<PAGE>
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TANDY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-1047710
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
100 THROCKMORTON STREET, SUITE 1800, FORT WORTH, TEXAS 76102 817-390-3700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
H.C. WINN, ESQ. COPIES OF CORRESPONDENCE TO:
SENIOR VICE PRESIDENT AND SECRETARY DWIGHT A. KINSEY, ESQ.
TANDY CORPORATION SATTERLEE STEPHENS BURKE & BURKE
100 THROCKMORTON STREET, SUITE 1800 LLP
FORT WORTH, TEXAS 76102 230 PARK AVENUE
817-390-3752 NEW YORK, NEW YORK 10169
(NAME, ADDRESS, INCLUDING ZIP CODE, CRAIG B. BROD, ESQ.
AND TELEPHONE NUMBER, INCLUDING CLEARY, GOTTLIEB, STEEN & HAMILTON
AREA CODE, OF AGENT FOR SERVICE) ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10006
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
AMOUNT TO BE MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE REGISTERED OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED (1) PER UNIT (2) PRICE(1)(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities.................. $300,000,000 100% $300,000,000 $90,910
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</TABLE>
(1) Plus such additional principal amount as may be necessary such that, if
Debt Securities are issued with original issue discount, the aggregate
initial offering price of all Debt Securities will equal $300,000,000, or
the equivalent of $300,000,000 if some or all of the securities are
denominated in one or more foreign currencies or composite currencies.
(2) Estimated solely for the purpose of calculating the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
The Debt Securities registered hereby may be offered from time to time by
means of the basic prospectus included herein and, when a particular series of
such Debt Securities is being offered or sold, such series of Debt Securities
may be offered or sold by means of the basic prospectus included herein and an
applicable prospectus supplement. If any series of Debt Securities registered
hereby are offered or sold in reliance upon the procedures contemplated by
Rule 430A under the Securities Act of 1933, as amended, such series of Debt
Securities will be offered or sold by means of the basic prospectus included
herein and a prospectus supplement in the form included herein. Series of Debt
Securities registered hereby which are not offered or sold in reliance upon
the procedures contemplated by Rule 430A may be offered or sold by means of
the basic prospectus included herein and a prospectus supplement in a form
other than the form of the supplement included herein.
1
<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, DATED MAY 16, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY , 1997
$150,000,000
TANDY CORPORATION
% NOTES DUE JUNE 15, 2007
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Interest on the % Notes due June 15, 2007 (the "Notes") issued by Tandy
Corporation (the "Company") is payable on June 15 and December 15 of each year,
commencing December 15, 1997. The Notes are not redeemable prior to maturity
and will not be subject to any sinking fund.
The Notes will be represented by global securities registered in the name of
a nominee of The Depository Trust Company (the "Depositary"). Beneficial
interests in the Notes will be shown on, and transfers thereof will be effected
only through, records maintained by the Depositary (with respect to
participants' interests) and its participants. The Notes will be issued only in
denominations of $1,000 and integral multiples thereof. Except as described
herein, Notes in definitive form will not be issued. See "Description of
Notes--Book Entry Procedures." The Notes will trade in the Depositary's Same-
Day Funds Settlement System until maturity, and secondary market trading
activity for the Notes will therefore settle in immediately available funds.
All payments of principal and interest will be made by the Company in
immediately available funds. See "Description of Notes."
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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
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
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<S> <C> <C> <C>
Per Note......................... % % %
Total............................ $ $ $
</TABLE>
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(1) Plus accrued interest, if any, from June , 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated expenses of $145,000 payable by the Company.
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The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Notes will be delivered in book-entry form through the facilities of The
Depository Trust Company in New York, New York, on or about June , 1997,
against payment therefor in immediately available funds.
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BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
RAUSCHER PIERCE REFSNES, INC.
The date of this Prospectus Supplement is June , 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS AND THE IMPOSITION
OF PENALTY BIDS. SEE "UNDERWRITING".
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus Supplement, the accompanying Prospectus and the documents
incorporated herein by reference contain "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
represent the Company's projections, estimates, expectations or beliefs
concerning, among other things, financial items that relate to management's
future plans or objectives or to the Company's future economic and financial
performance. Forward-looking statements involve known and unknown risks and
uncertainties and are indicated by words such as "anticipates", "expects",
"believes", "plans", "could" and similar words and phrases. These risks and
uncertainties include, but are not limited to, economic conditions including
consumer installment debt levels and interest rate fluctuations, shifts in
consumer electronic product cycles, technological advances or a lack thereof,
consumer demand for products and services, competitive products and pricing,
availability of products, inventory risks due to shifts in market demand, the
regulatory and trade environment and such other risks and uncertainties
described in the Company's reports and filings with the Securities and
Exchange Commission incorporated by reference herein, including in "Item 1--
Business" and "Item 7--Management's Discussion and Analysis of Results of
Operations and Financial Condition" in the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1996 (the "1996 Form 10-K") and "Item
2 Management's Discussion and Analysis of Results of Operations and Financial
Condition" in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997 (the "March 1997 Form 10-Q"). Potential investors
are cautioned that certain events or circumstances could cause the Company's
actual performance and financial results in future periods to differ
materially from those estimated or anticipated.
S-2
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THE COMPANY
The following summary of the business of the Company is qualified in its
entirety by and should be read together with the more detailed information and
the audited and unaudited financial statements, including the notes thereto,
included or incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus.
Tandy Corporation ("Tandy" or the "Company") engages in the retail sale of
consumer electronics, including personal computers, primarily in the United
States. The Company's principal retail operations include the RadioShack(R)
and Computer City(R) store chains with approximately 6,900 retail locations.
RadioShack sells primarily private label electronic parts and accessories,
audio/video equipment, digital satellite systems, personal computers and
cellular and conventional telephones, as well as specialized products such as
scanners, electronic toys and hard-to-find batteries. The Computer City chain
operates primarily as a "supercenter" format featuring name brand computers,
software and related products.
RADIOSHACK
RadioShack is the Company's largest operating division, offering the
shopping convenience of approximately 6,800 company-owned and dealer stores.
RadioShack stores offer primarily private label electronic parts and
accessories, audio/video equipment, digital satellite systems, personal
computers and cellular and conventional telephones, as well as specialized
products such as scanners, electronic toys and hard-to-find batteries.
RadioShack is committed to a retail environment that emphasizes knowledgeable
personnel and excellent customer service, including a "service-oriented"
approach. RadioShack has formed strategic relationships with key vendors to
market their products such as computers (IBM(R)), home security (ADT(R)),
direct-to-home satellite (RCA(R), PRIMESTAR(R), DIRECTV(R) and USSB(R)),
telecommunications and wireless communications (Sprint(R) and Sprint PCSSM).
These relationships augment the strong position RadioShack has historically
maintained in core product categories such as batteries, communications
equipment, telephones, antennas, electronic components, and parts and
accessories.
The RadioShack division operates approximately 4,900 company-owned stores,
located throughout the United States. These company-owned stores average
approximately 2,450 square feet and are located in major malls, strip centers
and individual store fronts. RadioShack plans to expand its company-owned
store base to approximately 5,000 locations by the year 2000. To provide
RadioShack products to smaller communities, RadioShack has a network of
approximately 1,900 dealer/franchise stores, including 57 international
stores.
RadioShack provides access to third party services such as cellular phone,
PCS (wireless personal communication services using a higher designated
frequency than traditional cellular communication), direct satellite
programming and pager service. RadioShack is also focusing on becoming
"America's Telephone Store". In connection with its recent alliance with
Sprint and its plans to implement a Sprint "store-within-a-store" concept at
its RadioShack store locations, Tandy intends to promote RadioShack as a "one
stop" telephone store with a broad assortment of wired and wireless
telecommunications products and services. For a discussion of RadioShack's
recent alliance with Sprint, see "Item 7--Management's Discussion and Analysis
of Results of Operations and Financial Condition--Net Sales and Operating
Revenues" in the 1996 Form 10-K incorporated herein by reference. For its
personal computer sales, which accounted for approximately 11.0% of the
RadioShack division's net sales and operating revenues in fiscal year 1996,
Tandy primarily targets the home and the small business markets.
COMPUTER CITY
Computer City stores offer approximately 4,400 different name brand items
(including computers, software and related products in such brands as IBM(R),
Sony(R), Lotus(R), Microsoft(R), Compaq(R), AST(R) and Hewlett Packard(R)),
competitive prices and customer service on computers, computer software and
accessories. Computer City operates two different size formats, Computer City
SuperCenters with 82 units and Computer City Express
S-3
<PAGE>
with 11 units, including five in Europe and seven in Canada. The SuperCenters
average approximately 21,150 square feet. Computer City Express stores average
approximately 12,300 square feet, serve smaller markets and supplement
SuperCenters in larger markets. The Company plans to open approximately four
additional Computer City stores in 1997. The 93 stores in operation at March
31, 1997 exclude the 21 Computer City stores closed pursuant to the Company's
December 30, 1996 restructuring announcement. All of these stores were closed
by March 31, 1997.
INCREDIBLE UNIVERSE
Incredible Universe stores average approximately 184,000 square feet and
offer a broad selection of brand name appliances and consumer electronics,
including personal computers and related software. On December 30, 1996, the
Company announced its plan to exit the Incredible Universe business. At
December 31, 1996, there were 17 open Incredible Universe locations and two
that had been previously closed. The Company has reached agreements for the
sale of six Incredible Universe stores to Fry's Electronics, Inc. ("Fry's")
and its affiliates in exchange for certain notes of Fry's and its affiliates.
The Company has sold two of these stores to Fry's and its affiliates as of
April 30, 1997 and expects to sell the other four stores to Fry's and its
affiliates by September 30, 1997. Of the remaining 13 stores, the Company
anticipates that eight stores will be sold by July 30, 1997 pursuant to
existing agreements. The five remaining stores are not presently under
contracts for sale, but the Company plans to sell those stores by December 31,
1997. There can be no assurance that any of the planned sales will occur.
For further discussion of the store closures and related restructuring, see
"Item 7 Management's Discussion and Analysis of Results of Operations and
Financial Condition--Provision for Business Restructuring" in the 1996 Form
10-K and "Notes to Consolidated Financial Statements (Unaudited) Note 4--
Restructuring Reserves" in the March 1997 Form 10-Q incorporated herein by
reference. Unexpected delays in liquidation and closing of asset sales or
further changes in Company strategy, among other factors, could result in
charges and reserves previously estimated being inadequate, and future charges
may be required.
For additional information with respect to the Company's business, see "Item
1 Business" in the 1996 Form 10-K incorporated by reference herein.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
are estimated to be approximately $148.9 million after deducting estimated
underwriting discounts and commissions, and estimated expenses of the
offering. The Company will use substantially all of the net proceeds to reduce
its short-term debt consisting of short-term bank debt pursuant to uncommitted
bank lines of credit and commercial paper which have maturities of less than
90 days. As of March 31, 1997 these borrowings totaled approximately $355
million with interest rates ranging between 5.54% and 5.96%. Proceeds from
these bank borrowings and commercial paper were utilized for inventory
requirements, Company common stock repurchases and other general corporate
purposes. Any net proceeds not used to repay short-term debt will be used for
general corporate purposes. The Company may reborrow short-term bank debt and
utilize commercial paper borrowings in the future.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of the
Company as of March 31, 1997 and as adjusted to reflect the issuance of the
Notes and the application of the net proceeds therefrom as described under
"Use of Proceeds". For further discussion of the Company's capitalization
presented in the schedule below, see the Company's March 1997 Form 10-Q and
Notes 12 and 17 to the Company's Consolidated Financial Statements in the 1996
Form 10-K incorporated by reference herein.
<TABLE>
<CAPTION>
MARCH 31, 1997
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AS
ACTUAL ADJUSTED
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(IN MILLIONS)
<S> <C> <C>
Short-term debt (1)................................... $ 361.6 $ 212.7
========= =========
Current maturities of long-term debt (2) ............. $ 41.4 $ 41.4
========= =========
Long-term debt (3).................................... 104.2 104.2
% Notes due 2007 ................................... -- 150.0
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Total long-term debt ............................. 104.2 254.2
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Stockholders' equity:
Preferred stock, no par value, 1.0 million shares au-
thorized:
Series A Junior Participating, 0.1 million shares
authorized
and none issued or outstanding .................... -- --
Series B Convertible, 0.1 million shares authorized,
0.1 million shares issued and outstanding (4)...... 100.0 100.0
Common stock, $1.00 par value, 250.0 million shares
authorized,
85.6 million shares issued and outstanding........... 85.6 85.6
Additional paid-in capital............................ 106.3 106.3
Retained earnings .................................... 2,202.4 2,202.4
Common stock in treasury, at cost, 30.7 million shares
(5).................................................. (1,273.7) (1,273.7)
Other equity (6) ..................................... (49.5) (49.5)
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Total stockholders' equity ....................... 1,171.1 1,171.1
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Total capitalization ............................. $ 1,275.3 $ 1,425.3
========= =========
</TABLE>
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(1) Short-term debt consists of $207.7 million of outstanding commercial paper
supported by a $500.0 million revolving credit facility (under which no
amounts were outstanding as of March 31, 1997), $146.7 million of
uncommitted money market borrowings from commercial banks and a $7.2
million short-term note payable.
(2) Current maturities of long-term debt consists of $28.7 million of medium-
term notes payable, $12.3 million associated with the Company's guarantee
of the Tandy Employees Stock Ownership Plan ("TESOP") indebtedness and
$0.4 million of capitalized lease obligations.
(3) Long-term debt consists of $39.9 million associated with the Company's
guarantee of TESOP indebtedness (with rates ranging from 6.47% to 9.34%),
$29.2 million of capitalized lease obligations, $26.0 million of medium-
term notes payable (with rates ranging from 7.25% to 8.63%) and $9.1
million of other notes payable (with variable interest rates currently
ranging from 5.00% to 6.63%).
(4) On July 31, 1990, the trustee for the TESOP, now the Tandy Fund, issued
$100.0 million of Guaranteed TESOP Notes due June 30, 2000 and used the
proceeds from the sale thereof to purchase 100,000 shares of Series B
Convertible Preferred Stock from the Company at a price of $1,000 per
share.
(5) The Company currently has authorization to purchase up to 15 million
shares, of which approximately 6.7 million shares had been purchased as of
March 31, 1997.
(6) Other equity consists of "Foreign currency translation effects," "Unearned
deferred compensation related to TESOP" and "Unrealized loss on securities
available for sale".
S-5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with the consolidated financial statements (including the notes
thereto) included in the 1996 Form 10-K and the March 1997 Form 10-Q, which are
incorporated herein by reference. The selected consolidated financial data for
the Company for the three month periods ended March 31, 1997 and 1996 have been
derived from unaudited interim financial statements of the Company which, in
the opinion of management, reflect all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of such data.
Operating results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1997 or for any future periods.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, YEAR ENDED DECEMBER 31, DECEMBER 31, (1) JUNE 30,
-------------------- --------------------------------------------- ------------------ ----------
1997 1996 1996 1995 1994 1993 1992 1991 1992
--------- --------- -------- -------- -------- -------- -------- -------- ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATIONS
DATA:
Net sales and
operating revenues
................... $ 1,291.7 $ 1,447.0 $6,285.5 $5,839.1 $4,943.7 $4,102.6 $2,161.1 $2,031.8 $3,649.3
Cost of products
sold .............. 840.1 955.3 4,263.1 3,764.9 3,017.6 2,382.7 1,221.2 1,069.5 1,926.4
--------- --------- -------- -------- -------- -------- -------- -------- --------
Gross profit........ 451.6 491.7 2,022.4 2,074.2 1,926.1 1,719.9 939.9 962.3 1,722.9
Selling, general and
administrative .... 379.5 413.9 1,761.1 1,646.5 1,532.7 1,354.7 761.8 730.7 1,342.1
Depreciation and
amortization....... 23.6 25.4 108.6 92.0 84.8 79.9 40.0 36.3 74.5
Interest income .... (2.2) (3.8) (13.0) (42.3) (78.6) (65.5) (33.3) (30.6) (67.4)
Interest expense.... 9.0 7.1 36.4 33.7 30.0 39.7 20.5 24.0 43.2
Provision for
restructuring
costs(2)........... -- -- 162.1 1.1 89.1 -- 48.0 -- --
Impairment of long-
lived assets(3) ... -- 26.0 112.8 -- -- -- -- -- --
Gain from sale of
credit accounts and
extended service
contracts(4) ...... -- -- -- -- (91.4) -- -- -- --
--------- --------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes,
discontinued
operations and
cumulative effect
of change in
accounting
principle ......... 41.7 23.1 (145.6) 343.2 359.5 311.1 102.9 201.9 330.5
Provision (benefit)
for taxes ......... 16.1 8.6 (54.0) 131.3 135.2 115.5 35.2 73.2 119.8
--------- --------- -------- -------- -------- -------- -------- -------- --------
Income (loss) from
continuing
operations ........ 25.6 14.5 (91.6) 211.9 224.3 195.6 67.7 128.7 210.7
Loss from
discontinued
operations(5) ..... -- -- -- -- -- (111.8) (63.9) (8.1) (26.9)
--------- --------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before
cumulative effect
of change in
accounting
principle ......... 25.6 14.5 (91.6) 211.9 224.3 83.8 3.8 120.6 183.8
Cumulative effect of
change in
accounting
principle(6)....... -- -- -- -- -- 13.0 -- -- --
--------- --------- -------- -------- -------- -------- -------- -------- --------
Net income (loss) .. $ 25.6 $ 14.5 $ (91.6)(7) $ 211.9 $ 224.3 $ 96.8 $ 3.8 $ 120.6 $ 183.8
========= ========= ======== ======== ======== ======== ======== ======== ========
Net income (loss)
from continuing
operations per
average common and
common equivalent
share.............. $ 0.43 $ 0.21 $ (1.64)(7) $ 3.12 $ 2.91 $ 2.50 $ 0.87 $ 1.61 $ 2.61
Dividends declared
per common share... $ 0.20 $ 0.20 $ 0.80 $ 0.74 $ 0.63 $ 0.60 $ 0.30 $ 0.30 $ 0.60
SELECTED BALANCE
SHEET DATA:
Total assets(8) .... $ 2,385.7 $ 2,685.5 $2,583.4 $2,722.1 $3,243.8 $3,219.1 $3,381.4 N/A $3,165.2
Working capital..... $ 649.9 $ 1,050.7 $ 746.3 $1,088.3 $1,350.1 $1,128.3 $1,478.0 N/A $1,556.4
Total debt(9) ...... $ 507.2 $ 370.0 $ 362.3 $ 330.7 $ 382.4 $ 574.6 $ 708.5 N/A $ 588.6
Total debt as a % of
total
capitalization..... 30.2% 19.1% 22.3% 17.1% 17.1% 22.8% 27.3% N/A 23.4%
OTHER DATA:
Earnings before
interest, taxes,
depreciation and
amortization
(EBITDA)(10).........$ 72.1 $ 51.8 $ (13.6) $ 426.6 $ 395.7 $ 365.2 $ 130.1 $ 231.6 $ 380.8
Ratio of earnings to
fixed charges(11).... 2.47 1.85 * (11) 4.22 4.56 3.89 2.83 N/A 3.95
Net cash provided by
operating
activities ........ $ (11.7) $ 23.6 $ 307.5 $ 673.0 $ 268.9 $ 322.3 $ 13.7 N/A $ 146.8
Net cash provided
(used) by investing
activities (12) ... $ (24.4) $ (46.6) $ (112.9) $ (180.3) $ 236.6 (12) $ (57.5) $ (90.2) N/A $ (102.2)
Net cash provided
(used) by financing
activities(13).......$ 16.1 $ (15.1) $ (216.6) $ (554.8) $ (513.1) $ (164.2) $ 82.7 N/A $ (124.4)
</TABLE>
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(1) In 1992, the Company changed its fiscal year end from June 30 to December
31 effective with the six-month transition period ended December 31, 1992.
(2) For further discussion regarding "Provision for restructuring costs", see
Note 3 to the Consolidated Financial Statements included in the 1996 Form
10-K incorporated herein by reference.
(3) For further discussion regarding "Impairment of long-lived assets", see
Note 4 to the Consolidated Financial Statements included in the 1996 Form
10-K incorporated herein by reference.
S-6
<PAGE>
(4) For further discussion regarding "Gain from sale of credit accounts and
extended service contracts", see Note 6 to the Consolidated Financial
Statements included in the 1996 Form 10-K incorporated herein by reference.
(5) During 1993, the Company discontinued and disposed of its computer
manufacturing business, O'Sullivan Industries Inc., Memtek's Product
Division and the Lika printed circuit board business.
(6) The change in 1993 reflected the Company's change in accounting for income
taxes to comply with Statement of Financial Accounting Standards,
"Accounting for Income Taxes" ("FAS 109").
(7) Excluding $230.3 million (net of taxes) in restructuring and other charges
in 1996, net income would have been $138.7 million and net income from
continuing operations per average common and common equivalent share would
have been $2.21.
(8) Includes investment in discontinued operations through December 31, 1993,
as discussed in (5) above.
(9) Total debt includes short-term debt, current maturities of long-term debt,
capital leases, TESOP indebtedness and long-term debt.
(10) EBITDA consists of earnings before interest income, interest expense,
income taxes, depreciation and amortization. EBITDA is not a measure of
financial performance under generally accepted accounting principles and
should not be considered in isolation or as an alternative to net income
as a measure of operating performance or to cash flows from operating
activities as a measure of liquidity. EBITDA should be considered in
conjunction with all of the information in the Selected Consolidated
Financial Data, the Company's Consolidated Financial Statements and the
Notes thereto prepared in accordance with generally accepted accounting
principles and included in the 1996 Form 10-K and the March 1997 Form 10-Q
incorporated herein by reference. The Company has presented EBITDA because
it is used by certain investors to determine a company's ability to
service debt.
The following table presents information regarding EBITDA with adjustments
to add back charges for inventory writedowns, impairment of assets,
restructuring costs and closed stores operating losses (and as further
adjusted to exclude closed stores depreciation and amortization) recorded
(as applicable) by the Company in the three months ended March 31, 1997 and
1996 and in fiscal years 1996, 1995 and 1994. EBITDA is also adjusted to
reflect credits for the gain from the sale of credit accounts and extended
service contracts in fiscal year 1994. The above-mentioned charges and
credits primarily relate to: (i) the Company's decision to close or convert
233 of the 306 Tandy Brand Name stores in fiscal year 1994; (ii) the first
restructuring plan for the Incredible Universe division announced during the
second quarter of fiscal year 1996 which involved an overhead reduction
plan, the closing of two stores and costs associated with the cancellation
of rights to certain real estate sites held for the development of new
stores; (iii) lease obligations, real estate costs, employee termination
expenses and contract cancellation costs associated with the closure of all
53 remaining McDuff Supercenters, the exiting of the Incredible Universe
business (consisting of 17 stores) and the closure of 21 Computer City
stores, each as announced in the fourth quarter of fiscal year 1996; (iv)
the Company's sale of its Computer City and Incredible Universe private
label credit card portfolios without recourse in fiscal year 1994; and (v)
the transfer of the Company's existing obligations on extended service
contracts to an unrelated third party in fiscal year 1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------
1997 1996 1996 1995 1994
--------- --------- ------------- ------ ------
(IN MILLIONS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
EBITDA .................. $ 72.1 $ 51.8 $(13.6) $426.6 $395.7
Add back:
Lower of cost or market
inventory writedown
(primarily
related to restructur-
ing).................... -- -- 91.4 -- --
Impairment of long-lived
assets ................. -- 26.0 112.8 -- --
Provision for restructur-
ing costs .............. -- -- 162.1 1.1 89.1
Closed stores operating
losses ................. 14.7 25.8 114.4 62.3 40.1
Closed stores deprecia-
tion and amortization .. (0.5) (5.2) (21.3) (16.2) (15.1)
Gain from sale of credit
accounts and extended
service contracts ...... -- -- -- -- (91.4)
--------- --------- ------ ------ ------
Adjusted EBITDA ......... $ 86.3 $ 98.4 $445.8 $473.8 $418.4
========= ========= ====== ====== ======
</TABLE>
(11) Computed using income from continuing operations. For purposes of
calculating the ratio of earnings to fixed charges, "earnings" consist of
income before income taxes plus fixed charges. "Fixed charges" consist of
interest expense, amortization of debt issuance expenses and discount and
an appropriate portion of rental expense that represents a reasonable
approximation of the interest factor (currently deemed to be one third).
Earnings before income taxes were not sufficient to cover fixed charges
during 1996 by approximately $145.6 million. Excluding $366.3 million pre-
tax ($230.3 million net of taxes) in restructuring and other charges, the
ratio of earnings to fixed charges for 1996 as so adjusted would have been
2.89, and if further adjusted to exclude $114.4 million pre-tax of closed
stores operating losses, would have been 3.87.
(12) Includes cash used for additions to property, plant and equipment, cash
provided by proceeds from the sales of property, plant and equipment,
proceeds from the sale of divested operations, proceeds from payment on
AST note and cash used or provided by other investing activities. Net cash
provided by investing activities during 1994 primarily includes cash used
for additions to property, plant and equipment of $180.5 million, cash
provided by proceeds from the sales of property, plant and equipment of
$56.4 million and proceeds from the sale of divested operations of $359.0
million.
(13) Includes cash used for purchases of treasury stock and payment of
dividends; includes cash provided by sales of treasury stock to the
employee stock purchase program, proceeds from the exercise of stock
options and, in the fiscal year ended June 30, 1992, issuance of preferred
stock. Also includes cash provided (used) by changes in debt.
S-7
<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
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, to which description reference is hereby
made. Capitalized terms not defined herein have the meanings assigned to such
terms in the Prospectus.
GENERAL
The Notes offered hereby will be limited to $150,000,000 aggregate principal
amount and will mature on June 15, 2007. The Notes are not entitled to a
sinking fund. Interest at the applicable annual rate set forth on the cover
page of this Prospectus Supplement will be payable semiannually on June 15 and
December 15, commencing December 15, 1997, to the persons in whose names the
Notes are registered at the close of business on June 1 or December 1, as the
case may be, preceding such interest payment date. Interest on the Notes will
accrue from June , 1997 or from the most recent interest payment date to
which interest has been paid or provided for to, but excluding, the next
interest payment date. The Notes constitute a separate series of Debt
Securities under the Indenture described in the Prospectus and will be issued
in denominations of $1,000 and integral multiples thereof.
The Notes will be unsecured and will rank on a parity with each other and
with all other unsecured and unsubordinated indebtedness of the Company.
The Notes may not be redeemed prior to maturity.
The provisions described in the Prospectus under "Description of Debt
Securities--Defeasance" will be applicable to the Notes.
BOOK-ENTRY PROCEDURES
The Notes will be issued in the form of one or more fully registered Global
Securities (the "Global Securities"), which will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the
"Depositary"), and registered in the name of the Depositary's nominee. Except
as set forth below, the Global Securities may be transferred, in whole or in
part, only to another nominee of the Depositary or to a successor of the
Depositary or its nominee.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (the "Participants") and to
facilitate the clearance and settlement of securities transactions between
Participants in such securities through electronic book-entry changes in
accounts of its Participants. Participants include securities brokers and
dealers (including certain of the Underwriters), banks (including the Trustee)
and trust companies, clearing corporations and certain other organizations.
Access to the Depositary's system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("indirect participants"). Persons who are not Participants may beneficially
own securities held by the Depositary only through Participants or indirect
participants.
Pursuant to procedures established by the Depositary, (i) upon issuance of
the Notes by the Company, the Depositary will credit the accounts of
Participants designated by the Underwriters with the principal amounts of the
Notes purchased by the Underwriters, and (ii) ownership of beneficial
interests in the Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
(with respect to the Participants' interests), the Participants and the
indirect participants. The laws of some states require that certain persons
take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer beneficial interests in the Global
Securities is limited to such extent.
S-8
<PAGE>
So long as a nominee of the Depositary is the registered owner of the Global
Securities, such nominee for all purposes will be considered the sole owner or
holder of the corresponding Notes under the Indenture. Except as provided
below, owners of beneficial interests in the Global Securities will not be
entitled to have Notes registered in their names, will not receive or be
entitled to receive physical delivery of Notes in definitive form, and will
not be considered the owners or holders thereof under the Indenture.
The Trustee, any Paying Agent and the Security Registrar will not have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Securities, or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Principal and interest payments on the Notes registered in the name of the
Depositary's nominee will be made by the Trustee to the Depositary's nominee
as the registered owner of the Global Securities. Under the terms of the
Indenture, the Company and the Trustee will treat the persons in whose names
the Notes are registered as the owners of such Notes for the purpose of
receiving payment of principal and interest on the Notes and for all other
purposes whatsoever. Therefore, neither the Company, the Trustee nor any
Paying Agent has any direct responsibility or liability for the payment of
principal or interest on the Notes to owners of beneficial interests in the
Global Securities. The Depositary has advised the Company and the Trustee that
its present practice is, upon receipt of any payment of principal or interest,
to immediately credit the accounts of the Participants with such payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interests in the Global Securities as shown on the records of the
Depositary. Payments by Participants and indirect participants to owners of
beneficial interests in the Global Securities will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name"
and will be the responsibility of the Participants or indirect participants.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue Notes in definitive form in exchange for the
Global Securities. In addition, the Company may at any time determine not to
have the Notes represented by Global Securities and, in such event, will issue
Notes in definitive form in exchange for the Global Securities. In either
instance, an owner of a beneficial interest in the Global Securities will be
entitled to have Notes equal in principal amount to such beneficial interest
registered in its name and will be entitled to physical delivery of such Notes
in definitive form. Notes so issued in the definitive form will be issued in
denominations of $1,000 and integral multiples thereof and will be issued in
registered form only, without coupon.
S-9
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the applicable Terms Agreement, each dated June , 1997, the Company has
agreed to sell to each of the Underwriters named below, for whom Bear, Stearns
& Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon
Brothers Inc and Rauscher Pierce Refsnes, Inc. are acting as representatives
(the "Representatives"), and each of the Underwriters has severally agreed to
purchase, the principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Bear, Stearns & Co. Inc..................................... $
Merrill Lynch, Pierce, Fenner & Smith Incorporated .........
Salomon Brothers Inc........................................
Rauscher Pierce Refsnes, Inc................................
------------
Total..................................................... $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the
applicable Terms Agreement, the Underwriters are obligated to take and pay for
all of the Notes, if any are taken.
The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement, and in part to certain securities dealers at such price
less a concession of % of the principal amount of the Notes. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of % of
the principal amount of the Notes to certain brokers and dealers.
After the Notes are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Representatives.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that they currently intend to
make a market in the Notes, although the Underwriters are not obligated to do
so and may discontinue such market making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or the trading
market for, the Notes.
In order to facilitate the offering, certain persons participating in the
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the Notes during and after the offering. Specifically, the
Underwriters may over-allot or otherwise create a short position in the Notes
for their own account by selling more Notes than have been sold to them by the
Company. The Underwriters may elect to cover any such short position by
purchasing Notes in the open market. In addition, such persons may stabilize
or maintain the price of the Notes by bidding for or purchasing Notes in the
open market and may impose penalty bids, under which selling concessions
allowed to syndicate members or other broker-dealers participating in the
offering are reclaimed if Notes previously distributed in the offering are
repurchased in connection with stabilization transactions or otherwise. The
effect of these transactions may be to stabilize or maintain the market price
of the Notes at a level above that which might otherwise prevail in the open
market. The imposition of a penalty bid may also affect the price of the Notes
to the extent that it discourages resales thereof. No representation is made
as to the magnitude or effect of any such stabilization or other transactions.
Such transactions, if commenced, may be discontinued at any time.
In the ordinary course of their respective businesses, certain of the
Underwriters and their affiliates have provided, and may in the future
provide, investment banking services to the Company and certain of its
affiliates.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
S-10
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 16, 1997
PROSPECTUS
TANDY CORPORATION
DEBT SECURITIES
Tandy Corporation ("Tandy" or the "Company") may offer from time to time in
one or more series its debt securities (the "Debt Securities") having an
aggregate initial public offering price or purchase price of up to U.S.
$300,000,000, or the equivalent thereof in one or more foreign currencies or
composite currencies, including European Currency Units ("ECU"), each series of
which will be offered on terms to be determined at the time of sale. Debt
Securities may be sold for U.S. dollars, or for one or more foreign or
composite currencies, and the principal of (and premium, if any) and any
interest on any Debt Securities may likewise be payable in U.S. dollars or in
one or more foreign or composite currencies.
Debt Securities of a series may be issuable as individual securities in
registered form without coupons or as one or more global securities in
registered form (each a "Global Security").
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, currency, denominations, maturity,
premium, rate (which may be fixed or floating) and time of payment of interest,
terms for redemption at the option of the Company or the holder, terms for
sinking fund payments, the initial public offering price and other terms in
connection with the offering and sale of the Debt Securities in respect of
which this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement").
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE
-----------
The Debt Securities may be sold through underwriting syndicates represented
by managing underwriters, by underwriters without a syndicate, through agents
designated from time to time, or directly to institutional purchasers. Any such
managing underwriters, underwriters or agents may include Bear, Stearns & Co.
Inc., Merrill Lynch & Co., Salomon Brothers Inc and Rauscher Pierce Refsnes,
Inc. The names of any underwriters or agents of the Company involved in the
sale of the Debt Securities in respect of which this Prospectus is being
delivered and any applicable commissions or discounts are set forth in the
Prospectus Supplement. The net proceeds to the Company from such sale are also
set forth in the Prospectus Supplement.
The date of this Prospectus is , 1997.
<PAGE>
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 and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
accessed through the Commission's web site at (http://www.sec.gov) and also
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, N.W. Washington, D.C. 20549 and
at the following regional offices: Citicorp 500 W. Madison, Suite 1400,
Chicago, Illinois 60611 and Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W, Washington, D.C.
20549 at prescribed rates. Reports and other information concerning the
Company also can be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (File No. 333- ; together with all amendments and exhibits, the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby
made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference (File No. 1-5571) is the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 and the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the Debt Securities shall be deemed to be incorporated by
reference in this Prospectus and made a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents that are not
specifically incorporated by reference in such documents). Written requests
should be directed to the Corporate Secretary, Tandy Corporation, 100
Throckmorton Street, Suite 1800, Fort Worth, Texas 76102. Telephone requests
may be directed to (817) 390-3021.
2
<PAGE>
THE COMPANY
Tandy is a leading marketer of consumer electronics with a broad retail
distribution system. The Company is engaged in marketing products in such
diverse technologies as audio, video, telephony and personal computers. Tandy
markets its products primarily in the United States. The retail distribution
system is comprised of the RadioShack and Computer City store chains.
RadioShack distributes primarily private label electronic parts and
accessories, audio/visual equipment, digital satellite systems, personal
computers, cellular and conventional telephones, as well as specialized
products such as scanners, electronic toys and hard-to-find batteries. The
Computer City chain operates primarily as a "supercenter" format featuring
many name brand computers, software and related products.
Tandy's principal executive offices are located at 100 Throckmorton Street,
Suite 1800, Fort Worth, Texas 76102. Tandy's mailing address is 100
Throckmorton Street, Suite 1800, P.O. Box 17180, Fort Worth, Texas 76102 and
its telephone number is (817) 390-3700.
USE OF PROCEEDS
Except as may be stated otherwise in the applicable Prospectus Supplement,
the net proceeds to be received by the Company from the sale of Debt
Securities will be added to its general corporate funds and may be used to
reduce long-term or short-term borrowings, for acquisitions or for other
business opportunities. Although the Company regularly evaluates the
advisability of making business acquisitions or investments, it currently has
no understandings or agreements for any specific acquisition or investment.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of the Company on a consolidated
basis for the periods indicated were as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS YEAR
ENDED YEAR ENDED DECEMBER ENDED ENDED
MARCH 31, 31, DECEMBER 31,(1) JUNE 30,
------------- ------------------- --------------- --------
1997 1996 1996 1995 1994 1993 1992 1992
------ ------ ---- ---- ---- ---- --------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges.......... 2.47 1.85 (2) 4.22 4.56 3.89 2.83 3.95
</TABLE>
- --------
(1) In 1992, the Company changed its fiscal year end from June 30 to December
31 effective with the six-month transition period ended December 31, 1992.
(2) Earnings before income taxes were not sufficient to cover fixed charges
during 1996 by approximately $145.6 million.
For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before income taxes plus fixed charges. "Fixed
charges" consist of interest expense, amortization of debt issuance expenses
and discount and an appropriate portion of rental expense that represents a
reasonable approximation of the interest factor (currently deemed to be one
third).
3
<PAGE>
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 offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to the Debt Securities so offered will be described in the
Prospectus Supplement relating to such Debt Securities.
The Debt Securities are to be issued under an Indenture dated as of May 1,
1997 between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee"), as supplemented from time to time by supplemental indentures
and/or modified from time to time by resolutions of the Board of Directors of
the Company as provided in Section 301 of such indenture (such indenture as so
supplemented and/or modified being hereinafter referred to as the
"Indenture"). A copy of the form of Indenture has been filed as an exhibit to
the Registration Statement. The following summaries of certain provisions of
the Indenture and the Debt Securities are not complete and are qualified in
their entirety by reference to the provisions of the Indenture. Numerical
references in parentheses are to sections in the Indenture, and unless
otherwise indicated capitalized terms have the meanings given them in the
Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued from time to time in series. (Section 301)
The Debt Securities will be unsecured obligations of the Company and will
rank on a parity with all other unsecured and unsubordinated indebtedness of
the Company.
The Indenture does not contain any covenants or provisions that would afford
debt holders protection in the event of a highly leveraged transaction.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the terms of
such Debt Securities in respect of which this Prospectus is being delivered,
including, where applicable: (i) the title of such Debt Securities; (ii) any
limit on the aggregate principal amount of such Debt Securities; (iii) the
price (expressed as a percentage of the aggregate principal amount thereof) at
which such Debt Securities will be issued; (iv) the date or dates on which the
principal of such Debt Securities is payable; (v) the currency of denomination
of such Debt Securities, which may be U. S. dollars or any other currency or
any composite currency, including ECU; (vi) the designation of the currency or
currencies in which payment of the principal of (and premium, if any) and any
interest on such Debt Securities will be made, and the designation, if any of
the currency or currencies in which payment of the principal of (and premium,
if any) or any interest on such Debt Securities, at the election of a Holder
thereof, may also be payable; (vii) if the amount of payments of principal of
(and premium, if any) or interest on the Debt Securities of the series may be
determined with reference to an index based on a currency or currencies other
than that in which the Debt Securities are denominated or designated to be
payable, the manner in which such amounts shall be determined; (viii) if the
payments of principal of (and premium, if any) or interest on the Debt
Securities of the series are to be made in a Foreign Currency other than the
Foreign Currency in which such Debt Securities are denominated, the manner in
which the exchange rate with respect to such payments shall be determined;
(ix) if the Debt Securities of such series are to be denominated or payable in
a currency other than dollars, the designation of the initial Exchange Rate
Agent; (x) the rate or rates (which may be fixed or floating), if any, at
which such Debt Securities will bear interest, the date or dates from which
such interest will accrue, the dates on which such interest will be payable,
and the record date for the interest payable on any interest payment date;
(xi) whether such Debt Securities are to be issued in whole or in part in the
form of one or more Global Securities and, if so, the identity of the
Depositary (as defined below) for such Global Security or Securities; (xii)
the terms and conditions, if any, on which such Debt Securities may be
redeemed by the Company; (xiii) the obligation, if any, of the Company to
redeem, repay or purchase such Debt Securities pursuant to any sinking fund or
at the option of a Holder thereof, and the terms and conditions on which such
Debt Securities shall be redeemed, repaid
4
<PAGE>
or purchased pursuant to such obligation; (xiv) any additional Events of
Default or restrictive covenants provided for with respect to such Debt
Securities; (xv) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the series
shall be issuable; (xvi) the place or places, if any, in addition to or other
than the office or agency of the Company in the Borough of Manhattan, the City
and State of New York, where the principal of (and premium, if any) and
interest on Debt Securities of the series shall be payable; (xvii) if other
than the principal amount thereof, the portion of the principal amount of Debt
Securities of the series which shall be payable upon declaration of
acceleration of the maturity thereof; (xviii) provisions, if any, for the
defeasance of Debt Securities of the series; and (xix) any other terms not
inconsistent with the Indenture, including any terms which may be required by
or advisable under United States laws or regulations or advisable in
connection with the marketing of such Debt Securities. (Section 301)
Unless otherwise indicated in the Prospectus Supplement, the Debt Securities
will be issued only in fully registered form without coupons or in the form of
one or more Global Securities, as described below under "Global Securities."
Debt Securities will be issued in denominations of $1,000 or any integral
multiple thereof unless otherwise provided in the applicable Prospectus
Supplement. (Section 302) The Prospectus Supplement relating to a series of
Debt Securities denominated in a composite currency or any currency other than
U. S. dollars will specify the denominations thereof.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. One or more series of
Debt Securities may be floating rate debt securities which are exchangeable
for fixed rate debt securities. Federal income tax consequences and special
considerations applicable to any such series will be described in the
Prospectus Supplement relating thereto.
The principal of (and premium, if any) and any interest on Debt Securities
shall be payable at the Place or Places of Payment designated for such Debt
Securities, provided that payment of interest on registered Debt Securities
may be made at the option of the Company by check mailed to the registered
Holders thereof or, if so provided in the applicable Prospectus Supplement, at
the option of the Holder by wire transfer to an account designated by such
Holder in writing to the Trustee. (Sections 307 and 1002)
Debt Securities (other than Global Securities) may be presented for
exchange, and registered Debt Securities may be presented for transfer, in the
manner, at the places, and subject to the restrictions set forth in the
Indenture and the Debt Securities and described in the applicable Prospectus
Supplement. No service charge will be made for any transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 305)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered Global Securities that will be deposited
with, or on behalf of, a depositary (the "Depositary") identified in the
Prospectus Supplement relating to such series. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive registered
form, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. (Sections 303 and 305)
The specific terms of the Depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all Depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depositary
("participants"). The
5
<PAGE>
accounts to be credited shall be designated by the underwriters or agents with
respect to such Debt Securities or by the Company if such Debt Securities are
offered and sold directly by the Company. Ownership of beneficial interests in
a Global Security will be limited to participants or persons that may hold
interests through participants. Ownership of participant's interests in a
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depositary for such Global
Security. Ownership of beneficial interests in a Global Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by participants or persons that hold through participants. The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to have Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture.
Principal, premium, if any, and any interest payments on Debt Securities
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of a
Global Security representing such Debt Securities. None of the Company, the
Trustee, any Paying Agent or the Security Registrar for such Debt Securities
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the Global Security or Securities for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 308)
The Company expects that the Depositary for a series of Debt Securities,
upon receipt of any payment of principal, premium or interest, will credit
immediately participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Global
Security or Securities for such Debt Securities as shown on the records of
such Depositary. The Company also expects that payments by participants to
owners of beneficial interests in such Global Security or Securities held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If a Depositary for a series of Debt Securities is at any time unwilling or
unable to continue as Depositary and a successor Depositary is not appointed
by the Company within ninety days, the Company will issue Debt Securities of
such series in definitive form in exchange for the Global Security or
Securities representing such series of Securities. In addition, the Company
may at any time and in its sole discretion determine not to have the Debt
Securities of a series represented by one or more Global Securities and, in
such event, will issue Debt Securities of such series in definitive form in
exchange for the Global Security or Securities representing such series of
Debt Securities. (Section 305)
Further, if the Company so specifies with respect to the Debt Securities of
a series, an owner of a beneficial interest in a Global Security representing
Debt Securities of such series may, on terms acceptable to the Company,
receive Debt Securities of such series in definitive form. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to have Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest registered in
its name and will be entitled to physical delivery of such Debt Securities in
definitive form. Debt Securities of such series so issued in definitive form
will, except as set forth in the applicable Prospectus Supplement, be issued
in denominations of $1,000 and integral multiples thereof and will be issued
in registered form only without coupons. (Sections 302 and 305)
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<PAGE>
RESTRICTIVE COVENANTS
Limitation on Liens. The Indenture provides that the Company may not, and
may not permit any Subsidiary to, create, incur, assume or suffer to exist any
Lien upon any Operating Property or Operating Asset, whether owned at the date
of the Indenture or thereafter acquired, to secure any Indebtedness, without
making effective provision whereby the Debt Securities of each series then
Outstanding (together with, if the Company shall so determine, any other
Indebtedness of the Company or any Subsidiary then existing or thereafter
created which is not subordinate to the Debt Securities of each series then
Outstanding) shall be secured by such Lien equally and ratably with (or prior
to) any and all other Indebtedness thereby secured, so long as such
Indebtedness shall be so secured, unless, after giving effect thereto, the
aggregate amount of all such Indebtedness secured by Liens, together with all
Attributable Debt of the Company and its Subsidiaries in respect of Sale and
Lease-Back Transactions (other than Sale and Lease-Back Transactions permitted
by clauses (2), (3) and (4) under "Limitation on Sales and Lease-Backs" below)
would not exceed the greater of (i) 10% of Consolidated Net Tangible Assets of
the Company or (ii) $140,000,000; provided, however, that the foregoing
restriction shall not apply to Indebtedness secured solely by: (i) Liens on
any property existing at the time of acquisition thereof by the Company or a
Subsidiary (subject to certain limitations); (ii) Liens on property of a
corporation existing at the time such corporation is merged into or
consolidated with the Company or a Subsidiary or otherwise becomes a
Subsidiary of the Company or at the time of a sale, lease or other disposition
of the properties of such corporation (or a division thereof) as an entirety
or substantially as an entirety to the Company or a Subsidiary (subject to
certain limitations); (iii) Liens securing Indebtedness of a wholly-owned
Subsidiary to the Company or to another wholly-owned Subsidiary; (iv) Liens on
property to secure all or part of the cost of acquiring, substantially
repairing or altering, constructing, developing or substantially improving
such property, or to secure Indebtedness incurred to provide funds for any
such purpose (subject to certain limitations); (v) Liens in favor of the
United States of America or any State thereof, or any department, agency or
instrumentality or political subdivision of the United States of America or
any state thereof, to secure partial progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or the cost of
constructing or improving the property subject to such Liens; (vi) Liens
incurred or assumed in connection with an issuance of revenue bonds the
interest on which is exempt from federal income tax pursuant to Section 103
and related Sections of the Internal Revenue Code of 1986, as amended; (vii)
Liens on customer and other accounts receivable owned by the Company or any
Subsidiary; and (viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses (i) to (vii), inclusive, subject to
certain limitations. (Section 1008)
Limitation on Sales and Lease-Backs. The Indenture provides that the Company
may not, nor may it permit any Subsidiary to, enter into any Sale and Lease-
Back Transactions with respect to any Operating Property or Operating Asset
more than 360 days after the later of (i) the completion of the acquisition,
substantial repair or alteration, construction, development or substantial
improvement of such Operating Property or Operating Asset; (ii) the placing in
operation of such Operating Property or Operating Asset or (iii) the placing
in operation of such Operating Property or Operating Asset as so substantially
repaired or altered, constructed, developed or substantially improved. This
covenant shall not apply to any Sale and Lease-Back Transaction with respect
to any Operating Property or Operating Asset (1) if the Company or such
Subsidiary could issue, assume or guarantee Indebtedness secured by a Lien on
the property to be leased back in an amount equal to the Attributable Debt
with respect to such Sale and Lease-Back Transaction without equally and
ratably securing the Outstanding Debt Securities of each series; (2) solely
between the Company and a wholly-owned Subsidiary or between wholly-owned
Subsidiaries of the Company; (3) if the terms of such Sale and Lease-Back
Transaction have been determined by the Company's Board of Directors to be
fair and arms' length and, within 360 days after the receipt of the proceeds
of such Sale and Lease-Back Transaction, the Company or any of its
Subsidiaries applies an amount equal to the greater of the net proceeds of
such Sale and Lease-Back Transaction or the fair value of such Operating
Property or Operating Asset at the time of such Sale and Lease-Back
Transaction to (x) the prepayment or retirement (other than any mandatory
prepayment or retirement) of Indebtedness not then due within one year of the
Company or any of its Subsidiaries (other than Indebtedness of a wholly-owned
Subsidiary
7
<PAGE>
to the Company or to another wholly-owned Subsidiary) or (y) the making of
capital expenditures incurred to purchase, construct or improve property used
in ordinary course of business of the Company or any of its Subsidiaries; or
(4) to the extent the Company transfers or sells all or part of its nine block
corporate headquarters complex and parking lots in existence on the date of the
Indenture, and any additions thereto, or all or part of any of its 12 regional
distribution centers in existence on the date of the Indenture, and any
additions thereto, in a transaction (including but not limited to the formation
of a partnership) in which the Company (x) receives an interest equal in value
(as determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) to the value of any property so
transferred or sold and (y) enters into a lease providing the Company with the
continued use of such property. (Section 1007)
Certain Definitions. "Attributable Debt" means, as to any particular lease
under which the Company or a Subsidiary is at the time liable, at any date as
of which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof, discounted from the respective due dates thereof to such date at the
rate of 10% per annum compounded annually. The net amount of rent required to
be paid under any such lease for any such period shall be the amount of the
rent payable by the lessee with respect to such period, after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the consolidated balance sheet of the Company and its
Subsidiaries, less the following: (i) current liabilities, including
liabilities for indebtedness maturing more than 12 months from the date of the
original creation thereof but maturing within 12 months from the date of
determination; (ii) reserves for depreciation and other asset valuation
reserves; and (iii) intangible assets including, but without limitation, such
items as goodwill, trademarks, trade names, patents and unamortized debt
discount and expense carried as an asset on said balance sheet.
"Indebtedness" means with respect to any Person, at any time, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person upon which interest
charges are customarily paid (other than accounts payable incurred in the
ordinary course of business), (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person, (v) all obligations of such Person issued or assumed
as the deferred purchase price of property (other than accounts payable
incurred in the ordinary course of business), (vi) all Capital Lease
Obligations of such Person, (vii) all Indebtedness of others secured by (or for
which the Holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien or security interest on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, and (viii) all obligations of such Person in respect of any
letters of credit supporting any Indebtedness of others and guarantees by such
Person of Indebtedness of others.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, security interest, lien (statutory or other), or
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing).
"Operating Assets" means all merchandise inventories, furniture, fixtures and
equipment (including all transportation and warehousing equipment but excluding
office equipment and data processing equipment) owned by the Company or any of
its Subsidiaries.
"Operating Property" means all real property and improvements thereon owned
by the Company or any of its Subsidiaries constituting, without limitation, any
store, warehouse, service center or distribution center wherever located,
provided that such term shall not include any store, warehouse, service center
or distribution center that the Company's Board of Directors declares by
resolution not to be of material importance to the business of the Company and
its Subsidiaries.
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<PAGE>
"Sale and Lease-Back Transaction" of the Company or a Subsidiary means any
arrangement whereby (i) property has been or is to be sold or transferred by
the Company or a Subsidiary to any Person with the intention on the part of
the Company or such Subsidiary of taking back a lease of such property
pursuant to which the rental payments are calculated to amortize the purchase
price of such property substantially over the useful life of such property and
(ii) such property is in fact so leased by the Company or such Subsidiary.
"Subsidiary" means any corporation of which a majority of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the time
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by the Company, by the Company and one or more
other Subsidiaries or by one or more Subsidiaries of the Company, and general
partnership, joint venture or similar entity, of which a majority of the
outstanding partnership or similar interests is at the time directly or
indirectly owned by the Company, or by one or more other Subsidiaries, or by
the Company and one or more other Subsidiaries, and any limited partnership of
which the Company or any other Subsidiary is a general partner.
EVENTS OF DEFAULT
The Indenture provides that the following shall constitute Events of Default
with respect to any series of Debt Securities thereunder: (i) default in
payment of principal of (or premium, if any, on) any Debt Security of such
series when due; (ii) default for 30 days in payment of interest on any Debt
Security of such series from when due; (iii) default in the deposit of any
sinking fund payment on any Debt Security of such series when due; (iv)
default in the performance or breach of any other covenant in the Indenture,
which default continues for 60 days after written notice thereof by the
Trustee or the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of such series; (v) default resulting in acceleration of
maturity of any other indebtedness of the Company or any Subsidiary in an
amount in excess of $20,000,000, which acceleration is not rescinded or
annulled for 10 days after written notice thereof by the Trustee or the
Holders of at least 25% in principal amount of the Outstanding Debt Securities
of such series; (vi) certain events of bankruptcy, insolvency or
reorganization and (vii) 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.
The Indenture provides that if an Event of Default specified therein shall
occur and be continuing, either the Trustee or the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of such series may declare
the principal of all such Debt Securities (or in the case of Original Issue
Discount Securities, such portion of the principal amount thereof as may be
specified in the terms thereof) to be due and payable immediately. In certain
cases, the Holders of a majority in principal amount of the outstanding Debt
Securities of any series may on behalf of the Holders of all such Debt
Securities rescind and annul such declaration of acceleration. (Section 502)
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the Holders of the Debt Securities of any series
before proceeding to exercise any right or power under the Indenture with
respect to such series at the request of such Holders. (Section 603) The
Indenture provides that no Holder of Debt Securities of any series may
institute any proceedings, judicial or otherwise, to enforce the Indenture
except in the case of failure of the Trustee thereunder, for 60 days, to act
after it has received a request to enforce such Indenture by the Holders of at
least 25% in aggregate principal amount of the then Outstanding Debt
Securities of such series, and an offer of reasonable indemnity. (Section 507)
This provision will not prevent any Holder of Debt Securities from enforcing
payment of the principal thereof (and premium, if any) and interest thereon at
the respective due dates thereof. (Section 508) The Holders of a majority in
aggregate principal amount of the Debt Securities of any series then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it with respect to the Debt Securities of
9
<PAGE>
such series. The Trustee may, however, refuse to follow any direction that it
determines may not lawfully be taken or would be illegal or in conflict with
the Indenture or involve it in personal liability or which would be unjustly
prejudicial to Holders not joining therein. (Section 512)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to any series of Debt Securities
thereunder, give to the Holders of Debt Securities of such series notice of
such default, if such default has not been cured or waived. Except in the case
of a default in the payment of principal of (or premium, if any) or interest
on, or in the payment of any sinking fund installment in respect of, any Debt
Securities of such series, the Trustee shall be protected in withholding such
notice if it determines in good faith that the withholding of such notice is
in the interest of the Holders of the Debt Securities of such series. (Section
602)
The Company will be required to file with the Trustee annually an Officers'
Certificate as to the absence of certain defaults under the terms of the
Indenture. (Section 1009)
MODIFICATION AND WAIVER
Modifications of and amendments to the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in 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: (i) change the Stated Maturity of the principal of,
or any installment of interest on, any Debt Security, (ii) reduce the
principal amount of, or any premium or interest on, any Debt Security (or
reduce the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the maturity
thereof); (iii) adversely affect the right of repayment or repurchase, if any,
at the option of the Holder; (iv) reduce the amount of, or postpone the date
fixed for, any payment under any sinking fund or analogous provisions for any
Debt Security; (v) change the place or currency or currency unit of payment of
the principal of (or premium, if any) or any interest on any Debt Security;
(vi) change or eliminate the rights of a Holder to receive payment in a
designated currency; (vii) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security; or (viii)
reduce the percentage of the principal amount of the outstanding Debt
Securities of any series the consent of whose Holders is required for
modification or amendment of the Indenture, for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults.
(Section 902)
The Holders of a majority in principal amount of the outstanding Debt
Securities of each series may, on behalf of all Holders of Debt Securities of
that series, waive, insofar as that series is concerned, compliance by the
Company with the provisions of the Indenture described above in "Restrictive
Covenants" before the time for such compliance. (Section 1010) The Holders of
a majority in principal amount of the outstanding Debt Securities of each
series may, on behalf of all Holders of Debt Securities of that series, waive
any past default under the Indenture with respect to Debt Securities of that
series except a default in the payment of the principal of (or premium, if
any) or any interest on any Debt Security of that series and except a default
in respect of a covenant or provision the modification or amendment of which
would require the consent of the Holder of each outstanding Debt Security
affected thereby. (Section 513)
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Company may not consolidate with or merge into any corporation, or
transfer its assets substantially as an entirety to any Person, unless: (i)
the successor corporation or transferee assumes the Company's obligations on
the Debt Securities and under the Indenture; (ii) after giving effect to the
transaction, no Event of Default and no event which, after notice or lapse of
time, would become an Event of Default shall have occurred and be continuing;
and (iii) certain other conditions are met. (Section 801)
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 such series
10
<PAGE>
(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 Paying Agencies, and hold money for payment in trust)
or (ii) will not be subject to the provisions of the Indenture described above
under "Restrictive Covenants" with respect to the Debt Securities of such
series, in each case if the Company deposits with the Trustee, in trust, money
or U.S. Government Obligations which through the payment of interest thereon
and principal thereof in accordance with their terms will provide money in an
amount sufficient to pay all the principal (including any mandatory sinking
fund payments) of, and interest on, the Outstanding Debt Securities of such
series on the dates such payments are due in accordance with the terms of such
Debt Securities. To exercise any such option, the Company is required to
deliver to the Trustee an Opinion of Counsel to the effect that (1) the
deposit and related defeasance would not cause the Holders of the Debt
Securities of such series to recognize income, gain or loss for federal income
tax purposes and, in the case of a discharge pursuant to clause (i), a ruling
to such effect received from or published by the United States Internal
Revenue Service; (2) the Company's exercise of its option under this provision
will not cause any violation of the Investment Company Act of 1940, as
amended, on the part of the Company, the trust, the trust funds representing
the Company's deposit or the Trustee; and (3) if the Debt Securities of such
series are then listed on the New York Stock Exchange, such Debt Securities
would not be delisted as a result of the exercise of such option. The Company
would also be required to deliver to the Trustee an Officer's Certificate
stating that no Event of Default or event (including such deposit) which, with
notice or lapse of time, or both, would become an Event of Default with
respect to the Debt Securities of such series has occurred and is continuing.
(Sections 1301 and 1302)
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture. The Chase
Manhattan Bank maintains normal banking relationships with the Company
including (i) acting as trustee under the Indenture dated as of November 15,
1990, with the Company as issuer and (ii) acting as trustee under the
Indenture dated as of June 30, 1990 with The Trust Established Under The Tandy
Employees Stock Ownership Plan as issuer and the Company as guarantor.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) through agents; or (iii) directly to a limited
number of purchasers or to a single purchaser. The Prospectus Supplement with
respect to each series of Debt Securities will set forth the terms of the
offering of the Debt Securities of such series, including the name or names of
any underwriters, the purchase price of such Debt Securities, the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price,
any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which the Debt Securities of such series may be
listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price, or at varying prices determined at the time of sale.
The Debt Securities may be offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase Debt Securities will be subject to
certain conditions precedent and the underwriters will be obligated to
purchase all the Debt Securities of a series if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
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<PAGE>
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
entities to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date. Such
contracts will be subject only to those conditions set forth in the Prospectus
Supplement. The Prospectus Supplement will set forth the commissions payable
for solicitation of such contracts.
Agents and underwriters may from time to time purchase and sell Debt
Securities in the secondary market, but are not obligated to do so, and there
can be no assurance that there will be a secondary market for the Debt
Securities or liquidity in the secondary market if one develops.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribution with respect to payments which the agents or
underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engage in transactions with or perform
services for the Company or its affiliates in the ordinary course of business.
EXPERTS
The financial statements incorporated in the Registration Statement and this
Prospectus by reference to the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 1996 have been so incorporated in reliance
on the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
LEGAL OPINIONS
The validity of the Debt Securities offered hereby will be passed on for the
Company by Satterlee Stephens Burke & Burke LLP, New York, New York, and for
any underwriters or agents by Cleary, Gottlieb, Steen & Hamilton, New York,
New York. From time to time, Cleary, Gottlieb, Steen & Hamilton provides legal
services to the Company.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUP-
PLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CON-
TAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF
SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Note Regarding Forward-Looking Statements.................................. S-2
The Company................................................................ S-3
Use of Proceeds............................................................ S-4
Capitalization............................................................. S-5
Selected Consolidated Financial Data....................................... S-6
Description of Notes....................................................... S-8
Underwriting............................................................... S-10
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratios of Earnings to Fixed Charges........................................ 3
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 11
Experts.................................................................... 12
Legal Opinions............................................................. 12
</TABLE>
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$150,000,000
TANDY CORPORATION
% NOTES DUE JUNE 15, 2007
---------------
PROSPECTUS SUPPLEMENT
---------------
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
SALOMON BROTHERS INC
RAUSCHER PIERCE REFSNES, INC.
June , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses, other than commissions,
expected to be incurred in connection with the offering described in the
Registration Statement:
<TABLE>
<CAPTION>
EXPENSE AMOUNT*
------- --------
<S> <C>
Securities and Exchange Commission registration fee.............. $ 90,910
Legal fees....................................................... 35,000
Printing and engraving expenses.................................. 11,500
Accountants' fees................................................ 35,000
Blue sky and legal investment fees and expenses.................. 2,500
Trustee and Authenticating Agent fees............................ 12,000
Rating Agency fees............................................... 97,000
Miscellaneous expenses........................................... 6,090
--------
Total.......................................................... $290,000
========
</TABLE>
- --------
*The first item is actual; the others are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware contains, in Section
145, provisions relating to the indemnification of officers and directors.
Article 14 of the bylaws of the Company contains provisions requiring
indemnification by the Company of its directors and officers to the full
extent permitted by law. These provisions extend to expenses reasonably
incurred by the director or officer in defense or settlement of any such
action or proceeding.
The board of directors of the Company has general authority to indemnify any
officer or director against losses arising out of his or her service as such,
unless prohibited by law. The Company carries insurance to cover potential
costs of the foregoing indemnification of the Company's officers and
directors.
Reference is made to Section 6 of the form of Underwriting Agreement filed
as Exhibit 1.1 to this Registration Statement for a description of the
indemnification arrangements expected to be provided if the offering of the
securities being registered is made through underwriters.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Form of Indenture dated as of May 1, 1997 between the Company and The
Chase Manhattan Bank, as Trustee.
5.1 Legal opinion of Satterlee Stephens Burke & Burke LLP.
12.1 Statement of computation of ratios of earnings to fixed charges of the
Company (incorporated by reference from Exhibit 12 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and from Exhibit 12 of the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1997).
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Satterlee Stephens Burke & Burke LLP (included in opinion
filed as Exhibit 5).
24.1 Power of Attorney (included on the signature page filed herewith).
25.1 Form T-1, Statement of Eligibility and Qualification of The Chase
Manhattan Bank, as Trustee, under the Indenture between the Company
and The Chase Manhattan Bank, as Trustee.
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) 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.
(3) 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.
(4) 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.
(5) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13 (a) or 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED IN THE CITY OF FORT WORTH, STATE OF TEXAS, ON THE 15TH DAY OF MAY,
1997.
TANDY CORPORATION
By__________________________________
JOHN V. ROACH, CHAIRMAN OF THE
BOARD, AND CHIEF EXECUTIVE OFFICER
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Tandy Corporation, a Delaware
Corporation, do hereby constitute and appoint John V. Roach and Dwain H.
Hughes, and either of them, their true and lawful attorneys-in-fact and agents
or attorney-in-fact and agent, with power and authority to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents, and any one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities Act of 1933,
as amended, and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers
granted include the full power of authority, the powers granted include the
full power of substitution and resubstitution, for them and in their name,
place and stead, in any and all capacities, the power and authority to sign
the names of the undersigned officers and directors in the capacities
indicated below to this Registration Statement, to any and all amendments
(including any post-effective amendments) and supplements thereto, and to any
and all instruments or documents filed as part of or in connection with such
Registration Statement, and each of the undersigned hereby ratifies and
confirms all that said attorneys and agents, or any of them, shall do or cause
to be done by virtue hereof. The Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney on the 15th day of May, 1997.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 15th day of May, 1997.
SIGNATURE TITLE
Chairman of the Board, Chief
--------------------------------- Executive Officer and
JOHN V. ROACH Director (Principal
Executive Officer)
Senior Vice President and
--------------------------------- Chief Financial Officer
DWAIN H. HUGHES (Principal Financial
Officer)
Vice President and
--------------------------------- Controller (Principal
RICHARD L. RAMSEY Accounting Officer)
Director
---------------------------------
JAMES I. CASH, JR.
Director
---------------------------------
LEWIS F. KORNFELD, JR.
Director
---------------------------------
JACK L. MESSMAN
Director
---------------------------------
WILLIAM G. MORTON, JR.
II-4
<PAGE>
SIGNATURE TITLE
Director
---------------------------------
THOMAS G. PLASKETT
Director
---------------------------------
LEONARD H. ROBERTS
Director
---------------------------------
ALFRED J. STEIN
Director
---------------------------------
WILLIAM E. TUCKER
Director
---------------------------------
JOHN A. WILSON
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Form of Indenture dated as of May 1, 1997 between the Company and The
Chase Manhattan Bank, as Trustee.
5.1 Legal opinion of Satterlee Stephens Burke & Burke LLP.
12.1 Statement of computation of ratios of earnings to fixed charges of the
Company (incorporated by reference from Exhibit 12 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and from Exhibit 12 of the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1997).
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Satterlee Stephens Burke & Burke LLP (included in opinion
filed as Exhibit 5).
24.1 Power of Attorney (included on the signature page filed herewith).
25.1 Form T-1, Statement of Eligibility and Qualification of The Chase
Manhattan Bank, as Trustee, under the Indenture between the Company
and The Chase Manhattan Bank, as Trustee.
</TABLE>
<PAGE>
DRAFT 5/15/97
Exhibit 1.1
TANDY CORPORATION
Debt Securities
UNDERWRITING AGREEMENT-BASIC PROVISIONS
_________ __, 199__
To: The Underwriters named in the within-mentioned Terms Agreement
Dear Sirs:
Tandy Corporation (the "Company") proposes to issue and sell its Debt
Securities having an aggregate initial public offering price or purchase price
of up to U.S.$300,000,000 or the equivalent thereof in foreign currencies or
currency units (the "Securities"), in one or more offerings on terms to be
determined at the time of sale. The Securities will be issued under an indenture
dated as of May 1, 1997 between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as supplemented from time to time by supplemental
indentures and/or modified from time to time by resolutions of the Board of
Directors of the Company as provided in Section 301 of such indenture (such
indenture as so supplemented and/or modified being hereinafter referred to as
the "Indenture").
Whenever the Company determines to make an offering of Securities, it will
enter into an agreement substantially in the form of Exhibit A hereto (a "Terms
Agreement") providing for the sale of such Securities to, and the purchase and
offering thereof by, the underwriter or underwriters named therein (the
"Underwriters" or "you," which terms shall include the underwriter or
underwriters named therein whether acting alone in the sale of Securities or as
members of an underwriting syndicate). The Terms Agreement relating to each
offering of Securities shall specify the principal amount of Securities to be
issued and their terms not otherwise specified in the Indenture, the name or
names of the Underwriters participating in such offering (subject to
substitution as provided in Section 10 hereof) and the principal amount of
Securities which each severally agrees to purchase, the name or names of the
Underwriters acting as manager or co-managers in connection with such offering,
if any (the "Representatives," which term shall include each Underwriter in the
event that there shall be no manager or co-managers), the price at which the
Securities are to be purchased by the Underwriters from the Company, the initial
public offering price, any delayed delivery arrangements and the time and place
of delivery and payment. Each offering of Securities will be governed by this
Agreement, as supplemented by the applicable Terms Agreement, and this Agreement
and such Terms Agreement shall inure to the benefit of and be binding upon each
Underwriter participating in the offering of such Securities.
SECTION 1. Representations and Warranties. The Company represents and
warrants to you that as of the date hereof, as of the date of the applicable
Terms Agreement and as of the Closing Time (as hereinafter defined) under such
Terms Agreement (in each case, the
<PAGE>
"Representation Date") as set forth below. Certain terms used in this Section 1
are defined in paragraph (c) hereof.
(a) If the offering of the Securities is a Delayed Offering (as specified
in Exhibit A hereto), paragraph (i) below is applicable and, if the offering of
the Securities is a Non-Delayed Offering (as so specified), paragraph (ii) below
is applicable.
(i) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "1933 Act"), and has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement (File No. 333-______) on such Form, including a basic prospectus,
for registration under the 1933 Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto, and
may have used a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so amended, has
become effective. The offering of the Securities is a Delayed Offering and,
although the Basic Prospectus may not include all the information with
respect to the Securities and the offering thereof required by the 1933 Act
and the rules thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the 1933 Act and the
rules thereunder to be included therein as of the Effective Date. The
Company will next file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included in
such registration statement relating to the Securities and the offering
thereof. As filed, such final prospectus supplement shall include all
required information with respect to the Securities and the offering
thereof and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(ii) The Company meets the requirements for the use of Form S-3 under
the 1933 Act and has filed with the Commission a registration statement
(File No. 333-_____) on such Form, including a basic prospectus, for
registration under the 1933 Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been furnished
to you. The Company will next file with the Commission either (x) a final
prospectus supplement relating to the Securities in accordance with Rules
430A and 424(b)(1) or (4), or (y) prior to the effectiveness of such
registration statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the case of clause
(x), the Company has included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the 1933 Act and the rules thereunder to be included in the
Final Prospectus
2
<PAGE>
with respect to the Securities and the offering thereof. As filed, such
final prospectus supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with all other
such required information, with respect to the Securities and the offering
thereof and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and when
the Final Prospectus is first filed (if required) in accordance with Rule 424(b)
and at the Closing Time, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
Trust Indenture Act of 1939, as amended, (the "Trust Indenture Act") and the
respective rules thereunder; on the Effective Date, the Registration Statement
did not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; on the Effective Date and at the
Closing Time, the Indenture did or will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b) and at
the Closing Time, the Final Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration Statement or
the Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
the applicable Terms Agreement (including this Agreement as incorporated by
reference therein) is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in the
case of a Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary
Final Prospectus" shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Securities and the offering thereof and is used
prior to filing of the Final Prospectus. "Final
3
<PAGE>
Prospectus" shall mean the prospectus supplement relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities, including the Basic Prospectus, included in the
Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Time (as hereinafter defined),
shall also mean such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the 1933 Act. "Rule
430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the 1934 Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the filing of
any document under the 1934 Act after the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be, deemed to be
incorporated therein by reference. A "Non-Delayed Offering" shall mean an
offering of securities which is intended to commence promptly after the
effective date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information) with
respect to the securities so offered must be included in such registration
statement at the effective date thereof. A "Delayed Offering" shall mean an
offering of securities pursuant to Rule 415 which does not commence promptly
after the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed Offering or a
Delayed Offering shall be set forth in Exhibit A hereto.
(d) The consolidated financial statements included or incorporated in the
Registration Statement and the Final Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as at the
dates indicated and the results of their operations for the periods specified,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the periods
involved, except as indicated therein; and the supporting schedules included or
incorporated in the Registration Statement present fairly the information
required to be stated therein.
(e) The documents incorporated by reference in the Final Prospectus, at the
time they were or hereafter are filed with the Commission, complied and will
comply in all
4
<PAGE>
material respects with the requirements of the 1934 Act and the rules and
regulations thereunder, and, when read together and with the other information
in the Final Prospectus, at the time the Registration Statement and any
amendments thereto became or become effective and at each Representation Date,
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, in the light of the circumstances under which they were
made, not misleading.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as may otherwise be
stated therein or contemplated thereby, (i) there has been no material adverse
change in the condition (financial or other), earnings, results of operations,
business or properties of the Company and its subsidiaries, considered as one
enterprise, whether or not arising from transactions in the ordinary course of
business and (ii) there have been no material transactions entered into by the
Company or any of its subsidiaries other than those in the ordinary course of
business.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Final Prospectus; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material adverse effect
on the condition (financial or other), earnings, results of operations, business
or properties of the Company and its subsidiaries, considered as one enterprise.
(h) Each subsidiary of the Company which is a "significant subsidiary" as
defined in Rule 405 of Regulation C under the 1933 Act (each a "Significant
Subsidiary") has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Final Prospectus and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the condition
(financial or other), earnings, results of operations, business or properties of
the Company and its subsidiaries, considered as one enterprise, and all of the
issued and outstanding capital stock of each such Significant Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and,
except for directors' qualifying shares, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(i) Neither the Company nor any of its Significant Subsidiaries is in
violation of its or any of their charters or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it or any of them is a party or by which it
or any of them or their properties may be bound; and the execution of this
5
<PAGE>
Agreement, the execution and delivery of the Indenture and the applicable Terms
Agreement (including this Agreement as incorporated by reference therein), the
filing of the Registration Statement and the consummation of the transactions
contemplated herein and therein have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of, or
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 Significant
Subsidiaries pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or any of them may be bound
or to which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or, to the
best of its knowledge, any law, administrative regulation or administrative or
court decree, and no consent, approval, authorization or order of any court or
governmental authority or agency is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act or the rules and regulations promulgated thereunder
(the "Regulations"), the Trust Indenture Act or state securities or "blue sky"
laws.
(j) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, except such certificates, authorities or permits which are not
material to such conduct of their business, and neither the Company nor any of
its Significant Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would have a material adverse effect on the condition
(financial or other), earnings, results of operations, business or properties of
the Company and its subsidiaries, considered as one enterprise.
(k) Except as set forth in the Final Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries that might result in any
material adverse effect on the condition (financial or other), earnings, results
of operations, business or properties of the Company and its subsidiaries,
considered as one enterprise, or might materially and adversely affect the
consummation of this Agreement and the applicable Terms Agreement, and there are
no contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement by the 1933 Act
or the Regulations which have not been so filed.
(l) The Securities have been duly authorized for issuance and sale pursuant
to this Agreement and the applicable Terms Agreement (or will have been so
authorized prior to each issuance of Securities) and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the purchasers thereof, will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their terms
(subject, as to enforcement of remedies, to applicable bankruptcy, fraudulent
transfer, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from
6
<PAGE>
time to time in effect and to principles relating to the availability of
equitable remedies to the extent that adequate remedies at law may exist) and
will be entitled to the benefits of the Indenture, which will be substantially
in the form heretofore delivered to you; and the Securities and the Indenture
conform in all material respects to all statements relating thereto contained in
the Final Prospectus.
(m) The Company and its Significant Subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct the businesses now operated by them, and neither the
Company nor any of its Significant Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or other), earnings, results of
operations, business or properties of the Company and its subsidiaries,
considered as one enterprise.
(n) No labor disturbance by the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent which might be expected
to have a material adverse effect on the condition (financial or other),
earnings, results of operations, business or properties of the Company and its
subsidiaries, considered as one enterprise.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with an offering
of Securities shall be deemed a representation and warranty by the Company, as
to the matters covered thereby, to each Underwriter.
SECTION 2. Purchase and Sale. The several commitments of the Underwriters
to purchase Securities pursuant to any Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Securities to be
purchased by the Underwriters shall be made at the place set forth in the
applicable Terms Agreement, or at such other place as shall be agreed upon by
the Representatives and the Company, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement or such other time as shall be agreed upon by the
Representatives and the Company (each such time and date being referred to as a
"Closing Time"). Except as indicated in the applicable Terms Agreement, payment
shall be made to the Company by wire transfer in same-day funds against delivery
to the Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. Such Securities shall be in such
denominations and registered in such names as the Representatives may request in
writing at least two business days prior to the applicable Closing Time. Such
Securities, which may be in temporary form, will be made available for
examination and packaging by the Representatives on or before the first business
day prior to Closing Time.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Securities from the Company pursuant to
delayed delivery
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contracts ("Delayed Delivery Contracts") substantially in the form of Exhibit B
hereto, with such changes therein as the Company may approve. As compensation
for arranging Delayed Delivery Contracts, the Company will pay to the
Representatives at Closing Time, for the accounts of the Underwriters, a fee
equal to that percentage of the principal amount of Securities for which Delayed
Delivery Contracts are made at Closing Time as is specified in the applicable
Terms Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types which will be set forth in the applicable prospectus
supplement included in the Final Prospectus. At Closing Time the Company will
enter into Delayed Delivery Contracts (for not less than the minimum principal
amount of Securities per Delayed Delivery Contract specified in the applicable
Terms Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate principal
amount of Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
The Representatives are to submit to the Company, at least two business
days prior to Closing Time, the names of any institutional investors with which
it is proposed that the Company will enter into Delayed Delivery Contracts and
the principal amount of Securities to be purchased by each of them, and the
Company will advise the Representatives, at least one business day prior to
Closing Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the principal amount of
Securities to be covered by each such Delayed Delivery Contract.
The principal amount of Securities agreed to be purchased by the respective
Underwriters pursuant to the applicable Terms Agreement shall be reduced by the
principal amount of Securities covered by Delayed Delivery Contracts, as to each
Underwriter as set forth in a written notice delivered by the Representatives to
the Company; provided, however, that the total principal amount of Securities to
be purchased by all Underwriters shall be the total amount of Securities covered
by the applicable Terms Agreement, less the principal amount of Securities
covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereto, to
become effective. Immediately following the execution of each Terms Agreement,
the Company will prepare a prospectus supplement to be included in the Final
Prospectus setting forth the principal amount of Securities covered thereby and
their terms not otherwise specified in the Indenture, the names of the
Underwriters and the principal amount of Securities which each severally has
agreed to purchase, the names of the Representatives, the price at which the
Securities are to be purchased by the Underwriters from the Company, the initial
public offering price, the selling concession and reallowance, if any, any
delayed delivery arrangements, and such other information as the Representatives
and the Company deem appropriate in connection with the offering of the
Securities. The Company will promptly transmit copies of the Final Prospectus to
the Commission for filing pursuant to Rule 424 of the Regulations.
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(b) If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of counsel for the Underwriters or counsel for the Company, to further amend or
supplement the Final Prospectus in order that the Final Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in the light of
circumstances existing at the time it is delivered to a purchaser or if it shall
be necessary, in the reasonable opinion of either such counsel, at any such time
to amend or supplement the Registration Statement or the Final Prospectus in
order to comply with the requirements of the 1933 Act or the Regulations, the
Company will promptly prepare and file with the Commission such amendment or
supplement, whether by filing documents pursuant to the 1934 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement comply with such requirements.
(c) With respect to each sale of Securities, the Company will make
generally available to its security holders and to the Representatives as soon
as practicable earnings statements of the Company that will satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the Regulations.
(d) From the date of a Terms Agreement, and for so long as a prospectus is
required to be delivered in connection with the sale of Securities covered by
such Terms Agreement, the Company will give the Representatives notice of its
intention to file any amendment to the Registration Statement or any amendment
or supplement to the Final Prospectus, whether pursuant to the 1934 Act, the
1933 Act or otherwise, and will furnish them with copies of any such proposed
amendment or supplement or other documents proposed to be filed a reasonable
time in advance of filing and will not file any such proposed amendment or
supplement to which any of the Representatives reasonably objects.
(e) From the date of a Terms Agreement, and for so long as a prospectus is
required to be delivered in connection with the sale of Securities covered by
such Terms Agreement, the Company will notify the Representatives immediately,
and confirm the notice in writing, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Final Prospectus or any document
to be filed pursuant to the 1934 Act which will be incorporated by reference
into the Registration Statement or Final Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Final Prospectus or any prospectus supplement, (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Final Prospectus or for additional information, and (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
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.
(f) The Company will deliver to the Representatives and counsel for the
underwriters as many signed and conformed copies of the Registration Statement
(as originally
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<PAGE>
filed) and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference in the
Final Prospectus) as the Representatives may reasonably request and will also
deliver to the Representatives a conformed copy of the Registration Statement
and each amendment thereto for each of the Underwriters. So long as delivery of
a prospectus by an Underwriter or dealer may be required by the 1933 Act, the
Company will deliver to the Representative as many copies of any Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request.
(g) The Company will arrange for the qualification of the Securities for
offering and sale under the laws of such jurisdictions as the Representatives,
after consultation with the Company, may collectively designate, will maintain
such qualifications in effect so long as required for the distribution of the
Securities and will arrange for the determination of the legality of the
Securities for purchase by institutional investors.
(h) The Company, during the period when the Final Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required to be
filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.
(i) Between the date of any Terms Agreement and the termination of any
trading restrictions or the Closing Time, whichever is later, with respect to
the Securities covered thereby, the Company will not, without the prior consent
of the Representatives, offer or sell, or enter into any agreement to sell, any
debt securities of the Company with a maturity of more than one year, including
additional Securities.
SECTION 4. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase Securities pursuant to any Terms Agreement are subject
to the accuracy of the representations and warranties on the part of the Company
herein contained as of the Execution Time and Closing Time, to the accuracy of
the statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance by the Company of all of
its covenants and other obligations hereunder and to the following further
conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 PM New York
City time, on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the public
offering price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus,
and any such supplement, shall have been filed in the manner and within the time
period required by Rule 424(b).
(b) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings thereof or initiated or threatened by the Commission,
(ii) there shall not have been
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<PAGE>
since the execution of such Terms Agreement any decrease in the ratings of any
of the Company's debt securities by any "nationally recognized statistical
rating organization" (as defined for purpose of Rule 436(g) under the 1933 Act)
or any notice given of any intended or potential decrease in any such rating or
of a possible change in any such rating that does not indicate the direction of
the possible change, and (iii) there shall not have come to the attention of the
Representatives any facts that would cause them reasonably to believe that the
Final Prospectus, at the time it was required to be delivered to a purchaser of
the Securities, contained an untrue statement of a material fact or omitted 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.
(c) At the applicable Closing Time you shall have received:
(1) The favorable opinion, dated as of the applicable Closing Time, of
Satterlee, Stephens, Burke & Burke LLP, counsel of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and where
failure to so qualify might impair title to any of its material
properties or any right to enforce its material contracts against
others;
(ii) all outstanding shares of capital stock of the Company and
each of its Significant Subsidiaries has been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus, all outstanding
shares of capital stock of the Significant Subsidiaries are owned by
the Company either directly or through wholly-owned subsidiaries free
and clear of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; and the Indenture and the Securities
covered by the applicable Terms Agreement conform in all material
respects to the descriptions thereof in the Final Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, fraudulent transfer,
reorganization, insolvency, moratorium or other laws affecting
11
<PAGE>
creditors' rights generally from time to time in effect and to
principles relating to the availability of equitable remedies to the
extent that adequate remedies at law may not exist); and the
Securities covered by the applicable Terms Agreement are in the form
contemplated by the Indenture, have been duly authorized and, when
executed and authenticated in accordance with the Indenture and
delivered to and paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their
terms (subject, as to enforcement of remedies, to applicable
bankruptcy, fraudulent transfer, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to principles relating to the availability
of equitable remedies to the extent that adequate remedies at law may
not exist);
(v) to the best knowledge of such counsel after reasonable
inquiry, (a) there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Company, its Significant Subsidiaries
or any of the Company's other subsidiaries, of a character required to
be disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and (b) there is no franchise,
contract or other document of a character required to be described in
the Registration Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus describing
any legal proceedings or material contracts or agreements relating to
the Company fairly summarize such matters;
(vi) the Registration Statement and any amendments thereto have
become effective under the 1933 Act; any required filing of the Basic
Prospectus, any Preliminary Final Prospectus and the Final Prospectus,
and any supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been
issued, and no proceedings for that purpose have been instituted or
threatened; the Registration Statement, the Final Prospectus, each
document incorporated by reference into the Registration Statement and
the Final Prospectus and each amendment thereof or supplement thereto
as of their respective effective or issue dates (other than the
financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion)
complied as to form in all material respects with the applicable
requirements of the 1933 Act, the Regulations, the 1934 Act, the Trust
Indenture Act and the respective rules and regulations thereunder; and
such counsel has no reason to believe that at the Effective Date the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Final Prospectus, as amended or supplemented, includes any
untrue statement of a material fact or omits to state a material fact
necessary
12
<PAGE>
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(vii) this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required to be obtained by the
Company for the consummation of the transactions contemplated herein
or in any Delayed Delivery Contracts, except such as have been
obtained under the 1933 Act and such as may be required under the
"blue sky" laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof or of any Delayed Delivery Contracts will conflict with, result
in a breach of, or constitute a default under, the charter or by-laws
of the Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company, any
Significant Subsidiary or any of the Company's other subsidiaries is a
party or may be bound, or any order or regulations known to such
counsel to be applicable to the Company, any Significant Subsidiary or
any of the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any of
the Company's other subsidiaries; and
(x) to the best knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware or the United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Underwriters; and (B) as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and of public officials. In addition, such opinion may
state that, as to the qualification and good standing of Significant
Subsidiaries in jurisdictions other than those in which they are incorporated,
as to all matters set forth in paragraph (ii) above and as to matters set forth
in paragraph (ix) above relating to the Company's other subsidiaries, such
counsel have relied, with the permission of the Underwriters, solely upon an
opinion thereon of John Clarson, Staff Attorney of the Company.
13
<PAGE>
(2) The favorable opinion, dated as of the applicable Closing Time, of
John Clarson, Staff Attorney of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and where
failure to so qualify might impair title to any of its material
properties or any right to enforce its material contracts against
others;
(ii) all outstanding shares of capital stock of the Company and
each Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding shares of capital
stock of the Significant Subsidiaries are owned by the Company either
directly or through wholly-owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such person,
after due inquiry, any other security interests, claims, liens or
encumbrances; and
(iii) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof or of any Delayed Delivery Contracts will conflict with, result
in a breach of, or constitute a default under, the charter or by-laws
of the Company or the terms of any indenture or other agreement or
instrument known to such person and to which the Company, any
Significant Subsidiary or any of the Company's other subsidiaries is a
party or may be bound, or any order or regulations known to such
person to be applicable to the Company, any Significant Subsidiary or
any of the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any of
the Company's other subsidiaries.
(3) The favorable opinion or opinions, dated as of the applicable
Closing Time, of Cleary, Gottlieb, Steen & Hamilton, counsel for the
Underwriters, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(d) At the applicable Closing Time there shall not have been, since the
date of the applicable Terms Agreement or since the respective dates as of which
information is given in
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the Registration Statement, no material adverse change in the condition
(financial or otherwise), earnings, results of operations, business or
properties of the Company and its subsidiaries considered as one enterprise,
whether or not arising from transactions in the ordinary course of business,
except as set forth or contemplated in the Final Prospectus (exclusive of any
supplement thereto), and the Company shall have furnished to the Representatives
a certificate of the Company, signed by the Chairman of the Board, the Chief
Executive Officer or the President and the principal financial or accounting
officer of the Company, dated as of such Closing Time, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, results of operations, business or
properties of the Company and its subsidiaries, considered as one
enterprise, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto).
(e) You shall have received from Price Waterhouse LLP or other independent
certified public accountants acceptable to the Representatives a letter or
letters, dated the date of the applicable Terms Agreement and as of the
applicable Closing Time, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the 1933 Act, the Regulations, the 1934 Act and the applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited consolidated financial
statements and financial statement schedules included or incorporated
in the Registration Statement and the Final Prospectus and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the Regulations, the 1934 Act
and the applicable published rules and regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
consolidated financial statements made available by the Company and
its subsidiaries; carrying out certain procedures specified by the
Representatives and performed by Price Waterhouse LLP (but not an
examination in accordance with generally accepted
15
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auditing standards), which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the stockholders, directors
and executive committee of the Company and the Significant
Subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events subsequent
to the date of the most recent audited financial statements included
or incorporated in the Final Prospectus, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial data included or incorporated in
the Registration Statement and the Final Prospectus do not comply
as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the
Commission with respect to financial data included or
incorporated in quarterly reports on Form 10-Q under the 1934
Act; or said unaudited consolidated financial data are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
consolidated financial statements included or incorporated in the
Registration Statement and the Final Prospectus;
(2) (i) at the date of the latest available interim
financial data, there have been any changes in the capital stock
(including preferred stock, common stock and paid-in-capital, but
excluding common stock held in treasury) or any increases in the
consolidated long-term debt of the Company and its consolidated
subsidiaries as compared with the amounts shown on the latest
available consolidated balance sheet included or incorporated in
the Registration Statement or the Final Prospectus, except in
each case for increases or decreases which the Registration
Statement or the Final Prospectus discloses have occurred or will
occur and (ii) at a date specified not more than five business
days prior to the date of the letter, there have been any changes
in excess of $5,000,000 in the capital stock (including preferred
stock, common stock and paid-in-capital, but excluding common
stock held in treasury), or any increases in excess of $5,000,000
in the consolidated long-term debt, of the Company and its
consolidated subsidiaries as compared with the amounts shown on
the latest available consolidated balance sheet, except in each
case for increases or decreases which the Registration Statement
or the Final Prospectus discloses have occurred or will occur and
(iii) for the period ended on the date of the latest available
interim financial data, there were any decreases, as compared
with the corresponding period in the preceding year, in
consolidated net revenues or in total or per share amounts of net
income available to common shareholders of the Company and its
consolidated subsidiaries, except in each case for decreases
which the
16
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Registration Statement or the Final Prospectus discloses have
occurred or will occur;
(3) for the period from the date of the latest available
financial statements to a specified date not more than five
business days prior to the date of the letter, there were any
decreases, as compared with the corresponding period in the
preceding year, in net revenues of the Company and its
consolidated subsidiaries, except for decreases which the
Registration Statement or the Final Prospectus discloses have
occurred or will occur; or
(4) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Final Prospectus do not agree with the amounts
set forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included or incorporated in the Registration
Statement and the Final Prospectus;
(iii) they have read the dollar amounts and percentages derived
from such dollar amounts of certain information of an accounting,
financial or statistical nature (which has been obtained from the
accounting records subject to internal controls of the Company's
accounting systems or which has been derived directly from such
accounting records by analysis or computation) set forth in the
Registration Statement and the Final Prospectus and in Exhibit 12 to
the Registration Statement, including the information included or
incorporated in Items 1, 2, 6, 7, and 11 of the Company's Annual
Report on Form 10-K and the information included or incorporated in
Item 2 of the Company's Quarterly Reports on Form 10-Q incorporated in
the Registration Statement and the Final Prospectus, as a result of
which they determined that such information agrees with the accounting
records of the Company, excluding any questions of legal
interpretation; and
(iv) if pro forma financial statements are included or
incorporated in the Registration Statement or the Final Prospectus, on
the basis of a reading of the unaudited pro forma financial
statements, carrying out certain specified procedures, inquiries of
certain officials of the Company and the acquired company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forms financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
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References to the Registration Statement and the Final Prospectus in this
paragraph (d) are to such documents as amended and supplemented at the date of
the letter.
(f) At the applicable Closing Time counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
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 in all material respects
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
If any condition specified in this Section shall not have been fulfilled in
all material respects when and as required to be fulfilled, the applicable Terms
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the applicable Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement and each Terms
Agreement, including (i) the printing or other production and filing of the
registration statement (as originally filed) and all amendments thereto, and the
printing or other production of this Agreement and each Terms Agreement, (ii)
the preparation, issuance and delivery of the Securities to the Underwriters,
(iii) the fees and disbursements of the Company's counsel and accountants, (iv)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(g), including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey and Legal Investment
Survey, (v) the printing or other production and delivery to the Underwriters in
quantities as hereinabove stated of copies of the registration statement (as
originally filed) and any amendments thereto, and of the Preliminary Final
Prospectus and the Final Prospectus and any amendments or supplements thereto,
(vi) the printing or other production and delivery to the Underwriters of copies
of the Indenture and any Blue Sky Survey and Legal Investment Survey, (vii) the
fees of rating agencies, (viii) the fees and expenses, if any, incurred in
connection with the listing of the Securities on any securities exchange, and
(ix) the fees, if any, of the National Association of Securities Dealers, Inc.
in connection with the review of the offering.
If a Terms Agreement is terminated by the Representatives in accordance
with the provisions of Section 4 or Section 9(i), the Company shall reimburse
the Underwriters named in such Terms Agreement for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of one
counsel for the Underwriters, that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the
18
<PAGE>
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Securities, as originally filed or any
amendment thereof, or any related Preliminary Final Prospectus or the Final
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company will not be liable in any
such case to the extent but only to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), jointly or several, to which they or any of them
may become subject under the 1933 Act, the 1934 Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Securities, as originally filed or any amendment thereof, or
any related Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
expressly for use therein. This indemnity will be in addition to any liability
which any Underwriter may otherwise have, including under this Agreement.
19
<PAGE>
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it form any liability which it
may have under this Section 6). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
SECTION 7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from any indemnifying party or is insufficient to
hold harmless a party indemnified thereunder, the Company and the Underwriters
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action , suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contributions, including persons who control the Company within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Securities
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative
20
<PAGE>
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and (y) the underwriting discounts and commissions received by
the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Final Prospectus. The relative fault of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or 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. Notwithstanding the provisions of
this Section 7, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the
securities purchased by such Underwriter hereunder, and (ii) 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. Notwithstanding the provisions of this
Section 7 and the preceding sentence, 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 that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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(a) of the 1934 Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect regardless of any
termination of the applicable Terms Agreement (including this Agreement as
incorporated by reference therein), or 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 any Securities to the Underwriters.
21
<PAGE>
SECTION 9. Termination. The Representatives may terminate the applicable
Terms Agreement (including this Agreement, as incorporated by reference
therein), immediately upon notice to the Company, at any time at or prior to the
applicable Closing Time (i) if there has been, since the date of such Terms
Agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, (financial
or otherwise), earnings, results of operations, business or properties of the
Company and its subsidiaries considered as one enterprise, whether or not from
transactions arising in the ordinary course of business, or (ii) if there has
occurred any outbreak or escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the reasonable judgment of the Representatives, impracticable to
market the Securities or enforce contracts for the sale of the Securities, or
(iii) if trading in the Common Stock of the Company has been suspended by the
Commission or a national securities exchange, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York authorities. In the
event of any such termination, (x) the covenants set forth in Section 3 with
respect to any offering of Securities purchased from the Company pursuant to the
applicable Terms Agreement and (y) the covenant set forth in Section 3(c), the
provisions of Section 5, the indemnity agreement set forth in Section 6, the
contribution provisions set forth in Section 7, and the provisions of Sections 8
and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at the
applicable Closing Time to purchase the Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the "Defaulted
Securities"), then 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, during such 24 hours you shall not have
completed such arrangements for the purchase of all of the Defaulted Securities,
then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of the Securities to be purchased
pursuant to such Terms Agreement, the nondefaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations under the applicable Terms Agreement
(including this Agreement as incorporated by reference therein) bear to the
underwriting obligations of all such non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of the Securities to be purchased pursuant to
such Terms Agreement, such Terms Agreement (including this Agreement as
incorporated by reference therein) shall terminate, without any liability on the
part of any non-defaulting Underwriter or the Company.
22
<PAGE>
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
the applicable Terms Agreement or this Agreement.
In the event of a default by any Underwriter or Underwriters as set forth
in this Section, either the Representatives or the Company shall have the right
to postpone the applicable Closing Time for a period not exceeding seven days in
order that any required changes in the Registration Statement or the Final
Prospectus or in any other documents or arrangements may be effected.
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 you as provided in the applicable Terms
Agreement. Notices to the Company shall be directed to it at Tandy Corporation,
1800 One Tandy Center, Fort Worth, Texas 76102, attention of the Secretary with
a copy to the Treasurer.
SECTION 12. Parties. The applicable Terms Agreement and this Agreement
shall inure to the benefit of and be binding upon the Underwriters and the
Company, and their respective successors. Nothing expressed or mentioned in the
applicable Terms Agreement or this Agreement is intended or shall be construed
to give any person, firm or corporation, other than the parties hereto or
thereto 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 the applicable Terms Agreement or this Agreement or any provision
therein or herein contained. The applicable Terms Agreement and this Agreement
and all conditions and provisions thereof and hereof are intended to be for the
sole and exclusive benefit of the parties 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. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
TANDY CORPORATION
By______________________________
Name:
Title:
23
<PAGE>
EXHIBIT A
TANDY CORPORATION
Debt Securities
TERMS AGREEMENT
Dated: _________ __, 199__
To: Tandy Corporation
1800 One Tandy Center
Fort Worth, Texas 76102
Dear Sirs:
We understand that Tandy Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell its Debt Securities having an aggregate
initial public offering price or purchase price of _____________ (as described
in more detail below, the "Securities"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, the underwriter(s) named below
(the "Underwriter(s)") hereby offer(s) to purchase such Securities.
The Securities to be purchased by the Underwriter(s), which are to be
issued under an Indenture dated as of May 1, 1997 between the Company and The
Chase Manhattan Bank, as Trustee, as supplemented from time to time by
supplemental indentures and/or modified from time to time by resolutions of the
Board of Directors of the Company as provided in Section 301 of such indenture,
shall have the following terms:
Date of maturity:
Interest rate:
Interest payment dates:
Public offering price:
Purchase price:
Redemption provisions:
Type of Offering: [Delayed Offering or Non-Delayed Offering]
Form of Securities: [Book Entry] [Certificated]
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery date:
Minimum contract:
A-1
<PAGE>
Maximum aggregate principal amount:
Fee: %
Closing date and location:
Payment Information:
Manager or Co-Managers:
Current ratings:
All of the provisions contained in the document entitled "Tandy Corporation
Debt Securities, Underwriting Agreement-Basic Provisions", dated as of _________
__, 199_, a copy of which is attached hereto as Annex A, are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein. Terms defined in such document are used herein as therein defined. Each
Underwriter severally agrees, subject to the terms and provisions of this Terms
Agreement, including the terms and provisions incorporated by reference herein,
to purchase the principal amount of Securities set forth opposite its name.
<TABLE>
<CAPTION>
Name Principal Amount
---- ----------------
<S> <C>
---------------
Total..................
===============
</TABLE>
Any notice by the Company to the Underwriter(s) pursuant to this Terms
Agreement shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication addressed to:
____________
The Company acknowledges that [the statements set forth in the last
paragraph of the cover page and in the ________ paragraphs[s] under the caption
"Underwriting"] in the Final Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Securities as originally filed or in any
amendment thereof, any related Preliminary Final Prospectus or the Final
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
Please accept this offer by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
[Managers]
A-2
<PAGE>
By_________________________________
Vice President
Accepted:
Tandy Corporation
By____________________________
A-3
<PAGE>
EXHIBIT B
TANDY CORPORATION
Debt Securities
DELAYED DELIVERY CONTRACT
_________ __, 199__
Tandy Corporation
c/o [Name and address of Representatives]
Attention:
Dear Sirs:
The undersigned hereby agree to purchase from Tandy Corporation (the
"Company"), and the Company agrees to sell to the undersigned on ________ __,
199_ (the "Delivery Date"), principal amount of the Company's Debt Securities
due ________ __, 199_ (the "Securities"), offered by the Company's Prospectus
dated 199_, as supplemented by its Prospectus Supplement dated _________ __,
199_, receipt of which is hereby acknowledged, at a purchase price of ___% of
the principal amount thereof, plus accrued interest from 199_, to the Delivery
Date, and on the further terms and conditions set forth in this contract
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or by wire transfer in same day
funds, on the Delivery Date, upon delivery to the undersigned at the office of
[name and address of Representatives], of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject only to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before ____________ __, 199_,
shall have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated ___________ __, 199_ between the Company and the
Underwriters. The obligation of the undersigned to take delivery of and make
payment for Securities shall not be affected by the failure of any purchaser to
take delivery of and make payment for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof, prohibited under
the laws of any jurisdiction to which the undersigned is subject and which
govern such investment.
B-1
<PAGE>
Promptly after completion of the sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
[Name of Purchaser]
By____________________________
Accepted:
Tandy Corporation
By____________________________
<PAGE>
DRAFT 5/15/97
EXHIBIT 4.1
- --------------------------------------------------------------------------------
TANDY CORPORATION
----------------------
INDENTURE
Dated as of May 1, 1997
----------------------
THE CHASE MANHATTAN BANK
as Trustee
Debt Securities
-------------------------------------------------------------------------------
<PAGE>
TANDY CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939, as amended,
and
Indenture, dated as of May 1, 1997
Trust Indenture Act Section Indenture Section
ss.310(a)(1) ............................................... 609
(a)(2) ............................................... 609
(a)(3) ............................................... Not Applicable
(a)(4) ............................................... Not Applicable
(a)(5) ............................................... 609
(b) .................................................. 608
610
(c) .................................................. Not Applicable
ss.311(a) .................................................. 613(a)
(b) .................................................. 613(b)
(b)(2) ............................................... 703(a)(3)
703(b)
(c) .................................................. Not Applicable
ss.312(a) .................................................. 701
702(a)
(b) .................................................. 702(b)
(c) .................................................. 702(c)
ss.313(a) .................................................. 703(a)
(b) .................................................. 703(b)
(c) .................................................. 703(c)
(d) .................................................. 703(d)
ss.314(a)(1) ............................................... 704
(a)(2) ............................................... 704
(a)(3) ............................................... 704
(a)(4) ............................................... 1009
(b) .................................................. Not Applicable
(c)(1) ............................................... 102
(c)(2) ............................................... 102
(c)(3) ............................................... Not Applicable
(d) .................................................. Not Applicable
(e) .................................................. 102
(f) .................................................. Not Applicable
ss.315(a) .................................................. 601(a)
601(c)
(b) .................................................. 602
(c) .................................................. 601(b)
(d) .................................................. 601(c)
<PAGE>
(d)(1) ............................................... 601(a)
(d)(2) ............................................... 601(c)(2)
(d)(3) ............................................... 601(c)(3)
(e) .................................................. 514
ss.316(a)(1)(A) ............................................ 512
(a)(1)(B) ............................................ 513
(a)(2) ............................................... Not Applicable
(a) last sentence .................................... 101
(b) .................................................. 508
(c) .................................................. 104(g)
ss.317(a)(1) ............................................... 503
(a)(2) ............................................... 504
(b) .................................................. 1003
ss.318(a) .................................................. 107
- ---------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
PARTIES ....................................................................................................................... 1
RECITALS ...................................................................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions ...................................................................................................... 2
Act .............................................................................................................. 2
Affiliate; control ............................................................................................... 2
Attributable Debt ................................................................................................ 2
Authenticating Agent ............................................................................................. 3
Board of Directors ............................................................................................... 3
Board Resolution ................................................................................................. 3
Business Day ..................................................................................................... 3
Capital Lease Obligation ......................................................................................... 3
Commission ....................................................................................................... 3
Company .......................................................................................................... 3
Company Request; Company Order ................................................................................... 3
Components ....................................................................................................... 4
Consolidated Net Tangible Assets ................................................................................. 4
Conversion Date .................................................................................................. 4
Corporate Trust Office ........................................................................................... 4
Corporation ...................................................................................................... 4
Debt Securities .................................................................................................. 5
Defaulted Interest ............................................................................................... 5
Depositary ....................................................................................................... 5
Discharged ....................................................................................................... 5
Dollar ........................................................................................................... 5
ECU .............................................................................................................. 5
Event of Default ................................................................................................. 5
Exchange Rate .................................................................................................... 5
Exchange Rate Agent .............................................................................................. 6
Exchange Rate Officer's Certificate .............................................................................. 6
Foreign Currency ................................................................................................. 6
Global Security .................................................................................................. 6
Holder ........................................................................................................... 6
Indebtedness ..................................................................................................... 6
Indenture ........................................................................................................ 7
interest ......................................................................................................... 7
Interest Payment Date ............................................................................................ 7
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Lien ............................................................................................................. 7
Maturity ......................................................................................................... 7
Officers' Certificate ............................................................................................ 7
Operating Assets ................................................................................................. 7
Operating Property ............................................................................................... 8
Opinion of Counsel ............................................................................................... 8
Original Issue Discount Security ................................................................................. 8
Outstanding ...................................................................................................... 8
Paying Agent ..................................................................................................... 9
Person ........................................................................................................... 9
Place of Payment ................................................................................................. 9
Predecessor Security ............................................................................................. 9
Redemption Date .................................................................................................. 9
Redemption Price ................................................................................................. 9
Regular Record Date .............................................................................................. 9
Required Currency ................................................................................................ 9
Responsible Officer .............................................................................................. 10
Sale and Lease-Back Transaction .................................................................................. 10
Security Register; Security Registrar ............................................................................ 10
Special Record Date .............................................................................................. 10
Stated Maturity .................................................................................................. 10
Subsidiary ....................................................................................................... 10
Trust Indenture Act .............................................................................................. 10
Trustee .......................................................................................................... 11
U.S. Government Obligations ...................................................................................... 11
SECTION 102. Compliance Certificates and Opinions ............................................................................. 11
SECTION 103. Form of Documents Delivered to Trustee ........................................................................... 12
SECTION 104. Acts of Holders .................................................................................................. 12
SECTION 105. Notices, etc., to Trustee and Company ............................................................................ 14
SECTION 106. Notice to Holders; Waiver ........................................................................................ 14
SECTION 107. Conflict with Trust Indenture Act ................................................................................ 14
SECTION 108. Effect of Headings and Table of Contents ......................................................................... 15
SECTION 109. Successors and Assigns ........................................................................................... 15
SECTION 110. Separability Clause .............................................................................................. 15
SECTION 111. Benefits of Indenture ............................................................................................ 15
SECTION 112. Governing Law .................................................................................................... 15
SECTION 113. Legal Holidays ................................................................................................... 15
SECTION 114. Moneys of Different Currencies to be Segregated .................................................................. 16
SECTION 115. Payment to be in Proper Currency ................................................................................. 16
ARTICLE TWO
DEBT SECURITY FORMS
SECTION 201. Forms Generally .................................................................................................. 16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 202. Forms of Debt Securities ......................................................................................... 18
SECTION 203. Form of Trustee's Certificate of Authentication .................................................................. 18
SECTION 204. Form of Trustee's Certificate of Authentication by an Authenticating Agent ....................................... 18
ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series ............................................................................. 20
SECTION 302. Denominations .................................................................................................... 22
SECTION 303. Execution, Authentication, Delivery and Dating ................................................................... 22
SECTION 304. Temporary Debt Securities ........................................................................................ 25
SECTION 305. Registration, Registration of Transfer and Exchange .............................................................. 26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities ............................................................ 28
SECTION 307. Payment of Interest; Interest Rights Preserved ................................................................... 29
SECTION 308. Persons Deemed Owners ............................................................................................ 31
SECTION 309. Cancellation ..................................................................................................... 31
SECTION 310. Computation of Interest .......................................................................................... 31
SECTION 311. Payment in Currencies ............................................................................................ 32
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture ......................................................................... 35
SECTION 402. Application of Trust Money ...................................................................................... 36
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default ................................................................................................ 36
SECTION 502. Acceleration of Maturity; Recission and Annulment ................................................................ 37
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee .................................................. 39
SECTION 504. Trustee May File Proofs of Claim ................................................................................. 39
SECTION 505. Trustee May Enforce Claims without Possession of Debt Securities ................................................. 40
SECTION 506. Application of Money Collected ................................................................................... 41
SECTION 507. Limitation on Suits .............................................................................................. 41
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest ........................................ 42
SECTION 509. Restoration of Rights and Remedies 42
SECTION 510. Rights and Remedies Cumulative ................................................................................... 42
SECTION 511. Delay or Omission Not Waiver ..................................................................................... 43
SECTION 512. Control by Holders ............................................................................................... 43
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
SECTION 513. Waiver of Past Defaults .......................................................................................... 43
SECTION 514. Undertaking for Costs ............................................................................................ 44
SECTION 515. Waiver of Stay or Extension Laws ................................................................................. 44
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities .............................................................................. 45
SECTION 602. Notice of Defaults ............................................................................................... 46
SECTION 603. Certain Rights of Trustee ........................................................................................ 46
SECTION 604. Not Responsible for Recitals or Issuance of Debt Securities ...................................................... 48
SECTION 605. May Hold Debt Securities ......................................................................................... 48
SECTION 606. Money Held in Trust .............................................................................................. 48
SECTION 607. Compensation and Reimbursement ................................................................................... 48
SECTION 608. Disqualification; Conflicting Interests .......................................................................... 49
SECTION 609. Corporate Trustee Required; Eligibility .......................................................................... 49
SECTION 610. Resignation and Removal; Appointment of Successor ................................................................ 50
SECTION 611. Acceptance of Appointment by Successor ........................................................................... 52
SECTION 612. Merger, Conversion, Consolidation or Succession to Business ...................................................... 53
SECTION 613. Preferential Collection of Claims Against Company ................................................................ 53
(a) Segregation and Apportionment of Certain Collections by Trustee; Certain Exceptions 53
(b) Certain Creditor Relationships Excluded from Segregation and Apportionment ........ 53
(c) Definitions of Certain Terms Used in this Section ................................. 54
SECTION 614 Authenticating Agents ............................................................................................. 57
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders ........................................................ 58
SECTION 702. Preservation of Information; Communications to Holders ........................................................... 59
SECTION 703. Reports by Trustee ............................................................................................... 60
SECTION 704. Reports by Company ............................................................................................... 60
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Consolidate, etc., Only on Certain Terms ............................................................. 61
SECTION 802. Successor Corporation Substituted ................................................................................ 62
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
<S> <C>
SECTION 901. Supplemental Indentures without Consent of Holders ............................................................... 62
SECTION 902. Supplemental Indentures with Consent of Holders .................................................................. 63
SECTION 903. Execution of Supplemental Indentures ............................................................................. 64
SECTION 904. Effect of Supplemental Indentures ................................................................................ 65
SECTION 905. Notice to Holders ................................................................................................ 65
SECTION 906. Conformity with Trust Indenture Act .............................................................................. 65
SECTION 907. Reference in Debt Securities to Supplemental Indentures .......................................................... 65
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest ...................................................................... 66
SECTION 1002. Maintenance of Office or Agency ................................................................................. 66
SECTION 1003. Money for Debt Securities Payments to Be Held in Trust .......................................................... 67
SECTION 1004. Corporate Existence ............................................................................................. 68
SECTION 1005. Maintenance of Properties ....................................................................................... 68
SECTION 1006. Payment of Taxes and Other Claims ............................................................................... 69
SECTION 1007. Limitation on Sales and Leasebacks .............................................................................. 69
SECTION 1008. Limitation on Liens ............................................................................................. 70
SECTION 1009. Certificate as to Default ....................................................................................... 71
SECTION 1010. Waiver of Certain Covenants ..................................................................................... 72
ARTICLE ELEVEN
REDEMPTION OF DEBT SECURITIES
SECTION 1101. Applicability of Article ........................................................................................ 72
SECTION 1102. Election to Redeem, Notice to Trustee ........................................................................... 72
SECTION 1103. Selection by Trustee of Debt Securities to Be Redeemed .......................................................... 73
SECTION 1104. Notice of Redemption ............................................................................................ 73
SECTION 1105. Deposit of Redemption Price ..................................................................................... 74
SECTION 1106. Debt Securities Payable on Redemption Date ...................................................................... 74
SECTION 1107. Debt Securities Redeemed in Part ................................................................................ 74
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article ........................................................................................ 75
SECTION 1202. Satisfaction of Sinking Fund Payments with Debt Securities ...................................................... 75
SECTION 1203. Redemption of Debt Securities for Sinking Fund .................................................................. 76
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE THIRTEEN
DEFEASANCE
<S> <C>
SECTION 1301. Applicability of Article ........................................................................................ 76
SECTION 1302. Defeasance Upon Deposit of Moneys or U.S. Government Obligations ................................................ 76
SECTION 1303. Deposited Moneys and U.S. Government Obligations To Be Held in Trust ............................................ 78
SECTION 1304. Repayment to Company ............................................................................................ 78
TESTIMONIUM ................................................................................................................... 88
SIGNATURES AND SEALS .......................................................................................................... 88
ACKNOWLEDGMENTS ............................................................................................................... 88
</TABLE>
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<PAGE>
INDENTURE dated as of May 1, 1997 between TANDY CORPORATION, a Delaware
corporation (hereinafter called the "Company"), having its principal office at
1800 One Tandy Center, Fort Worth, Texas 76102, and THE CHASE MANHATTAN BANK, a
New York banking corporation (hereinafter called the "Trustee"), having its
Corporate Trust Office at 450 West 33rd Street, 15th Floor, New York, New York
10001.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness (herein called the "Debt
Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Debt 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:
(1) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereafter shall mean such principles as are generally accepted in the United
States at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, as to any particular lease under which the
Company or a Subsidiary thereof is at the time liable, at any date as of which
the amount thereof is to be determined, the total net amount of rent required to
be paid by such Person under such lease during the remaining term thereof,
discounted from the respective due dates thereof to such date at the rate of 10%
per annum compounded annually.
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The net amount of rent required to be paid under any such lease for any such
period shall be the amount of the rent payable by the lessee with respect to
such period, after excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges.
"Authenticating Agent" means any agent or agents of the Trustee which at
the time shall be acting pursuant to Section 614.
"Board of Directors" means either the board of directors of the Company, or
the executive or any other committee of that board duly authorized to act in
respect hereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, unless
otherwise specified in a Board Resolution, and an Officers' Certificate, or in a
supplemental indenture, means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions or trust companies in an
applicable Place of Payment, the city in which the Trustee's Corporate Trust
Office is located or in the Borough of Manhattan, The City of New York are
authorized or obligated by law, executive order or regulation to remain closed.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
generally accepted accounting principles.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chairman of the Board, the
Chief Executive Officer, the President, a Senior Vice President or Vice
President-Controller, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
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<PAGE>
"Components", with respect to a composite currency (including but not
limited to the ECU), means the currency amounts that are components of such
component currency on the Conversion Date with respect to such composite
currency. If the official unit of any component currency is altered by way of
combination or subdivision, the amount of such currency in the component shall
be proportionately divided or multiplied. If two or more component currencies
are consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the amounts of such consolidated component currencies expressed in such
single currency, and such amount shall thereafter be a Component. If after such
Conversion Date any component currency shall be divided into two or more
currencies, the amount of such currency as a Component shall be replaced by
amounts of such two or more currencies, each of which shall be equal to the
amount of such former component currency divided by the number of currencies
into which such component currency was divided, and such amounts shall
thereafter be Components.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the consolidated balance sheet of the Company and its Subsidiaries,
as determined in accordance with generally accepted accounting principles, less
the following:
(1) current liabilities, including liabilities for indebtedness
maturing more than 12 months from the date of the original creation thereof
but maturing within 12 months from the date of determination;
(2) reserves for depreciation and other asset valuation reserves; and
(3) intangible assets including, but without limitation, such items as
goodwill, trademarks, trade names, patents and unamortized debt discount
and expense carried as an asset on said balance sheet.
Consolidated Net Tangible Assets shall be determined as of the most recent
published financial statements of the Company.
"Conversion Date", with respect to a composite currency (including but not
limited to the ECU), has the meaning specified in Section 311.
"Corporate Trust Office" means the corporate trust office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this instrument is
located at 450 West 33rd Street, 15th Floor, New York, New York 10001.
The term "corporation" includes corporations, associations, companies and
business trusts.
4
<PAGE>
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities authenticated and
delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Debt Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Debt Securities
of any such series shall mean the Depositary with respect to the Debt Securities
of that series.
"Discharged" has the meaning specified in Section 1302.
"Dollar" or "$" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of Ministers of the European Union.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" means (a) with respect to a currency (other than a
composite currency) in which payment is to be made on a series of Debt
Securities denominated in a composite currency, the exchange rate between such
currency and such composite currency reported by the agency or organization, if
any, designated pursuant to Section 301(11) or by the Council of Ministers of
the European Union (in the case of ECU, whose reports are currently based on the
rates in effect at 2:30 P.M., Brussels time, on the relevant exchange markets),
as appropriate, on the applicable Regular or Special Record Date with respect to
an Interest Payment Date or the fifteenth day immediately preceding the Maturity
of an installment of principal, or on such other date provided herein, as the
case may be; (b) with respect to Dollars in which payment is to be made on a
series of Debt Securities denominated in a Foreign Currency, the noon Dollar
buying rate for that currency for cable transfers quoted by the Exchange Rate
Agent in The City of New York on the Regular or Special Record Date with respect
to an Interest Payment Date or the fifteenth day immediately preceding the
Maturity of an installment of principal, or on such other date provided herein,
as the case may be, as certified for customs purposes by the Federal Reserve
Bank of New York; (c) with respect to Foreign Currency in which payment is to be
made on a series of Debt Securities denominated in Dollars or converted into
Dollars pursuant to Section 311(d)(ii), the noon Dollar selling rate for that
5
<PAGE>
currency for cable transfers quoted by the Exchange Rate Agent in The City of
New York on the Regular or Special Record Date with respect to an Interest
Payment Date or the fifteenth day immediately preceding the Maturity of an
installment of principal, or on such other date provided herein, as the case may
be, as certified for customs purposes by the Federal Reserve Bank of New York;
and (d) with respect to a Foreign Currency in which payment is to be made on a
series of Debt Securities denominated in a different Foreign Currency, the
exchange rate between such Foreign Currencies determined in the manner specified
pursuant to Section 301(14). If for any reason such rates are not available with
respect to one or more currencies for which an Exchange Rate is required, the
Company shall use such quotation of the Federal Reserve Bank of New York as of
the most recent available date, or quotations from one or more commercial banks
in The City of New York or in the country of issue of the currency in question,
or such other quotations as the Company, in each case, shall deem appropriate.
If there is more than one market for dealing in any currency by reason of
foreign exchange regulations or otherwise, the market to be used in respect of
such currency shall be the largest market upon which a nonresident issuer of
securities designated in such currency would purchase such currency in order to
make payments in respect to such securities.
"Exchange Rate Agent" means the New York clearing house bank designated
pursuant to Section 301, or any successor thereto.
"Exchange Rate Officer's Certificate", with respect to any date for the
payment of principal of (and premium, if any) and interest on any series of Debt
Securities, means a certificate setting forth the applicable Exchange Rate as of
the Regular or Special Record Date with respect to an Interest Payment Date or
the fifteenth day immediately preceding the Maturity of an installment of
principal, as the case may be, and the amounts payable in Dollars and Foreign
Currencies in respect of the principal of (and premium, if any) and interest on
Debt Securities denominated in ECU, any other composite currency or foreign
Currency, and signed by the Chairman of the Board, the president, any Vice
President, any Assistant Vice President, the Treasurer, any Assistant Treasurer,
the Controller or any Assistant Controller of the Company and delivered to the
Trustee.
"Foreign Currency" means a currency issued by the government of any country
other than the United States of America or a composite currency based on the
aggregate value of currencies of any group of countries.
"Global Security" means a Debt Security evidencing all or part of a series
of Debt Securities, issued to the Depositary for such series in accordance with
Section 303, and bearing the legend prescribed in Section 303.
"Holder" means a Person in whose name a Debt Security is registered in the
Security Register.
"Indebtedness" means with respect to any Person, at any time, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person upon which interest
charges are customarily paid (other than
6
<PAGE>
accounts payable incurred in the ordinary course of business), (iv) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (v) all obligations of
such Person issued or assumed as the deferred purchase price of property (other
than accounts payable incurred in the ordinary course of business), (vi) all
Capital Lease Obligations of such Person, (vii) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed and (viii) all obligations of such Person in respect of any letters
of credit supporting any Indebtedness of others, and guarantees by such Person
of Indebtedness of others.
"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, unless the
context otherwise requires, shall include the terms of a particular series of
Debt Securities established as contemplated by Section 301.
The term "interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", with respect to any Debt Security, means the
Stated Maturity of an installment of interest on such Debt Security.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, security interest, lien (statutory or other), or
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Maturity", when used with respect to any Debt Security, means the date on
which the principal of such Debt Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder thereof
or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, a Senior Vice President or
Vice President-Controller, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Operating Assets" means all merchandise inventories, furniture, fixtures
and equipment (including all transportation and warehousing equipment but
excluding office equipment and data processing equipment) owned by the Company
or any of its Subsidiaries.
7
<PAGE>
"Operating Property" means all real property and improvements thereon owned
by the Company or any of its Subsidiaries constituting, without limitation, any
store, warehouse, service center or distribution center wherever located,
provided that such term shall not include any store, warehouse, service center
or distribution center that the Company's Board of Directors declares by
resolution not to be of material importance to the business of the Company and
its Subsidiaries.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of, or counsel to, the Company and who shall be reasonably satisfactory
to the Trustee, that is delivered to the Trustee.
"Original Issue Discount Security" means any Debt Security which is issued
with original issue discount within the meaning of Section 1273(a) of the
Internal Revenue Code of 1986 and the regulations thereunder.
"Outstanding", when used with respect to Debt Securities, means, as of the
date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debt Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Debt Securities; provided, however, that if such
Debt Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(iii) Debt Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Debt Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Debt Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Debt Securities are held by a
bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Debt Securities Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debt Securities
owned by the Company or any other obligor upon the Debt Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities which the Trustee
knows to be so owned shall be so disregarded. Debt Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
8
<PAGE>
act with respect to such Debt Securities and that the pledgee is not the Company
or any other obligor upon the Debt Securities or any Affiliate of the Company or
of such other obligor. Notwithstanding any other provision of this Indenture to
the contrary, in the case of a series, all the Debt Securities of which are not
to be originally issued at one time, a Debt Security of such series shall not be
deemed to have been outstanding at any time hereunder if and to the extent that,
subsequent to the authentication and delivery thereof, such Debt Security is
delivered to the Trustee for cancellation by the Company or any agent thereof
upon the failure of the original purchaser thereof to make payment therefor
against delivery thereof, and any Debt Security so delivered to such Trustee
shall be promptly cancelled by it.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on behalf
of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Debt Securities of any
series, unless otherwise specified in a Board Resolution, an Officers'
Certificate or in a supplemental indenture, means the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, and such
other place or places, if any, where the principal of (and premium, if any) and
interest on the Debt Securities of that series are payable as specified pursuant
to Section 301.
"Predecessor Security" of any particular Debt Security means every previous
Debt Security evidencing all or a portion of the same debt as that evidenced by
such particular Debt Security; and, for the purposes of this definition, any
Debt Security authenticated and delivered under Section 306 in lieu of a lost,
destroyed or stolen Debt Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debt Security.
"Redemption Date", when used with respect to any Debt Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debt Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Debt Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Required Currency" has the meaning specified in Section 115.
9
<PAGE>
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the president, any vice
president (whether or not designated by a number or a word or words added before
or after the title "vice president"), the secretary, any assistant secretary,
any deputy secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer, the comptroller or any deputy comptroller 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 to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Sale and Lease-Back Transaction" of the Company or a subsidiary thereof
means any arrangement whereby (a) property has been or is to be sold or
transferred by the Company or such subsidiary to any Person with the intention
on the part of the Company or such Subsidiary of taking back a lease of such
property pursuant to which the rental payments are calculated to amortize the
purchase price of such property substantially over the useful life of such
property and (b) such property is in fact so leased by the Company or such
Subsidiary.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debt Security or any
installment of principal thereof, premium thereon or interest thereon, means the
date specified in such Debt Security as the fixed date on which the principal of
such Debt Security or such installment of principal, premium or interest is due
and payable.
"Subsidiary" means any corporation of which a majority of the outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the time
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by the Company, by the Company and one or more
other Subsidiaries or by one or more Subsidiaries of the Company, any general
partnership, joint venture or similar entity, of which a majority of the
outstanding partnership or similar interests is at the time directly or
indirectly owned by the Company, or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries, and any limited partnership of which
the Company or any other Subsidiary is a general partner.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this instrument was executed, except as
provided in Section 906.
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<PAGE>
"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 Debt Securities
of any series shall mean the Trustee with respect to Debt Securities of that
series.
"U.S. Government Obligations" has the meaning specified Section in 1302.
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 an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than the annual certificate
provided pursuant to Section 1009) shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(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.
Any instructions by the Company with respect to a Global Security given
after the initial issuance of such Global Security shall be in writing but need
not comply with this Section 102.
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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 is
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing,
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Trustee deems sufficient.
(c) The ownership of Debt Securities shall be proved by the Security
Register.
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(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Debt Security shall bind every future holder
of the same Debt Security and the Holder of any Debt Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, suffered or omitted by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Debt
Security.
(e) For purposes of determining the principal amount of Outstanding Debt
Securities of any series the Holders of which are required, requested or
permitted to give any request, demand, authorization, direction, notice,
consent, waiver or take any other Act under this Indenture, each Debt Security
denominated in a Foreign Currency or composite currency shall be deemed to have
a principal amount determined by an Exchange Rate Agent (as evidenced by a
certificate of such Exchange Rate Agent) by converting the principal amount of
such Debt Security in the currency in which such Debt Security is denominated
into Dollars at the Exchange Rate as of 9:00 A.M. New York time on the date such
Act is delivered to the Trustee and, where it is hereby expressly required, to
the Company (or, if there is no such rate on such date for the reasons specified
in Section 311(d)(i) of the Indenture, such rate on the date specified in such
Section).
(f) In determining whether the Holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under this Indenture, the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
502 at the time the taking of such action by the Holders of such requisite
principal amount is evidenced to the Trustee for such Debt Securities.
(g) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Such record date shall be the later of 30 days
prior to the first solicitation of such consent or vote or the date of the most
recent list of Holders furnished to the Trustee pursuant to Section 701 prior to
such solicitation. If a record date is fixed, those persons who were Holders of
Debt Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date; provided, however, that unless
such vote or consent is obtained from the Holders (or their duly designated
proxies) of the requisite principal amount of Outstanding Debt Securities prior
to the date which is the 120th day after such record date, any such vote or
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
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SECTION 105. Notices, etc., to Trustee and Company
Except as provided in Sections 501(4) and (5), any request, demand,
authorization, direction, notice, consent, waiver or other 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 and received by the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Secretary.
SECTION 106. Notice to Holders; Waiver
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In the event of suspension of regular mail service or for any other reason
it shall be impracticable to give such notice by mail, then such a notification
as shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act
If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 through 317, inclusive, of the Trust Indenture
Act through the operation of Section 318(c) thereof, such imposed duties shall
control.
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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.
SECTION 110. Separability Clause
In case any provision in this Indenture or in the Debt Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture
Nothing in this Indenture or in the Debt Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law
THIS INDENTURE AND THE DEBT SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
SECTION 113. Legal Holidays
In any case where any Interest Payment Date or Redemption Date or Maturity
of any Debt Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Debt
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or Maturity, and no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Maturity, as the case may be, to such Business Day if such
payment is made or duly provided for on such Business Day.
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SECTION 114. Moneys of Different Currencies to be Segregated
The Trustee shall segregate all moneys, funds and accounts held by the
Trustee hereunder in one currency from money, funds or accounts in any other
currencies, notwithstanding any provision herein which would otherwise permit
the Trustee to commingle such amounts.
SECTION 115. Payment to be in Proper Currency
Each reference in any Debt Security, or in the Board Resolution relating
thereto, to any currency shall be of the essence. In the case of any Debt
Security payable (in accordance with its terms or pursuant to any election made
by the Holder thereof as contemplated by Section 301) in any currency (the
"Required Currency") other than Dollars, except as otherwise provided therein or
in the related Board Resolution, the obligation of the Company to make any
payment of principal of (and premium, if any) and interest thereon shall not be
discharged or satisfied by any tender by the Company, or recovery by the
Trustee, in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely holding the full
amount of the Required Currency then due and payable. If any such tender or
recovery is in a currency other than the Required Currency, the Trustee may take
such actions as it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange, including without
limitation the risks of delay and exchange rate fluctuation, shall be borne by
the Company, and the Company shall remain fully liable for any shortfall or
delinquency in the full amount of Required Currency then due and payable, and in
no circumstances shall the Trustee be liable therefor. The Company hereby waives
any defense of payment based upon any such tender or recovery which is not in
the Required Currency, or which, when exchanged for the Required Currency by the
Trustee, is less than the full amount of Required Currency then due and payable.
ARTICLE TWO
DEBT SECURITY FORMS
SECTION 201. Forms Generally
The Debt Securities shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
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
securities exchange
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on which any of the Debt Securities may be listed, or to conform to usage, all
as determined by the officers executing such Debt Securities, as conclusively
evidenced by their execution of such Debt Securities.
The Trustee's certificate of authentication shall be in substantially the
form set forth in Section 203.
The definitive Debt Securities, 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 manner permitted by the rules of any
securities exchange on which the Debt Securities may be listed, all as
determined by the officers executing such Debt Securities, as conclusively
evidenced by their execution of such Debt Securities.
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SECTION 202. Forms of Debt Securities
Each Debt Security shall be in one of the forms approved from time to time
by or pursuant to a Board Resolution and an Officers' Certificate or one or more
indentures supplemental hereto which shall set forth the information required by
Section 301. If so provided as contemplated by Section 301, the Debt Securities
of a series shall be issuable in the form of one or more Global Securities. If
the form for a series of Debt Securities is established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the form for such series.
SECTION 203. Form of Trustee's Certificate of Authentication
The form of the Trustee's certificate of authentication to be borne by the
Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By ________________________________
Authorized Officer
SECTION 204. Form of Trustee's Certificate of Authentication by an
Authenticating Agent
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Debt Securities, then the Trustee's Certificate of
Authentication by such Authenticating Agent to be borne by Debt Securities of
each such series shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities referred to in the within-mentioned
Indenture.
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THE CHASE MANHATTAN BANK,
as Trustee
By _________________________________
Authenticating Agent
By _________________________________
Authorized Signatory
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ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Debt Securities of any series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt
Securities);
(2) the limit, if any, upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to Section 304, 305, 306, 907 or 1107);
(3) the date or dates (or manner of determining the same) on which the
principal of (and premium, if any, on) the Debt Securities of the series is
payable (which, if so provided in such Board Resolution, may be determined
by the Company from time to time and set forth in the Debt Securities of
the series issued from time to time);
(4) the rate or rates (or the manner of calculation thereof), if any,
at which the Debt Securities of the series shall bear interest, the date or
dates from which such interest shall accrue (which, if so provided in such
Board Resolution, may be determined by the Company from time to time and
set forth in the Debt Securities of the series issued from time to time),
the Interest Payment Dates on which such interest shall be payable (or
manner of determining the same) and the Regular Record Date for the
interest payable on any Interest Payment Date;
(5) the place or places, if any, in addition to or other than the
office or agency of the Company in the Borough of Manhattan, the City and
State of New York, where the principal of (and premium, if any) and
interest on Debt Securities of the series shall be payable;
(6) the period or periods within which or the date or dates on which,
if any, the price or prices at which and the terms and conditions upon
which Debt Securities of the series may be redeemed, in whole or in part,
at the option of the Company;
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(7) the obligation, if any, of the Company to redeem, repay or
purchase Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 502;
(10) provisions, if any, for the defeasance of Debt Securities of the
series;
(11) the currency of denomination of the Debt Securities of any
series, which may be in Dollars, any Foreign Currency or any composite
currency, including but not limited to the ECU, and, if such currency of
denomination is a composite currency other than the ECU, the agency or
organization, if any, responsible for overseeing such composite currency;
(12) the designation of the currency or currencies in which payment of
the principal of (and premium, if any) and interest on the Debt Securities
of the series will be made, and the designation, if any, of the currency or
currencies in which payment of the principal (and premium, if any) or the
interest on such Debt Securities, at the election of a Holder thereof, may
also be payable;
(13) if the amount of payments of principal of (and premium, if any)
or interest on the Debt Securities of the series may be determined with
reference to an index based on a currency or currencies other than that in
which the Debt Securities are denominated or designated to be payable, the
manner in which such amounts shall be determined;
(14) if the payments of principal of (and premium, if any) or interest
on the Debt Securities of the series are to be made in a Foreign Currency
other than the Foreign Currency in which such Debt Securities are
denominated, the manner in which the exchange rate with respect to such
payments shall be determined;
(15) any additional Events of Default or restrictive covenants
provided for with respect to Debt Securities of the series;
(16) if the Debt Securities of such series are to be denominated or
payable in a currency other than Dollars, the designation of the initial
Exchange Rate Agent;
(17) the form of Debt Securities of such series;
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(18) whether the Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and, in such
case, the Depositary for such Global Security or Securities and the terms
and conditions, if any, upon which interests in such Global Security or
Securities may be exchanged in whole or in part for the individual Debt
Securities represented thereby; and
(19) any other terms of the series (which terms shall not adversely
affect any prior series of Debt Securities) including any terms which may
be required or advisable under United States laws or regulations or
advisable in connection with the marketing of Debt Securities of the
series.
All Debt Securities of any particular series shall be substantially
identical except as to denomination, rate of interest, Stated Maturity and the
date from which interest, if any, shall accrue, and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officer's
Certificate or in any such indenture supplemental hereto. The terms of such Debt
Securities, as set forth above, may be determined by the Company from time to
time if so provided in or established pursuant to the authority granted in such
Board Resolution or supplemental indenture. All Debt Securities of any one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuance of additional Debt Securities of such
series.
If any of the terms of a series of Debt Securities is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations
Unless otherwise specified in a Board Resolution, and an Officers'
Certificate, or in a supplemental indenture, the Debt Securities of each series
shall be issuable in registered form without coupons in such denominations as
shall be specified in accordance with the requirements of Section 301. In the
absence of any such provisions with respect to the Debt Securities of any
series, and except as provided in Section 303, the Debt Securities of such
series shall be issuable in denominations of $1,000 or any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating
The Debt Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, one of its
Senior Vice Presidents or its Vice President-Controller, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Debt Securities may
be manual or facsimile.
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Debt Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debt Securities or did
not hold such offices at the date of such Debt Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Debt Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such Debt
Securities; provided that, with respect to Debt Securities of a medium term note
program, the Trustee shall authenticate and deliver Debt Securities of such
series for original issue from time to time in the aggregate principal amount
established for such series pursuant to such procedures acceptable to the
Trustee and to such recipients as may be specified from time to time by Company
Order. The maturity date, original issuance date, interest rate and any other
terms of the Debt Securities of such series shall be determined by or pursuant
to such Company Order and procedures. If provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral or
electronic instruction from the Company or its duly authorized agent, which
instructions, if given orally, shall be promptly confirmed in writing. The
Trustee shall be entitled to receive, prior to the authentication and delivery
of such Debt Securities, the supplemental indenture or the Board Resolution by
or pursuant to which the form and terms of such Debt Securities have been
approved (and, if such form or terms are approved pursuant to a Board
Resolution, an Officers' Certificate approving such terms and form), an
Officers' Certificate as to the absence of any event which is, or after notice
or lapse of time or both would become, an Event of Default, and an Opinion of
Counsel stating that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities
conform to the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and deliver such Debt
Securities;
(2) the form and terms of such Debt Securities have been established
in conformity with the provisions of this Indenture;
(3) in the event that the form or terms of such Debt Securities have
been established in a supplemental indenture, the execution and delivery of
such supplemental indenture have been duly authorized by all necessary
corporate action of the Company, such supplemental indenture has been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, constitutes a legal, valid and
binding obligation enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and
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subject to such other exceptions as counsel to the Company shall request
and as to which the Trustee shall not reasonably object;
(4) the execution and delivery of such Debt Securities have been duly
authorized by all necessary corporate action of the Company and such Debt
Securities have been duly executed by the Company, and, assuming due
authentication by the Trustee and delivery by the Company, constitute the
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, entitled to the benefit of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and subject to such other exceptions
as counsel to the Company shall request and as to which the Trustee shall
not reasonably object;
(5) all requirements hereunder and, to such counsel's best knowledge,
after reasonable inquiry (except for the "blue sky" laws of the various
states, with respect to which no opinion need be given), all laws in
respect of the execution and delivery by the Company of such Debt
Securities have been complied with; and
(6) such other matters as the Trustee may reasonably request, and, if
the authentication and delivery relates to Debt Securities of a series
constituting a medium term note program, paragraphs (2) and (4) of the
foregoing opinion shall read as follows:
"(2) the form of such Debt Securities and the procedures for
determining the terms of such Debt Securities as set forth in the
procedures relating thereto hereinabove referred to have been
established in conformity with the provisions of this Indenture; and
(4) the execution and delivery of such Debt Securities have been
duly authorized by all necessary corporate action of the Company and
such Debt Securities have been duly authorized by the Company and when
duly executed by the Company and completed and authenticated in
accordance with the Indenture and issued, delivered and paid for in
accordance with the applicable selling agency or distribution
agreement, will have been duly issued under the Indenture and will
constitute the legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms,
entitled to the benefit of the Indenture, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel to
the Company shall request and as to which the Trustee shall not
reasonably object."
The Trustee shall not be required to authenticate such Debt Securities if
the issuance of such Debt Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debt Securities and this
Indenture or otherwise in a manner which
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is not reasonably acceptable to the Trustee or if the Trustee determines that
such authentication may not lawfully be made or if the Trustee reasonably
determines that such authentication would be prejudicial to the Holders of
Outstanding Debt Securities.
Notwithstanding any contrary provision herein, if all Debt Securities of a
series are not to be originally issued at one time, it shall not be necessary to
deliver the Board Resolution, Officers' Certificate and Opinion of Counsel
otherwise required pursuant to this Section or Sections 102 and 201 at or prior
to the time of authentication of each Debt Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first Debt Security of such series to be issued.
Each Debt Security shall be dated the date of its authentication.
No Debt Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Debt
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of one of its authorized
officers, and such certificate upon any Debt Security shall be conclusive
evidence, and the only evidence, that such Debt Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
If the Company shall establish pursuant to Section 301 that the Debt
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall,
in accordance with this Section and the Company Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Debt Securities of such series issued and not yet
cancelled, (ii) shall be registered in the name of the Depositary for such
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Debt Securities in
definitive registered form, this Debt Security may not be transferred except as
a whole by the Depositary to the nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
Each Depositary designated pursuant to Section 301 must, at the time of its
designation and at all times while it serves as Depositary, be a clearing agency
registered under the Securities Exchange Act of 1934 and any other applicable
statute or regulation.
SECTION 304. Temporary Debt Securities
Pending the preparation of definitive Debt Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Debt Securities that are printed, lithographed, or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Debt Securities in lieu of which they are
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issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Debt Securities may determine, as
conclusively evidenced by their execution of such Debt Securities. In the case
of Debt Securities of any series, such temporary Debt Securities may be in
global form, representing all of the Outstanding Debt Securities of such series.
If temporary Debt Securities of any series are issued, the Company will
cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series of like Stated Maturity and with like
terms and provisions upon surrender of the temporary Debt Securities of such
series at the office or agency of the Company in a Place of Payment for such
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Debt Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Debt Securities of the same series of authorized
denominations and of the same Stated Maturity and with like terms and
provisions. Until so exchanged, the temporary Debt Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series and of like Stated Maturity and with
like terms and provisions.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at one of its offices or agencies
maintained pursuant to Section 1002 a register (the register maintained in such
office being herein sometimes 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 Debt Securities and of transfers and exchanges
of Debt Securities. Said office or agency is hereby appointed "Security
Registrar" for the purpose of registering Debt Securities and transfers and
exchanges of Debt Securities as herein provided. Separate registers may be kept
for separate series of Debt Securities.
Upon surrender for registration of transfer of any Debt Security of any
series at the office or agency of the Company maintained for such purpose, the
Company shall execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Debt Securities of the same series of any
authorized denomination or denominations, of like tenor and aggregate principal
amount.
Notwithstanding any other provision of this Section 305, unless and until
it is exchanged in whole or in part for individual Debt Securities in definitive
registered form, a Global Security representing all or a portion of the Debt
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or
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by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
At the option of the Holder, Debt Securities of any series (except a Global
Security) may be exchanged for other Debt Securities of the same series
containing identical terms and provisions of any authorized denomination or
denominations, of a like aggregate principal amount, upon surrender of the Debt
Securities to be exchanged at the office or agency of the Company maintained for
such purpose. Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities which the Holder making the exchange is entitled to receive.
If at any time the Depositary for the Debt Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Debt Securities of such series or if at any time the Depositary for the Debt
Securities of such series shall no longer be eligible under Section 303, the
Company shall appoint a successor Depositary with respect to the Debt Securities
of such series. If a successor Depositary for the Debt Securities of such series
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company's election pursuant
to Section 301(18) shall no longer be effective with respect to the Debt
Securities of such series and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
definitive Debt Securities of such series, will authenticate and deliver, to the
Person specified to the Trustee in writing by the Depositary, individual Debt
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing Debt
Securities of such series, in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Debt Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities. In
such event the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of individual definitive Debt
Securities of such series, will authenticate and deliver, to the Person
specified to the Trustee in writing by the Depositary, individual Debt
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series,
in exchange for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Debt Securities, the Depositary for such series of Debt Securities may
surrender a Global Security for such series of Debt Securities in exchange in
whole or in part for individual Debt Securities of such series in definitive
registered form on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to each Person specified to the Trustee in writing by such
Depositary, a new individual Debt Security or Securities of the same
series, of any
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authorized denomination as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security as the amount of such beneficial interest
is set forth in the written notice to the Trustee; and
(ii) to such Depositary a new Global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of individual Debt
Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for individual Debt Securities in
definitive registered form without coupons, in authorized denominations, such
Global Security shall be cancelled by the Trustee. Individual Debt Securities in
definitive registered form without coupons issued in exchange for a Global
Security pursuant to this Section 305 shall be registered in such names and in
such authorized denominations as the Depositary for such Global Security shall
instruct the Trustee. The Trustee shall deliver such Debt Securities to or as
directed by the Persons in whose names such Debt Securities are so registered.
All Debt Securities issued upon any registration of transfer or exchange of
Debt Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such registration of transfer or exchange.
Every Debt Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Security Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee, 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 Debt 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 transfer, registration of transfer or exchange of Debt
Securities, other than exchanges pursuant to Section 304, 907 or 1107 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Debt Securities of any particular series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Debt Securities of such series selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(ii) to register the transfer of or exchange any Debt Security called for
redemption in whole or in part, except the unredeemed portion of any Debt
Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities.
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If (i) any mutilated Debt Security is surrendered to the Trustee, or (ii)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Debt Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them and any Paying Agent harmless, then, in the absence of notice
to the Company or the Trustee that such Debt Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated Debt
Security or in lieu of any such destroyed, lost or stolen Debt Security, a new
Debt Security containing identical provisions and of like principal amount,
bearing a number not contemporaneously outstanding.
If, after the delivery of such new Debt Security, a bona fide purchaser of
the original Debt Security in lieu of which such new Debt Security was issued
presents for payment or registration such original Debt Security, the Trustee
shall be entitled to recover such new Debt Security from the person to whom it
was delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Trustee, the
Paying Agent or the Company in connection therewith.
In case any such mutilated, destroyed, lost or stolen Debt Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debt Security, pay the amount due on such Debt Security
in accordance with its terms.
Upon the issuance of any new Debt 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 Debt Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Debt Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Debt Security shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debt Securities of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified as contemplated by Section 301 for Debt
Securities of any series, interest on any Debt Security which is payable, and is
punctually paid or duly
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provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest,
notwithstanding the cancellation of such Debt Security upon any transfer or
exchange subsequent to the Regular Record Date. At the option of the Company,
payment of interest on any Debt Security may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or, if so specified in the manner contemplated by Section 301,
by wire transfer to an account designated by such Person in writing to the
Trustee.
Any interest on any Debt Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debt Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Debt Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Debt
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Debt Securities of such
series (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).
(2) The Company may make payment of any Defaulted Interest on the Debt
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Debt Securities
may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the
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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 Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Debt 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 Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Section 307) interest on such Debt Security and for all
other purposes whatsoever, whether or not such Debt Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
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 in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
Unless otherwise provided with respect to a series of Debt Securities, all
Debt Securities surrendered for payment, redemption, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Debt Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Debt Securities so delivered shall be promptly cancelled by the Trustee. No Debt
Securities shall be authenticated in lieu of or in exchange for any Debt
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Debt Securities held by the Trustee shall be
retained by the Trustee, subject to its document retention policies, unless by a
Company Order the Company shall direct that the cancelled Debt Securities be
returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
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SECTION 311. Payment in Currencies.
(a) Payment of the principal of (and premium, if any) and interest on the
Debt Securities of any series shall be made in the currency or currencies
specified pursuant to Section 301; provided that the Holder of a Debt Security
of such series may elect to receive such payment in any other currency
designated for such purpose pursuant to Section 301.
A Holder may make such election by delivering to the Trustee a written
notice thereof, substantially in the form attached hereto as Exhibit A or in
such other form as may be acceptable to the Trustee, not later than the close of
business on the Regular or Special Record Date immediately preceding the
applicable Interest Payment Date or the fifteenth day immediately preceding the
Maturity of an installment of principal, as the case may be. Such election shall
remain in effect with respect to such Holder until such Holder delivers to the
Trustee a written notice specifying a change in the currency in which such
payment is to be made; provided that any such notice must be delivered to the
Trustee not later than the close of business on the Regular or Special Record
Date immediately preceding the next Interest Payment Date or the fifteenth day
immediately preceding the Maturity of an installment of principal, as the case
may be, in order to be effective for the payment to be made thereon; and
provided further that no such change in currency may be made with respect to
payments to be made on any Debt Security with respect to which notice of
redemption has been given by the Company pursuant to Article Eleven.
(b) If payments on a series of Debt Securities are designated to be made in
a currency other than the currency in which such series of Debt Securities is
denominated or at least one Holder has made the election referred to in
subsection (a) above with respect to such series of Debt Securities, then the
Trustee shall deliver to the Company, not later than the fourth Business Day
after the Regular or Special Record Date with respect to an Interest Payment
Date or the tenth day immediately preceding the Maturity of an installment of
principal, as the case may be, a written notice specifying the currency or
currencies in which payment with respect to such series of Debt Securities is to
be made pursuant to said subsection (a) and the amount of principal of (and
premium, if any) and interest on such series of Debt Securities to be paid in
such other currency or currencies on such payment date.
(c) Except as otherwise specified as contemplated by Section 301, if
payments on a series of Debt Securities are designated to be made in a currency
other than the currency in which such series of Debt Securities is denominated,
or, if at least one Holder has made the election referred to in subsection (a)
above, then the amount receivable by Holders of a series of Debt Securities so
designated for payment or by Holders of a series of Debt Securities who have
elected payment in a currency other than the currency in which such series of
Debt Securities is denominated as provided in subsection (a) above, shall be
determined by the Company on the basis of the applicable Exchange Rate set forth
in the applicable Exchange Rate Officer's Certificate. The Company shall
deliver, not later than the eighth Business Day following each Regular or
Special Record Date or the fifth day immediately preceding the Maturity of an
installment of principal, as the case may be, to the Trustee an Exchange Rate
Officer's Certificate
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in respect of the payments to be made to such Holders on such payment date;
provided, however, that if payments of principal and interest are denominated in
and payable only in Dollars, no such Exchange Rate Officers' Certificate shall
be required.
(d) (i) If the Foreign Currency in which a series of Debt Securities is
denominated ceases to be used both by the government of the country which issued
such currency and for the settlement of transactions by public institutions of
or within the international banking community, then with respect to each date
for the payment of principal of (and premium, if any) and interest on such
series of Debt Securities occurring after the final date on which the Foreign
Currency was so used, all payments with respect to the Debt Securities of any
such series shall be made in Dollars. If payment is to be made in Dollars to the
Holders of any such series of Debt Securities pursuant to the provisions of the
preceding sentence, then the amount to be paid in Dollars on a payment date by
the Company to the Trustee and by the Trustee or any Paying Agent to Holders
shall be determined by an Exchange Rate Agent as of the Regular or Special
Record Date with respect to such Interest Payment Date or the fifteenth day
immediately preceding the Maturity of an installment of principal, as the case
may be, and shall be equal to the sum obtained by converting the specified
Foreign Currency into Dollars at the Exchange Rate on the last Record Date on
which such Foreign Currency was so used in either such circumstance.
If a Holder of a Debt Security denominated in a composite currency has
elected payment in a specified Foreign Currency as provided for by subsection
(a) and such Foreign Currency ceases to be used both by the government of the
country which issued such currency and for the settlement of transactions by
public institutions of or within the international banking community, such
Holder shall, subject to subsection (d)(ii) below, receive payment on such
composite currency, provided that such payment to such Holder may be made in a
different Foreign Currency designated for such purpose pursuant to Section 301
or in Dollars if that Holder has elected or elects payment in such Foreign
Currency or in Dollars pursuant to subsection (a) above.
(ii) If the ECU ceases to be used both within the European Monetary System
and for the settlement of transactions by public institutions of or within the
European Communities, or if any other composite currency in which a Debt
Security is denominated or payable ceases to be used for the purposes for which
it was established, then with respect to each date for the payment of principal
of (and premium, if any) and interest on a series of Debt Securities denominated
in ECU or such other composite currency, as appropriate (the "Conversion Date"),
occurring after the last date on which the ECU or such other composite currency
was so used, all payments with respect to the Debt Securities of any such series
shall be made in Dollars, provided that payment to a Holder of a Debt Security
of such series may be made in a Foreign Currency designated for such purpose
pursuant to Section 301 if that Holder has elected or elects payment in such
Foreign Currency pursuant to subsection (a) above.
If payment with respect to Debt Securities of a series denominated in ECU
or any other composite currency is to be made in Dollars pursuant to the
provisions of the preceding paragraph, then the amount to be paid in Dollars on
a payment date by the Company to the
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Trustee and by the Trustee or any Paying Agent to Holders shall be determined by
an Exchange Rate Agent as of the Regular or Special Record Date with respect to
such Interest Payment Date or the fifteenth day immediately preceding the
Maturity of an installment of principal, as the case may be, and shall be equal
to the sum of the amounts obtained by converting each Component of such
composite currency into Dollars at its respective Exchange Rate as of such
Record Date or fifteenth day, as appropriate, multiplied by the number of ECU or
units of such other composite currency, as appropriate, that would have been so
paid had the ECU or such other composite currency, as appropriate, not ceased to
be so used. If payment is to be made in Foreign Currency to the Holders of the
Debt Securities of such series pursuant to the preceding paragraph, then the
amount to be paid in such Foreign Currency on a payment date by the Company to
the Trustee and by the Trustee or any Paying Agent to Holders shall be
determined by an Exchange Rate Agent as of the Regular or Special Record Date
with respect to such Interest Payment Date or the fifteenth day immediately
preceding the Maturity of an installment of principal, as the case may be, and
shall be determined by (A) converting each Component of such composite currency
into Dollars at the Exchange Rate for such Component on such Record Date or
fifteenth day, as appropriate, and (B) converting the sum in Dollars so obtained
into such Foreign Currency at the Exchange Rate for such Foreign Currency on
such Record Date or fifteenth day, as appropriate.
(e) All decisions and determinations of an Exchange Rate Agent regarding
the Exchange Rate or conversion of Foreign Currency into Dollars pursuant to
subsection (d)(i) above or the conversion of ECU or any other composite currency
into Dollars or Foreign Currency pursuant to subsection (d)(ii) shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon Company, the Trustee, any Paying Agent and all Holders of the Debt
Securities. If a Foreign Currency in which payment of a series of Debt
Securities may be made, pursuant to subsection (a) above, ceases to be used both
by the government of the country which issued such currency and for the
settlement of transactions by public institutions of or within the international
banking community, the Company, after learning thereof, will give notice thereof
to the Trustee immediately (and the Trustee promptly thereafter will give notice
to the Holders in the manner provided in Section 106) specifying the last date
on which the Foreign Currency was used for the payment of principal of (and
premium, if any) or interest on such series of Debt Securities. In the event the
ECU ceases to be used both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Union, or any other composite currency in which a Debt Security is denominated
or payable ceases to be used for the purposes for which it was established, the
Company, after learning thereof, will give notice thereof to the Trustee
immediately (and the Trustee promptly thereafter will give notice to the Holders
in the manner provided in Section 106). In the event of any subsequent change in
any Component, the Company, after learning thereof, will give notice to the
Trustee similarly (and the Trustee promptly thereafter will give notice to the
Holders in the manner provided in Section 106). The Trustee shall be fully
justified and protected in relying and acting upon the information so received
by it from the Company and shall not otherwise have any duty or obligation to
determine such information independently.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Debt Securities herein expressly provided for and rights to receive payments of
principal and interest thereon) and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Debt Securities theretofore authenticated and delivered (other
than (i) Debt Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii) Debt
Securities for whose payment money in the Required Currency has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Debt Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice 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 the purpose an amount in the Required Currency sufficient to pay
and discharge the entire indebtedness on such Debt Securities for principal
(and premium, if any) and interest to the date of such deposit (in the case
of Debt Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
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(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company pursuant to Section 115, the obligations of the
Company to the Trustee under Section 607 and, 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 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Debt Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Debt 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, pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Debt Security of
such series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment when and as due
by the terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which
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has expressly been included in this Indenture solely for the benefit of
Debt Securities of a series other than 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 Debt Securities of such 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) if an event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for borrowed money of the Company or
any Subsidiary (including this Indenture), whether such indebtedness now
exists or shall hereafter be created, shall happen and shall result in such
indebtedness in an amount in excess of $20,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
become due and payable; and such acceleration shall not be rescinded or
annulled for a period of 10 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 Debt Securities of such series, a written notice specifying
such event of default and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(6) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other Federal or State bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, 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 unstayed
and in effect for a period of 90 consecutive days; or
(7) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any action;
or
(8) any other Event of Default provided with respect to Debt
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
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If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of Outstanding
Debt Securities of such series may declare the principal amount (or, if the Debt
Securities of such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such series) of all
the Debt Securities of such series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to Debt
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 Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Debt Securities
of such series,
(B) the principal of (and premium, if any, on) any Debt
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on each Debt Security
at the rate or rates prescribed therefor in such Debt Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Debt Securities of such
series, other than the non-payment of the principal of Debt Securities of
such series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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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 installment of interest on
any Debt Security when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Debt Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Debt Securities, the whole amount then due and
payable on such Debt Securities for principal (and premium, if any) and interest
and, to the extent that payment of such interest shall be legally enforceable,
interest upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at the rate or rates prescribed therefor in such Debt
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor upon such Debt Securities,
wherever situated.
If an Event of Default with respect to Debt 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 Debt Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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 proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or the
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property of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of such Debt 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,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Debt
Securities of such series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
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 Debt
Securities.
All rights of action and claims under this Indenture or the Debt Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Debt Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name, as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Debt Securities in respect of which such
judgment has been recovered.
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SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, (and premium,
if any) or interest, upon presentation of the Debt Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities, in
respect of which or for the benefit of which such money has been collected
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Debt Securities for principal (and premium,
if any) and interest, respectively. The Holders of each series of Debt
Securities denominated in ECU, any other composite currency or a Foreign
Currency shall be entitled to receive a ratable portion of the amount
determined by an Exchange Rate Agent by converting the principal amount
Outstanding of such series of Debt Securities in the currency in which such
series of Debt Securities is denominated into Dollars at the Exchange Rate
as of the date of declaration of acceleration of the Maturity of the Debt
Securities (or, if there is no such rate on such date for the reasons
specified in Section 311(d) (i) of the Indenture, such rate on the date
specified in such Section).
SECTION 507. Limitation on Suits.
No Holder of any Debt Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Debt Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
outstanding Debt Securities of such 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
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(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 Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Debt Security on the respective Stated Maturity or
Maturities expressed in such Debt Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right 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 the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided in Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debt Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that the Trustee shall have the right to
decline to follow any such direction
(1) if the Trustee being advised by counsel shall determine that the
action so directed may not lawfully be taken, or if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceedings would be illegal or in conflict with this Indenture or
involve it in personal liability; and
(2) subject to the provisions of Section 601, if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders of Debt Securities of such series not joining in
any such direction,
and 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 Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or
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(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 Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of 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 Debt Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
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
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Debt
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Debt Security on or after the respective Stated Maturity or Maturities
expressed in such Debt Security (or, in the case of redemption, on or after the
Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) With respect to Debt Securities of any series, except during the
continuance of an Event of Default with respect to the Debt Securities of such
series,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any
series has occurred and is continuing, the Trustee shall, with respect to the
Debt Securities of such series, exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the Outstanding Debt Securities of such
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.
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(d) 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.
(e) 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 Debt Securities of any series, the Trustee shall transmit by mail to all
Holders of Debt Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Debt Security of such series or in the payment of any
sinking fund installment with respect to Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders of Debt Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Debt Securities of such
series, no such Notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to Debt Securities of such series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction (including any
instructions given by the Depositary pursuant to Section 305), consent,
order, bond, debenture, note or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall 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
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action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Debt Securities pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
relevant to the facts or matters that are the subject of its inquiry,
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 reasonably acceptable to the Company and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any Event of
Default with respect to the Debt Securities of any series for which it is
acting as Trustee unless either (1) a Responsible Officer of the Trustee
assigned to the Corporate Trustee Administration Department of the Trustee
(or any successor division or department of the Trustee) shall have actual
knowledge of the Event of Default or (2) written notice of such Event of
Default shall have been given to the Trustee by the Company or any other
obligor on such Debt Securities or by any Holder of such Debt Securities;
(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(j) in the event the Trustee incurs expenses or renders services in
any proceedings which result from the occurrence or continuance of an Event
of Default under Section 501(6) or 501(7) hereof, or from the occurrence of
any event which, by virtue of the passage of time, would become such Event
of Default, the expenses so incurred and compensation for services so
rendered are intended to constitute expenses of administration under the
United States Bankruptcy Code or equivalent law;
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(k) the Trustee shall not be liable for incidental, indirect, special
or consequential damages in connection with or arising out of this
Indenture; and
(l) in the event that the Trustee is also acting as Authenticating
Agent, Paying Agent or Security Registrar hereunder, the rights,
protections and immunities accorded the Trustee under this Indenture,
including but not limited to those set out in this Article Six, shall also
be afforded to such Authenticating Agent, Transfer Agent or Security
Registrar.
SECTION 604. Not Responsible for Recitals or Issuance of Debt Securities.
The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debt Securities of any series. The Trustee shall not be
accountable for the use or application by the Company of any Debt Securities or
the proceeds thereof.
SECTION 605. May Hold Debt Securities.
The Trustee, any Paying Agent, the Security Registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Debt Securities, and, subject to Sections 608 and 613,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the reasonable
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 for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust or performance of its duties 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.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a claim prior to the Debt Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (and premium, if any) or interest
on Debt Securities.
SECTION 608. Disqualification; Conflicting Interests.
(a) The Trustee shall comply with Section 310(b) of the Trust Indenture
Act; provided, however, that there shall be excluded from the operation of
Section 310(b) of the Trust Indenture Act any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in Section 310(b) of the Trust Indenture Act are met.
(b) If Section 310(b) of the Trust Indenture Act is amended at any time
after the date of this Indenture to change the circumstances under which a
Trustee shall be deemed to have a conflicting interest with respect to the Debt
Securities of any series or to change any of the definitions in connection
therewith, this Section shall be automatically amended to incorporate such
changes.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws of the
United States of America, or of any state or territory thereof or of the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by federal, state,
territorial or District of Columbia authority, or
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(ii) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
Person directly or indirectly controlling, controlled by or under common control
with the Company shall serve as Trustee for the Debt Securities of any series.
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 under Section 611.
(b) The Trustee may resign at any time with respect to the Debt Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debt Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Debt 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 310(b) of the Trust
Indenture Act pursuant to Section 608 hereof with respect to the Debt
Securities of any series after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months, unless the Trustee's duty to resign is
stayed in accordance with the provisions of Section 310(b) of the Trust
Indenture Act, or
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(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or a decree or order
for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Trustee in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree or
order by a court having jurisdiction in the premises shall have been
entered for the appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trustee or of its
property or affairs, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, winding up or liquidation, or
(4) the Trustee shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law or shall consent to
the appointment of or taking possession by a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Trustee or its property or affairs, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or shall take corporate action in
furtherance to any such action, then, in any such case, (i) the Company by
a Board Resolution may remove the Trustee with respect to all Debt
Securities, or (ii) subject to Section 514, any Holder who has been a bona
fide Holder of a Debt Security of any series for at least six months may,
on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee for the Debt
Securities of such series and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Debt Securities of one or more series, the Company, by or pursuant to a
Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Debt Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Debt 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 Debt 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 Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt 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, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Debt Security of such series for at least
six months may, subject to Section 514,
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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 Debt Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Debt Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the name of
the successor Trustee with respect to the Debt Securities of such series and the
address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a successor Trustee with
respect to all Debt 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 request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject to its lien, if any,
provided for in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt 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 Debt 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 Debt 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
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effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of retiring Trustee with respect to the Debt
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 Debt 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
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of 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 Debt 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 Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt
Securities. In case any Debt Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt 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.
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(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection
(c) of this Section, or subsequent to such default, then, unless and until such
a default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the Debt
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a voluntary or
involuntary case had been commenced in respect of the Company under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law
upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
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Trustee had no reasonable cause to believe that a default as defined in
Subsection (c) of this Section would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of other
indenture securities dividends on claims filed against the Company in bankruptcy
or receivership or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law, but after
crediting thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from such dividends and from the
funds and property so held in such special account. As used in this paragraph,
with respect to any claim, the term "dividends" shall include any distribution
with respect to such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
other similar law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee and the Holders and the holders
of other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Holders and the holders
of other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or
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to make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
three-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such three-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or Depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section.
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(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Debt Securities or upon the
other indenture securities when and as such principal or interest becomes
due and payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which indenture and as to which securities the Trustee is also trustee,
(ii) which contains provisions substantially similar to the provisions of
this Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of or a lien upon the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Debt Securities.
SECTION 614. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on behalf of the Trustee and
subject to its direction in the authentication and delivery of Debt Securities
of any series issued upon exchange or registration of transfer thereof as fully
to all intents and purposes as though any such Authenticating Agent had been
expressly authorized to authenticate and deliver Debt Securities of such series;
provided that the Trustee shall have no liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the authentication and
delivery of Debt Securities of any series. Any such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of the
United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such
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authority, then for the purposes of this Section 614 the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 614 without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign with respect to one or more
or all series of Debt Securities by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the agency of
any Authenticating Agent with respect to one or more or all series of Debt
Securities by giving written notice of termination 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 any Authenticating Agent shall cease to be
eligible under this Section 614, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent with respect to
the applicable series eligible under this Section 614, shall give written notice
of such appointment to the Company and shall mail notice of such appointment to
all holders of the applicable series of Debt Securities as the names and
addresses of such holders appear on the Security Register. Any successor
Authenticating Agent with respect to all or any series upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities with respect to such series of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to Debt Securities of each series for which it acts as Trustee:
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(a) semiannually, not more than 15 days after the Regular Record Date
in respect of the Debt Securities of such series or on June 30 and December
31 of each year with respect to each series of Debt Securities to which
there are no Regular Record Dates, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such
Regular Record Date or June 15 or December 15, as the case may be, 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 if and so long as the Trustee shall be the Security
Registrar for Debt Securities of a series, no such list need be furnished with
respect to such series of Debt Securities.
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, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (hereinafter referred to as "applicants") of
Debt Securities of any series apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Debt Security
of such series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debt Securities of a particular series (in
which case the applicants must hold Debt Securities of such series) or with all
Holders of Debt Securities with respect to their rights under this Indenture or
under the Debt Securities and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debt Securities of such series or of all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
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If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Debt Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section 702(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to all Holders of Debt Securities such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the time and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Trustee shall, within 60 days after each May 15 following the date of
this Indenture, commencing with May 15, 1998, deliver to Holders a brief report,
dated as of such May 15, which complies with the provisions of such Section
313(a).
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Debt
Securities of such series are listed, with the Commission and also with the
Company. The Company will notify the Trustee when any series of Debt Securities
is listed on any stock exchange.
SECTION 704. Reports by Company.
The Company will:
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(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it will file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America, any political subdivision thereof or any State thereof and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Debt
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Securities and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation with or merger into any other corporation, or any
conveyance or transfer of the properties and assets of the Company substantially
as an entirety in accordance with Section 801, the successor corporation formed
by such consolidation or into which the Company is merged or the successor
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein, and thereafter the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Debt Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by such successor of the covenants of the Company herein
and in the Debt Securities contained; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities (and if such covenants are
to be for the benefit of less than all series of Debt Securities, stating
that such covenants are expressly being included
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solely for the benefit of such series), or to surrender any right or power
herein conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Debt Securities,
stating that such Events of Default are expressly being included solely to
be applicable to such series); or
(4) to provide for uncertificated Debt Securities in addition to or in
place of certificated Debt Securities; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Debt Security Outstanding of any series created prior to
the execution of such supplemental indenture which is entitled to the
benefit of such provision; or
(6) to establish the form or terms of Debt Securities of any series as
permitted by Sections 202 and 301; or
(7) to evidence and provide for the acceptance of appointment
hereunder 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 this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611(b); or
(8) to secure the Debt Securities pursuant to the requirements of
Section 1008 or otherwise; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
any provision of this Indenture, provided such other provisions shall not,
based on an Opinion of Counsel to that effect, adversely affect the
interests of the Holders of Debt Securities of any series in any material
respect.
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 Debt Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders under
this
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Indenture of such Debt Securities; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each outstanding Debt
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Debt Security, or reduce the principal amount thereof
or the interest thereon or any premium payable upon redemption thereof, or
reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or adversely affect the right of
repayment or repurchase, if any, at the option of the Holder, or reduce the
amount of, or postpone the date fixed for, any payment under any sinking
fund or analogous provisions for any Debt Security, or change any Place of
Payment, or the coin or currency or currency unit in which any Debt
Security or the interest thereon is payable, or change or eliminate the
rights of a Holder under Section 311, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
or
(2) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1010, 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 Debt Security
affected thereby; provided, however, that this clause shall not be deemed
to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1010, in accordance with the requirements of Sections 611(b) and
901(8) or the deletion of this proviso.
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 one or more particular series of Debt Securities, or which modifies
the rights of the Holders of Debt Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Debt Securities of any other series.
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
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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 shall form a part of this Indenture for all purposes; and every Holder
of Debt Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Notice to Holders.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture under Section 902 of this Article, the Company shall
transmit by mail a notice, setting forth in general terms the substance of such
supplemental indenture, to all Holders of Debt Securities, as the names and
addresses of such Holders appear on the Security Register for each series of
Debt Securities.
SECTION 906. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 907. Reference in Debt Securities to Supplemental Indentures.
Debt 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 Debt 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 Debt Securities of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Debt
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Debt Securities in accordance with the terms of the
Debt Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Debt
Securities an office or agency where Debt Securities may be presented or
surrendered for payment, where Debt Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of such Place of Payment) where the Debt Securities
of one or more series may be presented or surrendered for any or all of 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 any series of Debt Securities for such purposes. The Company will
give prompt written notice to the Trustee of any such designation and any change
in the location of any such other office or agency.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
Indenture supplemental hereto with respect to a series of Debt Securities, the
Company hereby initially designates as the Place of Payment for each series of
Debt Securities, the Borough of Manhattan, the City and State of New York, and
initially appoints the Trustee at its Corporate Trust Office as the Company's
office or agency for each such purpose in such city.
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SECTION 1003. Money for Debt Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Debt Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Debt Securities of
such series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
any series of Debt Securities, it will, prior to or on each due date of the
principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent with respect to any series of Debt
Securities 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:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt 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 herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debt Securities of such series) in the making of any
payment of principal of (and premium, if any) or interest on the Debt
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
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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 (and premium, if any)
or interest on any Debt Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debt
Security shall thereafter, as an unsecured general creditor look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, the City and State of New York, and
each Place of Payment with respect to Debt Securities of the series with respect
to which such moneys are so held or cause to be mailed to each such Holder, or
both, 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 will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
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SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a Lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings; and,
provided further that such claims under (2) above exceed $10,000,000 in the
aggregate.
SECTION 1007. Limitation on Sales and Leasebacks.
(a) The Company will not, nor will it permit any Subsidiary of the Company
to, enter into any Sale and Lease-Back Transaction with respect to any Operating
Property or Operating Asset more than 360 days after the later of (i) the
completion of the acquisition, substantial repair or alteration, construction,
development or substantial improvement of such Operating Property or Operating
Asset; (ii) the placing in operation of such Operating Property or Operating
Asset or (iii) the placing in operation of such Operating Property or Operating
Asset as so substantially repaired or altered, constructed, developed or
substantially improved. This Covenant shall not apply to any Sale and Lease-Back
Transaction with respect to any Operating Property or Operating Asset:
(1) if the Company or such Subsidiary could issue, assume or guarantee
Indebtedness secured by a Lien pursuant to Section 1008 on the property to
be leased back in an amount equal to the Attributable Debt with respect to
such Sale and Lease-Back Transaction without equally and ratably securing
the Outstanding Debt Securities of each series;
(2) solely between the Company and a wholly-owned Subsidiary or
between wholly-owned Subsidiaries of the Company;
(3) if the terms of such Sale and Lease-Back Transaction have been
determined by the Company's Board of Directors to be fair and arms' length
and, within 360 days after the receipt of the proceeds of such Sale and
Lease-Back Transaction, the Company or any of its Subsidiaries applies an
amount equal to the greater of the net proceeds of such Sale and Lease-Back
Transaction or the fair value of such Operating Property or Operating Asset
at the time of such Sale and Lease-Back Transaction to (x) the prepayment
or retirement (other than any mandatory prepayment or retirement) of
Indebtedness not then due within one year of the Company or any of its
Subsidiaries (other than Indebtedness of a wholly-owned Subsidiary to the
Company or to another
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wholly-owned Subsidiary) or (y) the making of capital expenditures incurred
to purchase, construct or improve property used in the ordinary course of
business of the Company or any of its Subsidiaries; or
(4) to the extent the Company transfers or sells all or part of its
nine block corporate headquarters complex and parking lots in existence on
the date hereof, and any additions thereto, or all or part of any of its 12
regional distribution centers in existence on the date hereof, and any
additions thereto, in a transaction (including but not limited to the
formation of a partnership) in which the Company (i) receives an interest
equal in value (as determined in good faith by the Board of Directors and
set forth in an Officers' Certificate delivered to the Trustee) to the
value of any property so transferred or sold and (ii) enters into a lease
providing the Company with the continued use of such property.
SECTION 1008. Limitation on Liens.
The Company will not, and will not permit any Subsidiary to, create, incur,
assume or suffer to exist any Lien upon any Operating Property or Operating
Asset of the Company or any Subsidiary, whether owned at the date of this
Indenture or thereafter acquired, to secure any Indebtedness, without making
effective provision whereby the Debt Securities of each series then Outstanding
(together with, if the Company shall so determine, any other Indebtedness of the
Company or any Subsidiary then existing or thereafter created which is not
subordinate to the Debt Securities of each series then Outstanding) shall be
secured by such Lien equally and ratably with (or prior to) any and all other
Indebtedness thereby secured, so long as such Indebtedness shall be so secured,
unless, after giving effect thereto, the aggregate amount of all such
Indebtedness secured by Liens together with all Attributable Debt of the Company
and its Subsidiaries in respect of Sale and Lease-Back Transactions (other than
the Sale and Lease-Back Transactions excluded from the prohibition of Section
1007 by clauses (2), (3) and (4) thereof) would not exceed the greater of (i)
10% of Consolidated Net Tangible Assets of the Company, or (ii) $140,000,000;
provided, however, that the foregoing restriction shall not apply to
Indebtedness secured by any of the following:
(1) Liens on any property existing at the time of acquisition thereof
by the Company or a Subsidiary, provided that (x) each such Lien shall at
all times be confined solely to the asset or assets so acquired and (y) the
principal amount of Indebtedness secured by each such Lien shall at no time
exceed the cost of the assets in question to the Company or the respective
Subsidiary (including the principal amount of the Indebtedness secured
thereby);
(2) Liens on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Subsidiary
or otherwise becomes a Subsidiary of the Company or at the time of a sale,
lease or other disposition of the properties of such corporation (or a
division thereof) as an entirety or substantially as an entirety to the
Company or a Subsidiary, provided that such Lien as a result of such
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merger, consolidation, sale, lease or other disposition is not extended to
property owned by the Company or such Subsidiary immediately prior thereto;
(3) Liens securing Indebtedness of a wholly-owned Subsidiary to the
Company or to another wholly-owned Subsidiary;
(4) Liens on property to secure all or part of the cost of acquiring,
substantially repairing or altering, constructing, developing or
substantially improving such property, or to secure Indebtedness incurred
to provide funds for any such purpose, provided that (i) such Lien comes
into existence not later than 360 days after the later of (a) the
completion of the acquisition, substantial repair or alteration,
construction, development or substantial improvement of such property or
(b) the placing in operation of such property or of such property as so
substantially repaired or altered, constructed, developed or substantially
improved and (ii) the principal amount of Indebtedness secured by such Lien
does not exceed the cost of such acquisition, repair, alteration,
construction, development or improvement;
(5) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any state thereof, to secure
partial progress, advance or other payments pursuant to any contract or
statute or to secure any indebtedness incurred for the purpose of financing
all or any part of the purchase price or the cost of constructing or
improving the property subject to such Liens;
(6) Liens incurred or assumed in connection with an issuance of
revenue bonds the interest on which is exempt from federal income tax
pursuant to Section 103 and related Sections of the Internal Revenue Code
of 1986, as amended;
(7) Liens on customer and other accounts receivable owned by the
Company or any Subsidiary; and
(8) any extension, renewal or replacement (or successive extension,
renewals or replacements), in whole or in part, of any Lien referred to in
the foregoing Clauses (1) to (7), inclusive; provided, however, that the
principal amount of Indebtedness secured thereby and not otherwise
authorized by said Clauses (1) to (7), inclusive, shall not exceed the
principal amount of Indebtedness, plus any premium or fee payable in
connection with any such extension, renewal or replacement, so secured at
the time of such extension, renewal or replacement.
SECTION 1009. Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not more than
four months after the end of each fiscal year of the Company (which on the date
hereof is December 31) ending after the date hereof, a certificate from the
principal executive officer, principal financial officer, treasurer or principal
accounting officer of the Company, stating whether or not,
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to the knowledge of such officer, the Company has complied with all conditions
and covenants under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature thereof of which such officer may
have knowledge.
For the purposes of this Section 1009, compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
The Company will deliver written notice to the Trustee five days after any
officer of the Company has knowledge of the occurrence of any event which with
the giving of notice or the lapse of time or both would become an Event of
Default under Subsection (5) of Section 501.
SECTION 1010. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with the
covenants set forth in Sections 1007 and 1008, with respect to the Debt
Securities of any series if, before the time for such compliance the Holders of
at least a majority in principal amount of the Debt Securities of such series at
the time Outstanding shall, by Act of such Holders, either waive such compliance
in such instance or generally waive compliance with such covenant, but no such
waiver shall extend to or affect such covenant except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF DEBT SECURITIES
SECTION 1101. Applicability of Article.
Debt Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Debt Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem, Notice to Trustee.
The election of the Company to redeem any Debt Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Debt Securities of any series, the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Debt Securities
of such series to be redeemed. In the case of any redemption of Debt Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Debt Securities or elsewhere in
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this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Debt Securities to Be Redeemed.
If less than all the Debt Securities of any series are to be redeemed, the
particular Debt Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding Debt
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Debt Securities of such series or any integral multiple
thereof) of the principal amount of Debt Securities of such series of a
denomination larger than the minimum authorized denomination for Debt Securities
of such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debt Securities shall relate, in
the case of any Debt Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debt Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Debt Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debt Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debt Securities to be redeemed,
(4) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Debt Security to be redeemed, and that interest
thereon shall cease to accrue on and after said date,
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(5) the Place or Places of Payment where such Debt Securities are to
be surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Debt Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
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 sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Debt
Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debt 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) such Debt Securities shall cease to bear interest. Upon surrender of
any such Debt Security for redemption in accordance with said notice, such Debt
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, except as
contemplated pursuant to Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Debt Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Dates according to their terms and the provisions of
Section 307.
If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
SECTION 1107. Debt Securities Redeemed in Part.
Any Debt Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company, the Security Registrar or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Security Registrar and the Trustee duly
executed by, the Holder thereof or his
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attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Debt Securities of
the same series and Stated Maturity, of any authorized denomination as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debt Security so surrendered, except
that if a Global Security is so surrendered, the Company shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global
Security, without service charge, a new Global Security or Securities in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Debt Securities of a series except as otherwise specified as
contemplated by Section 301 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debt 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 Debt Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debt Securities of any
series, the amount of any cash sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Debt Securities of any series as provided for by the terms of Debt
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Debt Securities.
The Company (1) may deliver outstanding Debt Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit Debt
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Debt Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such Debt
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debt Securities of such series required to be made
pursuant to the terms of such Debt Securities as provided for by the terms of
such series; provided, that such Debt Securities have not been previously so
credited. Such Debt Securities shall be received and credited for such purpose
by the Trustee at the Redemption Price specified in such Debt Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
75
<PAGE>
SECTION 1203. Redemption of Debt Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), 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, the portion thereof, if any, which is to be
satisfied by crediting Debt Securities of that series pursuant to Section 1202
and, prior to or concurrently with the delivery of such Officers' Certificate,
will also deliver to the Trustee any Debt Securities to be so credited and not
theretofore delivered to the Trustee. Not less than 45 days (unless a shorter
period shall be satisfactory to the Trustee) before each such sinking fund
payment date the Trustee shall select the Debt 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 Debt Securities shall be made upon the terms
and in the manner stated in Sections 1105, 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Applicability of Article.
If pursuant to Section 301 provision is made for the defeasance of Debt
Securities of a series, then the provisions of this Article shall be applicable
except as otherwise specified as contemplated by Section 301 for Debt Securities
of such series.
SECTION 1302. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
At the Company's option, either (a) the Company shall be deemed to have
been Discharged (as defined below) from its obligations with respect to Debt
Securities of any series on the 91st day after the applicable conditions set
forth below have been satisfied or (b) the Company shall cease to be under any
obligation to comply with any term, provision or condition set forth in Sections
1007 and 1008 with respect to Debt Securities of any series at any time after
the applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated
76
<PAGE>
solely to, the benefit of the Holders of the Debt Securities of such series
(i) money in the Required Currency in an amount, or (ii) in the case of
Debt Securities denominated in Dollars, U.S. Government Obligations (as
defined below), which through the payment of interest and principal in
respect thereof in accordance with their terms will provide (without any
reinvestment of such interest or principal), not later than one day before
the due date of any payment, money in an amount, or (iii) a combination of
(i) and (ii), sufficient, in the opinion (with respect to (ii) and (iii))
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee at or prior to
the time of such deposit, to pay and discharge each installment of
principal (including any mandatory sinking fund payments) of, and interest
on, the Outstanding Debt Securities of such series on the dates such
installments of interest or principal are due;
(2) the Company shall have delivered to the Trustee an Officers'
Certificate certifying as to whether the Debt Securities of such series are
then listed on the New York Stock Exchange;
(3) if the Debt Securities of such series are then listed on the New
York Stock Exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company's exercise of its option
under this Section would not cause such Debt Securities to be delisted;
(4) no Event of Default or event (including such deposit) 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 be
continuing on the date of such deposit as evidenced to the Trustee in an
Officers' Certificate delivered to the Trustee concurrently with such
deposit;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (and containing no assumption or qualification)
(i) Holders of the Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of the
Company's exercise of its option under this Section and will be subject to
Federal income tax on the same amount and in the same manner and at the
same time as would have been the case if such option had not been
exercised, and, in the case of the Debt Securities of such series being
Discharged, accompanied by a ruling to that effect received from or
published by the Internal Revenue Service (it being understood that (A)
such Opinion shall also state that such ruling is consistent with the
conclusions reached in such Opinion and (B) the Trustee shall be under no
obligation to investigate the basis or correctness of such ruling) and (ii)
all conditions precedent to the Discharge pursuant to this Section have
been complied with;
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
provision will not cause any violation of the Investment Company Act of
1940, as amended, on the part of the
77
<PAGE>
Company, the trust, the trust funds representing the Company's deposit or
the Trustee; and
(7) the Company shall have paid or duly provided for payment of all
amounts then due to the Trustee pursuant to Section 607.
"Discharged" means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by, and obligations under, the Debt
Securities of such series and to have satisfied all the obligations under this
Indenture relating to the Debt Securities of such series (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of and the interest on such Debt Securities when such payments are
due, (B) the Company's obligations with respect to the Debt Securities of such
series under Sections 305, 306, 1002 and 1303 and (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including without
limitation, the provisions of Section 607.
"U.S. Government Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case under clauses
(i) or (ii) are not callable or redeemable at the option of the issuer thereof.
SECTION 1303. Deposited Moneys and U.S. Government Obligations To Be Held
in Trust.
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 1302 in respect of Debt Securities of a series shall be held
in trust and applied by it, in accordance with the provisions of such Debt
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal, premium, if any, and interest, if any,
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 1304. Repayment to Company.
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any money and U.S. Government Obligations held by
them at any time that are not required for the payment of the principal of,
premium, if any, and interest on the Debt Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to section
1302.
78
<PAGE>
The provisions of the last paragraph of Section 1003 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Debt Securities for
which money or U.S. Government Obligations have been deposited pursuant to
Section 1302.
79
<PAGE>
* * * * *
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.
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.
TANDY CORPORATION
[CORPORATE SEAL]
By ______________________________
Name:
Title:
Attest:
___________________________________
Assistant Secretary
THE CHASE MANHATTAN BANK
[CORPORATE SEAL]
By ______________________________
Name:
Title:
Attest:
___________________________________
Assistant Trust Officer
80
<PAGE>
STATE OF )
COUNTY OF ) SS.:
On the _____ day of May, 1997, before me personally came ______________, to
me known, who, being by me duly sworn, did depose and say that he is
__________________ of Tandy Corporation, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
______________________________
Notary Public
State of __________
My commission expires ________
[Seal]
81
<PAGE>
Exhibit A
Form of election to receive payments in
[Dollars or other applicable currency]
or to rescind such election
The undersigned, registered owner of certificate number ______-_________
(the "Certificate"), representing [name of series of Debt Securities] (the "Debt
Securities") in an aggregate principal amount of _____________, hereby
- elects to receive all payments in respect of the Debt Securities in
[Dollars or other applicable currency]. Subject to the terms and
conditions set forth in the indenture under which the Debt Securities
were issued (the "Indenture"), this election shall take effect on the
next Record Date (as defined in the indenture) after this election
form is received by the Trustee and shall remain in effect until it is
rescinded by the undersigned or until the Certificate is transferred
or paid in full at Maturity.
- rescinds the election previously submitted by the undersigned to
receive all payments in respect of the Debt Securities in [Dollars or
other applicable currency] represented by the Certificate. Subject to
the terms and conditions set forth in the Indenture, this rescission
shall take effect on the next Record Date (as defined in such
Indenture) after this election form is received by the Trustee, or, in
the case of Maturity of an installment of principal, the fifteenth day
immediately preceding such Maturity.
All capitalized terms used herein, unless otherwise defined herein, shall
have the meanings assigned to them in the Indenture.
________________________________
(Name of Owner)
________________________________
(Signature of Owner)
82
<PAGE>
EXHIBIT 5.1
SATTERLEE STEPHENS BURKE & BURKE LLP
230 Park Avenue
New York, NY 10169
May 15, 1997
Tandy Corporation
100 Throckmorton Street,
Suite 1800
One Tandy Center
Fort Worth, TX 76102
Ladies and Gentlemen:
We have acted as counsel to Tandy Corporation, a Delaware corporation (the
"Company"), in connection with the proposed offering, from time to time, by the
Company of its debt securities having an aggregate initial public offering price
or purchase price of up to U.S. $300,000,000 or the equivalent in foreign or
composite currencies (the "Debt Securities") pursuant to a Registration
Statement on Form S-3 filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), (the Registration Statement
as amended at the time when it becomes effective being herein referred to as the
"Registration Statement").
In connection therewith, we have examined and relied upon the original, or
copies certified to our satisfaction, of (i) the Certificate of Incorporation
and the Bylaws of the Company, as amended; (ii) minutes and records of the
corporation proceedings of the Company; (iii) the Registration Statement and
exhibits thereto; (iv) the form of Underwriting Agreement to be entered into
among the Company and one or more Underwriters to be named therein; (v) the form
of Terms Agreement to be entered into among the Company and Bear Stearns & Co.,
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Brothers Inc
and Rauscher Pierce Refsnes, Inc.; (vi) the form of Indenture, dated as of May
1, 1997, to be entered into by and between the Company and The Chase Manhattan
Bank, as Trustee; and (vii) such other documents and instruments as we have
deemed necessary for the expression of the opinions contained herein.
In making the foregoing examinations, we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. As to various questions of fact
material to this opinion and as to the content and form of the Certificate of
Incorporation, Bylaws, minutes, records, resolutions, and other documents or
writings of the
<PAGE>
Company, we have relied, to the extent we deem reasonably appropriate, upon
representations or certificates of officers or directors of the Company and upon
documents, records, and instruments furnished to us by the Company, without
independent check or verification of their accuracy. We have assumed that the
Terms Agreement, Underwriting Agreement, and Indenture will be executed in
substantially the same form as submitted to us.
Based upon the foregoing, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The Company is a corporation duly incorporated, existing, and in good
standing under the laws of the State of Delaware.
2. The Debt Securities proposed to be sold by the Company pursuant to the
Underwriting Agreement and the Terms Agreement have been duly authorized for
issuance and, subject to (i) the Registration Statement becoming effective, (ii)
a supplement or amendment to the prospectus, forming a part of such Registration
Statement, specifying certain terms with respect to the offering of such Debt
Securities being filed or mailed for filing to the Securities and Exchange
Commission pursuant to Rule 424 under the Act, and (iii) compliance with any
applicable Blue Sky laws, when executed by the Company, authenticated by the
Trustee, and delivered and sold in accordance with the provisions of the
Underwriting Agreement and the Terms Agreement, will be valid and legally
binding obligations of the Company, enforceable in accordance with the terms and
entitled to the benefits of the Indenture, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or similar laws now or hereafter in effect affecting the rights of
creditors generally.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to us under "Legal Opinions" in the Prospectus forming a part of such
Registration Statement.
Very truly yours,
Satterlee Stephens Burke & Burke LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 19, 1997, except as to the treasury stock repurchase program
described in Note 11 as to which the date is March 3, 1997, appearing on page
29 of Tandy Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
Price Waterhouse LLP
Fort Worth, Texas
May 16, 1997
<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) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
TANDY CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 75-1047710
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1800 ONE TANDY CENTER
FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
_____________________________________________
DEBT SECURITIES
(Title of the indenture securities)
________________________________________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 28TH day of APRIL, 1997.
THE CHASE MANHATTAN BANK
By /s/ T. J. Foley
------------------------------
T. J. Foley
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................... $11,509
Interest-bearing balances ....................... 8,457
Securities:........................................
Held to maturity securities........................ 3,128
Available for sale securities...................... 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................ 9,222
Securities purchased under agreements to resell... 422
Loans and lease financing receivables:
Loans and leases, net of unearned income. $133,935
Less: Allowance for loan and lease losses 2,789
Less: Allocated transfer risk reserve.... 16
--------
Loans and leases, net of unearned income,
allowance, and reserve........................... 131,130
Trading Assets..................................... 49,876
Premises and fixed assets (including capitalized
leases)........................................... 2,877
Other real estate owned............................ 290
Investments in unconsolidated subsidiaries and
associated companies.............................. 124
Customer's liability to this bank on acceptances
outstanding....................................... 2,313
Intangible assets.................................. 1,316
Other assets....................................... 11,231
--------
TOTAL ASSETS....................................... $272,429
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices............................ $87,006
Noninterest-bearing................... $35,783
Interest-bearing...................... 51,223
-------
In foreign offices, Edge and Agreement
subsidiaries, and IBF's....................... 73,206
Noninterest-bearing .................. $ 4,347
Interest-bearing...................... 68,859
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's Federal
funds purchased................................. 14,980
Securities sold under agreements to repurchase.. 10,125
Demand notes issued to the U.S. Treasury......... 1,867
Trading liabilities.............................. 34,783
Other Borrowed money:
With a remaining maturity of one year or less.. 14,639
With a remaining maturity of more than one year 425
Mortgage indebtedness and obligations under
capitalized leases.............................. 40
Bank's liability on acceptances executed and
outstanding..................................... 2,267
Subordinated notes and debentures................ 5,471
Other liabilities................................ 11,343
TOTAL LIABILITIES................................ 256,152
--------
Limited-Life Preferred stock and related surplus 550
EQUITY CAPITAL
Common stock......................................... 1,251
Surplus.............................................. 10,243
Undivided profits and capital reserves............... 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities..................... (309)
Cumulative foreign currency translation adjustments.. 16
TOTAL EQUITY CAPITAL................................. 15,727
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................ $272,429
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
