding the same, may be proved by the production of such Bearer
Securities or by a certificate executed, as depositary, by any trust company,
bank, banker or other depositary reasonably acceptable to the Company, wherever
situated, if such certificate shall be deemed by the Company and the Trustee to
be satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Company and the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until
(1) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, or (2) such Bearer Security is provided to
the Trustee by some other Person, or (3) such Bearer Security is no longer
Outstanding. The ownership, principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or writing and the
date of the commencement and the date of the termination of holding the same may
also be proved in any other manner which the Company and the Trustee deem
sufficient.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(g) For purposes of this Indenture, any action by the Holders which may be
taken in writing may be taken by electronic means or as otherwise reasonably
acceptable to the Trustee.
Section 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the
-14-
<PAGE>
Trustee at its Corporate Trust Office or at any other address previously
furnished in writing by the Trustee to the Holders or the Company or any
other obligor on the Securities, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing to or with the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument to the Attention of the Treasurer
with a copy to the Company's Chief Financial Officer or at any other
address previously furnished in writing to the Trustee by the Company. Any
such communication shall be effective upon receipt.
Section 106. Notice to Holders; Waiver.
-------------------------
Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of any event,
(1) such notice shall be sufficiently given (unless otherwise
herein expressly provided) to each Holder of Registered Securities affected by
such event if in writing and mailed, first-class postage prepaid, , at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice.
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, affected by such event if published in an Authorized
Newspaper in The City of New York and in such other city or cities as may be
specified in such Securities on a Business Day, such publication to be not
earlier than the earliest date and not later than the latest date prescribed for
the giving of such notice. Any such notice shall be deemed to have been given
on the date of such publication or, if published more than once, on the date of
the first such publication.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of Registered Securities shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been received by such Holder of Registered
Securities, whether or not such Holder of Registered Securities actually
receives such notice. In case by reason of the suspension of regular mail
service
-15-
<PAGE>
or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the Trust Indenture Act provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
Section 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
-16-
<PAGE>
Section 110. Separability Clause.
-------------------
In case any provision in this Indenture, any Security or any Coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 111. Benefits of Indenture.
---------------------
Nothing in this Indenture, any Security or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent, any Authenticating Agent and their successors hereunder and
the Holders of Securities or Coupons, and, solely in the case of Securities
which, pursuant to Section 301, are by their terms expressly subordinated in
right of payment to Senior Indebtedness, the holders of such Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 112. Governing Law.
-------------
This Indenture, the Securities and any Coupons shall be deemed to be a
contract under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of such state, without
regard to principles of conflicts of laws. This Indenture is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
Section 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity, as the case may
be, of any Security shall not be a Business Day at any Place of Payment for such
Security, then notwithstanding any other provision of this Indenture, any
Security or any Coupon (other than a provision of any Security or any Coupon
established as contemplated by Section 301 and which specifically states that
such provision shall apply in lieu of this Section 113), payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date or at the Stated
Maturity or Maturity, as the case may be, and no interest shall accrue on such
payment for the period from and after such Interest Payment Date, Redemption
Date, Repayment Date, sinking fund payment date, Stated Maturity or Maturity, as
the case may be, to the next succeeding Business Day. For purposes of this
Section 113, the sole Place of
-17-
<PAGE>
Payment with respect to any Book-Entry Securities for which the Depositary is
The Depository Trust Company or its successor shall be deemed to be the Borough
of Manhattan, The City of New York.
Section 114. Immunity of Stockholders, Directors, Officers and Agents of the
---------------------------------------------------------------
Company.
- -------
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any past, present or future stockholder, employee,
officer or director, as such, of the Company or of any predecessor or successor,
either directly or through the Company or any predecessor or successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.
-18-
<PAGE>
ARTICLE TWO
SECURITY FORMS
Section 201. Forms of Securities.
-------------------
Each Registered Security, Bearer Security, Coupon and temporary or
permanent Book-Entry Security issued pursuant to this Indenture shall be in
substantially the forms as shall be established by or pursuant to one or more
Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than as set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements placed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons.
The definitive Securities and definitive Coupons, if any, shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities or Coupons.
Section 202. Securities in Book-Entry Form.
-----------------------------
If Securities of or within a series are issuable in book-entry form, as
specified as contemplated by Section 301, then, notwithstanding clause (9) of
Section 301 and the provisions of Section 302, any such Security shall represent
such of the Outstanding Securities of such series as shall be specified therein
and may provide that it shall represent the aggregate amount of Outstanding
Securities of such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Security in book-entry form to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such Person or Persons as shall be specified in such Security or in the
Company Order to be delivered
-19-
<PAGE>
to the Trustee pursuant to Section 303 or 304. Subject to the provisions of
Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent book-entry form in the manner and upon
instructions given by the Person or Persons specified in such Security or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instruction by the Company with
respect to endorsement, delivery or redelivery of a Security in book-entry form
shall be in writing but need not comply with Section 102 and need not be
accompanied by Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in book-entry form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in book-entry form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise specified
as contemplated by Section 301, payment of principal of (and premium, if any),
any interest on, and any Additional Amounts in respect of any Security in
temporary or permanent book-entry form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent Book-Entry Security (i) in the case of a
permanent Book-Entry Security in registered form, the Holder of such permanent
Book-Entry Security in registered form or (ii) in the case of a Book-Entry
Security in bearer form, the Persons or Persons specified pursuant to Section
301.
Section 203. Form of Legend for Book-Entry Securities.
----------------------------------------
Any Book-Entry Security authenticated and delivered hereunder shall bear a
legend in substantially the following form and such other legends as may be
required by the applicable Depositary or as shall be deemed necessary or
desirable by the Company:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is not
exchangeable for Securities registered in the name of a Person other
than the Depositary or its nominee except in the limited circumstances
described in the Indenture, and unless and until it is exchanged in
whole or in part for Securities in definitive certificated form, this
Security may not be
-20-
<PAGE>
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 nominee of such successor
Depositary."
Section 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificates of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
State Street Bank and Trust Company of
California, N.A., as Trustee
By: ____________________________________
Authorized Signatory
-21-
<PAGE>
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series
------------------------------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. With respect to any
series of Securities which may be designated and authenticated and delivered
under this Indenture, there shall be established in or pursuant to one or more
Board Resolutions (and to the extent established pursuant to rather than as set
forth in a Board Resolution, in an Officers' Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any such series (except as provided in
the last paragraph of this Section 301), any or all of the following, as
applicable, each of which (except for the matters set forth in clauses (1), (2)
(with respect to any limit upon the aggregate principal amount of the Securities
which may be authenticated and delivered under this Indenture), (18) and (21)
below), if so provided, may be determined from time to time by the Company with
respect to unissued Securities of the series when issued from time to time:
(1) the title of the Securities (which shall distinguish the
Securities of the series from Securities of any other series) or series of
which they are a part;
(2) the aggregate principal amount of the Securities and any limit
upon the aggregate principal amount of the Securities of the series which
may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107, upon repayment in part of any Security
of such series pursuant to Article Thirteen or upon surrender in part of
any Security for conversion or exchange into Common Stock or other
securities pursuant to its terms, and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder), which limit, unless otherwise expressly established,
may be changed from time to time by or pursuant to Board Resolution,
Officers' Certificate or indentures supplemental hereto without the consent
of any Holders; in the event that such series of Securities may be reopened
from time to time for issuances of additional Securities of such series,
the terms thereof shall indicate whether any such additional Securities
shall have the same terms as the prior Securities of such series or whether
the Company shall be
-22-
<PAGE>
entitled to establish additional or different terms with respect to such
additional Securities;
(3) the Person to whom any interest on a Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such series;
(4) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal of (and
premium, if any, on) such Securities will be payable;
(5) the rate or rates (which may be fixed, floating or adjustable) or
the method of determination thereof, at which the Securities of the series
will bear interest, if any, the date or dates from which such interest
shall accrue or method by which such date or dates shall be determined, the
Interest Payment Dates on which any such interest shall be payable, the
Regular Record Date, if any, for any such interest payable on any Interest
Payment Date, or the method by which such date or dates shall be
determined, whether and under what circumstances Additional Amounts on such
Securities or any of them shall be payable and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer
and exchange, where Securities of that series that are convertible or
exchangeable may be surrendered for conversion or exchange, as applicable,
and where notices or demands to or upon the Company in respect of the
Securities of the series and the Indenture may be served;
(7) the period or periods within which, the price or prices at which,
the Currencies, currency units or composite currencies in which, and the
other terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem, repay or
purchase any of such Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof, and the
period or periods within which, the price or prices at which and the other
terms and conditions upon which Securities of the series will be redeemed,
repaid or purchased, in whole or in part, pursuant to any such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof the denominations in which any Registered Securities of the series
shall be
-23-
<PAGE>
issuable, and if other than the denominations of $5,000 and any integral
multiple thereof, the denominations in which Securities of the series that
are Bearer Securities shall be issuable;
(10) if other than the Currency of the United States of America, the
Foreign Currency in which the principal of or any premium or interest on
such Securities will be payable (and the manner in which the equivalent of
the principal amount thereof in the Currency of the United States of
America is to be determined for any purpose, including for the purpose of
determining the principal amount deemed to be outstanding at any time);
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series ("Indexed Securities") may be
determined with reference to an index, pursuant to a formula, or pursuant
to other methods (which index, formula or method may be based, without
limitation, on one or more currencies, currency units, composite
currencies, commodities, equity indices or other indices), the manner in
which such amounts will be determined;
(12) if the principal of or any premium or interest on such Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more Currencies, currency units or composite currencies
other than those in which the Securities are stated to be payable, the
currencies, currency units or composite currencies in which payment of any
such amount as to which such election is made will be payable, and the
periods within which and the terms and conditions upon which such election
is to be made;
(13) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to this
Indenture or, if applicable, the portion of the principal amount of
Securities of the series that is convertible into or exchangeable for other
securities or the method by which such portion shall be determined;
(14) the application, if any, of Section 1402 and/or 1403 to the
Securities of the series (and, in the case of Section 1403, if applicable,
any additional covenants subject to covenant defeasance) and any provisions
in modification of, in addition to or in lieu of any of the provisions in
Sections 1402 and 1403; and, if either Section 1402 or 1403 is made
applicable with respect to the Securities of the series, whether such
defeasance or covenant defeasance must be effected with respect to all
Outstanding Securities of the series or whether such defeasance or covenant
defeasance may be effected with respect to Securities within the series;
(15) the obligation, if any, of the Company to permit the conversion
of the Securities of the series into the Company's Common Stock or other
securities, as
-24-
<PAGE>
the case may be, and the terms and conditions upon which such conversion
shall be effected (including, without limitation, the initial conversion
price or rate, the conversion period, the conversion agent, if any
adjustment of the applicable conversion price or rate and any requirements
relative to the reservation of such shares or securities for purposes of
conversion);
(16) whether any of the Securities of the series will be issued in
whole or in part in book-entry form and, in such case, the initial
Depositary with respect to such Book-Entry Security or Securities and the
circumstances under which any such Securities may be registered in the name
of a Person other than such Depositary or its nominee, if other than as set
forth in Section 305;
(17) whether Securities of the series are to be issuable as Registered
Securities, as Bearer Securities or alternatively as Bearer Securities and
Registered Securities, and whether the Bearer Securities are to be issuable
with Coupons, without Coupons or both, and any restrictions applicable to
the offer, sale or delivery of the Bearer Securities and the terms, if any,
upon which Bearer Securities of the series may be exchanged for Registered
Securities of the series and vice versa;
(18) if any of the Securities of the series are to be issuable as
Bearer Securities, the date as of which any such Bearer Security shall be
dated, if other than the date of original issuance of the first of such
Securities to be issued;
(19) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(20) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company provided for with respect to
Securities of the series (whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein) and, if Section 1006 is not to be applicable to any additional
covenants established with respect to the Securities, those covenants;
(21) the terms, if any, pursuant to which the Securities of the
series will be made subordinate in right of payment to all Senior
Indebtedness of the Company, and the definition of any such Senior
Indebtedness (in the absence of an express statement that the Securities of
such series are subordinate in right of payment to all Senior Indebtedness,
the Securities of such series shall not be subordinate to Senior
Indebtedness);
(22) whether the payment of principal, premium and interest, if any,
Additional Amounts, if any, and other amounts due hereunder, and
performance of
-25-
<PAGE>
the Company's other obligations hereunder, will be guaranteed by one or
more guarantors, including subsidiaries of the Company; and
(23) any other terms of the series, whether or not consistent with the
provisions of this Indenture.
All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided by the Company in the Board Resolution, or pursuant to the Board
Resolution and set forth in the Officers' Certificate, or in any indenture or
indentures supplemental hereto pertaining to such series of Securities. The
terms of the Securities may provide, without limitation, that the Securities
shall be authenticated and delivered by the Trustee on original issue from time
to time upon telephonic or written order of persons designated in the Board
Resolution, Officers' Certificate or supplemental indenture (telephonic
instructions to be promptly confirmed in writing by such person) and that such
persons are authorized to determine, consistent with such Board Resolution,
Officers' Certificate or supplemental indenture, such terms as are specified in
such Board Resolution, Officers' Certificate or supplemental indenture. All
Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company as contemplated by this Section 301, a
series may be reopened without consent of any Holder from time to time for
issuances of additional Securities of such series or to establish additional
terms of such series of Securities (which additional term shall only be
applicable with respect to unissued or additional Securities of such series).
The terms of any Security may be established prior to the issuance thereof but
after the issuance of other Securities of the same series.
Section 302. Currency; Denominations.
-----------------------
In the absence of any such provisions with respect to the Securities of any
series, the principal of, any premium and interest on and any Additional Amounts
with respect to the Securities shall be payable in Dollars. In the absence of
any such provisions with respect to the Securities of any series, the Registered
Securities denominated in Dollars shall be issuable in registered form without
Coupons, other than Registered Securities issued in book-entry form (which may
be of any denomination), and shall be issuable in denominations of $1,000 and
any integral multiple thereof. Bearer Securities denominated in Dollars shall
be issuable in registered form without Coupons, other than Bearer Securities
issued in book-entry form (which may be of any denomination) and shall be
issuable in denominations of $5,000 and any integral multiple thereof.
Securities not denominated in Dollars shall be issuable in such denominations as
are established with respect to such Securities in or pursuant to this
Indenture.
-26-
<PAGE>
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities and Coupons, if any, shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer or one of its Vice
Presidents, under its corporate seal or a facsimile thereof which may, but need
not, be attested by its Treasurer, one of its Assistant Treasurers, its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities or Coupons, if any, may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities or Coupons.
Securities and any Coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or Coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
Coupons appertaining thereto, executed by the Company, to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities to or upon the order of the
Company or pursuant to such procedures acceptable to the Trustee and to such
recipients as the case may be as specified from time to time by a Company Order.
If all the Securities of any series are not to be issued at one time and if the
terms of such Securities established as contemplated by Section 301 so permit,
such Company Order may set forth procedures acceptable to the Trustee for the
completion and authentication of such Securities from time to time. In
authenticating Securities of any series and any Coupons appertaining thereto,
and accepting the additional responsibilities under this Indenture in relation
to such Securities and any Coupons appertaining thereto, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon,
(i) any Board Resolution, Officers' Certificate and/or indenture
supplemental hereto by or pursuant to which the forms and terms of such
Securities are established as contemplated by Sections 201 and 301;
(ii) an Officers' Certificate stating that the forms and terms of
such Securities and Coupons, if any, have been established pursuant to
Sections 201 and 301 and comply with this Indenture; and
(iii) an Opinion of Counsel substantially to the effect that:
-27-
<PAGE>
(a) the forms and the terms of such Securities and Coupons, if
any, have been duly authorized and established in conformity with the
provisions of this Indenture,
(b) all conditions precedent provided for in this Indenture
relating to the Trustee's authentication of such Securities and
Coupons, if any, have been complied with, and
(c) such Securities and Coupons, if any, 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, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and to such other
matters as such counsel may specify.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Company Order, Board Resolution,
indentures supplemental hereto, Officers' Certificate and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents (with such
modifications as may be appropriate) are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be
issued and reasonably contemplate such authentication of each such Security.
Each Registered Security shall be dated the date of its authentication
unless otherwise established therefor as contemplated by Section 301. Each
Bearer Security shall be dated as of the date specified in or pursuant to this
Indenture.
No Security or Coupon appertaining thereto, if any, shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee or an
Authenticating Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture. Except as permitted by Section 306 or 307 or as may otherwise be
provided in or pursuant to this Indenture, the Trustee shall not authenticate
and deliver
-28-
<PAGE>
any Bearer Security unless all Coupons appertaining thereto then matured have
been detached and canceled. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an opinion of
counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities of such series which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized in or pursuant to this
Indenture, in bearer form with one or more Coupons or without Coupons and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in book-entry form.
Except in the case of temporary Securities in book-entry form, which shall
be exchanged in accordance with the provisions thereof, if temporary Securities
of any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the Office or Agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
(accompanied by any unmatured Coupons appertaining thereto), the Company shall
execute, and the Trustee shall authenticate and deliver in exchange therefor,
one or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor; provided,
--------
however, that no definitive Bearer Security, except as provided in or pursuant
- -------
to this Indenture, shall be delivered in exchange for a temporary Registered
Security; and provided, further, that a definitive Bearer Security shall be
-------- -------
delivered in exchange for a temporary Bearer Security only in compliance with
the conditions set forth in or pursuant to this Indenture. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series and
tenor.
-29-
<PAGE>
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
With respect to the Registered Securities of each series, the Company shall
cause to be kept at the Corporate Trust Office of the Trustee or in any Office
or Agency of the Company in a Place of Payment a register (the register
maintained in such office and in any other Office or Agency of the Company in a
Place of Payment being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities and of transfers of the Registered Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby appointed "Security Registrar" for the purpose of registering
the Securities and transfers of the Securities as herein provided.
The Company shall have the right to remove and replace from time to time
the Security Registrar for any series of Securities; provided that no such
--------
removal or replacement shall be effective until a successor Security Registrar
with respect to such series of Securities shall have been appointed by the
Company and shall have accepted such appointment. In the event the Trustee
shall not be or shall cease to be Security Registrar with respect to a series of
Securities, it shall have the right to examine the Security Register for such
series at all reasonable times. There shall be only one Security Register for
each series of Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at the Office or Agency of the Company in a Place of Payment for
Securities of that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
containing identical terms and provisions, bearing a number not
contemporaneously outstanding.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series, any authorized
denominations and of a like aggregate principal amount and tenor, containing
identical terms and provisions, upon surrender of the Securities to be exchanged
at such Office or Agency. Whenever any Registered Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive.
If (but only if) permitted by the applicable Board Resolution and set forth
in the applicable Officers' Certificate, or in any indenture supplemental
hereto, with respect to Securities of any series, at the option of the Holder,
Bearer Securities of such series may be exchanged for Registered Securities of
such series containing identical terms,
-30-
<PAGE>
denominated as authorized in or pursuant to this Indenture and in the same
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such series, with all unmatured Coupons
and all matured Coupons in default thereto appertaining. If the Holder of a
Bearer Security is unable to produce any such unmatured Coupon or Coupons or
matured Coupon or Coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to any Paying
Agent any such missing Coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in Section 1002, interest
- -------- -------
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office or Agency for such series in exchange for a
Registered Security of such series and like tenor after the close of business at
such Office or Agency on (i) any Regular Record Date and before the opening of
business at such Office or Agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such Office or
Agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the Coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such Coupon
is so surrendered with such Bearer Security, such Coupon shall be returned to
the Person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, shall not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but shall be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by the
immediately preceding two paragraphs, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to
-31-
<PAGE>
the same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer and
other than exchanges of interests in Book-Entry Securities for definitive
Securities pursuant to the second succeeding paragraph.
Except as otherwise provided in or pursuant to this Indenture, neither the
Company nor the Trustee shall be required (i) to issue, register the transfer of
or exchange Securities of any series, if such Security may be among those
selected for redemption, during a period beginning at the opening of business 15
days before selection of the Securities of that series to be redeemed under
Section 1103 and ending at the close of business on (A) if such Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security, or portion
thereof, so selected for redemption in whole or in part, except in the case of
any Registered Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except, to the extent provided with respect to such Bearer Security, that such
Bearer Security shall be simultaneously surrendered for redemption with written
instruction for payment consistent with the provisions of this Indenture or (iv)
to issue, register the transfer of or exchange any Security which, in accordance
with its terms, has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Security not be so repaid.
Notwithstanding the foregoing, no Book-Entry Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Sections 304, 306, 906 or 1107 or otherwise, in the name of a
Person other than the Depositary for such Book-Entry Security or its nominee
until (i) the Depositary with respect to a Book-Entry Security notifies the
Company that it is unwilling or unable to continue as Depositary for such Book-
Entry Security or the Depositary ceases to be a clearing agency registered under
the Exchange Act and no successor Depositary for such
-32-
<PAGE>
Securities shall have been appointed within 90 days of such notification or of
the Company becoming aware of the Depositary ceasing to be so registered, as the
case may be, (ii) the Company, in its sole discretion, executes and delivers to
the Trustee a Company Order that all Book-Entry Securities of such series shall
be so transferable and exchangeable or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Securities of such series.
Upon the occurrence in respect of any Book-Entry Security of any series of any
one or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be established as
contemplated by Section 301 for Securities of such series, the Company shall
without unnecessary delay deliver to the Trustee certificated Securities of such
series in such form and denominations as are required by or pursuant to this
Indenture, containing identical terms and in aggregate principal amount equal to
the aggregate principal amount of such Book-Entry Securities and shall cause the
Trustee to authenticate and deliver such certificated Securities to such Persons
and registered in such names as the Depositary with respect to such series shall
direct.
Except as provided in the preceding paragraph, any Security authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, any Book-Entry Security, whether pursuant to this Section, Section 304, 306,
906 or 1107 or otherwise, shall also be a Book-Entry Security and bear the
legend specified in Section 203.
Subject to the second preceding paragraph, if the Securities are Book-Entry
Securities, the Depositary or its nominee, as registered owner of a Book-Entry
Security, shall be the Holder of such Book-Entry Security for all purposes under
this Indenture, and owners of beneficial interests in a Book-Entry Security
shall hold such interests pursuant to the applicable procedures of the
Depositary. Accordingly, any such owner's beneficial interest in a Book-Entry
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee.
If any beneficial owner of an interest in a Book-Entry Security is entitled
to exchange such interest for Securities of such series of like tenor, terms and
principal amount and which are not Book-Entry Securities, whether pursuant to
the third preceding paragraph or as otherwise specified as contemplated by
Section 301, and provided that any applicable notice provided in the Book-Entry
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such Book-Entry Security, executed by the Company. On or after the
earliest date on which such interests may be so exchanged, such Book-Entry
Security shall be surrendered by the Depository or such depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities
-33-
<PAGE>
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such Book-Entry Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor and terms as the portion of such Book-Entry Security to be exchanged
which, unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, as specified as contemplated by Section
301, shall be in the form of Bearer Securities or Registered Securities, or any
combination thereof; provided, however, that no Bearer Security delivered in
-------- -------
exchange for a portion of a Book-Entry Security shall be mailed or otherwise
delivered to any location in the United States. If a Registered Security is
issued in exchange for any portion of a Book-Entry Security after the close of
business at the Office or Agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such Office or Agency on the
relevant Interest Payment Date or (ii) any Special Record Date and before the
opening of business at such Office or Agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, only to the Person to whom interest in respect of such portion of such
Book-Entry Security is payable in accordance with the provisions of this
Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee or the Company, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them or any agent of each of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security, with Coupons appertaining thereto corresponding to the
Coupons, if any, of the same series and of like tenor, terms and principal
amount and bearing a number not contemporaneously outstanding, with Coupons
corresponding to the Coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request,
the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security or in exchange for the Security to which a destroyed, lost or
stolen Coupon appertains (with all appurtenant Coupons not destroyed, lost or
stolen), a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding, with
-34-
<PAGE>
Coupons corresponding to the Coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost or
stolen Coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or Coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security or Coupon; provided, however, that
-------- -------
payment of principal of, any premium or interest on or any Additional Amounts
with respect to any Bearer Securities shall, except as otherwise provided in
Section 1002, be payable only at an Office or Agency for such Securities located
outside the United States and, unless otherwise provided in or pursuant to this
Indenture, any interest on Bearer Securities and any Additional Amounts with
respect to such interest shall be payable only upon presentation and surrender
of the Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series, together with any Coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security, or in exchange for the Security to which a destroyed, lost or
stolen Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and Coupons appertaining thereto or the destroyed, lost or stolen Coupon shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series and Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this
Indenture with respect to particular Securities or generally, are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Securities
or Coupons.
Section 307. Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Except as otherwise established as contemplated by Section 301 with respect
to any Securities of any series, interest on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest; provided, however, that each installment of
-------- -------
interest on any Registered Security may at the Company's option be paid by (i)
mailing a check for such interest, payable to or upon the written order of
-35-
<PAGE>
the Person entitled thereto pursuant to Section 308, to the address of such
Person as its appears on the Security Register, or (ii) wire transfer to an
account located inside the United States maintained by the payee.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States. Unless otherwise provided in or pursuant to
this Indenture, in case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business at
an Office or Agency for such Security on any Regular Record Date therefor and
before the opening of business at such Office or Agency on the next succeeding
Interest Payment Date therefor, such Bearer Security shall be surrendered
without the Coupon relating to such Interest Payment Date and interest shall not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but shall be payable only to the
Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise established as contemplated by Section 301 with respect
to Securities of any series, any interest on any Registered Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in paragraph (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Registered Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money in cash
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 provided in this clause. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall not be 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
-36-
<PAGE>
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of such Securities at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Company cause a similar notice to be published at least once in an
Authorized Newspaper of general circulation in the Borough of Manhattan,
The City of New York, but such publication shall not be a condition
precedent to the establishment of 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 such Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
In case a Bearer Security is surrendered at the Office or Agency for such
Security in exchange for a Registered Security after the close of business
at such Office or Agency on any Special Record Date and before the opening
of business at such Office or Agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be surrendered
without the Coupon relating to such Defaulted Interest and Defaulted
Interest shall not be payable on such proposed date of payment in respect
of the Registered Security issued in exchange for such Bearer Security, but
shall be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.
(2) The Company may pay any Defaulted Interest on the Securities of
any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Security for the purpose of receiving payment of principal of and
any premium and (subject to Section 305 and 307) any interest on such Registered
Security and for all other purposes whatsoever, whether or not any payment with
respect to such Registered Security shall be
-37-
<PAGE>
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not any payment with respect to such Security or Coupon shall be overdue, and
neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any Book-Entry Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Book-Entry Security, and such Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as owner of such Book-
Entry Security for all purposes whatsoever. None of the Company, the Trustee,
any Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Book-Entry Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Notwithstanding the foregoing, with respect to any Book-Entry Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary, as a Holder, with respect to
such Book-Entry Security or impair, as between such Depositary and owners of
beneficial interests in such Book-Entry Security, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Book-Entry Security.
Section 309. Cancellation.
------------
All Securities and Coupons surrendered for payment, redemption, repayment
at the option of the Holder, registration of transfer or exchange, conversion,
or for credit against any sinking fund payment shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities and any Coupons so delivered shall
be promptly canceled by the Trustee. If the Company shall so acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation. No Securities shall
be authenticated in lieu of or in exchange for any
-38-
<PAGE>
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be disposed
of as directed by a Company Order.
Section 310. Computation of Interest.
-----------------------
Except as otherwise established as contemplated by Section 301 in respect
of Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
-39-
<PAGE>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Order cease to be of further effect with
respect to Securities of any series specified in such Company Order and any
Coupons appertaining thereto (except as to any surviving rights as provided in
the last paragraph of this Section 401 and rights to receive the principal,
premium, if any, and interest, if any, on and Additional Amounts, if any, with
respect to Securities of such series), and the Trustee, upon receipt of Company
Order, and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series,
when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all Coupons appertaining thereto (other than (i) Coupons
appertaining to Bearer Securities of such series surrendered in exchange
for Registered Securities of such series and maturing after such exchange
whose surrender is not required or has been waived as provided in Section
305, (ii) Securities and Coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 1106, and (iv) Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, if applicable, any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the
-40-
<PAGE>
Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose money in the Currency in which such Securities are
payable in an amount sufficient to pay and discharge the entire
indebtedness on such Securities and any Coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation, including the
principal of, any premium and interest on, and any Additional Amounts with
respect to, such Securities and any Coupons appertaining thereto, to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date thereof, as the case
may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of such
series and any Coupons appertaining thereto; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to Securities of any series pursuant to this Section 401, (i) the
obligations of the Company to the Trustee under Section 607, (ii) the
obligations of the Company to any Authenticating Agent under Section 614, (iii)
if money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003, in each case with respect to such Securities
and (iv) the obligations of the Company and the Trustee with respect to the
Securities of such series under Sections 305, 306, 402, 1002 and 1003, with
respect to the payment of Additional Amounts, if any, with respect to such
Securities as contemplated by Section 1007, with respect to any rights of the
Holders of such Securities to require the Company to repay such Securities as
contemplated by Section 1301, and with respect to any rights of the Holders to
convert or exchange such Securities into Common Stock or other securities, shall
survive.
-41-
<PAGE>
Section 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all cash
deposited with the Trustee pursuant to Section 401, shall be held in trust and
applied by it, in accordance with the provisions of the Securities of the
relevant series, the Coupons, if any, appertaining thereto, and this Indenture,
to the payment, either directly or through any Paying Agent (other than the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any), interest and
Additional Amounts for whose payment such cash has been deposited with or
received by the Trustee, but such cash need not be segregated from other funds
except to the extent required by law.
-42-
<PAGE>
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is specifically deleted or modified in or pursuant to the
supplemental Indenture, Board Resolution or Officers' Certificate establishing
the terms of such series pursuant to Section 301 of this Indenture:
(1) default in the payment of principal of or premium, if any, on any
Security of that series when due (whether at Stated Maturity, on any
Redemption Date or Repayment Date or otherwise); or
(2) default in the payment of any interest on, or any Additional
Amounts payable in respect of, any Security of that series or any Coupon
appertaining thereto as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance or breach of any covenant or agreement
of the Company in this Indenture (other than any such default or breach
which is elsewhere in this Section specifically dealt with or which is
included herein solely for the benefit of a series of Securities other than
that series) or in the Securities of such series, and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage, indenture or
other instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company (or
by a Significant Subsidiary of the Company, the repayment of which the
Company has guaranteed or for which the Company is directly responsible or
liable as obligor or
-43-
<PAGE>
guarantor) having an aggregate principal amount outstanding of at least
$20,000,000, whether such indebtedness exists at the date of this Indenture
or shall thereafter be created, which default shall have resulted in such
indebtedness being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness
being discharged or such acceleration having been rescinded or annulled
within 30 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities
of that series a written notice specifying such default and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company a
bankrupt or insolvent, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the written consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law, or the written consent by it to the filing or
commencement of any case or proceeding in respect of the Company under any
applicable bankruptcy, insolvency, reorganization or other similar law, or
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due; or
(8) any other Event of Default established as contemplated by Section
301 with respect to Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of
-44-
<PAGE>
the Outstanding Securities of that series may declare the principal of (or, if
any of the Securities of that series are Original Issue Discount Securities or
Indexed Securities, such portion of the principal amount of such Securities as
may be specified in the terms thereof) and accrued interest on all of the
Securities of that series to be immediately due and payable by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) and interest shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient in cash to pay:
(A) all interest on the Securities of that series and any Coupons
appertaining thereto which has become due otherwise than by such
declaration of acceleration and any Additional Amounts with respect
thereto,
(B) the principal of (and premium, if any, on) the Securities of
that series which has become due otherwise than by such declaration of
acceleration,
(C) to the extent that payment of such interest is lawful, interest
upon overdue principal of, premium and interest (if any) on and
Additional Amounts (if any) with respect to the Securities of such
series at the rate or rates prescribed therefor in such Securities or
this Indenture (it being understood that, if no rate of interest on
overdue amounts is specifically provided, then any such overdue
principal, premium, interest and Additional Amounts shall, to the
extent lawful, bear interest at the rate of interest borne by such
Securities), and
(D) all amounts owing the Trustee pursuant to Section 607 in respect
of Securities of that series; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal and interest, if any, of
Securities of that series which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
-45-
<PAGE>
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on, or any
Additional Amounts payable in respect of, any Security or any Coupon
appertaining thereto when such interest or Additional Amounts, as the case
may be, becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of or premium, if
any, on any Security when due (whether at Stated Maturity, on any
Redemption Date or Repayment Date or otherwise),
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any Coupons appertaining thereto, the whole
amount then due and payable on such Securities and any Coupons appertaining
thereto for principal and any premium and interest and Additional Amounts and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal, premium, interest and Additional Amounts at
the rate or rates prescribed therefor in such Securities (it being understood,
that if no rate of interest on overdue amounts is specifically provided, then
any such overdue principal, premium, interest and Additional Amounts shall, to
the extent lawful, bear interest at the rate of interest borne by such
Securities), and, in addition thereto, such further amount as shall be
sufficient to cover the amounts due the Trustee pursuant to Section 607 in
respect of such Securities.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and Coupons and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
and any Coupons appertaining thereto, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
Coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any
-46-
<PAGE>
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of any Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of any series, of
principal, and premium, if any, interest and Additional Amounts owing and
unpaid in respect of such Securities and any Coupons and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee pursuant to Section 607 and of the Holders allowed in
such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official), in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay the Trustee any amount due it pursuant to Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the
-47-
<PAGE>
payment of the amounts due the Trustee pursuant to Section 607, be for the
ratable benefit of the Holders of the Securities or Coupons in respect of which
such judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article or otherwise on
behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject to applicable
law, in the following order, at the date or dates fixed by the Trustee and, in
the case of the distribution of such money on account of principal or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 607;
SECOND: Solely in the case of any money collected in respect of
Subordinated Securities, to the payment of amounts then due and unpaid to the
holders of the applicable Senior Indebtedness to the extent required pursuant to
the subordination provisions relating to such Subordinated Securities;
THIRD: To the payment of the amounts then due and unpaid for principal of
and any premium, interest and Additional Amounts payable on the Securities and
any Coupons appertaining thereto in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities and Coupons
for principal and any premium, interest and Additional Amounts, respectively;
and
FOURTH: To the payment of the remainder, if any, to the Company.
Section 507. Limitation on Suits.
-------------------
No Holder of any Security of any series or any Coupons appertaining thereto
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
-48-
<PAGE>
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders of Securities of another series or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium, if
----------------------------------------------------------------
any, and Interest and Additional Amounts, if any.
------------------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of any
Security or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 305
and 307) any interest on or any Additional Amounts with respect to such Security
or such Coupon, as the case may be, on the respective Maturity or Maturities
therefor and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
-49-
<PAGE>
Section 510. Rights and Remedies Cumulative.
------------------------------
To the extent permitted by applicable law, except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or Coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities or
Coupons appertaining thereto to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of any series or be unduly
prejudicial to Holders of Securities of such series not joining therein,
and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto waive any past
default hereunder with respect to such series and its consequences, except a
default
-50-
<PAGE>
(1) in the payment of the principal of or any premium or interest on,
or any Additional Amounts with respect to, any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security of any
series by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee in respect of the Securities of such
series, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company or the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of such series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on, or Additional Amounts, if
any, with respect to any Security on or after the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date and, in the case of repayment, on or after the Repayment Date)
or for the enforcement of the right, if any, to convert or exchange any Security
into Common Stock or other securities in accordance with its terms.
Section 515. Waiver of Usury, Stay or Extension Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
-51-
<PAGE>
suffer and permit the execution of every such power as though no such law had
been enacted.
-52-
<PAGE>
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act and this Indenture. The Trustee shall be under no
obligation, subject to the duty of the Trustee during a default to act with the
required standard of care, to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders of Securities of any
series, unless such Holders shall have offered the Trustee reasonable security
or indemnity against costs, expenses and liabilities which might be incurred by
it in compliance with such request. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
Section 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit to all Holders of
Securities of such series, in the manner and to the extent provided in Trust
Indenture Act Section 313(c), notice of such default hereunder, unless such
default shall have been cured or waived; provided, however, that, except in the
-------- -------
case of a default in the payment of the principal of (or premium, if any) or
interest on or any Additional Amounts with respect to any Security of such
series, or in the payment of any sinking fund installment with respect to the
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 Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Holders of the
Securities and Coupons of such series; and provided, further, that in the case
-------- -------
of any default of the character specified in Section 501(4) with respect to
Securities of such series, no notice to Holders shall be given until at least 60
days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to the Securities of such series.
Subject to Trust Indenture Act Section 315(b), the Trustee shall not be deemed
to have, or be required to take, notice of any default or Event of Default
(other than a default described in paragraph (1), (2), or (3) of Section 501)
except upon (A) written notification from the Company or (B) written
notification from a Holder and, in the absence of such notice, the Trustee may
conclusively presume that there is no default or Event of Default except as
aforesaid. Subject to Section 601 of this Indenture, such notification shall not
be deemed
-53-
<PAGE>
to include receipt of information obtained in any report or other documents
furnished under Section 704 of this Indenture, which reports and documents the
Trustee shall have no duty to examine.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601 hereof and to the provisions of
Sections 315(a) through 315(d) of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon receipt by it of any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any Coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
evidenced as provided therein) and any resolution of the Board of Directors may
be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a Board Resolution, an Opinion of Counsel or an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of any series or any Coupons appertaining thereto pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make
-54-
<PAGE>
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(i) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it;
(j) in the absence of bad faith on its part, the Trustee may conclusively
rely on the statements in certificates and opinions furnished to it and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture;
(k) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(l) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding Securities of any
series, relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities of such
series; and
(m) no provision of this Indenture shall require the Trustee to determine
the maximum interest rate permissible under applicable law.
-55-
<PAGE>
Section 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, and in any Coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate subject to the qualifications set forth therein. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee or of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other Person.
Section 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
Section 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by it in accordance
with any provision of this Indenture (including the reasonable compensation
and the
-56-
<PAGE>
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee and each predecessor Trustee and the
officers, directors, employees and agents of the Trustee (the Trustee, each
predecessor Trustee and such officers, directors, employees and agents
being hereinafter referred to in this Section collectively as the
"Indemnified Parties" and individually as an "Indemnified Party") for, and
to hold each Indemnified Party harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder; provided that any
--------
Indemnified Party shall promptly notify the Company of the commencement of
any action, or proceeding for which it intends to seek indemnity hereunder,
will permit the Company to conduct the defense thereof on its behalf and
will not compromise or settle any such action, suit or proceeding without
the prior approval of the Company.
The Company's payment obligations pursuant to this Section 607 shall
survive the discharge of this Indenture. When the Trustee renders services or
incurs expenses or makes disbursements or advances after the occurrence of an
Event of Default specified in Section 501(6) or (7), the compensation for such
services and such expenses, disbursements and advances are intended to
constitute expenses of administration under any bankruptcy, insolvency,
reorganization or other similar law.
Section 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has (or
if such Trustee is a Subsidiary of a bank holding company, its parent bank
holding company has) combined capital and surplus of at least $50,000,000. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined
-57-
<PAGE>
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may, or any Holder who has been a
bona fide Holder of a Security of the applicable series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder of a Security who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to Board Resolution may
remove the Trustee with respect to all Securities or the Securities of any
series, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security of any series for at least six months may, on behalf of
himself and all others similarly situated, petition any
-58-
<PAGE>
court of competent jurisdiction for the removal of the Trustee with respect to
the Securities of such series and the appointment of a successor Trustee or
Trustees with respect thereto.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by or pursuant to a
Company Request, Company Order or Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
of such appointment shall include the name of the successor Trustee with respect
to the Securities of such series and the address of its Corporate Trust Office.
Notices of resignation, removal and appointment may be combined into a single
notice.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such
-59-
<PAGE>
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and, subject to Section 1003, shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
such one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such 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; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraphs (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
-60-
<PAGE>
Section 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In case
any Securities shall not have been authenticated by such predecessor Trustee,
any such successor Trustee may authenticate and deliver such Securities, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption or repayment
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Any such appointment
shall be evidenced by an instrument in writing signed by a Responsible Officer
of the Trustee, a copy of which instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a bank or trust company or corporation organized and doing business
under the laws of the United States
-61-
<PAGE>
of America, any State thereof or the District of Columbia, authorized under such
laws to act as Authenticating Agent, having (or if such entity is a Subsidiary
of a bank holding company, its parent bank holding company has) a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee for such series and to the Company. The Trustee for any
series of Securities may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee for such series may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall (i) mail written notice of such appointment by first-class
mail, postage prepaid, to all Holders of Registered Securities, if any, of the
series with respect to which such Authenticating Agent will serve, as their
names and addresses appear in the Security Register, and (ii) if Securities of
that series are issued as Bearer Securities, publish notice of such appointment
at least once in an Authorized Newspaper in the place where such successor
Authenticating Agent has its principal office if such office is located outside
the United States. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
If at any time there shall be an Authenticating Agent appointed with
respect to one or more series of Securities, then in lieu of the Trustee's
certificate of authentication, an
-62-
<PAGE>
alternative certificate of authentication shall be borne by such Securities
substantially in the following form:
-63-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
By: ______________________________,
as Trustee
By: ______________________________,
as Authenticating Agent
By: ______________________________,
Authorized Signatory
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
-64-
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than 15 days after each Regular Record Date
for Securities of each series at the time Outstanding, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities as of such Regular Record Date, or if there is no Regular
Record Date for interest for such series of Securities, semi-annually, upon such
dates as are set forth in the Board Resolution, Officers' Certificates indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
- --------- -------
such list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities or Coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under the Trust Indenture Act.
-65-
<PAGE>
Section 703. Reports by Trustee.
------------------
(a) Within 60 days after each May 15, commencing with the first May 15
after the first issuance of Securities pursuant to this Indenture, the Trustee
shall transmit to the Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to Trust Indenture Act
Section 313(a) in the manner provided pursuant thereto, and such other reports
as may be required under such Act in the manner and at the times provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to
the Holders, be filed by the Trustee with the Company and, to the extent
required, with each stock exchange upon which any Securities are listed and with
the Commission. The Company will notify the Trustee when any Securities are
listed on any stock exchange.
Section 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
--------
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
-66-
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge with or into any other
Person, and the Company shall not sell, lease, assign, transfer or otherwise
convey all or substantially all of its assets to another Person, unless:
(1) (a) in the case of a merger, the Company shall be the surviving
corporation or (b) the Person (if other than the Company) surviving the merger,
formed by such consolidation or which acquires such assets shall be an entity
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume the due and
punctual payment of the principal of and any premium and interest on and any
Additional Amounts with respect to all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the other
covenants and conditions of this Indenture and the Securities to be performed or
observed by the Company by an indenture supplemental hereto, complying with
Article Nine hereof, satisfactory to the Trustee, executed and delivered to the
Trustee by such Person; and
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or the lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing.
Section 802. Rights and Duties of Successor Corporation.
------------------------------------------
In case of any such merger in which the Company is not the surviving
corporation or any such consolidation, sale, lease, assignment, transfer or
conveyance and upon any such assumption by the successor entity, such successor
entity shall succeed to and be substituted for, and may exercise every right and
power of, the Company under this Indenture and the Securities, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor Person, except in the event of a lease, shall be relieved of any
further obligation under this Indenture and the Securities. Such successor
entity thereupon may cause to be signed, and may issue either in its own name or
in the name of the Company, any or all of the Securities issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor entity, 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 Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
-67-
<PAGE>
successor entity thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities of any series so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities of such series theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Securities had been issued at
the date of the execution hereof.
In case of any such merger in which the Company is not the surviving
corporation or any such consolidation, sale, lease, assignment, transfer or
conveyance, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
Section 803. Officers' Certificate and Opinion of Counsel.
--------------------------------------------
Any consolidation, merger, sale, conveyance, assignment, transfer or lease
permitted under Section 801 is also subject to the condition that the Trustee
shall have received an Officers' Certificate and an Opinion of Counsel to the
effect that any such consolidation, merger, sale, conveyance, transfer,
assignment or lease, and the assumption by any successor Person and any such
supplemental indenture, comply with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
-68-
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a Board
Resolution (which Board Resolution may provide general terms for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to a Company Order), and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities as obligor under this Indenture; or
(2) to add to the covenants of the Company for the benefit of the
Holders of the Securities of all or any series (and if such covenants are
to be for the benefit of the Securities of less than all series, stating
that such covenants are expressly being included solely for the benefit of
the Securities of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are expressly being included solely for
the benefit of the Securities of such series); provided, however, that in
-------- -------
respect of any such additional Events of Default such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in 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 rights of Holders of a majority in aggregate principal amount of
that or those series of Securities to which such additional Events of
Default apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without Coupons, to change or eliminate any restrictions on the
payment of principal of, any premium or interest on or any Additional
Amounts with respect to Bearer Securities, to permit Bearer Securities to
be issued in exchange for Registered Securities, to permit Bearer
Securities to be exchanged for Bearer Securities of
-69-
<PAGE>
other authorized denominations or to permit or facilitate the issuance of
Securities in uncertificated form, provided that any such action shall not
--------
adversely affect the interests of the Holders of Securities of any series
or any Coupons appertaining thereto in any material respect; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
--------
such addition, change or elimination (i) shall neither (A) apply to any
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 Security with respect to such provision or
(ii) shall become effective only when there is no such Security
Outstanding; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(7) to secure the Securities; or
(8) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance,
covenant defeasance or satisfaction and discharge of the Securities of any
series pursuant to this Indenture; provided that any such action shall not
--------
adversely affect the interests of the Holders of Securities of such series
or any other series or any Coupons appertaining thereto in any material
respect; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (9)
--------
shall not adversely affect the interests of the Holders of Securities of
any series or any Coupons appertaining thereto in any material respect;
(10) to add a guarantor or guarantors for any series or all series of
the Securities;
(11) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(12) to establish the form or terms of Securities of any series and
any related Coupons as contemplated by Sections 201 and 301, including the
-70-
<PAGE>
provisions and procedures relating to Securities convertible into or
exchangeable for Common Stock or other securities, as the case may be.
Section 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by Board Resolution (which Board
Resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to a Company Order), and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series and any related Coupons under this Indenture;
provided, however, that no such supplemental indenture shall, without the
- -------- -------
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or premium, if
any, or any installment of principal of or interest on any Security, or the
date, if any, on which any Security is subject to repayment at the option
of the Holder, or reduce the principal amount thereof or the rate (or
modify the calculation of such rate) of interest thereon or any Additional
Amounts with respect thereto or any premium payable thereon, or change the
obligation of the Company to pay Additional Amounts pursuant to Section
1007 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue
Discount Security or other Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the amount provable in bankruptcy pursuant to Section 504, or change any
Place of Payment where or Currency in which any Security or any premium or
interest on, or any Additional Amounts with respect to any Security is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity thereof (as such Maturity may be
extended, if applicable, in accordance with the terms of such Security or
Coupon appertaining thereto), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 1504 for quorum or voting, or
-71-
<PAGE>
(3) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby or, in the case of Subordinated Securities, modify any of the
provisions relating to subordination or the related definition of "Senior
Indebtedness" in a manner adverse to the holders of such Subordinated
Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of the Securities of one or more particular series, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplement hereto. If a record date is fixed, the Holders at the close of
business on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to consent to such supplemental indenture, whether or
not such Holders remain Holders after such record date; provided, that unless
--------
such consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record date,
any such consent previously given shall automatically and without further action
by any Holder be canceled and of no further effect.
Section 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture
-72-
<PAGE>
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder and
of any Coupon appertaining thereto shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act, as then in effect at the
time of execution thereof.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
-73-
<PAGE>
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of the Holders of
Securities of each series that it will duly and punctually pay the principal of
(and premium, if any) and interest on and any Additional Amounts payable in
respect or the Securities of that series in accordance with the terms of the
Securities of that series, any Coupons appertaining thereto and this Indenture.
Unless otherwise specified as contemplated by Section 301 with respect to any
series of Securities, any interest due on and any Additional Amounts payable in
respect of Bearer Securities on or before Maturity, other than Additional
Amounts, if any, payable in respect of principal of (or premium, if any, on)
such a Security, shall be payable only upon presentation and surrender of the
several Coupons for such interest installments as are evidenced thereby as they
severally mature. Unless otherwise specified with respect to Securities of any
series pursuant to Section 301, at the option of the Company, all payments of
principal may be paid by (i) check to the registered Holder of the Registered
Security or other person entitled thereto or (ii) wire transfer to an account
located inside the United States maintained by the payee, in each case, against
surrender of such Security.
Section 1002. Maintenance of Office or Agency.
-------------------------------
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for the Securities of that series
of Securities an Office or Agency where Securities of that series may be
presented or surrendered for payment or, if applicable, conversion, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. If Securities of a
series are issuable as Bearer Securities, the Company shall maintain, subject to
any laws or regulations applicable thereto, an Office or Agency in a Place of
Payment for such series which is located outside the United States where
Securities of such series and any Coupons appertaining thereto may be presented
and surrendered for payment or, if applicable, conversion; provided, however,
-------- -------
that if the Securities of such series are listed on the London Stock Exchange or
the Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company shall
maintain a Paying Agent in London, Luxembourg or any other required city located
outside the United States, as the case may be, so long as the Securities of such
series are listed on such exchange. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such
-74-
<PAGE>
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, except that Bearer
Securities or such series and any Coupons appertaining thereto may be presented
and surrendered for payment at the place specified for the purpose with respect
to such Securities as provided in or pursuant to this Indenture, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium, interest or Additional Amounts with respect to Bearer
Securities shall be made at any Office or Agency in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
-------- -------
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Securities may be made at the Corporate Trust Office of
the Trustee in the Borough of Manhattan, The City of New York, or any Office or
Agency designated by the Company in the Borough of Manhattan, The City of New
York, if (but only if) payment of the full amount of such principal, premium,
interest or Additional Amounts at all offices outside the United States
maintained for such purpose by the Company in accordance with this Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligation to maintain an Office or Agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other Office or
Agency. Unless otherwise provided in or pursuant to this Indenture, the Company
hereby designates as the Place for Payment of each series of Securities the
Borough of Manhattan, The City of New York, and initially appoints the Corporate
Trust Office of the Trustee in the Borough of Manhattan, The City of New York,
as the Company's Office or Agency in the Borough of Manhattan, The City of New
York for such purpose and as Security Registrar. The Company may subsequently
appoint a different Office or Agency in the Borough of Manhattan, The City of
New York and a different Security Registrar for the Securities of any series.
Section 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with respect
to the Securities of any series, it will, on or before each due date of the
principal of or any premium or interest on, or any Additional Amounts with
respect to, any of the Securities
-75-
<PAGE>
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum in the Currency or Currencies in which the Securities of
such series are payable (except as otherwise specified pursuant to Section 301
for the Securities of such series) sufficient to pay the principal and any
premium and interest and Additional Amounts so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series and any related Coupons, it will, on or prior to each
due date of the principal of or any premium or interest on, or any Additional
Amounts with respect to, any Securities of that series, deposit with a Paying
Agent a sum (in the Currency or Currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series)) sufficient to pay such amount, such sum to be
held in trust for the benefit of the Persons entitled thereto, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent for the Securities of any series,
other than the Trustee, to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent, (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series, and (iii) hold all sums
held by it for the payment of the principal of, any premium or interest on or
any Additional Amounts with respect to Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as provided in or pursuant to this
Indenture.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on or any Additional Amounts with respect to any Security of any series
or any Coupon appertaining thereto and remaining unclaimed for two years after
such principal, premium
-76-
<PAGE>
or interest or Additional Amount has become due and payable shall be paid to the
Company upon Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such repayment, may at the expense of the Company cause to
be published once in an Authorized Newspaper in each Place of Payment for such
series or mailed to Holders of Registered Securities entitled to such money
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and related rights and franchises (charter and statutory); provided,
--------
however, that the Company shall not be required to preserve any such right or
- -------
franchise if the Board of Directors of the Company shall determine that the
preservation thereof is no longer necessary or desirable in the conduct of the
business of the Company; and provided, further, however, that the foregoing
shall not prohibit a sale, transfer or conveyance of a Subsidiary or any of its
assets in compliance with the terms of the Indenture.
Section 1005. Statement as to Compliance.
--------------------------
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, a written
statement (which need not be contained in or accompanied by an Officer's
Certificate) signed by the principal executive officer, the principal financial
officer or the principal accounting officer of the Company, stating whether or
not, to the best of his or her knowledge, the Company is in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which he or she may have knowledge.
Section 1006. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 and 1005 with respect to the
Securities of any series or with the covenants established as contemplated by
Section 301 with respect to the Securities of any series, except to the extent
the terms of such Securities established as contemplated by Section 301 make
this Section 1006 inapplicable to any
-77-
<PAGE>
such term, provision or condition of any such covenant, if before or after the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
Section 1007. Additional Amounts.
------------------
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least 10 days prior to the first Interest Payment Date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest prior to Maturity, the first day on which a payment of
principal or premium is made), and at least 10 days prior to each date of
payment of principal or premium or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company shall furnish to the Trustee and the principal Paying Agent or
Paying Agents, if other than the Trustee, an Officers' Certificate instructing
the Trustee and such Paying Agent or Paying agents whether such payment of
principal of and premium, if any, or interest, if any, on the Securities of such
series shall be made to Holders of Securities of such series or the Coupons
appertaining thereto who are not United States persons without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of such series. If any such withholding shall be required, then
such Officers' Certificate shall specify by country the amount, if any, required
to be withheld on such payments to such Holders of Securities or Coupons, and
the Company agrees to pay to the Trustee or such Paying Agent the Additional
Amounts
-78-
<PAGE>
required by the terms of such Securities. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
-79-
<PAGE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms established as contemplated
by Section 301 and (except as otherwise expressly established as contemplated by
Section 301 in respect of Securities of such series) in accordance with this
Article.
Section 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or by action taken pursuant to a Board Resolution. In case
of any redemption at the election of the Company of less than all the Securities
of any series, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed (unless
all of the Securities of such series of a specified tenor and with identical
terms are to be redeemed), the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series not previously called for redemption,
pro rata among Securities of such series with the same Stated Maturity and
within a Stated Maturity by lot or by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
-80-
<PAGE>
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted or exchanged for Common Stock or other securities in part before
termination of the conversion or exchange right with respect to the portion of
the Security so selected, the converted or exchanged portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted or exchanged during a selection of
Securities to be redeemed shall be treated by the Trustee as Outstanding for the
purpose of such selection.
Section 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified in the Securities to be redeemed, to each
Holder of Securities to be redeemed, at his address appearing in the Security
Register. Failure to give notice by mailing in the manner herein provided to the
Holder of any Registered Securities designated for redemption as a whole or in
part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other Securities or
portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date
upon surrender of such Security, the holder will receive, without a charge,
a new Security or Securities in the aggregate principal amount equal to the
unredeemed portion thereof.
-81-
<PAGE>
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities, together (in the case
of Bearer Securities) with all Coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price and, if applicable, any accrued interest and
Additional Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing Coupon or Coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on the Redemption Date pursuant to Section 305 or otherwise, the
last date, as determined by the Company, on which such exchanges may be
made,
(10) in the case of Securities of any series that are convertible or
exchangeable into Common Stock or other securities, the conversion or
exchange price or rate, the date or dates on which the right to convert or
exchange the principal of the Securities of such series to be redeemed will
commence or terminate, as applicable, and the place or places where such
Securities may be surrendered for conversion or exchange, and
(11) the CUSIP number of such Securities, if any (or any other numbers
used by a Depository to identify such Securities.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
-82-
<PAGE>
Section 1105. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money, in the Currency or Currencies in which the Securities of such series are
payable, sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities shall, if the same were interest-bearing,
cease to bear interest and the Coupons for such interest appertaining to any
Bearer Securities so to be redeemed, except to the extent provided below, shall
be void. Upon surrender of any such Security and any Coupons appertaining
thereto for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price, together with, unless otherwise
provided in or pursuant to the Indenture, any accrued and unpaid interest to the
Redemption Date; provided, however, that, except as otherwise provided in or
-------- -------
pursuant to this Indenture or the Bearer Securities of such series, installments
of interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of Coupons
for such interest (at an Office or Agency located outside the United States
except as provided in Section 1002), and provided, further, that, except as
-------- -------
otherwise provided in or pursuant to this Indenture or the Registered Securities
of any series, installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Registered
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Dates according to their terms
and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price, or, at the option of the
Company, after payment to the Trustee for the benefit of the Company of, an
amount equal to the face amount of all such missing Coupons, or the surrender of
such missing Coupon or Coupons may be waived by the Company and the Trustee if
there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to the Trustee or any Paying Agent any such
missing Coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the
-83-
<PAGE>
amount so deducted; provided, however, that any interest or Additional Amounts
-------- -------
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such Security located outside of the
United States except as otherwise provide in Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security or, if no rate of interest on overdue amounts is prescribed in such
Security, at the rate of interest borne by such Security.
Section 1107. Securities Redeemed in Part.
---------------------------
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Registered
Securities of the same series and of like tenor, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
-84-
<PAGE>
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series and this Indenture.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series (1) deliver
Outstanding Securities of a series (other than any previously called for
redemption or which have been surrendered for repayment at the option of the
Holders), together in the case of any Bearer Securities of such series with all
unmatured Coupons appertaining thereto and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such series; provided that such Securities so
--------
delivered or applied as a credit have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities so delivered or applied as a
credit for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the
-85-
<PAGE>
Currency or Currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202, and
the optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and will also deliver to the Trustee any Securities to be
so delivered and credited. If such Officers' Certificate shall specify an
optional amount to be added in cash to the next ensuing mandatory sinking fund
payment, the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 and not more than 60 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105, 1106 and 1107.
-86-
<PAGE>
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article.
------------------------
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder, to require repayment
of Securities before their Stated Maturity, for purposes of Section 309, shall
not operate as a payment, redemption or satisfaction of the indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a directive that such
Securities be canceled. Notwithstanding anything to the contrary contained in
this Section 1301, in connection with any repayment of Securities, the Company
may arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
Repayment Date an amount not less than the Repayment Price payable by the
Company on repayment of such Securities, together with, if applicable, accrued
interest thereon, and the obligation of the Company to pay the Repayment Price
of such Securities shall be satisfied and discharged to the extent such payment
is so paid by such purchasers.
-87-
<PAGE>
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1401. Applicability of the Article; Company's Obligation to Effect
------------------------------------------------------------
Defeasance or Covenant Defeasance.
---------------------------------
If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of or within a series under Section 1402 or (ii)
covenant defeasance of the Securities of or within a series under Section 1403,
then the provision of the Section or Sections, as the case may be, together with
other provisions of this Article (with such modifications thereto as may be
specified pursuant to Section 301 with respect to any Securities), shall be
applicable to such Securities and any Coupons appertaining thereto, and the
Company may at its option by Board Resolution, at any time, with respect to such
Securities and any Coupons appertaining thereto, elect to have Section 1402 (if
applicable) or Section 1403 (if applicable) be applied to such Outstanding
Securities and any Coupons appertaining thereto upon compliance with the
conditions set forth below in this Article.
Section 1402. Defeasance and Discharge.
------------------------
Upon the Company's exercise of the above option applicable to this Section
with respect to any Securities of or within a series, the Company shall be
deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any Coupons appertaining thereto on the date the
conditions set forth Section 1404 are satisfied (hereinafter, "defeasance"). For
this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any Coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purpose of Section 1405 and other
Sections of this Indenture referred to in clauses (A) through (D), inclusive, of
this Section, and to have satisfied all its other obligations under such
Securities and any Coupons appertaining thereto and this Indenture insofar as
such Securities and any Coupons appertaining thereto are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged herein: (A) the rights of Holders of such
Outstanding Securities and any Coupons appertaining thereto to receive, solely
from the trust funds described in Section 1404 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any) and
interest, if any, on and Additional Amounts, if any, with respect to such
Securities and any Coupons appertaining thereto when such payments are due, (B)
the Company's and the Trustee's obligations with respect to such Securities
under Sections 305, 306, 1002 and 1003, with respect to payments of Additional
Amounts, if any, on such Securities as contemplated by
-88-
<PAGE>
Section 1007, with respect to the rights, if any, of the holders of such
Securities to require the Company to repay such Securities as contemplated by
Section 1301 and with respect to the rights, if any, of Holders to convert or
exchange such Securities into Common Stock or other securities, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article. Subject to compliance with this Article Fourteen, the Company may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any Coupons
appertaining thereto.
Section 1403. Covenant Defeasance.
-------------------
Upon the Company's exercise of the option applicable to this Section with
respect to any Securities of or within a series, the Company shall be released
from its obligations under Section 1004 (other than the Company's obligation
under Section 1004 to preserve and keep in full force and effect its
corporate existence, subject to Article Eight) and 1005, and, if specified
pursuant to Section 301, its obligations under any other covenant, with respect
to such Outstanding Securities and any Coupons appertaining thereto on and after
the date the conditions set forth in Section 1404 are satisfied (hereinafter
"covenant defeasance"), and such Securities and any Coupons appertaining thereto
shall thereafter be deemed to be not "Outstanding" for the purpose of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 1004 (other than the
Company's obligation under Section 1004 to preserve and keep in full force and
effect its corporate existence, subject to Article Eight) and 1005, or such
other covenant, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that, with
respect to such Outstanding Securities and any Coupons appertaining thereto, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or such other
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section (other than the Company's obligation under Section
1004 to preserve and keep in full force and effect its corporate existence,
subject to Article Eight) or other such covenant or by reason of reference in
any such Section or such other covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 501(4) or 501(8) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any Coupons appertaining thereto shall be unaffected thereby.
Section 1404. Applicability of the Article; Company's Obligation to Effect
------------------------------------------------------------
Defeasance or Covenant Defeasance.
---------------------------------
The following shall be the conditions to application of Section 1402 or
1403 to any Outstanding Securities of or within a series and any Coupons
appertaining thereto:
-89-
<PAGE>
(a) the Company shall have deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this
Article Fourteen) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities and any Coupons
appertaining thereto, (1) an amount sufficient (in such Currency or
Currencies in which such Securities and any Coupons appertaining thereto,
and installments of principal, if any, thereof and interest, if any,
thereon, are then specified as payable at Stated Maturity), or (2)
Government Obligations applicable to such Securities and Coupons
appertaining thereto (determined on the basis of the Currency or Currencies
in which such Securities and Coupons appertaining thereto, and installments
of principal, if any, thereof and interest, if any, thereon, are then
specified as payable at Stated Maturity) which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide not later than one day before the due date of any
payment of principal of (and premium, if any) and interest, if any, on, and
Additional Amounts, if any, with respect to such Securities and any Coupons
appertaining thereto, money in an amount, or (3) a combination thereof, in
each case in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants or an independent investment banking
firm expressed in a written certification thereof delivered to the Trustee
to pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge (i) the principal of (and premium,
if any, on), interest, if any, on, and Additional Amounts, if any, with
respect to such Outstanding Securities and any Coupons appertaining thereto
on the Stated Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or analogous payments
applicable to such Outstanding Securities and any Coupons appertaining
thereto on the day on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities and any Coupons
appertaining thereto;
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound;
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities
and any Coupons appertaining thereto shall have occurred and be containing
on the date of such deposit or, insofar as Section 501(6) or (7) are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
-90-
<PAGE>
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel from independent legal
counsel of nationally recognized standing stating that (i) the Company has
received from, or there has been published by, the Internal Revenue Service
a ruling or (ii) since the date of this Indenture, there has been a change
in the applicable United States federal income tax law or the judicial
interpretation thereof by a U.S. federal court of competent jurisdiction,
in either case to the effect that, and based thereon such opinion shall
confirm that, Holders of the Securities of that series and any Coupons
appertaining thereto 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;
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel from independent legal
counsel of nationally recognized standing to the effect that Holders of
such Securities and any Coupons appertaining thereto 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;
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance
under Section 1403 (as the case may be) have been complied with and an
Opinion of Counsel to the effect that, as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be), registration is not
required under the Investment Company Act of 1940, as amended, by the
Company, with respect to the trust funds representing such deposit or by
the Trustee for such trust funds; and
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
established as contemplated by Section 301 in respect of the Securities of
that series.
Section 1405. Deposited Money and Government Obligations to Be Held in Trust;
---------------------------------------------------------------
Other Miscellaneous Provisions.
-------------------------------
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations (or other property as may be provided pursuant to
Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in
-91-
<PAGE>
respect of any Outstanding Securities of any series and any Coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any Coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company acting as its own Paying Agent) as the Trustee may determine,
to the Holders of such Securities and any Coupons appertaining thereto of all
sums due and to become due thereon in respect of principal (and premium, if any)
and interest and Additional Amounts, if any, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or any
Securities pursuant to Section 301, if, after a deposit referred to in Section
1404(a) has been made, (a) the Holder of a Security in respect of which such
deposit was made is entitled to, and does, elect pursuant to Section 301 or the
terms of such Security to receive payment in a Currency other than that in which
the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the Foreign Currency in
which the deposit pursuant to Section 1404(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on ,
and Additional Amounts, if any, with respect to such Security as the same
becomes due out of the proceeds yielded by converting (from time to time as
specified below in the case of any such election ) the monies, proceeds from
Government Obligations or other property deposited in respect of such Security
into the Currency in which such Security becomes payable as a result of such
election or Conversion Event based on (x) in the case of payments made pursuant
to clause (a) above, the applicable market exchange rate for such Currency in
effect on the second Business Day prior to each payment date, or (y) with
respect to a Conversion Event, the applicable market exchange rate for such
Foreign Currency in effect (as nearly as feasible) at the time of the Conversion
Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations
deposited pursuant to this Section 1404 or the principal or interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any Coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or Government Obligations (or other property and any proceeds therefrom) held by
it as provided in Section 1404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect a defeasance or covenant
defeasance, as applicable, in accordance with this Article
-92-
<PAGE>
Section 1406. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any cash or
Government Obligations deposited pursuant to Section 1404 in accordance with
this Indenture or the Securities of or within the applicable series by reason of
any legal proceedings or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1404 until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with this Indenture and such
Securities; provided, however, that if the Company makes any payment of
-------- -------
principal of, premium, if any or interest on, any such Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the cash and
Government Obligations held by the Trustee or Paying Agent.
Section 1407. Effect on Subordination Provisions.
----------------------------------
Unless otherwise expressly provided pursuant to Section 301 with respect to
any series of Subordinated Securities, the provisions for subordination of such
Subordinated Securities contemplated by Article Sixteen hereof are hereby
expressly made subject to the provisions for satisfaction and discharge set
forth in Article Four hereof and the provisions for defeasance and covenant
defeasance set forth in this Article Fourteen and, anything herein to the
contrary notwithstanding, upon the effectiveness of such satisfaction and
discharge pursuant to Article Four or any such defeasance or covenant defeasance
pursuant to this Article Fourteen with respect to any Securities, such
Securities shall thereupon cease to be so subordinated and shall no longer be
subject to the subordination provisions applicable thereto and, without
limitation to the foregoing, all monies, Government Obligations and other
securities or property deposited with the Trustee (or other qualifying trustee)
in trust in connection with such satisfaction and discharge, defeasance or
covenant defeasance, as the case may be, and all proceeds therefrom may be
applied to pay the principal of, premium, if any, and interest, if any, on, and
Additional Amounts, if any, with respect to such Securities as and when the same
shall become due and payable notwithstanding the provisions contemplated by
Article Sixteen hereof.
-93-
<PAGE>
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 1502. Call, Notice and Place of Meetings.
----------------------------------
(1) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series have been issued in whole or in part as Bearer
Securities, in London or in such place outside the United States as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution)
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of or made
the first publication of the notice of such meeting within 21 days after receipt
of such request (whichever shall be required pursuant to Section 106) or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or, if Securities of such series are
to be issued as Bearer Securities, in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in clause (1) of
this Section.
Section 1503. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a
-94-
<PAGE>
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 1504. Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(l), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
- -------- -------
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than a specified percentage,
which is less than a majority in principal amount of the Outstanding Securities
of a series may be adopted at a meeting or an adjourned meeting duly convened
and at which a quorum is present as aforesaid only by the affirmative vote of
the Holders of at least such specified percentage in principal amount of the
Outstanding Securities of that series.
-95-
<PAGE>
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(1) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(3) At any meeting, each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of Securities of
such series held or represented by him; provided, however, that no vote shall be
-------- -------
cast or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. If
the Securities of such series are issuable in minimum denominations of less than
$1,000, then a Holder of such a Security in a principal amount of less than
$1,000 shall be entitled to a fraction of one vote which is equal to the
fraction that the principal amount of such Security bears to $1,000. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by
-96-
<PAGE>
Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
-97-
<PAGE>
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security of any
series, by his acceptance thereof, likewise covenants and agrees, that solely to
the extent and in the manner set forth in an indenture supplemental hereto
pursuant to Section 301(21) hereof, the indebtedness represented by the
Securities of such series and the payment of principal of (and premium, if any)
and interest on each or all of the Securities of such series will be expressly
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness.
-98-
<PAGE>
ARTICLE SEVENTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1701. Applicability of Article.
------------------------
Whenever this Indenture provides for any distribution to Holders of
Securities of any series in which not all of such Securities are denominated in
the same Currency, in the absence of any provision to the contrary in or
pursuant to this Indenture or the Securities of such series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such distribution as that amount of Dollars that could be
obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such distribution (or, if there shall be no applicable record date, such other
date reasonably proximate to the date of such distribution) as the Company may
specify in a written notice to the Trustee or, in the absence of such written
notice, as the Trustee may determine.
________________________
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-99-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
SOLA INTERNATIONAL INC.
By: _________________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By: _____________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., Trustee
By: _________________________________
Authorized Signatory
-100-
<PAGE>
EXHIBIT 4.5
FORM OF DEBT SECURITY
[LEGEND FOR INCLUSION IN GLOBAL NOTES-- THIS NOTE IS A GLOBAL NOTE WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE CERTIFICATED
FORM, THIS NOTE 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.]
[LEGEND FOR INCLUSION IN GLOBAL NOTES-- UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
No.: .
CUSIP No.: . Principal Amount: $___________
SOLA INTERNATIONAL INC.
.% Notes due 2008
Sola International Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of _____________ DOLLARS ($_____________)
on ., 2008 (the "Maturity Date"), and to pay interest thereon from ., 1998 or
from the most recent date to which interest has been paid or duly provided for,
semiannually on . 15 and . 15 of each year (each, an "Interest Payment Date"),
commencing . 15, 1998, and at Maturity, at the rate of .% per annum, until the
principal hereof is paid or duly made available for payment. Interest on this
Note shall be calculated on the basis of a 360-day year consisting of twelve 30-
day months. The interest so payable and punctually paid or duly provided for on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the . 1 or . 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest which
is payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the registered Holder hereof
on the relevant Regular Record Date by virtue of having been such Holder, and
may be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Note not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in such Indenture.
<PAGE>
Payment of the principal of, premium, if any, and interest on this Note
will be made at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that, at the option of
the Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or by
transfer to an account maintained by the payee located in the United States.
This Note is one of a duly authorized issue of Securities of the Company
(herein called the "Notes") issued and to be issued in one or more series under
an Indenture dated as of ., 1998 (herein called, together with all indentures
supplemental thereto, the "Indenture") between the Company and State Street Bank
and Trust Company of California, N.A., as trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes, and the
terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof, initially limited
(subject to exceptions provided in the Indenture) in aggregate principal amount
to $100,000,000.
[INSERT REDEMPTION PROVISIONS, IF APPLICABLE]
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of any series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Notes
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.
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 of, premium, if any, and
interest on this Note, at the time, place and rate, and in the coin or currency,
herein and in the Indenture prescribed.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Security Register
upon surrender of this Note for registration of transfer at the office or agency
of the Company maintained for the purpose in any place where the principal of,
premium, if any, and interest on this Note are payable, duly endorsed, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in the
denominations of $1,000 and integral multiples of $1,000. As provided in the
Indenture and subject to certain limitations set forth therein, the Notes are
exchangeable for a like aggregate principal amount of Notes of authorized
denominations as requested by the Holders surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
2
<PAGE>
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be discharged
from its obligations with respect to the Notes (subject to certain exceptions)
or (ii) the Company may be released from its obligations under specified
covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or Government Obligations sufficient
to pay and discharge the entire indebtedness on all Notes, and satisfies certain
other conditions, all as more fully provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefits under
the Indenture or be valid or obligatory for any purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
[Seal] SOLA INTERNATIONAL INC.
Attest: By:
---------------------------- ----------------------------
. Steven M. Neil
Assistant [Secretary/Treasurer] Executive Vice President,
Chief Financial Officer, Treasurer
and Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------
Authorized Signatory
4
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--__________Custodian__________
TEN ENT--as tenants by the (Cust) (Minor)
entireties
JT TEN-- as joint tenants with Under Uniform Gifts to Minors
right of survivorship Act_____________________________
and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
______________________________________
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
[ ]
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
Attorney
- ------------------------------------------------------------------------
to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:
--------------------------------------------------------------------------
Notice: The signature(s) to this assignment must correspond with the
name(s) as it/they appear(s) upon the face of the within Note in every
particular, without alteration or enlargement or any change whatever.
5
<PAGE>
EXHIBIT 5.1
March 5, 1998
Sola International Inc.
2420 Sand Hill Road, Suite 200
Menlo Park, California 94025
Ladies and Gentlemen:
We are acting as counsel to Sola International Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 (File No. 333-45929) (together with any
amendments thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), covering $250,000,000 aggregate issue
amount of (i) Common Stock, par value $0.01 per share (the "Common Stock") and
(ii) debt securities (the "Debt Securities"), in each case to be issued from
time to time by the Company. All capitalized terms used herein that are defined
in, or by reference in, the Registration Statement have the meanings assigned to
such terms therein or by reference therein, unless otherwise defined herein.
With your permission, all assumptions and statements of reliance herein have
been made without any independent investigation or verification on our part
except to the extent otherwise expressly stated, and we express no opinion with
respect to the subject matter or accuracy of such assumptions or items relied
upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of all such agreements, instruments, documents and records
of the Company, such certificates of public officials and such other documents,
and (iii) received such information from officers and representatives of the
Company as we have deemed necessary or appropriate for the purposes of this
opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
original and certified documents and the conformity to original or certified
documents of all copies submitted to us as conformed or reproduction copies. We
also have assumed, with respect to all parties to agreements or instruments
relevant hereto other than the Company, that such parties had the requisite
power and authority (corporate or otherwise) to execute, deliver and perform
such agreements or instruments, that such agreements or instruments have been
duly authorized by all
<PAGE>
Sola International Inc. -2- March 5 1998
requisite action (corporate or otherwise), executed and delivered by such
parties, that such agreements or instruments are the valid, binding and
enforceable obligations of such parties, and that such parties will comply with
all obligations thereunder and laws applicable thereto. As to various questions
of fact relevant to the opinions expressed herein, we have relied upon, and
assume the accuracy of, certificates and oral or written statements and other
information of or from representatives of the Company and others.
Based upon the foregoing and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that: (i)
in the case of the Common Stock, when the Registration Statement has become
effective under the Securities Act, the terms of the Common Stock and their
issue and sale have been duly approved by the Board of Directors of the Company
in conformity with the Company's Amended and Restated Certificate of
Incorporation and when issued and delivered against payment therefor for an
amount in excess of the par value thereof and in accordance with the applicable
underwriting agreement or other agreement, will be validly issued, fully paid
and non-assessable; and (ii) in the case of the Debt Securities, when the
Registration Statement has become effective under the Securities Act, the terms
of the Debt Securities and their issue and sale have been duly established in
conformity with the Indenture so as not to violate any applicable law or
agreement or instrument then binding on the Company and the Debt Securities have
been duly executed and authenticated in accordance with the terms of the
Indenture and issued and sold as contemplated in the Registration Statement, the
Debt Securities will constitute valid and binding obligations of the Company,
subject to (x) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other laws now or hereafter in effect affecting creditors' rights
generally, and (y) general principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness) whether
considered in a proceeding in equity or at law.
We express no opinion as to the legality, validity, binding effect or
enforceability of any provision of the Debt Securities or the Indenture
providing for payments thereunder in a currency other than currency of the
United States of America to the extent that a court of competent jurisdiction,
under applicable law, will convert any judgment rendered in such other currency
into currency of the United States of America or to the extent that payment in a
currency other than the currency of the United States of America is contrary to
applicable law. In this connection, we note that, as of the date of this
opinion, in the case of a Debt Security denominated in foreign currency, a state
court in the State of New York rendering a judgment on such Debt Security would
be required under Section 27 of the New York Judiciary Law to render such
judgment in the foreign currency in which the Debt Security is denominated, and
such judgment would be converted
<PAGE>
Sola International Inc. -3- March 5 1998
into United States dollars at the exchange rate prevailing on the date of entry
of the judgment.
The opinions expressed herein are limited to the laws of the State of
New York and, to the extent relevant to the opinion expressed above, the General
Corporation Law of the State of Delaware, as currently in effect. The opinions
expressed herein are given as of the date hereof, and we undertake no obligation
to supplement this letter if any applicable laws change after the date hereof or
if we become aware of any facts that might change the opinion expressed herein
after the date hereof or for any other reason.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus and the caption "Legal Matters" in any
Prospectus Supplement forming a part of the Registration Statement to the extent
that a "Legal Matters" section is included in such Prospectus or Prospectus
Supplement. In giving these consents, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act.
The opinion expressed herein is solely for your benefit in connection
with the Registration Statement and may not be relied on in any manner or for
any purpose by any other person or entity and may not be quoted in whole or in
part without prior written consent.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Frederick H. Fogel
---------------------------------------
Frederick H. Fogel
<PAGE>
EXHIBIT 10.1
AMENDMENT NO. 3
TO
MULTICURRENCY CREDIT AGREEMENT
THIS AMENDMENT NO. 3, DATED AS OF MARCH 4, 1998, TO MULTICURRENCY CREDIT
AGREEMENT, DATED AS OF JUNE 14, 1996, AS AMENDED (this "Amendment"), among Sola
---------
International, Inc., a Delaware corporation (the "Company"), Sola IFSC, an Irish
-------
unlimited liability company, Sola International Holdings Ltd. (ACN007719708), a
South Australian corporation, Sola Optical Holdings (U.K.) Limited, an English
corporation, Sola Optical S.A., a French corporation, Sola Optical GmbH, a
German Corporation, Sola Hong Kong Limited, a Hong Kong corporation, Sola ADC
Lenses Limited, an Irish corporation, Sola Optical Italia S.p.A., an Italian
corporation, Sola Optical Japan Limited, a Japanese corporation, Sola Optical
Singapore Pte. Ltd., a Singapore corporation, America Optical Company
International AG, a Switzerland corporation (the Company and such other Persons
(such capitalized term and all other capitalized terms used herein without being
defined shall have the meanings provided for in the Existing Credit Agreement
(as defined below)), are each referred to as a "Tranche A Revolving Borrower"
----------------------------
and collectively as the "Tranche A Revolving Borrowers", the several financial
-----------------------------
institutions from time to time party to the Amended Credit Agreement (as defined
below), including in their capacity as co-agents (collectively, the "Banks" and
-----
individually a "Bank"), and Bank of America National Trust and Savings
----
Association, as agent (in such capacity, the "Agent") for the Banks.
-----
RECITALS
--------
A. The Company, the Tranche A Revolving Borrowers, American Optical
Lens Company, a Delaware corporation (the "Released Subsidiary Guarantor"), the
-----------------------------
Banks, the Co-Agents and the Agent are parties to a Multicurrency Credit
Agreement, dated as of June 14, 1996, as amended by Amendment No. 1, dated as of
March 31, 1997, and as further amended by Amendment No. 2, dated as of November
5, 1997 (as so amended, the "Existing Credit Agreement").
-------------------------
B. The Company, the Tranche A Revolving Borrowers and the Released
Subsidiary Guarantor have requested that the Banks amend the Existing Credit
Agreement and release the Released Subsidiary Guarantor from its obligations
thereunder, each as herein provided.
C. The Banks are willing to amend the Existing Credit Agreement and
release the Released Subsidiary Guarantor from its obligations thereunder,
subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1
<PAGE>
1. Amendments to Credit Agreement. Effective on (and subject to the
------------------------------
occurrence of) the Effective Date (as herein defined), the Existing Credit
Agreement is amended as follows (the Existing Credit Agreement as so amended is
herein referred to as the "Amended Credit Agreement"):
------------------------
The preamble of the Existing Credit Agreement is amended by
deleting the phrase "the Persons named on the signature pages hereof as
Subsidiary Guarantors or from time to time added as parties hereto pursuant to
Section 7.13 (each a "Subsidiary Guarantor" and collectively the "Subsidiary
-------------------- ----------
Guarantors")," which appears on lines 18 through 20 of page 1 of the Existing
- ----------
Credit.
(b) The definition of Domestic Obligations in Article I of the
Existing Credit Agreement is amended by deleting the words "and each Domestic
Subsidiary Guarantor".
(c) The definition of Domestic Subsidiary Guarantor in Article I of
the Existing Credit Agreement is deleted in its entirety.
(d) The definition of Obligations in Article I of the Existing Credit
Agreement is amended by deleting the words "or Subsidiary Guarantor".
(e) The definition of Subsidiary Guarantor in Article I of the
Existing Credit Agreement is deleted in its entirety.
(f) Section 6.01 of the Existing Credit Agreement is amended by
deleting the phrase ", the Subsidiary Guarantors".
(g) Section 6.02 of the Existing Credit Agreement is amended by
deleting the words "and Subsidiary Guarantor", the words "or Subsidiary
Guarantor's", and the words "or Subsidiary Guarantor" in each place where they
appear in such Section.
(h) Section 6.03 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor".
(i) Section 6.04 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor" and "and Subsidiary Guarantor" in
each place where they appear in such Section.
(j) Section 6.06 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor".
(k) Section 7.13 of the Existing Credit Agreement is amended by
deleting the first two sentences thereof, and by deleting the words "In
addition" at the beginning of the third sentence thereof.
2
<PAGE>
(l) Subsection 9.01(j) of the Existing Credit Agreement is amended in
its entirety to read as follows:
(j) Guarantor Defaults. The Company fails in any material respect
------------------
to perform or observe any term contained in Section 11.09; or Section
11.09 is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be
in full force and effect, or the Company contests in any manner the
validity or enforceability thereof or the Company denies that it has
any further liability or obligations thereunder; or
(m) Section 11.01 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor" at line 28 of page 100; by deleting
the comma before the words "the Borrowers" at line 30 and line 33 of page 100
and inserting the word "and" in lieu thereof; by deleting the words "and the
Subsidiary Guarantors" at line 30 and line 33 of page 100; and by deleting
subsection 11.01(e) in its entirety.
(n) Section 11.02 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor" and "Subsidiary Guarantor".
(o) Section 11.06 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor".
(p) Section 11.09 of the Existing Credit Agreement is amended in its
entirety to read as follows:
11.09 Guaranty of the Company.
-----------------------
(a) Guaranty. The Company makes the following guarantee:
--------
The Company unconditionally and irrevocably guarantees the full and
prompt payment when due, whether at stated maturity, by acceleration or
otherwise (including, without limitation, all amounts which would have
become due but for the operation of the automatic stay under Section 362(a)
of the Bankruptcy Code or other comparable law) of all the Obligations,
whether for principal, interest, fees, expenses or otherwise, and including
any and all costs and expenses (including reasonable Attorney Costs)
incurred by the Agent, any Bank or any Indemnified Person in enforcing any
of their respective rights with respect thereto. The foregoing guaranty
constitutes a guaranty of payment when due and not merely of collection,
and the Company specifically agrees that it shall not be necessary or
required for the Agent, any Bank or any Indemnified Person to exercise any
right, assert any claim or demand or enforce any remedy whatsoever against
any Borrower or any other Person before or as a condition to the
obligations of the Company hereunder.
(b) Acceleration of Guarantee. The Company agrees that (i) in
-------------------------
the event of any Insolvency Proceeding affecting any Borrower or (ii) upon
3
<PAGE>
notice of acceleration of the Obligations from the Agent pursuant to
Section 9.02, and if any such event shall occur at a time when any of the
Obligations may not then be due and payable, the Company will pay pursuant
to subsection (a) of this Section 11.09 to the Agent (on behalf of the
Banks) forthwith the full amount which would be payable hereunder by the
Company if all the Obligations were then due and payable.
(c) Guarantee Absolute. The guaranty pursuant to this Section
------------------
11.09 is a continuing, absolute, unconditional and irrevocable guaranty of
payment and shall remain in full force and effect until (A) all the
Obligations guaranteed by the Company have been indefeasibly paid in full
in cash and (B) all related Commitments shall have permanently terminated.
The Company guarantees that the Obligations guaranteed by it will be paid
strictly in accordance with the terms of this Agreement, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or any of the Banks
with respect thereto. The liability of the Company under this Section
11.09 shall be absolute and unconditional irrespective of:
(i) any lack of validity, legality or enforceability of this
Agreement, the Notes, any other Loan Document or any other agreement
or instrument relating to any thereof;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any compromise,
renewal, extension, acceleration or release with respect thereto, or
any other amendment or waiver of or any consent to departure from this
Agreement, the Notes or any other Loan Document;
(iii) any addition, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
(iv) the failure of the Agent or any Bank:
(A) to assert any claim or demand or to enforce any
right or remedy against any Borrower or any other Person under
the provisions of this Agreement, any Note, any other Loan
Document or otherwise;
(B) to exercise any right or remedy against any other
guarantor of, or collateral securing, any of the Obligations; or
(C) to disclose to the Company any matter relating to
the business, operation or condition of any Borrower or any
4
<PAGE>
other matter relating to any of their financial condition or
otherwise;
(v) any amendment to, rescission, waiver or other
modification of, or any consent to departure from, any of the terms of
this Agreement, any Note or any other Loan Document;
(vi) any defense, set-off or counter-claim which may at any
time be available to or be asserted by any Borrower against any other
Borrower, the Agent or any Bank;
(vii) any reduction, limitation, impairment or termination
of the Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and the Company hereby waives any right to or claim of) any
defense or setoff, conterclaim, recoupment or termination whatsoever
by reason of the ivalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, the Obligations or otherwise; or
(viii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Company
(d) Reinstatement, etc. The Company agrees that its guaranty
------------------
hereunder shall continue to be effective or be reinstated, as the case may
be, if at any time any payment (in whole or in part) of any of the
Obligations guaranteed by the Company is rescinded or must otherwise be
restored by the Agent or any Bank as a result of any Insolvency Proceeding
affecting any Borrower or otherwise, all as though such payment had not
been made.
(e) Waiver of Diligence, etc. The Company hereby waives
------------------------
promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations guaranteed by the Company and this
guaranty and any requirement that the Agent or any Bank protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any
right or take any action against any Borrower or any other Person.
(f) Waiver of Subrogation. The Company hereby irrevocably
---------------------
waives any claim or other rights which it may now or hereafter acquire
against any Borrower that arises from the existence, payment, performance
or enforcement of its obligations under its guaranty hereunder, including
any right of subrogation, reimbursement, exoneration or indemnification,
any right to participate in any claim or remedy of the Agent or any Bank
against any Borrower which the Agent or any Bank now has or hereafter
acquires (whether or not such claim, remedy or right arises in equity,
5
<PAGE>
or under contract, statute or common law), including the right to take or
receive from any Borrower, directly or indirectly, in cash or other
property or by set-off or in any manner, payment or security on account of
such claim or other rights. If any amount shall be paid to the Company in
violation of the preceding sentence and the Obligations guaranteed by the
Company shall not have been indefeasibly paid in cash in full and all the
related Commitments have not been permanently terminated, such amount shall
forthwith be paid to the Agent on behalf of the Banks by the Company, to be
credited and applied against such Obligations, whether matured or
unmatured, and (except in the case of property of Sola International
Holdings Ltd. or property of the Company situated in Australia) until such
payment shall be deemed to have been paid to the Company, for the benefit
of, and held in trust for, the Banks. The Company acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Agreement and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.
(g) Intercompany Subordinated Indebtedness. Each Borrower
--------------------------------------
agrees that the payment of the principal of, or interest on, any
Indebtedness or other amounts owing to it by any Borrower (the
"Intercompany Subordinated Indebtedness") is hereby expressly subordinated,
---------------------------------------
to the extent and in the manner hereinafter set forth, to the prior payment
in full in cash of all the Obligations:
(i) Upon the maturity of any Obligations, whether at stated
maturity, by acceleration or otherwise, such Obligations shall first
be paid in full in cash and all the Commitments shall have been
permanently terminated before any payment (whether in cash, property,
securities or otherwise) is made by any Borrower on account of the
Intercompany Subordinated Indebtedness;
(ii) If any Default or Event of Default is in existence no
Borrower shall, directly or indirectly, make any payment of any
Intercompany Subordinated Indebtedness until all the Obligations have
been paid in full in cash and all the Commitments have been
permanently terminated. Each Borrower hereby agrees that, so long as
any such Default or Event of Default exists, it will not sue for, or
otherwise take any action to enforce any Borrower's obligations to
pay, any amounts owing in respect of any Intercompany Subordinated
Indebtedness.
(iii) In the event that notwithstanding the provisions of
the preceding subsections (i) and (ii), a Borrower shall make any
payment on account of any Intercompany Subordinated Indebtedness at a
time when payment is not permitted by said subsection (i) or (ii),
such payment shall be paid forthwith over and delivered to, the Agent,
if paid by the Company, or the Tranche A Revolving Bank, if paid by
any other Borrower, for application to the payment in full in cash of
all the
6
<PAGE>
Domestic Obligations and Foreign Obligations, as the case may
be and (except in the case of payments by Sola International Holdings
Ltd.) shall be held by such Borrower in trust for the benefit of the
Agent, if paid by the Company, or the Tranche A Revolving Bank, if
paid by any other Borrower; and
(iv) In the event any Borrower is subject to any Insolvency
Proceeding, any payment or distributions of assets of such Borrower of
any kind or character, whether in cash, property or securities to
which any Borrower would be entitled except for the provisions of this
subsection, shall be paid by the liquidating trustee or agent or other
person making such payment or distribution directly to the Agent, with
respect to payments or distributions on behalf of the Company, or the
Tranche A Revolving Bank, with respect to payments or distributions on
behalf of any other Borrower, for application to the payment in full
in cash of all the Domestic Obligations and Foreign Obligations, as
the case may be.
The terms of this subsection (g) are continuing, absolute,
unconditional and irrevocable, and shall remain in full force and effect
notwithstanding the occurrence of any of the events described in subsection
(c) of this Section.
(q) Section 11.11 of the Existing Credit Agreement is amended by
deleting the words "or Subsidiary Guarantor", "and Subsidiary Guarantors", and
"or Foreign Subsidiary Guarantor" in each place where they appear in such
Section.
(r) Section 11.16 and Section 11.17 of the Existing Credit Agreement
are each amended by deleting the words "AND SUBSIDIARY GUARANTOR" in each place
where they appear in such Section.
(s) Section 7.14 and Section 11.20 of the Existing Credit Agreement
are each deleted in their entirety.
(t) Exhibit H to the Existing Credit Agreement is amended in its
entirety to read as indicated in the form of revised Exhibit H attached hereto.
2. Release of Released Subsidiary Guarantor. The Released Subsidiary
----------------------------------------
Guarantor shall, effective on (and subject to the occurrence of) the Effective
Date, be released from its obligations under the Existing Credit Agreement and
any other Loan Document and shall no longer be a party thereto. In addition, it
is hereby confirmed that all Persons that formerly constituted Foreign
Subsidiary Guarantors pursuant to the original terms of the Existing Credit
Agreement or a Joinder thereto have been previously released from all
obligations thereunder.
7
<PAGE>
3. Representations and Warranties. In order to induce the Banks to make
------------------------------
the amendments provided for in Section 1, each of the Company and the Tranche A
Revolving Borrowers hereby (a) represents and warrants to the Agent and the
Banks that (i) each of the representations and warranties contained in the
Existing Credit Agreement and in the other Loan Documents is true and correct in
all material respects as of the date hereof as if made on the date hereof
(except, if any such representation and warranty relates to an earlier date,
such representation and warranty shall be true and correct in all material
respects as of such earlier date), (ii) both immediately before and immediately
after giving effect to the provisions of this Amendment, no Default or Event of
Default has occurred and is continuing, and (iii) each of the Company and the
Tranche A Revolving Borrowers is entering into this Amendment on the basis of
its own investigation and for its own reasons, without reliance upon the Agent
and the Banks or any other Person, and (b) agrees that the incorrectness in any
material respect of any representation and warranty contained in this Section 3
shall constitute an immediate Event of Default.
4. Effective Date. This Amendment will become effective as of the date
--------------
(the "Effective Date") that the Agent has received from the Company, each of the
--------------
Tranche A Revolving Borrowers and each of the Banks a duly executed original
(or, if elected by the Agent, an executed facsimile copy) of this Amendment.
5. Miscellaneous.
-------------
(a) References in this Amendment to any Section are, unless otherwise
specified, to such Section of this Amendment.
(b) This Amendment is a Loan Document executed pursuant to the Amended
Credit Agreement, including, without limitation, for purposes of construction as
provided in Article I and XI thereof. Except as expressly amended hereby, all
of the representations, terms, covenants and conditions contained in the
Existing Credit Agreement and each other Loan Document shall remain unamended or
otherwise unmodified and in full force and effect. The amendments set forth
herein shall be limited precisely as provided for herein and shall not be deemed
to be a waiver of, amendment of, consent to or modification of any other term or
provision of the Existing Credit Agreement or of any term or provision of any
other Loan Document or of any transaction or further or future action on the
part of the Company or the Tranche A Revolving Borrowers which would require the
consent of any of the Banks under the Existing Credit Agreement, the Amended
Credit Agreement or any other Loan Document.
(c) This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the Agent of a
facsimile transmitted document purportedly bearing the signature of a Bank, the
Company or a Tranche A Revolving Borrower shall bind such Person, with the same
force and effect as the delivery of a hard copy original. Any failure by the
Agent to receive the hard copy executed original of such document shall not
diminish the binding effect of receipt of the facsimile
8
<PAGE>
transmitted executed original of such document of the party whose hard copy page
was not received by the Agent.
(d) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns.
(e) The Company and the Tranche A Revolving Borrowers shall execute
and deliver, from time to time, in favor of the Agent and the Banks, such
documents, agreements, certificates and other instruments as shall be necessary
or advisable to effect the purposes of this Amendment.
(f) The Company and the Tranche A Revolving Borrowers jointly and
severally agree to pay all reasonable costs and expenses incurred by the Agent
(including the reasonable fees and out-of-pocket expenses of legal counsel of
the Agent, including allocated costs of in-house counsel) incurred in connection
with the execution and delivery of this Amendment.
(g) THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PERSON A PARTY HERETO
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AMENDMENT OR
ANY AGREEMENT OR DOCUMENT ENTERED INTO IN CONNECTION HEREWITH. THIS AMENDMENT
CONSTITUTES THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENT, WRITTEN OR ORAL,
WITH RESPECT HERETO.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
BORROWERS:
------------------------------------------------------
SOLA INTERNATIONAL INC.
By: /s/ James Gould
---------------------------------------------------
Name: James Gould
Title: Attorney in Fact
SOLA IFSC
SOLA INTERNATIONAL HOLDINGS LTD.
(ACN007719708)
SOLA OPTICAL HOLDINGS (U.K.) LIMITED
SOLA OPTICAL S.A.
SOLA OPTICAL GMBH
SOLA HONG KONG LIMITED
SOLA ADC LENSES LIMITED
SOLA OPTICAL ITALIA S.P.A.
SOLA OPTICAL JAPAN LIMITED
SOLA OPTICAL SINGAPORE PTE. LTD.
AMERICAN OPTICAL COMPANY
INTERNATIONAL AG
By: /s/ James Gould
-----------------------------------------------------
Name: James Gould
Title: Attorney in Fact
10
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent
By: /s/ Christine Cordi
-----------------------------------------------------
Name: Christine Cordi
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Issuing Bank and as a Bank
By: /s/ James P. Johnson
-----------------------------------------------------
Name: James P. Johnson
Title: Managing Director
THE BANK OF NOVA SCOTIA, as Co-Agent and as a Bank
By: /s/ Chris Osborn
-----------------------------------------------------
Name: Chris Osborn
Title: Relationship Manager
BANKBOSTON N.A., as Co-Agent and as a Bank
By: /s/ Robert W. MacElhiney
-----------------------------------------------------
Name: Robert W. MacElhiney
Title: Vice President
11
<PAGE>
NATIONSBANK OF TEXAS N.A., as Co-Agent and as a Bank
By: /s/ Michelle L. Hilse
-----------------------------------------------------
Name: Michelle L. Hilse
Title: Vice President
LASALLE NATIONAL BANK
By: /s/ Susan M. Kaminski
-----------------------------------------------------
Name: Susan M. Kamanski
Title: VP
SOCIETE GENERALE
By: /s/ Maureen E. Kelly
-----------------------------------------------------
Name: Maureen E. Kelly
Title: Vice President
BANQUE PARIBAS
By: /s/ John J. McCormick, III
-----------------------------------------------------
Name: John J. McCormick, III
Title: Vice President
By: /s/ Duane Helkowski
-----------------------------------------------------
Name: Duane Helkowski
Title: Vice President
12
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
Los Angeles Branch
By: /s/ Christian Jagenberg
-----------------------------------------------------
Name: Christian Jagenberg
Title: SVP and Manager
By: /s/ John Korthius
-----------------------------------------------------
Name: John Korthius
Title: Vice President
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Alex T. McCombs
-----------------------------------------------------
Name: Alex T. McCombs
Title: VP
BANQUE NATIONALE DE PARIS
By: /s/ Katherine Wolfe
-----------------------------------------------------
Name: Katherine Wolfe
Title: Vice President
By: /s/ Colleen S. Breit
-----------------------------------------------------
Name: Colleen S. Breit
Title: Assistant Vice President
THE DAI-ICHI KANGYO BANK, LIMITED,
SAN FRANCISCO AGENCY
By: /s/ Takuo Yoshida
-----------------------------------------------------
Name: Takuo Yoshida
Title: General Manager & Agent
13
<PAGE>
EXHIBIT 10.2
September 2, 1997
Mr. Steve M. Neil
2541 Ashwood Court, SE
Ada, Michigan 49301
Dear Steve,
I am delighted to confirm our offer to join SOLA International as Executive Vice
President/Chief Financial Officer based in Menlo Park, California and reporting
directly to me.
Your base salary on joining will be $20,833.34 per month ($250,000 on an annual
basis) paid in two equal installments on the 15th and 30th of each month. Your
salary will be subject to discretionary review increases, the first effective
January 1, 1999 and annually thereafter on January 1.
You will be immediately eligible to participate in the SOLA Group Management
Incentive Plan (MIP), which is an annual cash incentive program based on
achievement of financial goals for the Group. The plan is targeted to pay 60%
of base salary on achievement of planned financial performance and enables you
to earn up to and beyond 120% of base salary according to performance above
plan. Details of the MIP program for 1997/8 are attached. For the remainder of
SOLA's fiscal year through March 31, 1998, we will apply the current plan and
performance targets established for my corporate group and me, based on the full
year's performance, but paid pro-rata to your months of service with SOLA. For
1997/8, your MIP payment will no less than the bonus paid at plan (60%) pro rata
to your months of service (i.e. $150,000/2 = $75,000).
SOLA will pay you the $31,500 that you will forego in bonus from your current
employer. This payment will be made in January, 1998.
In addition, you will be immediately granted options to purchase SOLA common
stock under the SOLA International Inc. Stock Option Plan. Your initial option
grant will be for 80,000 share at an exercise price equivalent to the closing
market price on the date you join SOLA. 20% of your options will be immediately
vested at the date of grant and the remainder will become progressively vested
over a four year period. A further 30,000 options will be reserved for future
grant subject to performance. A bullet point summary of the Plan's main
features is attached and a full package including copy of the Stock Option Plan
and a Stock Option Agreement will be sent to you directly on joining.
You will be reimbursed for the cost of an automobile lease up to a monthly
maximum of $800.00 in addition to your expenses for insurance up to a maximum of
$1,500 per year and the cost of registration fees, maintenance and gasoline for
business and personal use. Steve Lee will provide you with further details on
the car plan, including the choice of automobile.
<PAGE>
You will qualify for immediate coverage under the SOLA Group Medical, Dental,
Life and Disability Insurance Programs.
After a year of service, you will be eligible to participate in the SOLA Optical
Pension Plan and SOLA Gold 401(k) Savings Plan and our Vision Service Plan.
Your vacation entitlement will be 20 days per year in addition to 11 public
holidays.
As part of your relocation package, to help mitigate the impact of higher
housing costs in the Menlo Park area, your house purchase will be supported by
the following assistance package, based on a purchase price assumption of
$1,400,000:
An interest-free loan of $300,000, structured as an IRS Relocation Loan
tied to your continuing employment with SOLA, forgiven over a period of 5
years at $60,000 per year commencing at the beginning of the 4th year
following the date your house purchase closes. We will need to get some
advice on setting this up to qualify as an IRS Relocation Loan.
SOLA will take an equity stake in your house of up to $350,000. You may
buy out all or part of SOLA's equity stake at the original cost for a
period of 5 years from the date of close. After 5 years, the SOLA equity
stake may be bought out at original cost plus 50% of assessed appreciation
based on an agreed valuation. SOLA will pay property taxes and insurance
and fund any capital improvements in proportion to its equity ownership.
As the majority owner, the decision on any capital improvements will remain
yours. Maintenance of the property will be exclusively your
responsibility.
In addition to loan funds of $550,000 (your existing mortgage loan
balance), you will need to contribute a further $200,000 from your own
sources, some of which will be the equity you have in your existing home.
Should you purchase a home for less than $1,400,000, the SOLA equity stake
will be reduced accordingly.
We would support your desire to relocate quickly and SOLA will provide bridging
finance covering the $100,000 equity that you have in your current home if your
sale has not closed before your purchase of a new home in the Bay Area. SOLA
will also guarantee your minimum equity assumption of $100,000. In the event
that your current home does not sell for at least cost ($650,000) and we make a
mutual decision to sell at a lower figure, the company will make up the equity
shortfall to $100,000.
In addition, SOLA will reimburse the out-of-pocket expenses of your relocation
to the Menlo park area, covering the following items:
Air fares and ground transportation for your wife and your family from your
current home to the Menlo Park area.
- 2 -
<PAGE>
Transportation of your household goods and personal effects, inclusive of
replacement insurance coverage, to your new home. This includes shipment
of two automobiles.
The out-of pocket costs of selling your current home, including legal and
administrative fees and real estate agents' commissions.
The out-of pocket costs of purchasing a home in the Menlo Park area
including:
Loan origination fees up to 2 percentage points
Escrow and title insurance/policy fees
Revenue/recording or other mandatory transfer taxes or fees
Credit report and mandatory inspection fees
We will also reimburse the cost of temporary living arrangements prior to your
move into permanent accommodation. We will agree the details when these needs
are clearer.
Finally, you will be provided with a Severance Agreement in common with other
officers of the Company, providing for continuation of salary and benefits for
12 months in the event of termination by the Company for reasons other than
Cause. Severance is mitigated by salary and benefits from future employment
received during the term of continuation, (a feature of the existing agreements
that is not specified in the proxy statement).
Steve, I know you have a good feel for the challenges and opportunities we have
in SOLA and, I hope, our excitement for the task. I am confident that we can
offer you plenty of challenge and a lot of fun. I am very much looking forward
to working with you.
If you have any questions, please call me or Steve Lee. Please return a signed
copy of this letter indicating your acceptance of our offer as soon as you can.
Yours sincerely,
/s/ Steve Lee
John Heine
Chief Executive officer
Agreed* and Acknowledged: /s/ Steve M. Neil 9/7/97
--------------------- -----------------
Steve M. Neil Date
* Agreed to with the understanding that Sola agrees to increase their equity
stake in our house should the house cost more than that indicated in this
letter.
/s/ Steve M. Neil
9/7/97
- 3 -
<PAGE>
EXHIBIT 12.1
SOLA INTERNATIONAL INC.
RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Predecessor
Business Predecessor
Nine Months Year Year Year Four Months Eight Months Business
Ended Ended Ended Ended Ended Ended Year Ended
December 31, March 31, March 31, March 31, March 31, November 30, March 31,
1997 1996 1997 1996 1995 1994 1993 1993
------- ------- --------- --------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations before
income taxes............................ $50,736 $23,626 $41,386 $48,612 $21,222 $(67,332) $16,990 $25,022
------- ------- ------- ------- ------- -------- ------- -------
Fixed charges:
Interest.............................. 13,408 11,817 16,187 12,412 18,068 6,227 3,220 4,826
Amortization of financing costs....... 343 289 414 273 924 338 -- --
Interest portion of rental expense.... 1,641 1,414 1,862 1,790 1,690 331 1,184 1,657
------- ------- ------- ------- ------- -------- ------- -------
Total................................. 15,392 13,520 18,463 14,475 20,682 6,896 4,404 6,483
------- ------- ------- ------- ------- -------- ------- -------
TOTAL................................. $66,128 $37,146 $59,849 $63,087 $41,904 $(60,436) $21,394 $31,505
------- ------- ------- ------- ------- -------- ------- -------
Fixed charges......................... $15,392 $13,520 $18,463 $14,475 $20,682 $ 6,896 $ 4,404 $ 6,483
------- ------- ------- ------- ------- -------- ------- -------
Ratio of earnings to fixed charges.... 4.30 2.75 3.24 4.36 2.03 -- 4.86 4.86
------- ------- ------- ------- ------- -------- ------- -------
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-45929) and
related Prospectus and Prospectus Supplement of Sola International Inc. for
the registration of $250,000,000 of common stock and/or debt securities and to
the incorporation by reference therein of our report dated May 6, 1997, with
respect to the consolidated financial statements and schedule of Sola
International Inc. included in its Annual Report (Form 10-K) for the year
ended March 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
_____________________________________
ERNST & YOUNG LLP
Palo Alto, California
March 4, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-45929) and
related Prospectus and Prospectus Supplement of Sola International Inc. for
the registration of $250,000,000 of common stock and/or debt securities and to
the incorporation by reference therein of our report dated June 7, 1996, with
respect to the combined financial statements of the Worldwide Ophthalmic Group
of American Optical Corporation included in the Current Report on Form 8-K/A
(Amendment No. 1) of Sola International Inc. dated May 6, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
_____________________________________
ERNST & YOUNG LLP
Palo Alto, California
March 4, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures
appear below, constitute and appoint John E. Heine and Steven M. Neil, and each
of them as their true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for them and in their names, places, and
steads, in any and all capacities, to sign the Registration Statement on Form S-
3 to be filed in connection with the offering of common stock and/or debt
securities of Sola International Inc. and any and all amendments (including
post-effective amendments) to the Registration Statement, and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as they might or could do in person, thereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his or
her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Dated: February 9, 1998
/s/ Irving S. Shapiro
- ------------------------- -------------------------
Irving S. Shapiro Douglas D. Danforth
- ------------------------- -------------------------
John E. Heine A. William Hamill
- ------------------------- -------------------------
Steven M. Neil Hamish Maxwell
- ------------------------- -------------------------
Maurice J. Cunniffe Jackson L. Schultz
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
_________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) [X]
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
(Exact name of trustee as specified in its charter)
United States 06-1143380
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
633 West 5/th/ Street, 12/th/ Floor, Los Angeles, California 90071
(Address of principal executive offices) (Zip Code)
Lynda A. Vogel, Senior Vice President and Managing Director
633 West 5/th/ Street, 12/th/ Floor, Los Angeles, California 90071
(213) 362-7399
(Name, address and telephone number of agent for service)
SOLA INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)
Delaware 94-3189941
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2420 San Hill Road Suite 200
Menlo Park, California 94025
(Address of principal executive offices) (Zip Code)
____% Notes due 2008
(Title of indenture securities)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH
IT IS SUBJECT.
Comptroller of the Currency, Western District Office, 50 Fremont
Street, Suite 3900, San Francisco, California, 94105-2292
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent, State
Street Bank and Trust Company.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibits with corresponding exhibit numbers to the Form T-1of Oasis
Residential, Inc., filed pursuant to Section 305(b)(2) of the Act, on
November 18, 1996 (Registration No. 033-90488), and are incorporated
herein by reference.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A Certificate of Corporate Existence (with fiduciary powers) from
the Comptroller of the Currency, Administrator of National Banks is on
file with the Securities and Exchange Commission as Exhibits with
corresponding exhibit numbers to the Form T-1 of Oasis Residential, Inc.,
filed pursuant to Section 305(b)(2) of the Act, on November 18, 1996
(Registration No. 033-90488), and are incorporated herein by reference.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
Authorization of the Trustee to exercise fiduciary powers (included
in Exhibits 1 and 2; no separate instrument).
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibits with
corresponding exhibit numbers to the Form T-1 of Oasis Residential, Inc.,
filed pursuant to Section 305(b)(2) of the Act, on November 18, 1996
(Registration No. 033-90488), and are incorporated herein by reference.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company of California, N.A.,
organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Los Angeles, and
State of California, on the 24/th/ day of February, 1998.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
By: /S/ Joni Frederick
-------------------
NAME JONI FREDERICK
TITLE ASSISTANT VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by Sola
International, Inc. of its __% NOTES DUE 2008, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
By: /S/ Joni Frederick
-------------------
NAME JONI FREDERICK
TITLE ASSISTANT VICE PRESIDENT
DATED: FEBRUARY 24, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition and Income for A Bank With Domestic Offices
Only and Total Assess of Less Than $100 Million of State Street Bank and Trust
Company of California, a national banking association duly organized and
existing under and by virtue of the laws of the United States of America, at
the close of business December 31, 1997, published in accordance with a call
-----------------
made by the Federal Deposit Insurance Corporation pursuant to the required
law: 12 U.S.C. Section 324 (State member banks); 12 U.S.C. Section 1817 (State
nonmember banks); and 12 U.S.C. Section 161 (National banks).
Thousands
ASSETS of Dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and coin.............. 5,580
Interest-bearing balances....................................... 0
Securities.............................................................. 38
Federal funds sold and securities purchased
under agreements to resell in domestic
offices of the bank and its Edge subsidiary..................... 0
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... 0
Allowance for loan and lease losses.......................... 0
Allocated transfer riskreserve............................... 0
Loans and leases, net of unearned income and allowances ..... 0
Assets held in trading accounts......................................... 0
Premises and fixed assets............................................... 276
Other real estate owned................................................. 0
Investments in unconsolidated subsidiaries.............................. 0
Customers' liability to this bank on acceptances outstanding............ 0
Intangible assets....................................................... 0
Other assets............................................................ 726
-----
Total assets............................................................ 6,620
=====
LIABILITIES
Deposits:
In domestic offices............................................. 0
Noninterest-bearing.................................. 0
Interest-bearing..................................... 0
In foreign offices and Edge subsidiary.......................... 0
Noninterest-bearing.................................. 0
Interest-bearing..................................... 0
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge
subsidiary...................................................... 0
Demand notes issued to the U.S. Treasury and Trading Liabilities........ 0
Other borrowed money.................................................... 0
Subordinated notes and debentures....................................... 0
Bank's liability on acceptances executed and outstanding................ 0
Other liabilities....................................................... 3,076
Total liabilities....................................................... 3,076
-----
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................... 0
Common stock............................................................ 500
Surplus................................................................. 750
Undivided profits and capital reserves/Net unrealized holding
gains(losses)................................................... 2,294
Cumulative foreign currency translation adjustments..................... 0
Total equity capital.................................................... 3,544
-----
Total liabilities and equity capital.................................... 6,620
=====
4
<PAGE>
I, Kevin R. Wallace, Vice President and Comptroller of the above named bank do
hereby declare that this Report of Condition and Income for this report date
have been prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true to the best of my
knowledge and belief.
Kevin R. Wallace
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and
correct.
Lynda A. Vogel
Donald W. Beatty
Stephen Rivero
5
