AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 1997
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
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THE TORO COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 41-0580470
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8111 LYNDALE AVENUE SOUTH, BLOOMINGTON, MINNESOTA 55420-1196
(612) 888-8801
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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J. LAWRENCE MCINTYRE, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
THE TORO COMPANY
8111 LYNDALE AVENUE SOUTH
BLOOMINGTON, MINNESOTA 55420-1196
TELEPHONE: (612) 888-8801
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
DEAN R. EDSTROM, ESQ. MITCHELL L. HOLLINS, ESQ.
DOHERTY, RUMBLE & BUTLER PROFESSIONAL SONNENSCHEIN NATH & ROSENTHAL
ASSOCIATION 8000 SEARS TOWER
3500 FIFTH STREET TOWERS CHICAGO, ILLINOIS 60606
150 SOUTH FIFTH STREET TELEPHONE: (312) 876-8144 TELEFAX:
MINNEAPOLIS, MINNESOTA 55402-4235 (312) 876-7934
TELEPHONE: (612) 340-5555 TELEFAX:
(612) 340-5584
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS
DETERMINED BY MARKET CONDITIONS.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If 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
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE
Debt Securities.........................................
Common Stock(1).........................................
Warrants to purchase Debt Securities.................... $250,000,000(3)(4) 100% $250,000,000(4)(5)
Warrants to purchase Common Stock Units(2)..............
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
Debt Securities.........................................
Common Stock(1).........................................
Warrants to purchase Debt Securities.................... $75,757.58
Warrants to purchase Common Stock Units(2)..............
(1) Associated with the shares of Common Stock are Preferred Share Purchase
Rights that will not be exercisable or evidenced separately from the Common
Stock prior to the occurrence of certain events.
(2) The Debt Securities, shares of Common Stock, and Warrants to purchase Debt
Securities and Common Stock registered hereunder may be sold separately or
together with other such securities as Units.
(3) Includes a principal amount of Debt Securities, an indeterminate number of
shares of Common Stock issued at indeterminable prices, the consideration,
if any, for Warrants to purchase Debt Securities and Common Stock, and a
principal amount of Debt Securities and an indeterminate number of shares of
Common Stock issued at indeterminable prices as may be issued upon exercise
of Warrants, but with an aggregate initial offering price of all such
Securities, including Units, not to exceed $250,000,000, plus such
indeterminate number of shares of Common Stock as may be issued upon
conversion of Debt Securities registered hereunder, for which no separate
consideration will be received. The amount of Debt Securities shall be the
principal amount thereof or, if issued with an original issue discount, the
gross proceeds thereof, excluding accrued interest and accrued amortization
of discount, if any, to the date of delivery. The number of shares of Common
Stock is limited to that which is permissible under Rule 415(o)(4) under the
Securities Act.
(4) Or the equivalent thereof in one or more foreign currencies or composite
currencies.
(5) 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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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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 LAW OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 31, 1997
[LOGO]
$250,000,000
THE TORO COMPANY
DEBT SECURITIES
COMMON STOCK
WARRANTS
UNITS OF SECURITIES
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The Toro Company (the "Company") may from time to time offer (i) its debt
securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness (the "Debt Securities"), (ii) shares of its common stock, $1.00 par
value per share (the "Common Stock"), (iii) warrants to purchase Debt Securities
or Common Stock (the "Warrants") and (iv) units ("Units") consisting of two or
more of the foregoing securities, with an aggregate initial public offering
price of up to $250,000,000 or the equivalent thereof in one or more foreign
currencies or composite currencies, on terms to be determined at the time of
sale. The Debt Securities, Common Stock, Warrants and Units (collectively, the
"Securities") may be offered separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (a "Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable, (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, currency, denominations, maturity,
premium, rate and time of payment of interest, terms for redemption at the
option of the Company or repayment at the option of the holder, terms for
sinking fund payments, covenants, terms for conversion or exchange into shares
of Common Stock and the initial public offering price; (ii) in the case of
shares of Common Stock, the initial public offering price; (iii) in the case of
Warrants, the duration, offering price, exercise price and detachability, and
(iv) in the case of Units, a description of the Securities comprising such Units
and the offering price thereof. Units may be issued in amounts, at prices, on
terms and containing such conditions, covenants and other provisions, and
consisting of such Securities, as will be set forth in a Prospectus Supplement.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplements.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable fee, commission, purchase price or discount arrangements with
them, will be set forth, or will be calculable from the information set forth,
in the applicable Prospectus Supplement. See "Plan of Distribution." No
Securities may be sold without delivery of the applicable Prospectus Supplement
describing the method and terms of the offering of such Securities.
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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 OR ANY
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN AND THEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE OF SUCH PROSPECTUS OR PROSPECTUS SUPPLEMENT OR THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE THEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE OF SUCH PROSPECTUS OR PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Citicorp Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such materials can be obtained from the Public
Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site
(located at http://www.sec.gov) which includes reports, proxy statements and
other information filed electronically by registrants, including the Company,
with the Commission. The Company's Common Stock is listed on the New York Stock
Exchange. Reports, proxy statements and other information concerning the Company
can also 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 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus and any Prospectus Supplement do 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 with respect to the Company and the Securities, reference is made to
the Registration Statement, including the exhibits and schedules thereto, which
may be inspected without charge at the principal office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates. Statements contained herein or in any
Prospectus Supplement concerning any document filed as an exhibit to the
Registration Statement do not purport to be complete, and in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in and made a part of this Prospectus by reference: (i) Annual
Report on Form 10-K for the fiscal year ended October 31, 1996; and (ii) Current
Report on Form 8-K dated December 16, 1996.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained
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herein or in any Prospectus Supplement or in a document incorporated or deemed
to be incorporated by reference herein or therein shall be deemed to be modified
or superseded for purposes of this Prospectus and any Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently filed
document which is incorporated or deemed to be incorporated by reference herein
or in any 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 or any Prospectus
Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the information incorporated
herein by reference (other than exhibits, unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to N. Jeanne Ryan, Assistant Secretary, The Toro Company,
8111 Lyndale Avenue South, Bloomington, Minnesota 55420. Telephone requests may
be directed to (612) 888-8801.
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THE COMPANY
The Toro Company is a leading manufacturer of consumer lawn mowers,
snowthrowers, trimmers, commercial mowing and turf maintenance equipment and
underground automatic irrigation systems. These products are sold under the
Toro-Registered Trademark-, Wheel Horse-Registered Trademark-,
Lawn-Boy-Registered Trademark- and other brand names to the consumer market and
professional market, which includes entities that manage or construct golf
courses, parks and other large turf areas. The consumer product line includes
walk-behind mowers; riding mowers and lawn and garden tractors; electrical home
improvement products, such as low voltage lighting, electric trimmers and leaf
blowers; and snow removal products. The professional product line includes
commercial products for professional turf and golf course maintenance, such as
precision cutting mowers and turf aeration equipment, and irrigation products
such as sprinkler heads and control devices for underground irrigation systems.
The Company sells most of its products through domestic and foreign distributors
and mass merchandisers.
The Company was incorporated in Minnesota in 1935 as the successor to a
business founded in 1914. It was reincorporated in Delaware in 1983. The
Company's executive offices are located at 8111 Lyndale Avenue South,
Bloomington, Minnesota 55420, telephone number (612) 888-8801. Unless the
context indicates otherwise, the term "Company" refers to The Toro Company and
its subsidiaries. The Company finances a significant portion of its receivables
through Toro Credit Company, its wholly owned consolidated finance subsidiary
("Toro Credit").
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios (unaudited) of earnings to fixed
charges for the Company and its consolidated subsidiaries for each of the four
fiscal years ended July 31, 1995, for the three month transition period ended
October 31, 1995, and for the fiscal year ended October 31, 1996.
TRANSITION
PERIOD
YEAR ENDED JULY 31, ENDED YEAR ENDED
---------------------------------- OCTOBER 31, OCTOBER 31,
1992 1993 1994 1995 1995 1996
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Ratio of earnings to fixed
charges(1)....................... -- (2) 2.12 3.32 5.10 3.02 4.60
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(1) Earnings consist of pre-tax earnings plus fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt expense and
premium, and that portion of rentals representative of interest.
(2) For fiscal year ending July 31, 1992, earnings were insufficient to cover
fixed charges by $34,903,000.
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USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds received by the Company from the sale of the Securities will be
utilized by the Company as required from time to time for working capital and
expansion of the businesses of the Company and its subsidiaries, including Toro
Credit, for the repayment of existing indebtedness and for other general
corporate purposes. To the extent not theretofore utilized, the net proceeds
received by the Company may be placed in short-term investments, including
commercial paper and certificates of deposit, or utilized to reduce other
short-term borrowings. Except as may be indicated in the applicable Prospectus
Supplement, no specific determination has been made as to the use of the
proceeds of the Securities in respect of which this Prospectus is being
delivered.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may not apply thereto will be
described in the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued in one or more series under an
Indenture dated as of January 31, 1997 (the "Indenture") between the Company and
First Trust National Association, as Trustee (the "Trustee"), a copy of which is
filed as an exhibit to the Registration Statement. The following summaries of
certain provisions of the Debt Securities and the Indenture do not purport to be
complete and are subject to, and are qualified in their entireties by reference
to, all of the provisions of the Indenture, including the definitions therein of
certain terms. Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are incorporated by
reference herein.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Indenture does not limit the amount of other
indebtedness or securities, other than certain secured indebtedness as described
below, which may be issued by the Company. All Debt Securities will be unsecured
and will rank pari passu with all other unsecured and unsubordinated
indebtedness of the Company. The Trustee will authenticate and deliver Debt
Securities executed and delivered to it by the Company as set forth in the
Indenture.
Reference is made to the related Prospectus Supplement for the following and
other possible terms of each series of the Offered Debt Securities in respect of
which this Prospectus is being delivered: (i) the title of the Offered Debt
Securities; (ii) any limit upon the aggregate principal amount of the Offered
Debt Securities; (iii) if other than 100% of the principal amount, the
percentage of their principal amount at which the Offered Debt Securities will
be offered; (iv) the date or dates on which the principal of the Offered Debt
Securities will be payable; (v) the rate or rates (or method of determination
thereof), if any, at which the Offered Debt Securities will bear interest, the
date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Offered Debt Securities in
registered form, the record dates for the determination of the holders to whom
interest is payable; (vi) if other than as set forth herein, the place or places
where the principal of and interest, if any, on the Offered Debt Securities will
be payable; (vii) the price or prices at which, the period or periods within
which and the terms and conditions upon which the Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company, pursuant to any
sinking fund or otherwise; (viii) if other than the principal amount thereof,
the portion of the principal amount of the Offered Debt Securities which will be
payable upon maturity or acceleration of the maturity thereof; (ix) the
obligation, if any, of the Company to redeem, purchase or repay the Offered Debt
Securities, whether pursuant to any sinking fund or analogous
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provisions or pursuant to other provisions set forth therein or at the option of
a holder thereof; (x) whether the Offered Debt Securities will be issuable in
registered or bearer form or both, and the rights of the holders to exchange the
Offered Debt Securities in bearer form for the Offered Debt Securities in
registered form and vice versa and the circumstances under which any such
exchanges, if permitted, may be made; (xi) whether and under what circumstances
the Company will pay additional amounts on the Offered Debt Securities held by a
person who is not a U.S. Person in respect of taxes or similar charges withheld
or deducted and, if so, whether the Company will have the option to redeem the
Offered Debt Securities rather than pay such additional amounts; (xii) whether
and under what circumstances the Offered Debt Securities are convertible into
Debt Securities of a different series; (xiii) information with respect to
Warrants, if any; (xiv) the currency or currency unit in which the Offered Debt
Securities are issued or payable; (xv) whether the Offered Debt Securities will
be represented in whole or in part by one or more global notes registered in the
name of a depositary or its nominee; and (xvi) any other terms or conditions not
inconsistent with the provisions of the Indenture upon which the Offered Debt
Securities will be offered. "Principal" when used herein includes, when
appropriate, the premium, if any, on the Debt Securities.
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. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement or Prospectus Supplements relating to any such series
of Debt Securities. In general, federal income tax consequences applicable to a
series of Debt Securities will be described in the Prospectus Supplement
relating thereto, to the extent applicable.
Unless otherwise provided in the Prospectus Supplement relating to any
Offered Debt Securities, principal and interest, if any, will be payable, and
the Debt Securities will be transferable or exchangeable, at the office or
offices or agency maintained by the Company for such purposes, provided that
payment of interest on any registered Debt Securities will be paid at such place
of payment by check mailed to the persons entitled thereto at the addresses of
such persons appearing on the Debt Securities register. Interest on registered
Debt Securities will be payable on any interest payment date to the persons in
whose name the Debt Securities are registered at the close of business on the
record date with respect to such interest payment date.
The Debt Securities may be issued in registered form or, if provided by a
supplement to the Indenture, in bearer form or both as specified in the terms of
the series. Additionally, the Debt Securities may be represented in whole or in
part by one or more global notes registered in the name of a depositary or its
nominee and, if so represented, beneficial interests in such global note will be
shown on, and transfers thereof will be effected only through, records
maintained by the designated depositary and its participants.
The Debt Securities offered hereby will be issued in denominations of $1,000
or any whole multiple of $1,000 or the equivalent thereof in foreign denominated
currency or currency units, unless otherwise specified in the Prospectus
Supplement relating to any Debt Securities.
The Indenture requires the annual filing by the Company with the Trustee of
a certificate as to compliance with certain covenants contained in the
Indenture.
The Company will comply with Section 14(e) under the Exchange Act, and any
other tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of the Company to purchase Offered Debt
Securities at the option of the holders thereof. Any such obligation applicable
to a series of Debt Securities will be described in the Prospectus Supplement or
Prospectus Supplements relating thereto.
The Company may at any time purchase Debt Securities at any price in the
open market or otherwise. Debt Securities so purchased by the Company may, at
its sole option, be held, resold or surrendered to the Trustee in satisfaction
of any sinking fund payment obligation or for cancellation.
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Unless otherwise described in a Prospectus Supplement relating to any
Offered Debt Securities, there are no covenants or provisions contained in the
Indenture which may afford the holders of Offered Debt Securities direct
protection in the event of a highly leveraged transaction involving the Company.
EXCHANGE AND TRANSFER
At the option of the holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities (as defined in the Indenture), Debt
Securities of each series will be exchangeable for other Debt Securities of the
same series of any authorized denomination and of like tenor and aggregate
principal amount.
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security Registrar
(as defined in the Indenture) or at the office of any transfer agent designated
by the Company for such purpose. No service charge will 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 payable in connection therewith. Such transfer or exchange will be
effected by the Security Registrar or such transfer agent, as the case may be,
being satisfied with the documents of title and identity of the person making
the request. The Company has appointed the Trustee as Security Registrar. The
Company may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the Company will be required to
maintain a transfer agent in each place of payment for the Debt Securities of
each series.
If the Debt Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company will not be required to (i) issue,
register the transfer of or exchange any Debt Security of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security that may be selected for redemption and
ending at the close of business on the day of such mailing, or (ii) register the
transfer of or exchange any Debt Security so selected for redemption, in whole
or in part, except the unredeemed portion of any such Debt Security being
redeemed in part.
RESTRICTIVE COVENANTS
LIMITATIONS ON LIENS
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that, so long as any of the Debt Securities of a series remain
outstanding, the Company will not, and will not permit any Restricted Subsidiary
(as defined below) to, issue, incur, create, assume or guarantee, any debt for
borrowed money secured by a mortgage, security interest, pledge, lien, charge or
other encumbrance ("mortgages") upon any Principal Property (as defined below)
of the Company or any Restricted Subsidiary or upon any shares of stock or
indebtedness of any Restricted Subsidiary (whether such Principal Property,
shares or indebtedness are existing or owned at the date of the Indenture or are
thereafter created or acquired) without in any such case effectively providing
concurrently with the issuance, incurrence, creation, assumption or guarantee of
any such secured debt, or the grant of a mortgage with respect to any such
indebtedness, that the Securities (together with, if the Company shall so
determine, any other indebtedness of or guarantee by the Company or such
Restricted Subsidiary ranking equally with the Securities) shall be secured
equally and ratably with (or prior to) such secured debt. The foregoing
restriction, however, will not apply to:
(a) mortgages on property existing at the time of acquisition thereof by
the Company or any Subsidiary (as defined below);
(b) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
6
(c) mortgages on property, shares of stock or indebtedness existing at
the time of acquisition thereof by the Company or a Restricted Subsidiary or
mortgages thereon to secure the payment of all or any part of the purchase
price thereof, or mortgages on property, shares of stock or indebtedness to
secure any indebtedness for borrowed money incurred prior to, at the time
of, or within 270 days after, the latest acquisition thereof, or, in the
case of property, the completion of construction, the completion of
improvements, or the commencement of substantial commercial operation of
such property for the purpose of financing all or any part of the purchase
price thereof, such construction, or the making of such improvements;
(d) mortgages to secure indebtedness owing to the Company or to a
Restricted Subsidiary;
(e) mortgages existing at the date of the Indenture;
(f) mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary;
(g) mortgages in favor of certain governmental subdivisions or agencies
to secure indebtedness incurred to finance the purchase, construction or
improvement of the property subject to such mortgages;
(h) mortgages created in connection with the acquisition of assets or a
project financed with, and created to secure; a Nonrecourse Obligation (as
defined below);
(i) extensions, renewals, refinancings or replacements of the foregoing
any mortgage referred to in the foregoing clauses (a), (b), (c), (e), (f),
(g) and (h) provided, however, that any mortgages permitted by any of the
foregoing clauses (a), (b), (c), (e), (f), (g) and (h) shall not extend to
or cover any property of the Company or such Restricted Subsidiary, as the
case may be, other than the property, if any, specified in such clauses and
improvements thereto, and provided further that any refinancing or
replacement of any mortgages permitted by the foregoing clauses (g) and (h)
shall be of the type referred to in such clauses (g) and (h), as the case
may be.
Notwithstanding the restrictions described in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Securities,
provided that after giving effect thereto, the aggregate amount of all debt so
secured by mortgages (not including mortgages permitted under clauses (a)
through (i) above) does not exceed 10% of the Consolidated Net Tangible Assets
(as defined below) of the Company as most recently determined on or prior to
such date.
RESTRICTIONS ON SALE AND LEASEBACKS
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that, so long as any of the Debt Securities of a series remain
outstanding, the Company will not, nor will it permit any Restricted Subsidiary
to, enter into any Sale and Leaseback Transaction (as defined below) with
respect to any Principal Property unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur indebtedness secured by a mortgage on the
Principal Property involved in such transaction at least equal in amount to the
Attributable Debt (as defined below) with respect to such Sale and Leaseback
Transaction, without equally and ratably securing the Debt Securities; or (b)
the Company shall apply an amount equal to the greater of the net proceeds of
such sale or the Attributable Debt with respect to such Sale and Leaseback
Transaction within 270 days of such sale to either (or a combination of) the
retirement (other than any mandatory retirement, mandatory prepayment or sinking
fund payment or by payment at maturity) of debt for borrowed money of the
Company or a Restricted Subsidiary that matures more than 12 months after the
creation of such indebtedness or the purchase, construction or development of
other comparable property.
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LIMITATION ON SUBSIDIARY DEBT
Unless otherwise indicated in a Prospectus Supplement, the Company will
covenant that it will not permit any Subsidiary (other than Toro Credit, or any
successor finance Subsidiary so long as such Subsidiary or successor has no
operating assets and is engaged solely in financing activities) to Incur (as
defined below) or have any Debt except: (a) Debt outstanding on the date of the
Indenture; (b) Debt issued to and held by the Company or a Wholly Owned
Subsidiary (as defined below); (c) Debt Incurred by a Person (as defined in the
Indenture) prior to the time such Person became, merges into, or consolidates
with a Subsidiary, or a Subsidiary merges into or consolidates with such Person
and thereby such Person becomes a Subsidiary; (d) Debt which is exchanged for,
or the proceeds of which are used to refinance or refund, any Debt permitted to
be outstanding pursuant to clauses (a) through (c) above (or any extension or
renewal thereof), in an aggregate principal amount not to exceed the principal
amount of the Debt so exchanged, refinanced or refunded and provided such
refinancing or refunding Debt by its terms, or by the terms of any agreement or
instrument pursuant to which such Debt is issued (x) does not provide for
payments of principal at the stated maturity of such Debt or by way of a sinking
fund applicable to such Debt or by way of any mandatory redemption, defeasance,
retirement or repurchase of such Debt by the Company (including any redemption,
retirement or repurchase which is contingent upon events or circumstances, but
excluding any retirement required by virtue of acceleration of such Debt upon an
event of default thereunder), in each case prior to the stated maturity of the
Debt being refinanced or refunded and (y) does not permit redemption or other
retirement (including pursuant to an offer to purchase made by the Company) of
such Debt at the option of the holder thereof prior to the stated maturity of
the Debt being refinanced or refunded, other than a redemption or other
retirement at the option of the holder of such Debt (including pursuant to an
offer to purchase made by the Company) which is conditioned upon the change of
control of the Company; and (e) Debt having a principal amount and liquidation
value not in excess of 20% of the Consolidated Net Tangible Assets of the
Company.
CERTAIN DEFINITIONS APPLICABLE TO COVENANTS
The term "Attributable Debt" means, at the time of determination, the
present value of the total net amount of rent and other payments required to be
paid under a lease during the remaining term thereof (including any renewal term
or period for which such lease has been extended), discounted at the rate of
interest set forth or implicit in the terms of such lease or, if not practicable
to determine such rate, the weighted average interest rate per annum (in the
case of Original Issue Discount Securities (as defined in the Indenture), the
imputed interest rate) borne by the Debt Securities of each series outstanding
pursuant to the Indenture compounded semi-annually. For purposes of the
foregoing definition, rent shall not include amounts required to be paid by the
lessee, whether or not designated as rent or additional rent, on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) and the net
amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" means, as of any particular
time, total assets (excluding applicable reserves and other properly deductible
items) less: (a) total current liabilities, except for (1) notes and loans
payable, (2) current maturities of long-term debt, and (3) current maturities of
obligations under capital leases; and (b) goodwill, patents and trademarks, to
the extent included in total assets; all as set forth on the most recent
consolidated balance sheet of the Company and its Restricted Subsidiaries and
computed in accordance with generally accepted accounting principles.
The term "Debt" means, with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
8
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) the maximum fixed redemption or repurchase
price of redeemable stock of such Person at the time of determination, (vi)
every obligation to pay rent or other payment amounts of such Person with
respect to any Sale and Leaseback Transaction and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise.
The term "Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring"
shall have the meanings correlative to the foregoing); provided, however, that a
change in generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt.
The term "Nonrecourse Obligation" means indebtedness or other obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Restricted Subsidiary or (ii) the financing of a project
involving the development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to such indebtedness
or obligation has no recourse to the Company or any Restricted Subsidiary or any
assets of the Company or any Restricted Subsidiary other than the assets which
were acquired with the proceeds of such transaction or the project financed with
the proceeds of such transaction (and the proceeds thereof).
The term "Principal Property" means the land, land improvements, buildings
and fixtures (to the extent they constitute real property interests), (including
any leasehold interest therein) constituting the principal corporate office, any
manufacturing facility, or any distribution center (whether now owned or
hereafter acquired) which: (a) is owned by the Company or any Subsidiary; (b) is
located within the United States; (c) has not been determined in good faith by
the Board of Directors of the Company not to be materially important to the
total business conducted by the Company and its Subsidiaries taken as a whole;
and (d) has a market value on the date as of which the determination is being
made in excess of 1.0% of Consolidated Net Tangible Assets of the Company as
most recently determined on or prior to such date.
The term "Restricted Subsidiary" means any Subsidiary which owns any
Principal Property which has a market value on the date as of which the
determination is being made in excess of 2.0% of Consolidated Net Tangible
Assets of the Company as most recently determined on or prior to such date.
The term "Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
any Principal Property which property has been or is to be sold or transferred
by the Company or such Restricted Subsidiary to such Person.
The term "Subsidiary" means any corporation of which at least a majority of
the outstanding voting stock having the power to elect a majority of the board
of directors of such corporation is at the time owned, directly or indirectly,
by the Company or by one or more other Subsidiaries, or by the Company and one
or more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
9
The term "Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding capital stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any Person (a
"successor Person"), and may not permit any Person to consolidate with or merge
into, or convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless (i) the successor Person (if any) is a
corporation, partnership, trust or other entity organized and validly existing
under the laws of any domestic jurisdiction and assumes the Company's
obligations on the Debt Securities and under the Company's obligations on the
Debt Securities and under the Indenture, (ii) immediately after giving effect to
the transaction, no Event of Default (as defined below), and not event which,
after notice or lapse of time or both, would become an Event of Default, shall
have occurred and be continuing, (iii) if, as a result of the transaction,
property of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance that would not be permitted under the
limitation on mortgage, pledge, lien, security interest or other encumbrance
described above under "Restrictive Covenants," the Company takes such steps as
shall be necessary to secure the Securities equally and ratably with (or prior
to) the indebtedness secured by such mortgage, pledge, lien, security interest
or other encumbrance and (iv) certain other conditions are met.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as: (i) default in the payment of any interest upon any
Debt Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or (ii) default in the payment of the
principal of or any premium on any Debt Security of that series at its Maturity;
or (iii) default in the deposit of any sinking fund payment, when and as due by
the terms of a Debt Security of that series; or (iv) default in the performance,
or breach, of any other covenant or warranty of the Company in the Indenture
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this paragraph specifically dealt with or which has
expressly been included in the Indenture solely for the benefit of series of
Securities other than that series) and continuance of such default or breach for
a period of 30 days after there has been given to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 10% in principal
amount of the outstanding Debt Securities of that series a written notice as
provided in the Indenture; or (v) a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company (including a
default with respect to Securities of any series other than that series), or
under any mortgage, indenture or instrument (including the Indenture) under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company having an aggregate principal
amount outstanding of at least $10 million, whether such indebtedness now exists
or shall hereafter be created, which default (A) shall constitute a failure to
pay any portion of the principal of such indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto or (B) shall
have resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without, in the case of clause (A), such indebtedness having been discharged or
without, in the case of clause (B), such indebtedness having been discharged or
such acceleration having been rescinded or annulled, in each such case, within a
period of 10 days after there shall have been given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
principal amount of the outstanding Debt Securities of that series a written
notice as provided in the Indenture specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled, as the case may be, or (vi) certain
10
events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary. Additional Events of Default may be prescribed for the
benefit of holders of certain series of Debt Securities which, if prescribed,
will be described in the Prospectus Supplement relating to such Debt Securities.
If a default occurs under the Indenture with respect to Debt Securities of
any series, the Trustee will give the holders of Debt Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act
of 1939; provided, however, that in the case of any default of the character
specified in clause (iv) of the preceding paragraph 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 paragraph,
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.
The Indenture provides that if an Event of Default (other than an Event of
Default described in clause (vi) of the second preceding paragraph) with respect
to any series of Debt Securities shall have occurred and be continuing, either
the Trustee or the holders of not less than 25% in aggregate principal amount of
Debt Securities of that series then outstanding by notice as provided in the
Indenture may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities (as defined), such portion of the
principal amount as may be specified in the term of that series) of all the Debt
Securities of that series to automatically, and without any action by the
Trustee or any Holder, become immediately due and payable. After any such
acceleration, but before a judgment or decree based on acceleration, the Holders
of a majority in principal amount of the Outstanding Securities of that series
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal (or other
specified amount), have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, see "Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee shall be under no obligation to exercise any of its rights
or powers under the Indenture at the request or direction of any of the holders
of that series, unless such holders shall have offered to the Trustee reasonable
security or indemnity. Subject to such provisions for security for
indemnification and certain limitations contained in the Indenture, the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of each series affected by an Event of Default will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee under the Indenture or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of that series.
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture, or for the appointment
of a receiver or trustee, or for any other remedy thereunder, unless (i) such
holder has previously given the Trustee written notice of a continuing Event of
Default with respect to Debt Securities of that series, (ii) the holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
that series shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee and (iii) the Trustee has
failed to institute such proceeding within 60 days after its receipt of such
notice, request, and offer and has not received from the holders of a majority
in aggregate principal amount of the outstanding Debt Securities of that series
a direction inconsistent with such request. However, the right of a holder of
any Debt Security to receive payment of the principal of and any interest on
such Debt Security on or after the due dates expressed in such Debt Security, or
to institute suit for the enforcement of any such payment on or after such
dates, shall not be impaired without the consent of such holder.
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to the best of
their knowledge, is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults.
11
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture with respect to any series (except for certain specified
surviving obligations) will be satisfied and discharged upon the satisfaction of
certain conditions, including the deposit with the Trustee of money sufficient
for the payment or redemption of all the Debt Securities of such series in
accordance with the Indenture and terms of the Debt Securities of such series.
MODIFICATION AND WAIVER
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debt Securities of each affected series at the time
outstanding, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of, the Indenture or
any supplemental indenture with respect to the Debt Securities of such series or
modifying in any manner the rights of the holders of the Debt Securities of such
series; provided that no such supplemental indenture may, without the consent of
the holder of each outstanding Debt Security affected thereby, (i) change the
Stated Maturity (as defined in the Indenture) of the principal of, or any
installment of principal of or interest on, any Debt Security, (ii) reduce the
principal amount of, or any premium or interest on, any Debt Security, (iii)
reduce the amount of principal of an Original Issue Discount Security or any
other Debt Security payable upon acceleration of the Maturity (as defined in the
Indenture) thereof, (iv) change the place or currency of payment of principal
of, or any premium or interest on, any Debt Security, (v) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, (vi) reduce the percentage in principal amount of outstanding Debt
Securities of any series, the consent of whose holders is required for
modification or amendment of the Indenture, (vii) reduce the percentage in
principal amount of outstanding Debt Securities of any series necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults or (viii) modify such provisions with respect to modification
and waiver.
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may waive compliance by the Company
with certain restrictive provisions of the Indenture. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest and certain covenants and provisions
of the Indenture which cannot be amended without the consent of the holder of
each outstanding Debt Security of such series affected.
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the Indenture
as of any date, (i) the principal amount of an Original Issue Discount Security
that will be deemed to be outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable (for
example, because it is based on an index), the principal amount of such Debt
Security deemed to be outstanding as of such date will be an amount determined
in the manner prescribed for such Debt Security and (iii) the principal amount
of a Debt Security denominated in one or more foreign currencies or currency
units that will be deemed to be outstanding will be the U.S. dollar equivalent,
determined as of such date in the manner of such Debt Security (or, in the case
of a Debt Security described in clause (i) or (ii) above, of the amount
described in such clause). Certain Debt Securities, including those for whose
payment or redemption money has been deposited or set aside in trust for the
holders and those that have been fully defeased pursuant to Section 13.02 of the
Indenture, will not be deemed to be outstanding.
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the holders of
outstanding Debt Securities of any series entitled to give or take any demand,
authorization, direction, notice, consent, waiver or other action under the
Indenture, in the manner and subject to the limitations provided in the
Indenture. In certain limited circumstances, the
12
Trustee will be entitled to set a record date for action by holders. If a record
date is set for any action to be taken by holders of a particular series, such
action may be taken only by persons who are holders of outstanding Debt
Securities of that series on the record date. To be effective, such action must
be taken by holders of the requisite principal amount of such Debt Securities
within a specified period following the record date. For any particular record
date, this period will be 180 days or such shorter period as may be specified by
the Company (or the Trustee, if it set the record date), and may be shortened or
lengthened (but not beyond 180 days) from time to time.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, that, if such provision is made applicable to the
Debt Securities of a series, then the Company may elect either (a) to terminate
(and be deemed to have satisfied) all its obligations with respect to such Debt
Securities (except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary of mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, to compensate and indemnify the Trustee and to punctually pay or
cause to be paid the principal of, and interest on, all Debt Securities of such
series when due) ("Defeasance") or (b) to be released from its obligations
described above under "Limitations on Liens", "Restrictions on Sale and
Leasebacks" and "Limitation on Subsidiary Debt" and certain requirements as to
maintenance of Principal Properties and payment of taxes and other claims
("Covenant Defeasance"), upon the deposit with the Trustee, in trust for such
purpose, of money and/or U.S. Government Obligations which through the payment
of principal and interest in accordance with their terms (without consideration
of any reinvestment) will provide money, in an amount sufficient (in the opinion
of a nationally recognized firm of independent public accountants) to pay the
principal of and interest, if any, on the Outstanding Debt Securities of such
series, and any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates therefor. Such a trust may be established only if, among
other things, the Company has delivered to the Trustee an opinion of counsel
with regard to certain matters, including an opinion to the effect that the
Holders of such Debt Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and discharge and will
be subject to Federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if such deposit and Defeasance or
Covenant Defeasance, as the case may be, had not occurred. The Prospectus
Supplement may further describe the provisions, if any, permitting Defeasance or
Covenant Defeasance with respect to the Debt Securities of any series.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the law of the State of New York.
CONCERNING THE TRUSTEE
The Company presently does, and may from time to time in the future,
maintain lines of credit and have customary banking relationships with
affiliates of First Trust National Association, the Trustee under the Indenture.
The Company has debt securities outstanding under another indenture for which
the Trustee is serving as trustee and the Trustee may serve as trustee for other
debt securities issued by the Company from time to time.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 35,000,000 shares of
Common Stock, par value $1.00 per share, 1,000,000 shares of Voting Preferred
Stock, par value $1.00 per share; and 1,000,000 shares of Non-Voting Preferred
Stock, par value $1.00 per share, of which 150,000 shares are designated as
Series A $11.28 Cumulative Non-Voting Preferred Stock (the "Series A Preferred
Stock"). The Board of Directors has adopted a certificate of designation with
respect to a series of 150,000 shares of Voting Preferred Stock, the Series B
Junior Participating Voting Preferred Stock, $1.00 par value (the "Series B
13
Preferred Stock"), in connection with the Company's Rights Agreement dated June
14, 1988 (the "Rights Agreement"). See "Rights Plan" below.
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Delaware General Corporation Law
and the Company's Certificate of Incorporation, as amended.
COMMON STOCK
At January 30, 1997, there were 12,160,137 shares of Common Stock
outstanding. All outstanding shares of Common Stock are, and the shares offered
hereby, when issued, will be fully paid and nonassessable. All holders of Common
Stock have voting rights and are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Holders of Common
Stock do not have the right to cumulate votes in the election of directors and
do not have a right of redemption or any preferential right of subscription for
any securities of the Company, except as described below under "Rights Plan."
Subject to preferences that may be applicable to any shares of preferred
stock outstanding at the time, holders of Common Stock are entitled to dividends
when and as declared by the Board of Directors from funds legally available
therefor and are entitled, in the event of liquidation, to share ratably in all
assets remaining after payment of liabilities.
PREFERRED STOCK
At January 30, 1997, there were no shares of Series A Preferred Stock or
Series B Preferred Stock outstanding. Previously outstanding shares of Series A
Preferred Stock have been redeemed and may not be reissued as Series A Preferred
Stock; however, the Board of Directors is authorized to retire such series in
which case the shares previously designated as such series shall assume the
status of authorized but unissued shares of Preferred Stock. The Series B
Preferred Stock is issuable in accordance with the terms of the Company's Rights
Agreement. See "Rights Plan" below.
The Board of Directors has the authority, in most instances without further
stockholder action, to issue from time to time all or any part of the authorized
Preferred Stock. Additional Preferred Stock is issuable in one or more series,
and the Board of Directors is authorized to determine the designation of and
number of shares in each series and to fix the dividend, redemption,
liquidation, retirement, conversion and voting rights, if any, of such series,
and any other rights and preferences thereof. Any shares of Preferred Stock
which may be issued may have disproportionately high voting rights or class
voting rights, may be convertible into shares of Common Stock and may rank prior
in right to shares of Common Stock as to payment of dividends and upon
liquidation. Although the issuance of additional Preferred Stock may have an
adverse effect on the rights (including voting rights) of holders of Common
Stock, the consent of the holders of Common Stock would not be required for any
such issuance of Preferred Stock. In addition, the issuance of additional
Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company. The Company has no current plans to issue any
Preferred Stock, except as provided for in the Rights Agreement. See "Rights
Plan" below.
RIGHTS PLAN
On June 14, 1988, the Board of Directors declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of Common
Stock to holders of record on June 24, 1988. Each Right entitles the registered
holder to purchase from the Company, at a price of $85, one one-hundredth of a
share of Series B Preferred Stock subject to adjustment as provided in the
Rights Agreement. Pursuant to the Rights Agreement, one Right attaches to and
trades together with each share of Common Stock issued by the Company, including
any shares of Common Stock offered hereby.
14
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the outstanding
Common Stock or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 20% or more of such
outstanding Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be attached to the Common Stock and will
be evidenced by the Common Stock certificate.
Until the Distribution Date, the Rights will be transferred with and only
with the Common Stock. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date. The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 14, 1998 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed by the Company.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, each holder of a Right will thereafter have the right to
receive, upon the exercise at the then current exercise price of the Right,
shares of common stock of the acquiring company which at the time of such
transaction have a market value of two times the exercise price of the Right. In
the event that (i) any person becomes an Acquiring Person (unless such person
first acquires 20% or more of the outstanding Common Stock by a purchase
pursuant to a tender offer for all of the Common Stock for cash, which purchase
increases such person's beneficial ownership to 80% or more of the outstanding
Common Stock) or (ii) during such time as there is an Acquiring Person, there
shall be any reclassification of securities or recapitalization or
reorganization of the Company which has the effect of increasing by more than 1%
the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its subsidiaries beneficially owned by the
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereafter be void), will thereafter have
the right to receive upon exercise Common Stock having a market value of two
times the exercise price of the Right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock and prior to the acquisition by such person or group of 50% or more
of the outstanding Common Stock, the Board of Directors may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of Common Stock, or one
one-hundredth of a share of Series B Preferred Stock (or of a share of a class
or series of the Company's Preferred Stock having equivalent rights, preferences
and privileges), per Right.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
In addition, if a bidder who does not beneficially own more than 1% of the
Common Stock (and who has not within the past year owned in excess of 1% of the
Common Stock and, at a time he held such greater than 1% stake, disclosed, or
caused the disclosure of, an intention which relates to or would result in the
acquisition or influence of control of the Company) proposes to acquire all of
the Common Stock (and all other shares of capital stock of the Company entitled
to vote with the Common Stock in the election of directors or on mergers,
consolidations, sales of all or substantially all of the Company's assets,
liquidations, dissolutions or windings up) for cash at a price which a
nationally recognized investment banker selected by such bidder states in
writing is fair, and such bidder has obtained written financing commitments (or
otherwise has financing) and complies with certain procedural requirements, then
the Company, upon the request of the bidder, will hold a special stockholders
meeting to vote on a resolution requesting the Board of Directors to accept the
bidder's proposal. If a majority of the outstanding shares
15
entitled to vote on the proposal vote in favor of such resolution, then for a
period of 60 days after such meeting the Rights will be automatically redeemed
at the Redemption Price immediately prior to the consummation of any tender
offer for all of such shares at a price per share in cash equal to or greater
than the price offered by such bidder. No redemption will be permitted or
required after the acquisition by any person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
Common Stock. Immediately upon redemption, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including without limitation, the right to vote
or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
unless the offer is conditional on a substantial number of Rights being
acquired. The Rights, however, should not affect any prospective offeror willing
to make an offer at an equitable price and which is otherwise in the best
interests of the Company and its stockholders, as determined by the Board of
Directors. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Board of Directors may,
at its option, redeem the Rights at any time until there is an Acquiring Person.
The foregoing summary of certain terms of the Rights is qualified in its
entirety by reference to the Rights Agreement, a copy of which is incorporated
by reference as an exhibit to the Registration Statement.
CHANGE OF CONTROL
Certain provisions of the Company's Certificate of Incorporation may have
the effect of prevent-ing, discouraging or delaying any change in the control of
the Company. The following provisions may have anti-takeover effects: (a) the
Board of Directors is classified into three classes, each of which serves for
three years, with one class being elected each year; (b) directors may be
removed only for cause and only with the approval of holders of at least 80% of
the then outstanding shares of the capital stock entitled to vote generally in
the election of directors ("Voting Stock"); (c) any vacancy on the Board may be
filled only by the remaining directors then in office; (d) stockholder action
must be taken at a meeting of stockholders and stockholders may not act by
written consent; (e) special meetings of stockholders of the Company may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the entire Board; (f) a "fair price" provision requires the approval
by the holders of 80% of the then outstanding Voting Stock as a condition for
mergers and certain other business combinations of the Company with any holder
of more than 10% of such voting power (an "Interested Stockholder") unless
either (i) the transaction is approved by a majority of the members of the Board
of Directors who are unaffiliated with the Interested Stockholder and were
members of the Board of Directors prior to the time the Interested Stockholder
became an Interested Stockholder or (ii) certain minimum price and procedural
requirements are met; and (g) the stockholder vote required to alter, amend or
repeal the foregoing provisions is 80% of the then outstanding Voting Stock.
These provisions, individually and collectively, will make difficult and may
discourage a merger, tender offer or proxy fight, even if such transaction or
occurrence may be favorable to the interests of the stockholders, and may delay
or frustrate the assumption of control by a holder of a large block of the
Common Stock and the removal of incumbent management. Furthermore, these
provisions may deter or could be utilized to frustrate a future takeover attempt
which is not approved by the incumbent Board of Directors, but which the holders
of a majority of the shares may deem to be in their best interests or in which
stockholders may receive a substantial premium for their stock over prevailing
market prices of such stock. By discouraging takeover attempts, these provisions
might have the incidental effect of inhibiting certain changes in management
(some or all of the members of which might be replaced in the course of a
16
change of control) and also the temporary fluctuations in the market price of
the stock which often result from actual or rumored takeover attempts.
In addition, Section 203 of the Delaware General Corporation Law restricts
certain business combinations between the Company and a stockholder who acquires
15% or more of the outstanding voting stock of the Company (an "interested
stockholder"). Unless an exception from the restriction is available, the
Company may not engage in certain business combinations involving the interested
stockholder or its affiliates for a period of three years from the time the
interested stockholder became such. The restriction does not apply if (i) prior
to the interested stockholder becoming an interested stockholder the Board
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder, (ii) the interested
stockholder acquires 85% of the outstanding voting stock in the same transaction
in which the 15% threshold is exceeded or (iii) the proposed business
combination is approved by the Board of Directors and authorized at a
stockholders' meeting by at least 66 2/3% of the outstanding disinterested
voting stock not owned by the interested stockholder. The three year probation
will also be inapplicable if the Board of Directors and a majority of the
Company's continuing directors approves a merger or sale or does not oppose a
tender offer for at least 50% of the outstanding voting stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Norwest Bank
Minnesota, National Association. Its mailing address is 161 North Concord
Exchange, South St. Paul, Minnesota 55075-0738.
DESCRIPTION OF WARRANTS
The Corporation may issue Warrants for the purchase of Debt Securities
("Debt Warrants") or for the purchase of Common Stock ("Common Stock Warrants").
Warrants may be issued independently or together with Debt Securities or shares
of Common Stock offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities or shares of Common Stock. Each series of
Warrants will be issued under a separate warrant agreement (a "Warrant
Agreement") to be entered into between the Corporation and a bank or trust
company, as Warrant Agent, all as set forth in the Prospectus Supplement
relating to the particular issue of Warrants. The Warrant Agent will act solely
as an agent of the Corporation in connection with the Warrants and will not
assume any obligation or relationship of agency or trust for or with any holders
of Warrants or beneficial owners of Warrants. Copies of the forms of Warrant
Agreements, including the forms of Warrant certificates representing the
Warrants, will be filed as exhibits or incorporated by reference in the
Registration Statement to which this Prospectus pertains. The following
summaries of certain provisions of the forms of Warrant Agreements and Warrant
certificates do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Warrant Agreements
and the Warrant certificates.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Debt Warrants, the
following where applicable: (i) the offering price; (ii) the currencies in which
such Debt Warrants are being offered; (iii) the designation, aggregate principal
amount, currencies, denominations and terms of the series of Debt Securities
purchasable upon exercise of such Debt Warrants; (iv) the designation and terms
of any series of Debt Securities with which such Debt Warrants are being offered
and the number of such Debt Warrants being offered with each such Debt Security
or share of Common Stock; (v) the date on and after which such Debt Warrants and
the related series of Debt Securities or shares of Common Stock will be
transferable separately; (vi) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Debt Warrant and the price at
which and currencies in which such principal amount of Debt Securities of such
series may be purchased upon such exercise; (vii) the date on which the right to
exercise such Debt Warrants shall
17
commence and the date (the "Expiration Date") on which such right shall expire;
(viii) whether the Debt Warrants will be issued in registered or bearer form;
(ix) United States federal income tax consequences; and (x) any other terms of
such Debt Warrants.
In the case of Common Stock Warrants, the applicable Prospectus Supplement
will describe the terms of such Common Stock Warrants, including the following
where applicable: (i) the offering price; (ii) the aggregate number of shares of
Common Stock purchasable upon exercise of such Common Stock Warrants; (iii) the
designation and terms of the series of Debt Securities or shares of Common Stock
with which such Common Stock Warrants are being offered and the number of such
Common Stock Warrants being offered with each such Debt Security or share of
Common Stock; (iv) the date on and after which such Common Stock Warrants and
the related series of Debt Securities or shares of Common Stock will be
transferable separately; (v) the number of shares of Common Stock purchasable
upon exercise of each such Common Stock Warrant and the price at which such
number of shares of Common Stock may be purchased upon each exercise; (vi) the
date on which the right to exercise such Common Stock Warrants shall commence
and the Expiration Date; (vii) United States federal income tax consequences;
and (viii) any other terms of such Common Stock Warrants. Common Stock Warrants
will be offered and exercisable for U.S. dollars only and will be in registered
form only.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement. Prior to the exercise of any Debt Warrant, holders of such Debt
Warrants will not have any of the rights of holders of the Debt Securities
purchasable upon such exercise, including the right to receive payments of
principal of, premium, if any, or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the Indenture. Prior
to the exercise of any Common Stock Warrants, holders of such Common Stock
Warrants will not have any rights of holders of shares of Common Stock
purchasable upon such exercise, including the right to receive payments of
dividends, if any, on the shares of Common Stock purchasable upon such exercise
or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Common Stock, as the case may
be, at such exercise price as shall in each case be set forth in, or calculable
from, the Prospectus Supplement relating to the offered Warrants. After the
close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by the Company), unexercised Warrants will
become void.
Warrants may be exercised by delivering to the Warrant Agent payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities or shares of Common Stock, as the case may be,
purchasable upon such exercise together with certain information set forth on
the reverse side of the Warrant certificate. Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price, subject to the
receipt, within five business days, of the Warrant certificate evidencing such
Warrants. Upon receipt of such payment and the Warrant certificate properly
completed and duly executed at the corporate trust office of the Warrant Agent
or any other office indicated in the applicable Prospectus Supplement, the
Company will, as soon as practicable, issue and deliver the Debt Securities or
shares of Common Stock, as the case may be, purchasable upon such exercise. If
fewer than all of the Warrants represented by such Warrant certificate are
exercised, a new Warrant certificate will be issued for the remaining amount of
Warrants. The holder of a Warrant will be required to pay any tax or other
governmental charge that may be imposed in connection with any transfer involved
in the issuance of the Debt Securities or shares of Common Stock, as the case
may be.
18
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent of
the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a Common
Stock Warrant are subject to adjustment in certain events, including (i) the
issuance of capital stock as a dividend or distribution on shares of the Common
Stock; (ii) subdivisions and combinations of the shares of Common Stock; (iii)
the issuance to all holders of shares of the Common Stock of certain rights or
warrants entitling them to subscribe for or purchase shares of the Common Stock
within 45 days after the date fixed for the determination of the stockholders
entitled to receive such rights or warrants at less than the current market
price (as defined in the Warrant Agreement for such series of Common Stock
Warrants); and (iv) the distribution to all holders of shares of the Common
Stock of evidences of indebtedness or assets of the Company (excluding certain
cash dividends and distributions described below) or rights or warrants
(excluding those referred to above). In the event that the Company shall
distribute any rights or warrants to acquire capital stock pursuant to clause
(iii) above (the "Capital Stock Rights"), pursuant to which separate
certificates representing such Capital Stock Rights will be distributed
subsequent to the initial distribution of such Capital Stock Rights (whether or
not such distribution shall have occurred prior to the date of the issuance of a
series of Common Stock Warrants), such subsequent distribution shall be deemed
to be the distribution of such Capital Stock Rights; provided that the Company
may, in lieu of making any adjustment in the exercise price of and the number of
shares of Common Stock covered by a Common Stock Warrant upon a distribution of
separate certificates representing such Capital Stock Rights, make proper
provision so that each holder of such a Common Stock Warrant who exercises such
Common Stock Warrant (or any portion thereof) (a) before the record date for
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with Capital Stock Rights and (b)
after such record date and prior to the expiration, redemption or termination of
such Capital Stock Rights shall be entitled to receive upon such exercise, in
addition to the shares of Common Stock issuable upon such exercise, the same
number of such Capital Stock Rights as would a holder of the number of shares of
Common Stock that such Common Stock Warrant so exercised would have entitled the
holder thereof to acquire in accordance with the terms and provisions applicable
to the Capital Stock Rights if such Common Stock Warrant was exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of and the number of shares of Common
Stock covered by a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any such adjustment
not so made will be carried forward and taken into account in any subsequent
adjustment; and provided further that any such adjustment not so made shall be
made no later than three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Except as stated above, the exercise
price of and the number of shares of Common Stock covered by a Common Stock
Warrant will not be adjusted for the issuance of shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock, or
securities carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company or (iii) a sale or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of the
19
Company's Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the holders of the Common Stock Warrants then outstanding will be
entitled thereafter to convert such Common Stock Warrants into the kind and
amount of shares of stock and other securities or property which they would have
received upon such reclassification, change, consolidation, merger, sale or
conveyance had such Common Stock Warrants been exercised immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance.
DESCRIPTION OF UNITS OF SECURITIES
The Company may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time specified
therein may be transferable as, a single Security only, as distinguished from
the separate constituent Securities comprising such Units. Any such Units will
be offered pursuant to a Prospectus Supplement which will (i) identify and
designate the title of any series of Units; (ii) identify and describe the
separate constituent Securities comprising such Units; (iii) set forth the price
or prices at which such Units will be issued; (iv) describe, if applicable, the
date on and after which the constituent Securities comprising the Units will
become separately transferable; (v) provide information with respect to
book-entry procedures, if any; (vi) discuss applicable United States federal
income tax considerations relating to the Units; and (vii) set forth any other
terms of the Units and their constituent Securities.
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through underwriters and also may
sell Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., or a group of underwriters
represented by firms including Goldman, Sachs & Co. Goldman, Sachs & Co. may
also act as agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions. Underwriters
may sell Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Securities shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which such purchaser is subject. The underwriters and
20
such other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Unless otherwise indicated in a Prospectus Supplement, certain legal matters
regarding the Securities will be passed upon for the Company by Doherty, Rumble
& Butler Professional Association, Minneapolis, Minnesota, and for the
underwriters, if any, by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedule of The Toro Company and
subsidiaries as of October 31, 1995 and 1996 and for the years ended July 31,
1994 and 1995, the three months ended October 31, 1995 and the year ended
October 31, 1996, incorporated by reference herein, have been incorporated
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
Registration Fee................................................. $ 75,758
*Legal Fees and Expenses.......................................... 150,000
*Trustee Fees and Expenses........................................ 6,000
*Accounting Fees and Expenses..................................... 60,000
*Blue Sky Fees and Expenses....................................... 10,000
*Printing and Engraving Fees...................................... 40,000
*Rating Agency Fees............................................... 100,000
*Miscellaneous.................................................... 38,242
---------
Total........................................................... $ 480,000
---------
---------
- ------------------------
* Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware empowers
a corporation incorporated under the statute to indemnify its directors,
officers, employees and agents and its former directors, officers, employees and
agents and those who serve in such capacities with another enterprise at the
corporation's request against expenses (including attorneys' fees), as well as
judgments, fines and settlements, actually and reasonably incurred by them in
connection with any action, suit or proceeding in which they or any of them were
or are made parties or are threatened to be made parties by reason of their
serving or having served in such capacity. The power to indemnify exists only
where such officer, director, employee or agent has acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation and, in the case of a criminal action, where such
person had no reasonable cause to believe his conduct was unlawful. Unless a
court determines to the contrary, a corporation has no power of indemnification
in any action or suit by or in the right of the corporation, where such person
has been adjudged liable to the corporation. Indemnification against expenses is
mandatory to the extent a claim, issue or matter has been successfully defended.
Indemnification and advancement of expenses are not deemed exclusive of any
other rights to which those indemnified may be entitled under any bylaw,
agreement, vote of stockholders or otherwise. A Delaware corporation also has
the power to purchase and maintain insurance on behalf of any person it has the
power to indemnify, whether or not indemnity against liability would be allowed
under the statute.
Section 1 of Article XI of the Registrant's Certificate of the Incorporation
provides, in accordance with Section 102(b)(7) of the Delaware General
Corporation Law, for the elimination or limitation of the personal liability of
a director to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as a director under certain circumstances.
Section 2 of Article XI of the Registrant's Certificate of Incorporation
mandates indemnification of a director or officer of Registrant or a person
serving at the request of the Registrant as a director, officer, employee or
agent of another entity to the fullest extent authorized by the Delaware General
Corporation Law against expenses, liability and loss and authorizes the Board to
express such rights in written contract.
The Registrant also maintains liability insurance policies which provide for
indemnification of a director or officer of Registrant or a person serving at
the request of the Registrant as a director, officer, employee or agent of
another entity against certain liabilities under certain circumstances.
II-1
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
1 Form of Underwriting Agreement for Debt Securities.
4(a) Certificate of Incorporation of the Registrant as amended and
corrected through May 18, 1987 (incorporated by reference to Exhibit
4.2 to Registrant's Registration Statement on Form S-3, Registration
No. 33-16125).
4(b) Certificate of Amendment to Certificate of Incorporation dated
December 8, 1987 (incorporated by reference to Exhibit 3 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
January 29, 1988, Commission File No. 1-8649).
4(c) Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to
Registrant's Annual Report on Form 10-K for the year ended July 31,
1991, Commission File No. 1-8649).
4(d) Rights Agreement dated as of June 14, 1988, between the Registrant and
Norwest Bank Minnesota National Association, relating to rights to
purchase Series B Junior Participating Voting Preferred Stock
(incorporated by reference to Exhibit 1 to Registrant's Registration
Statement on Form 8-A dated June 17, 1988, Commission File No.
1-8649).
4(e) Amendment to Rights Agreement dated as of August 14, 1990, between the
Registrant and Norwest Bank Minnesota National Association
(incorporated by reference to Exhibit 1 to Registrant's Report on
Form 8-K dated August 14, 1990, Commission File No. 1-8649).
4(f) Specimen form of Common Stock certificate (incorporated by reference
to Exhibit 4(c) to Registrant's Registration Statement on Form S-8,
Registration No. 2-94417).
4(g) Form of Indenture.
4(h) Forms of Debt Securities (filed as part of Exhibit 4(g)).
5 Opinion of Doherty, Rumble & Butler Professional Association.
12 Computations of ratio of earnings to fixed charges.
23(a) Consent of Doherty, Rumble & Butler Professional Association (included
as part of Exhibit 5).
23(b) Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney (included on the signature pages of this
Registration Statement).
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of First Trust National Association as Trustee.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
II-2
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commissions such indemnification is against public policy as expressed in the
act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has bene settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Toro Company
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 Bloomington and the State of Minnesota, on the 31st
day of January 1997.
THE TORO COMPANY
By /s/ KENDRICK B. MELROSE
-----------------------------------------
Kendrick B. Melrose
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Know all men by these presents, that each person whose signature appears
below hereby constitutes and appoints Kendrick B. Melrose, Gerald T. Knight and
J. Lawrence McIntyre, or any one of them, each with full power to act without
the other, as his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments or
post-effective amendments to this Registration Statement and to file or cause to
be filed the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, or any of them or their or his or her
substitute or substitutes, full power to do and perform each and every act and
thing requisite and necessary or desirable to be done in and about the premises,
as fully to all intents and purposes as he or she might or could do in person,
and ratifying and confirming all that said attorneys-in-fact and agents, or any
of them or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman and Chief
/s/ KENDRICK B. MELROSE Executive Officer
- ------------------------------ (Principal Executive January 31, 1997
Kendrick B. Melrose Officer)
Vice President and Chief
/s/ GERALD T. KNIGHT Financial Officer
- ------------------------------ (Principal Financial January 31, 1997
Gerald T. Knight Officer)
/s/ RANDY B. JAMES Vice President and
- ------------------------------ Controller (Principal January 31, 1997
Randy B. James Accounting Officer)
/s/ RONALD O. BAUKOL
- ------------------------------ Director January 31, 1997
Ronald O. Baukol
II-4
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ ROBERT C. BUHRMASTER
- ------------------------------ Director January 31, 1997
Robert C. Buhrmaster
/s/ JANET K. COOPER
- ------------------------------ Director January 31, 1997
Janet K. Cooper
/s/ ALEX A. MEYER
- ------------------------------ Director January 31, 1997
Alex A. Meyer
/s/ ROBERT H. NASSAU
- ------------------------------ Director January 31, 1997
Robert H. Nassau
/s/ DALE R. OLSETH
- ------------------------------ Director January 31, 1997
Dale R. Olseth
/s/ EDWIN H. WINGATE
- ------------------------------ Director January 31, 1997
Edwin H. Wingate
II-5
EXHIBIT INDEX
DOCUMENT DESCRIPTION
FORM OF FILING
--------------------------
1 Form of Underwriting Agreement for Debt Securities.......................... Electronic Transmission
4(a) Certificate of Incorporation of the Registrant (incorporated by reference to
Exhibit 4.2 to Registrant's Registration Statement on Form S-3,
Registration No. 33-16125).
4(b) Certificate of Amendment to Certificate of Incorporation dated December 8,
1987 (incorporated by reference to Exhibit 3 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended January 29, 1988, Commission
File No. 1-8649).
4(c) Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to
Registrant's Annual Report on Form 10-K for the year ended July 31, 1991,
Commission File No. 1-8649).
4(d) Rights Agreement dated as of June 14, 1988, between the Registrant and
Norwest Bank Minnesota National Association, relating to rights to
purchase Series B Junior Participating Voting Preferred Stock
(incorporated by reference to Exhibit 1 to Registrant's Registration
Statement on Form 8-A dated June 17, 1988, Commission File No. 1-8649).
4(e) Amendment to Rights Agreement dated as of August 14, 1990, between the
Registrant and Norwest Bank Minnesota National Association (incorporated
by reference to Exhibit 1 to Registrant's Report on Form 8-K dated August
14, 1990, Commission File No. 1-8649).
4(f) Specimen form of Common Stock certificate (incorporated by reference to
Exhibit 4(c) to Registrant's Registration Statement on Form S-8,
Registration No. 2-94417).
4(g) Form of Indenture........................................................... Electronic Transmission
4(h) Debt Securities (filed as part of Exhibit 4(g)).
5 Opinion of Doherty, Rumble & Butler Professional Association................ Electronic Transmission
12 Computations of ratio of earnings to fixed charges.......................... Electronic Transmission
23(a) Consent of Doherty, Rumble & Butler Professional Association (included as
part of Exhibit 5).
23(b) Consent of KPMG Peat Marwick LLP............................................ Electronic Transmission
24 Powers of Attorney (included on the signature pages of this Registration
Statement).
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
First Trust National Association as Trustee............................... Electronic Transmission
II-6
THE TORO COMPANY
DEBT SECURITIES
_______________
UNDERWRITING AGREEMENT
................, 1997
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described
Ladies and Gentlemen:
From time to time The Toro Company, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing
Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate principal amount
of such Designated Securities, the initial public offering price of such
Designated Securities, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters and the
principal amount of such Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-______ (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement, as amended by pre-effective amendment
number ____ and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives and,
excluding exhibits thereto, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement'), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed or transmitted
for filing with the Commission (other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part of
the registration statement became effective but excluding Form T-1, each as
amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; the prospectus relating to the Securities, in
the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any reference
to the
2
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Securities; there is no material document of a character required to
be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed
as required;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term
debt of the Company or any of its
3
subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
current or future position (financial or otherwise), stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole, upon the Company's ability to perform its obligations under this
Agreement or upon the validity or consummation of the transactions
contemplated by this Agreement (a "Material Adverse Effect"); and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect;
(f) The Company has an authorized and outstanding capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares and as set forth or incorporated by reference in the
Registration Statement) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which will
be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will constitute
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or supplemented
with respect to such Designated Securities;
4
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any of its subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement or any
Pricing Agreement or the Indenture, except such as have been, or will have
been prior to the Time of Delivery, obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Underwriters;
(i) The statements set forth in the Prospectus under the captions
"Description of Debt Securities," "Description of Debentures," "Description
of Capital Stock," "Description of Warrants" and "Description of Units,"
insofar as they purport to constitute a summary of the terms of such
securities, and under the captions "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and fairly and
correctly present in all material respects the information required to be
presented by the Act or the rules and regulations of the Commission
thereunder;
(j) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(l) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) To the best of the Company's knowledge, neither the Company nor any
of its affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes; and
5
(n) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, and Coopers & Lybrand LLP,
who have certified certain financial statements of James Hardie Irrigation,
Inc., James Hardie Irrigation Pty. Limited and James Hardie Irrigation
Europe S.p.A., included or incorporated by reference in the Prospectus, are
each independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder.
(o) The consolidated financial statements and schedules of the Company
included or incorporated by reference in the Registration Statement present
fairly the consolidated financial position of the Company as of the
respective dates of such financial statements, and the consolidated results
of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed in the Prospectus. The financial statements and schedules of
James Hardie Irrigation, Inc., James Hardie Irrigation Pty. Limited and
James Hardie Irrigation Europe S.p.A. included or incorporated by reference
in the Registration Statement present fairly the consolidated financial
position of the covered entities as of the respective dates of such
financial statements, and the results of operations and cash flows of the
covered entities for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed in the
Prospectus. The supporting schedules included in the Registration
Statement present fairly the information required to be stated therein.
The financial information set forth in the Prospectus under the captions
"Selected Historical Consolidated Financial Data" and "Ratios of Earnings
to Fixed Charges" presents fairly on the basis stated in the Prospectus,
the information set forth therein. The pro forma information included or
incorporated by reference in the Prospectus presents fairly the information
shown therein, has been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma information, has been properly compiled on the pro
forma basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate under the circumstances.
(p) The Company together with its subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties a valid, enforceable right to use, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "Patent and Proprietary Rights") currently or proposed to be
employed by it in connection with its business, except where the failure to
own or license such Patent and Proprietary Rights would not, individually
or in the aggregate, have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries has received any notice of infringement or
misappropriation of or conflict with asserted rights of others with respect
to any Patent or Proprietary Rights, or of any facts which would render any
Patent or Proprietary Rights invalid or inadequate to protect the interest
of the Company or its subsidiaries therein, and which asserted
infringement, misappropriation or conflict or invalidity or inadequacy,
individually or in the aggregate, would or could reasonably be expected to
result in a Material Adverse Effect;
6
(q) The Company and its subsidiaries (A) are in compliance in all
respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a
Material Adverse Effect; and (B) possess and are in compliance with the
terms and conditions of such licenses, permits, consents, orders,
certificates or authorizations issued by the appropriate federal, state,
foreign or local regulatory agencies or bodies necessary to conduct the
businesses now operated by each of them, except for licenses, permits,
consents, orders, certificates or authorizations, the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect;
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or authorizations other
than revocations or modifications which, individually or in the aggregate,
would not have a Material Adverse Effect;
(r) The Company and each of its subsidiaries has filed all necessary
foreign, federal and state income, value-added, franchise,
telecommunications excise, sales and use and similar tax returns and has
paid all taxes shown as due thereon, and there is no tax deficiency that
has been, or to the knowledge of the Company might be, asserted against the
Company, any of its subsidiaries, or any of their respective properties or
assets that would or could be expected to have a Material Adverse Effect;
and
(s) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is reasonable for the
conduct of their businesses and the value of their properties and as is
customary for companies engaged in similar businesses in similar
industries.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus
as
7
amended or supplemented after the date of the Pricing Agreement
relating to such Securities and prior to the Time of Delivery for such
Securities which shall be disapproved by the Representatives for such
Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such
Time of Delivery and furnish the Representatives with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so
long as the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or
for additional information; and, in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of
any prospectus relating to the Securities or suspending any such
qualification, to promptly use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of such
Securities, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of each Pricing Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
as amended or supplemented in New York City in such quantities as the
Representatives may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of the Securities and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as the Representatives may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
8
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Company by the Representatives
and (ii) the Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives;
(f) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act; and
(g) To use the net proceeds received by it from the sale of
Designated Securities pursuant to this Agreement in the manner specified
in the Prospectus, as amended or supplemented prior to the Time of
Delivery, under the caption "Use of Proceeds."
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and Legal Investment Surveys; (iv) any fees
charged by securities rating services for rating the Securities; (v) any
filing fees incident to, and the reasonable fees and disbursements of counsel
for the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs
9
and expenses, including the fees of their counsel, transfer taxes on resale
of any of the Securities by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions dated the Time of Delivery for
such Designated Securities, with respect to the incorporation of the
Company, the validity of the Indenture, the validity of the Designated
Securities being delivered at such Time of Delivery, the Registration
Statement, the Prospectus, and such other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to the Representatives
shall have furnished to the Representatives their written opinion, dated
the Time of Delivery for such Designated Securities, in the form
presented to the Representatives prior to the execution of this
Agreement and in form and substance satisfactory to the Representatives,
to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and all of the issued
shares of capital stock of each such Significant Subsidiary have
been duly
10
and validly authorized and issued, are fully paid and non-assessable,
and (except for directors' qualifying shares and as set forth or
incorporated by reference in the Registration Statement) are owned
directly or indirectly by the Company;
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
(vi) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Indenture; and the Designated Securities
and the Indenture conform in all material respects to the
descriptions thereof in the Prospectus as amended or supplemented;
(vii) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act;
(viii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, this Agreement and the Pricing
Agreement with respect to the Designated Securities and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company
is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties;
(ix) No consent, approval, authorization, order, filing,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Designated Securities or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture, except such as have been obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, orders, filings, registrations or qualifications as
may be required under state
11
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(x) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its By-laws
or Certificate of Incorporation;
(xi) The statements set forth in the Prospectus under the
captions "Description of Debt Securities," "Description of
Debentures," "Description of Capital Stock," "Description of
Warrants" and "Description of Units," insofar as they purport to
constitute a summary of the terms of such securities, and under the
captions "Plan of Distribution" and "Underwriting", insofar as they
purport to describe the provisions of the laws and documents
referred to therein, are accurate and fairly and correctly present
in all material respects the information required to be presented by
the Act or the rules and regulations of the Commission thereunder;
(xii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xiii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and
(xiv) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery for the Designated
Securities (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the Trust Indenture Act and the rules and regulations
thereunder.
Such counsel shall also advise the Underwriters that, although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
documents incorporated by reference in the Prospectus as amended or
supplemented, they have no reason to believe that any such documents
incorporated by reference (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may be,
contained, in the case of a registration statement which became effective
under the Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the Commission, 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 when such documents were so filed, not misleading.
Such counsel shall also advise the Underwriters that, although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus as amended or supplemented, during the
course of its representation of the Company in connection with
12
the preparation of the Registration Statement and the Prospectus as amended
or supplemented, and on the basis of conferences with officers of the
Company, examination of documents referred to in the Registration Statement
and Prospectus as amended or supplemented and such other procedures as such
counsel deemed appropriate, nothing has come to the attention of such counsel
that causes such counsel to believe that as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus as
amended or supplemented prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented prior to the Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering the foregoing opinions, such counsel may rely (i) as to
matters of law other than the law of the States of Delaware and Minnesota and
federal law, upon the opinion or opinions of local counsel provided that the
extent of such reliance is specified in such opinion and that such counsel
shall state that such opinion or opinions of local counsel are satisfactory
to them and that they believe they and you are justified in relying thereon
and (ii) as to matters of fact, to the extent such counsel deems reasonable,
upon certificates of officers of the Company provided that the extent of such
reliance is specified in such opinion;
(d) The general counsel of the Company or other counsel for the
Company satisfactory to the Representatives shall have furnished to the
Representatives his written opinion, dated the Time of Delivery for such
Designated Securities, in the form presented to the Representatives prior
to the execution of this Agreement and in form and substance satisfactory
to the Representatives, to the effect that:
(i) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and all of the issued
shares of capital stock of each such Significant Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and as
set forth or incorporated by reference in the Registration
Statement) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(ii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings
13
are threatened or contemplated by governmental authorities or threatened
by others;
(iii) To the best of such counsel's knowledge, the Company
together with its subsidiaries owns and possesses all right, title
and interest in and to, or has duly licensed from third parties a
valid, enforceable right to use, all Patent and Proprietary Rights
currently or proposed to be employed by it in connection with its
business. To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries has received any notice of
infringement or misappropriation of or conflict with asserted rights
of others with respect to any Patent or Proprietary Rights, or of
any facts which would render any Patent or Proprietary Rights
invalid or inadequate to protect the interest of the Company or its
subsidiaries therein, and which asserted infringement,
misappropriation or conflict or invalidity or inadequacy,
individually or in the aggregate, would or could reasonably be
expected to result in a Material Adverse Effect;
(iv) To the best of such counsel's knowledge, the Company and
each of its subsidiaries has filed all necessary federal and state
income, franchise, sales and use tax returns and has paid all taxes
shown as due thereon, and there is no tax deficiency that has been,
or to the best of such counsel's knowledge, might be, asserted
against the Company, any of its subsidiaries, or any of their
respective properties or assets that would or could be expected to
have a Material Adverse Effect;
(v) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its By-laws
or Certificate of Incorporation or is in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or
by which it or any of its properties may be bound;
(vi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and
(vii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery for the Designated
Securities (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the Trust Indenture Act and the rules and regulations
thereunder.
Such counsel shall also advise the Underwriters that, although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
documents incorporated by reference in the Prospectus as amended or
supplemented, he has no reason to believe that any of such documents
incorporated by reference (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became
14
effective or were filed with the Commission, as the case may be, contained,
in the case of a registration statement which became effective under the Act,
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under the Act
or the Exchange Act with the Commission, 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 when such documents were so filed, not misleading.
Such counsel shall also advise the Underwriters that, although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus as amended or supplemented, during the
course of its representation of the Company in connection with the
preparation of the Registration Statement and the Prospectus as amended or
supplemented, and on the basis of conferences with officers of the Company,
examination of documents referred to in the Registration Statement and
Prospectus as amended or supplemented and such other procedures as such
counsel deemed appropriate, nothing has come to the attention of such counsel
that causes such counsel to believe that as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus as
amended or supplemented prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented prior to the Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering the foregoing opinions, such counsel may rely (i) as to
matters of law other than the law of the States of Delaware and Minnesota and
federal law, upon the opinion or opinions of local counsel provided that the
extent of such reliance is specified in such opinion and that such counsel
shall state that such opinion or opinions of local counsel are satisfactory
to him and that he believes that he and you are justified in relying thereon
and (ii) as to matters of fact, to the extent such counsel deems reasonable,
upon certificates of officers of the Company provided that the extent of such
reliance is specified in such opinion;
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at the Time of Delivery for such
Designated Securities, (i) KPMG Peat Marwick LLP shall have furnished to
the Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements of the Company and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, in the form
15
presented to the Representatives prior to the execution of this
Agreement and in form and substance satisfactory to the Representatives,
to the effect set forth in Annex II hereto, and (ii) Coopers & Lybrand
LLP shall have furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the most
recent report of the Company filed with the Commission containing
financial statements of James Hardie Irrigation, Inc., James Hardie
Irrigation Pty. Limited and James Hardie Irrigation Europe S.p.A. and
incorporated by reference in the Registration Statement, if the date of
such report is later than such effective date, and a letter dated such
Time of Delivery, respectively, in the form presented to the
Representatives prior to the execution of this Agreement and in form and
substance satisfactory to the Representatives, to the effect set forth
in Annex III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as
amended or supplemented prior to the date of the Pricing Agreement
relating to the Designated Securities there shall not have been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries, or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus as amended or supplemented prior
to the date of the Pricing Agreement relating to the Designated
Securities, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as first amended
or supplemented relating to the Designated Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or Nasdaq Stock
Market; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal,
New York or Illinois authorities; or (iv) the outbreak or escalation of
hostilities involving the United States
16
or the declaration by the United States of a national emergency or war,
if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented relating to the Designated Securities;
(i) The Company shall have furnished or caused to be furnished to
the Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in the introductory paragraph of
this Section, subsection (e) of this Section and as to such other
matters as the Representatives may reasonably request; and
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of such Pricing Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged
17
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(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 the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters of the Designated Securities on the other from the offering of
the Designated Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters of the Designated Securities on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be
18
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriters. The relative fault
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 on the one hand or such Underwriters on the other 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 subsection (d) were determined by PRO RATA allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Designated Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute
are several in proportion to their respective underwriting obligations with
respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Designated Securities, or the
Company notifies the Representatives that it has so arranged for the purchase
of such Designated Securities, the Representatives or the Company shall have
the right to postpone the Time of Delivery for such Designated Securities for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to
19
the Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to the
Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of
Designated Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Designated Securities which such Underwriter
agreed to purchase under such Pricing Agreement) of the Designated Securities
of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Securities, but the Company shall then be
under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated
20
Securities shall act on behalf of each of such Underwriters, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice
or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth
in the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement: Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of
this Agreement or any such Pricing Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by
reason of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. As used herein, "Significant
Subsidiaries" shall mean all direct and indirect subsidiaries of the Company
as of the Time of Delivery other than any subsidiaries which, considered in
the aggregate as a single subsidiary as of the end of the most recent fiscal
year of the Company, would not constitute a significant subsidiary as defined
in Rule 1-02 of Regulation S-X (or any successor thereto).
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
THE TORO COMPANY
By:
-----------------------------------
Name:
Title:
21
ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.,
[Names of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
............., 199..
Ladies and Gentlemen:
The Toro Company, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated .............., 1997 (the "Underwriting Agreement"), to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as
of the date of this Pricing Agreement, except that each representation and
warranty which refers to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as of the date
of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall
be deemed to refer to you. Unless otherwise defined herein, terms defined in
the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Securities pursuant to
Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the principal amount of Designated Securities set forth opposite
the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ___ [one for the Company and each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
THE TORO COMPANY
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
[By:
-----------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
2
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
------------- ------------
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . $
[Name(s) of Co-Representative(s) . . . . . . . . . . . . . .
[Names of other Underwriters] . . . . . . . . . . . . . . . .
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------------
-------------
3
SCHEDULE II
Title of Designated Securities:
Aggregate principal amount:
Price to Public:
Purchase Price by Underwriters:
Form of Designated Securities:
Specified funds for payment of purchase price:
Time of Delivery:
Indenture:
Indenture dated .................., 1997 between the Company and ......
as Trustee
Maturity:
Interest Rate:
Interest Payment Dates:
Redemption Provisions:
Sinking Fund Provisions:
Extendable provisions (if any):
Floating rate provisions (if any):
Defeasance provisions:
4
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Other Terms:
5
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, KPMG Peat
Marwick LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that (i) the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations; or
(ii) any material modification should be made to the unaudited condensed
consolidated financial statements;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for five such fiscal years
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to
the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments
2
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified
by the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
3
ANNEX III
Pursuant to Section 7(d) of the Underwriting Agreement, Coopers &
Lybrand LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to James Hardie Irrigation, Inc., James Hardie Irrigation Pty. Limited
and James Hardie Irrigation Europe S.p.A. and their respective
subsidiaries ("James Hardie") within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the interim financial statements, selected financial data, pro forma
financial information, and/or condensed financial statements derived
from audited financial statements of James Hardie for the periods
specified in such letter, as indicated in their reports thereon, copies
of which have been separately furnished to the representatives of the
Underwriters (the "Representatives") such term to include an Underwriter
or Underwriters who act without any firm being designated as its or
their representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed statements of income, balance sheets and
statements of cash flows of James Hardie included in the Prospectus
and/or included in the Company's current report on Form 8-K incorporated
by reference into the Prospectus as indicated in their reports thereon
copies of which have been separately furnished to the Representatives;
and on the basis of specified procedures including inquiries of
officials of James Hardie who have responsibility for financial and
accounting matters regarding whether the unaudited condensed financial
statements of James Hardie comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations, nothing came to
their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE TORO COMPANY, AS ISSUER
TO
FIRST TRUST NATIONAL ASSOCIATION, AS TRUSTEE
---------------
INDENTURE
DATED AS OF , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
RECITALS OF THE COMPANY............................................................................. 1
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................................. 1
SECTION 1.01. Definitions..................................................................... 1
Act............................................................................................. 1
Affiliate....................................................................................... 1
Attributable Debt............................................................................... 1
Authenticating Agent............................................................................ 2
Board of Directors.............................................................................. 2
Board Resolution................................................................................ 2
Business Day.................................................................................... 2
Commission...................................................................................... 2
Company......................................................................................... 2
Company Request or "Company Order".............................................................. 2
Consolidated Net Tangible Assets................................................................ 2
Corporate Trust Office.......................................................................... 3
Covenant Defeasance............................................................................. 3
Debt............................................................................................ 3
Defaulted Interest.............................................................................. 3
Defeasance...................................................................................... 3
Depositary...................................................................................... 3
Event of Default................................................................................ 3
Exchange Act.................................................................................... 3
Expiration Date................................................................................. 3
Global Security................................................................................. 3
Holder.......................................................................................... 3
Incur........................................................................................... 3
Indenture....................................................................................... 3
Interest........................................................................................ 4
Interest Payment Date........................................................................... 4
Investment Company Act.......................................................................... 4
Maturity........................................................................................ 4
Nonrecourse Obligation.......................................................................... 4
Notice of Default............................................................................... 4
Officers' Certificate........................................................................... 4
Opinion of Counsel.............................................................................. 4
Original Issue Discount Security................................................................ 4
Outstanding..................................................................................... 4
Paying Agent.................................................................................... 5
Person.......................................................................................... 5
Place of Payment................................................................................ 5
Predecessor Security............................................................................ 5
Principal Property.............................................................................. 5
Redemption Date................................................................................. 5
Redemption Price................................................................................ 5
Regular Record Date............................................................................. 5
Restricted Subsidiary........................................................................... 6
Sale and Lease-Back Transaction................................................................. 6
i
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Securities...................................................................................... 6
Securities Act.................................................................................. 6
Security Register............................................................................... 6
Special Record Date............................................................................. 6
Stated Maturity................................................................................. 6
Subsidiary...................................................................................... 6
Trust Indenture Act............................................................................. 6
Trustee......................................................................................... 6
U.S. Government Obligation...................................................................... 6
Vice President.................................................................................. 6
Wholly Owned Subsidiary......................................................................... 6
SECTION 1.02. Compliance Certificates and Opinions............................................ 7
SECTION 1.03. Form of Documents Delivered to Trustee.......................................... 7
SECTION 1.04. Acts of Holders; Record Dates................................................... 7
SECTION 1.05. Notices, Etc., to Trustee and Company........................................... 9
SECTION 1.06. Notice to Holders; Waiver....................................................... 9
SECTION 1.07. Conflict With Trust Indenture Act............................................... 9
SECTION 1.08. Effect of Headings and Table of Contents........................................ 10
SECTION 1.09. Successors and Assigns.......................................................... 10
SECTION 1.10. Separability Clause............................................................. 10
SECTION 1.11. Benefits of Indenture........................................................... 10
SECTION 1.12. Governing Law................................................................... 10
SECTION 1.13. Legal Holidays.................................................................. 10
SECTION 1.14. Appointment of Agent for Service................................................ 10
ARTICLE II. SECURITY FORMS......................................................................... 10
SECTION 2.01. Forms Generally................................................................. 10
SECTION 2.02. Form of Face of Security........................................................ 11
SECTION 2.03. Form of Reverse of Security..................................................... 12
SECTION 2.04. Form of Legend for Global Securities............................................ 15
SECTION 2.05. Form of Trustee's Certificate of Authentication................................. 16
ARTICLE III. THE SECURITIES........................................................................ 16
SECTION 3.01. Amount Unlimited; Issuable in Series............................................ 16
SECTION 3.02. Denominations................................................................... 18
SECTION 3.03. Execution, Authentication, Delivery and Dating.................................. 18
SECTION 3.04. Temporary Securities............................................................ 19
SECTION 3.05. Registration, Registration of Transfer and Exchange............................. 19
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities................................ 20
SECTION 3.07. Payment of Interest; Interest Rights Preserved.................................. 21
SECTION 3.08. Persons Deemed Owners........................................................... 22
SECTION 3.09. Cancellation.................................................................... 22
SECTION 3.10. Computation of Interest......................................................... 22
ARTICLE IV. SATISFACTION AND DISCHARGE............................................................. 22
SECTION 4.01. Satisfaction and Discharge of Indenture......................................... 22
SECTION 4.02. Application of Trust Money...................................................... 23
ARTICLE V. REMEDIES................................................................................. 23
SECTION 5.01. Events of Default............................................................... 23
ii
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SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.............................. 24
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee................. 25
SECTION 5.04. Trustee May File Proofs of Claim................................................ 26
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities..................... 26
SECTION 5.06. Application of Money Collected.................................................. 26
SECTION 5.07. Limitation on Suits............................................................. 26
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest....... 27
SECTION 5.09. Restoration of Rights and Remedies.............................................. 27
SECTION 5.10. Rights and Remedies Cumulative.................................................. 27
SECTION 5.11. Delay or Omission Not Waiver.................................................... 27
SECTION 5.12. Control by Holders.............................................................. 27
SECTION 5.13. Waiver of Past Defaults......................................................... 28
SECTION 5.14. Undertaking for Costs........................................................... 28
SECTION 5.15. Waiver of Usury, Stay or Extension Laws......................................... 28
ARTICLE VI. THE TRUSTEE............................................................................ 28
SECTION 6.01. Certain Duties and Responsibilities............................................. 28
SECTION 6.02. Notice of Defaults.............................................................. 28
SECTION 6.03. Certain Rights of Trustee....................................................... 29
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.......................... 29
SECTION 6.05. May Hold Securities............................................................. 30
SECTION 6.06. Money Held in Trust............................................................. 30
SECTION 6.07. Compensation and Reimbursement.................................................. 30
SECTION 6.08. Conflicting Interests........................................................... 30
SECTION 6.09. Corporate Trustee Required; Eligibility......................................... 30
SECTION 6.10. Resignation and Removal; Appointment of Successor............................... 30
SECTION 6.11. Acceptance of Appointment by Successor.......................................... 31
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business..................... 32
SECTION 6.13. Preferential Collection of Claims Against Company............................... 33
SECTION 6.14. Appointment of Authenticating Agent............................................. 33
ARTICLE VII. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................................... 34
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders....................... 34
SECTION 7.02. Preservation of Information; Communications to Holders.......................... 34
SECTION 7.03. Reports by Trustee.............................................................. 35
SECTION 7.04. Reports by Company.............................................................. 35
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE................................. 35
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms............................ 35
SECTION 8.02. Successor Substituted........................................................... 36
ARTICLE IX. SUPPLEMENTAL INDENTURES................................................................ 36
SECTION 9.01. Supplemental Indentures Without Consent of Holders.............................. 36
SECTION 9.02. Supplemental Indentures With Consent of Holders................................. 37
SECTION 9.03. Execution of Supplemental Indentures............................................ 38
SECTION 9.04. Effect of Supplemental Indentures............................................... 38
SECTION 9.05. Conformity With Trust Indenture Act............................................. 38
SECTION 9.06. Reference in Securities to Supplemental Indentures.............................. 38
iii
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ARTICLE X. COVENANTS............................................................................... 38
SECTION 10.01. Payment of Principal, Premium and Interest...................................... 38
SECTION 10.02. Maintenance of Office or Agency................................................. 38
SECTION 10.03. Money for Securities Payments to be Held in Trust............................... 39
SECTION 10.04. Statement by Officers as to Default............................................. 39
SECTION 10.05. Existence....................................................................... 39
SECTION 10.06. Maintenance of Properties....................................................... 40
SECTION 10.07. Payment of Taxes and Other Claims............................................... 40
SECTION 10.08. Limitation on Liens............................................................. 40
SECTION 10.09. Limitation on Sale and Lease-Back Transactions.................................. 41
SECTION 10.10. Limitation on Subsidiary Debt................................................... 41
SECTION 10.11. Waiver of Certain Covenants..................................................... 42
ARTICLE XI. REDEMPTION OR REPAYMENT OF SECURITIES.................................................. 42
SECTION 11.01. Applicability of Article........................................................ 42
SECTION 11.02. Election to Redeem; Notice to Trustee........................................... 42
SECTION 11.03. Selection by Trustee of Securities to be Redeemed............................... 43
SECTION 11.04. Notice of Redemption............................................................ 43
SECTION 11.05. Deposit of Redemption Price..................................................... 44
SECTION 11.06. Securities Payable on Redemption Date........................................... 44
SECTION 11.07. Securities Redeemed in Part..................................................... 44
SECTION 11.08. Right of Repayment.............................................................. 44
SECTION 11.09. Form of Option to Elect Repayment............................................... 45
ARTICLE XII. SINKING FUNDS.......................................................................... 45
SECTION 12.01. Applicability of Article........................................................ 45
SECTION 12.02. Satisfaction of Sinking Fund Payments With Securities........................... 45
SECTION 12.03. Redemption of Securities for Sinking Fund....................................... 45
ARTICLE XIII. DEFEASANCE AND COVENANT DEFEASANCE................................................... 46
SECTION 13.01. Company's Option to Effect Defeasance or Covenant Defeasance.................... 46
SECTION 13.02. Defeasance and Discharge........................................................ 46
SECTION 13.03. Covenant Defeasance............................................................. 46
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance................................. 47
SECTION 13.05. Deposited Money and U.S. Government Obligations to be Held in Trust;
Miscellaneous Provisionsc..................................................... 48
SECTION 13.06. Reinstatement................................................................... 48
- ------------------------
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
iv
INDENTURE, dated as of , 1997, between The Toro Company, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 8111 Lyndale
South, Bloomington, Minnesota 55420, and First Trust National Association, a
national banking association duly organized and existing under the laws of the
United States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (herein called the "Securities"), to be
issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) any gender used in this Indenture shall be deemed and construed to
include correlative words of the masculine, feminine or neutral gender;
(4) 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 hereunder shall mean such accounting principles as are
generally accepted at the date of such computation;
(5) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of
this Indenture; and
(6) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" when used in connection with a Sale and Lease-Back
Transaction involving a Principal Property means, at the time of determination,
the present value of the total net amount of rent
and other payments required to be paid under such lease during the remaining
term thereof (including any renewal term or period for which such lease has been
extended), discounted at the rate of interest set forth or implicit in the terms
of such lease or, if not practicable to determine such rate, the weighted
average interest rate per annum (in the case of Original Issue Discount
Securities, the imputed interest rate) borne by the Securities of each series
outstanding pursuant to the Indenture compounded semi-annually. For purposes of
the foregoing definition, rent shall not include amounts required to be paid by
the lessee, whether or not designated as rent or additional rent, on account of
or contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) and the net
amount determined assuming no such termination.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee. In the event the Board of Directors
shall delegate to any director or officer of the Company or any group consisting
of directors of the Company, officers of the Company or directors and officers
of the Company the authority to take any action which under the terms of this
Indenture may be taken by "Board Resolution," then any action so taken by, and
set forth in a resolution adopted by, the director, officer or group within the
scope of such delegation shall be deemed to be a "Board Resolution" for purposes
of this Indenture.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to time
constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, its Chief Executive
Officer, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time, total
assets (excluding applicable reserves and other properly deductible items) less:
(a) total current liabilities, except for (1) notes and loans payable, (2)
current maturities of long-term debt, and (3) current maturities of obligations
under capital leases; and (b) goodwill, patents and trademarks, to the extent
included in total assets; all as set forth on the most recent consolidated
balance sheet of the Company and its Restricted Subsidiaries and computed in
accordance with generally accepted accounting principles.
2
"Corporate Trust Office" means the principal office of the Trustee in the
state of Minnesota at which at any particular time its corporate trust business
shall be principally administered, which office is at the date of this Indenture
located at 180 East Fifth Street, St. Paul, Minnesota 55101.
"Corporation" includes corporations, associations, companies, joint stock
companies and business trusts.
"Covenant Defeasance" has the meaning specified in Section 13.03.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) the maximum fixed redemption or repurchase
price of redeemable stock of such Person at the time of determination, (vi)
every obligation to pay rent or other payment amounts of such Person with
respect to any Sale and Lease-back Transaction to which such Person is a party
and (vii) every obligation of the type referred to in Clauses (i) through (vi)
of another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Defeasance" has the meaning specified in Section 13.02.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.01.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.04.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 2.04 (or such
legend as may be specified as contemplated by Section 3.01 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring"
shall have the meanings correlative to the foregoing); PROVIDED, HOWEVER, that a
change in generally accepting accounting principles that results in an
obligation of such Person that exists at such time becoming Debt shall not be
deemed an Incurrence of such Debt.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this
3
instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 3.01.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of such principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Nonrecourse Obligation" means indebtedness or other obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Restricted Subsidiary or (ii) the financing of a project
involving the development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to such indebtedness
or obligation has no recourse to the Company or any Restricted Subsidiary or any
assets of the Company or any Restricted Subsidiary other than the assets which
were acquired with the proceeds of such transaction or the project financed with
the proceeds of such transaction (and the proceeds thereof).
"Notice of Default" means a written notice of the kind specified in Section
5.01(4) or 5.01(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.04 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.02.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, EXCEPT:
(1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(2) 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 Securities; PROVIDED that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 13.02; and
(4) Securities which have been paid pursuant to Section 3.06 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
4
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 5.02, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.01, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 3.01, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 3.01.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means the land, land improvements, buildings and
fixtures (to the extent they constitute real property interests), (including any
leasehold interest therein) constituting the principal corporate office, any
manufacturing facility, or any distribution center (whether now owned or
hereafter acquired) which: (a) is owned by the Company or any Subsidiary; (b) is
located within any of the present 50 states of the United States (or the
District of Columbia); (c) has not been determined in good faith by the Board of
Directors of the Company not to be materially important to the total business
conducted by the Company and its Subsidiaries taken as a whole; and (d) has a
market value on the date as of which the determination is being made in excess
of 1.0% of Consolidated Net Tangible Assets of the Company as most recently
determined on or prior to such date.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 3.01.
5
"Responsible Officer", means when used with respect to the Trustee, any
officer of the Trustee assigned to the Corporate Trust Office including any Vice
President, Assistant Vice President, Secretary, Assistant Secretary, Managing
Director or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"Restricted Subsidiary" means any Subsidiary which owns any Principal
Property which has a market value on the date as of which the determination is
being made in excess of 2.0% of Consolidated Net Tangible Assets of the Company
as most recently determined on or prior to such date.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing by the Company or any Restricted Subsidiary of any
Principal Property which property has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such person.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity", when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the
outstanding voting stock having the power to elect a majority of the board of
directors of such corporation is at the time owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; PROVIDED, HOWEVER, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 13.04.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding capital stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
6
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee such certificates
and opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers' Certificate,
if to be given by an officer of the Company, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust Indenture
Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include,
(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.
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. ACTS OF HOLDERS; RECORD DATES. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
7
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, PROVIDED that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; PROVIDED that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 1.06.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; PROVIDED that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders
8
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities
of the relevant series in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; PROVIDED that no Expiration Date shall be later than the 180th day
after the applicable record date; and PROVIDED, FURTHER, that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the other party hereto in writing, and to each Holder of Securities of the
relevant series in the manner set forth in Section 1.06, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with respect
to any record date set pursuant to this Section, the party hereto which set such
record date shall be deemed to have initially designated the 180th day after
such record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.05. NOTICES, ETC., TO TRUSTEE AND COMPANY. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(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 a Responsible Officer of the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, 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.
SECTION 1.06. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 1.07. CONFLICT WITH TRUST INDENTURE ACT. This Indenture is subject
to, and shall be governed by, the provisions of the Trust Indenture Act that are
required to be part of this Indenture. If any provision hereof limits, qualifies
or conflicts with a provision of the Trust Indenture Act which is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
9
SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. SEPARABILITY CLAUSE. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. LEGAL HOLIDAYS. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of any Security which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity.
SECTION 1.14. APPOINTMENT OF AGENT FOR SERVICE. By the execution and
delivery of this Indenture, the Company hereby appoints the Trustee as its agent
upon which process may be served in any legal action or proceeding which may be
instituted in any Federal or State court in the Borough of Manhattan, City of
New York, arising out of or relating to the Securities or this Indenture.
Service of process upon such agent at the office of such agent at the Corporate
Trust Office of the Trustee, Attention: Corporate Trust Department, and written
notice of said service to the Company by the Person serving the same addressed
as provided in Section 1.05, shall be deemed in every respect effective service
of process upon the Company in any such legal action or proceeding, and the
Company hereby submits to the jurisdiction of any such court in which any such
legal action or proceeding is so instituted. Such appointment shall be
irrevocable so long as the Holders of Securities shall have any rights pursuant
to the terms thereof or of this Indenture until the appointment of a successor
by the Company with the consent of the Trustee and such successor's acceptance
of such appointment. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
such agent or successor. By the execution and delivery of this Indenture, the
Trustee hereby agrees to act as such agent and undertakes promptly to notify the
Company of receipt by it of service of process in accordance with this Section
1.14.
ARTICLE II.
SECURITY FORMS
SECTION 2.01. FORMS GENERALLY. The Securities of each series shall be in
substantially the form set forth in this Article, or in such other form as shall
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or Depositary therefor or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof. If the form of Securities of any series
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
10
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities.
The definitive Securities shall be typewritten, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.02. FORM OF FACE OF SECURITY. [INSERT ANY LEGEND REQUIRED BY THE
INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.]
------------------------
No. $
, a corporation duly organized and existing
under the laws of (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or
registered assigns, the principal sum of Dollars
on .
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT-- , and to
pay interest thereon from or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on and in each year, commencing , at the
rate of % per annum, until the principal hereof is paid or made available
for payment [IF APPLICABLE, INSERT-- , PROVIDED that any principal and
premium, and any such installment of interest, which is overdue shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the or (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture].
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption[, repayment]
or at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of % per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal or premium shall be payable on demand. [Any such interest
on overdue principal or premium which is not paid on demand shall bear interest
at the rate of % per annum (to the extent that the payment of such interest
on interest shall be legally enforceable), from the date of such demand until
the amount so demanded is paid or made available for payment. Interest on any
overdue interest shall be payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable, insert
any such] interest on this Security will be made at the office or agency of
the Company maintained for that purpose in , in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts [IF APPLICABLE, INSERT--; PROVIDED, HOWEVER,
that at
11
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
----------------------------------------------
By
------------------------------------------
Attest:
- ------------------------------
SECTION 2.03. FORM OF REVERSE OF SECURITY. This Security is one of a duly
authorized issue of securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture, dated as of
(herein called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and
, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [IF APPLICABLE, INSERT--, limited in
aggregate principal amount to $ ].
[IF APPLICABLE, INSERT--The Securities of this Series are subject to
repayment on or after , , at the option of the Holder upon not
less than 30 days' (but not more than 60 days') notice by mail to the Paying
Agent prior to the repayment date including (a) appropriate wire instructions
and (b) either (i) the Security with the form entitled Option to Elect Repayment
(as set forth below) attached to the Security duly completed or (ii) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or trust company in the United States setting forth the name of the Holder
of such Security, the principal amount of such Debenture, the portion of the
principal amount of such Security to be repaid, the certificate number or a
description of the tenor and terms of such Security, a statement that the option
to elect repayment is being exercised thereby and a guarantee that such Security
to be repaid with the form entitled Option to Elect Repayment (substantially in
the form set out in the Indenture) attached to such Security duly completed will
be received by the Paying Agent not later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and such Security and
form duly completed must be received by the Paying Agent by such fifth Business
Day. Exercise of the repayment option by the Holder of such Security shall be
irrevocable. The repayment option may be exercised by the Holder of such
Security for less than the entire principal amount of the Security provided that
the principal amount of the Security remaining outstanding after repayment is an
authorized denomination. No
12
registration of, transfer or exchange of such Security (or, in the event that
such Security is to be repaid in part, the portion of the Security to be repaid)
will be permitted after exercise of a repayment option.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE,
INSERT--(1) on in any year commencing with the year and
ending with the year through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [IF APPLICABLE, INSERT--on or after , 19 ], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [IF APPLICABLE,
INSERT--on or before , %, and if redeemed] during the 12-month
period beginning of the years indicated,
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- --------- ----------- --------- -----------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on in any
year commencing with the year and ending with the year through operation
of the sinking fund for this series at the Redemption Prices for redemption
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time [IF APPLICABLE,
INSERT--on or after ], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
of the years indicated,
REDEMPTION PRICE
REDEMPTION PRICE FOR REDEMPTION
THROUGH OTHERWISE THAN
OPERATION OF THE THROUGH OPERATION OF
YEAR SINKING FUND THE SINKING FUND
- --------- ---------------- --------------------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the
13
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]
[IF APPLICABLE, INSERT--Notwithstanding the foregoing, the Company may not,
prior to , redeem any Securities of this series as contemplated by [IF
APPLICABLE, INSERT--Clause (2) of] the preceding paragraph as a part of, or in
anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than % per annum.]
[IF APPLICABLE, INSERT--The sinking fund for this series provides for the
redemption on in each year beginning with the year and ending with
the year of [IF APPLICABLE, INSERT--not less than $
("mandatory sinking fund") and not more than] $ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [IF APPLICABLE,
INSERT--mandatory] sinking fund payments may be credited against subsequent [IF
APPLICABLE, INSERT--mandatory] sinking fund payments otherwise required to be
made in the [IF APPLICABLE, INSERT--inverse] order in which they become due.]
[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT--In the event
of redemption of this Security in part only, a new Security or Securities of
this series and of like tenor for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.]
[IF APPLICABLE, INSERT--The Indenture contains provisions for Defeasance at
any time of [the entire indebtedness of this Security] [or] [certain restrictive
covenants and Events of Default with respect to this Security] [, in each case]
upon compliance with certain conditions set forth in the Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer of this Security or in exchange for or in lieu of this Security,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a
14
receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not less
than 25% in principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. Prior to due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 2.04. FORM OF LEGEND FOR GLOBAL SECURITIES. Unless otherwise
specified as contemplated by Section 3.01 for the Securities evidenced thereby,
every Global Security authenticated and delivered hereunder shall bear a legend
in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR
A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
15
SECTION 2.05. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificates of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
----------------------------------------------
As Trustee
By:
------------------------------------------
Authorized Signatory
ARTICLE III.
THE SECURITIES
SECTION 3.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.03,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the first
issuance of a Security of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07 and except for
any Securities which, pursuant to Section 3.03, are deemed never to have
been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal or installments of
principal of any Securities of the series is payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions upon
which
16
any Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;
(11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition
of "Outstanding" in Section 1.01;
(12) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or
those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which
such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion of
the principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to Section
5.02;
(14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to be
the principal amount shall be determined);
(15) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 13.02 or Section
13.03 or both such Sections and, if other than by a Board Resolution, the
manner in which any election by the Company to defease such Securities shall
be evidenced;
(16) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in
such case, the respective Depositaries for such Global Securities, the form
of any legend or legends which shall be borne by any such Global Security in
addition to or in lieu of that set forth in Section 2.04 and any
circumstances in addition to or in lieu of those set forth in Clause (2) of
the last paragraph of Section 3.05 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or
names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(17) any addition to, limitation of or change in the Events of Default
which applies to any Securities of the series and any change in the right of
the Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 5.02;
(18) any addition to, limitation of or change in the covenants set forth
in Article X which applies to Securities of the series; and
17
(19) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section
9.01(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 3.03) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action 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 3.02. DENOMINATIONS. The Securities of each series shall be
issuable only in registered form without coupons and only in such denominations
as shall be specified as contemplated by Section 3.01. In the absence of any
such specified denomination with respect to the Securities of any series, the
Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.
SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.01 and
3.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 2.01, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 3.01, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
18
Notwithstanding the provisions of Section 3.01 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.01 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.09, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 3.04. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are
typewritten, printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
SECTION 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so
19
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 11.03 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof
or custodian therefor, and each such Global Security shall constitute a
single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or
a nominee thereof unless (A) such Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or (ii) has ceased to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security or (C) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have
been specified for this purpose as contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be registered
in such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 3.04, 3.06, 9.06
or 11.07 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
SECTION 3.06. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
20
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Except as
otherwise provided as contemplated by Section 3.01 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the 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 given to
each Holder of Securities of such series in the manner set forth in Section
1.06, not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are
21
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. PERSONS DEEMED OWNERS. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Section 3.07) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 3.09. CANCELLATION. All Securities surrendered for payment,
redemption, registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be destroyed, and
the Trustee shall have provide proof of destruction to the Company.
SECTION 3.10. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 3.01 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either (A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.06 and (ii)
Securities for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or (B) all such Securities
not theretofore delivered to the Trustee for cancellation (i) have become
due and payable, or (ii) will become due and payable at their Stated
Maturity within one year, or (iii) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the
22
Trustee as trust funds in trust for the purpose money in an amount
sufficient to pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation, for principal and
any premium and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 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 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. APPLICATION OF TRUST MONEY. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Trustee pursuant
to Section 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal and any premium and interest for whose payment such money has been
deposited with the Trustee.
ARTICLE V.
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default", wherever used herein
with respect to Securities of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due
by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 30 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
10% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Securities of any series other than that series), or under any
mortgage, indenture or instrument (including this Indenture) under which
there
23
may be issued or by which there may be secured or evidenced any indebtedness
for money borrowed by the Company having an aggregate principal amount
outstanding of at least $10 million, whether such indebtedness now exists or
shall hereafter be created, which default (A) shall constitute a failure to
pay any portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace period with respect thereto or
(B) shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due
and payable, without, in the case of Clause (A), such indebtedness having
been discharged or without, in the case of Clause (B), such indebtedness
having been discharged or such acceleration having been rescinded or
annulled, in each such case, within a period of 10 days after there shall
have been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled, as the case may be, and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any of its
Restricted Subsidiaries in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any of its
Restricted Subsidiaries a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any of its Restricted
Subsidiaries under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any of its Restricted Subsidiaries or of
any substantial part of its property (or that of any such Restricted
Subsidiary), or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company or any of its Restricted
Subsidiaries in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any of its
Restricted Subsidiaries or of any substantial part of its property (or that
of any such Restricted Subsidiary), 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 or any of its Restricted Subsidiaries in furtherance
of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default (other than an Event of Default specified in Section 5.01(6) or
5.01(7)) with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of that series
may declare the principal amount of all the Securities of that series (or, if
any Securities of that series are Original Issue Discount Securities, such
portion of the principal amount of such Securities as may be specified by the
terms thereof) 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. If an Event of Default specified in Section 5.01(6) or 5.01(7) with
24
respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if any Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof)
shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay (A) all overdue interest on all Securities of that series, (B) the
principal of (and premium, if any, on) any Securities of that series which
have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate or rates prescribed therefor in such
Securities, (C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in
such Securities, and (D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due to the Trustee
under Section 6.07; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13.
No such rescission and annulment shall affect any subsequent default or impair
any right consequent thereon.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if:
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due to the Trustee
under Section 6.07.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
25
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to (i) file and prove a claim for the whole amount of principal
and any premium and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 6.07) and of
the Holders allowed in such judicial proceeding; and (ii) collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and for any
other amounts due to the Trustee under Section 6.07, be for the ratable benefit
of the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 5.06. APPLICATION OF MONEY COLLECTED. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal or any premium or interest, upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07; and
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively.
THIRD: The balance, if any, to the Persons or Persons entitled thereto.
SECTION 5.07. LIMITATION ON SUITS. No Holder of any Security of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
26
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more of such Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over
any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit
of all of such Holders.
SECTION 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section
3.07) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 3.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS. The Holders of a majority in aggregate
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
27
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.13. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default:
(1) in the payment of the principal of or any premium or interest on any
Security of such series, or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, 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 5.14 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 25% in principal amount of
the Outstanding Securities of any series, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal and
any premium and interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
SECTION 5.15. WAIVER OF USURY, STAY OR EXTENSION LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI.
THE TRUSTEE
SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 6.02. NOTICE OF DEFAULTS. If a default occurs hereunder with
respect to Securities of any series, the Trustee shall give the Holders of
Securities of such series notice of such default as and to the
28
extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case
of any default of the character specified in Section 5.01(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 6.01:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) 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;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(4) 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) except with respect to Sections 1.02, 10.01 and 10.04, the Trustee
shall have no duty to inquire as to the performance of the Issuers'
covenants in Article X. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 1.02, 5.01(1), 5.01(2), 10.01 and 10.04 or
(ii) any Default or Event of Default on which the Trustee shall have
received written notification or obtained actual knowledge.
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
29
SECTION 6.05. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent,
any Paying Agent, any Security Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 6.06. MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee 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 the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
SECTION 6.08. CONFLICTING INTERESTS. If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture. To the extent permitted by such Act, the Trustee shall not be deemed
to have a conflicting interest by virtue of being a trustee under this Indenture
with respect to Securities of more than one series.
SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder that is a Corporation organized and doing business
under the laws of the United States of America, any State or the District of
Columbia, authorized under such laws to exercise corporate trust powers, or any
other person permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has or is a
wholly-owned subsidiary of a banking holding company having a combined capital
and surplus (computed in accordance with the Trust Indenture Act) of at least
$50,000,000, is subject to supervision or examination by Federal, State or
District of Columbia authority and is not otherwise ineligible under the Trust
Indenture Act. If such Corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 6.09, the combined
capital and surplus of such Corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.
30
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.11 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
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 1.06. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute,
31
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such 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.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
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 the
first or second preceding paragraph, as the case may be.
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.
The retiring Trustee shall have no liability for any acts or omissions of
any successor Trustee hereunder.
Upon the appointment of any successor Trustee, hereunder, all fees, charges
and expenses of the retiring Trustee shall become immediately due and payable.
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt
32
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities; in
case any of the Securities shall not have been authenticated by the Trustee then
in office, any successor by merger, conversion or consolidation to such Trustee
may authenticate such Securities either in the name of such predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint
an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like
33
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.07.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
----------------------------------------------
As Trustee
By:
------------------------------------------
As Authenticating Agent
By:
------------------------------------------
Authorized Officer
ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS. The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not later than January 15 and July 15 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of each series as of the preceding
December 31 or June 30, as the case may be, and
(2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. The
Trustee shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders contained in the most recent list furnished to
the Trustee as provided in Section 7.01 and the names and addresses of Holders
received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
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SECTION 7.03. REPORTS BY TRUSTEE. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 7.04. REPORTS BY COMPANY. The Company shall:
(1) file with the Trustee, within 15 days after it 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 such Issuer or the Guarantor may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall 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 Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations; notwithstanding anything to
the contrary herein, the Trustee shall have no duty to review such documents
for purposes of determining compliance with any provisions of this
Indenture;
(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 VIII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all the
Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
35
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as
a result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Securities equally and ratably with (or
prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 8.02. SUCCESSOR SUBSTITUTED. Upon any consolidation of the Company
with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 8.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events of
Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, PROVIDED that any
such addition, change or elimination (A) shall neither
36
(i) apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such provision
nor (ii) modify the rights of the Holder of any such Security with respect
to such provision or (B) shall become effective only when there is no such
Security Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section
10.08 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11; 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; PROVIDED that such action pursuant to this Clause (9)
shall not adversely affect the interests of the Holders of Securities of any
series.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; PROVIDED, HOWEVER, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) Change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02, or change any Place of Payment where, or the coin or currency
in which, any Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.11 except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding 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 10.11, or the
deletion of this proviso, in accordance with the requirements of Sections
6.11 and 9.01(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
37
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
SECTION 9.06. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X.
COVENANTS
SECTION 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the
Securities of that series in accordance with the terms of the Securities and
this Indenture.
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
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SECTION 10.03. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent with respect to any series
of Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and any premium and 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 for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York City,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 10.04. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 10.05. EXISTENCE. Subject to Article VIII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; PROVIDED,
HOWEVER, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in
39
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 10.06. 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.
SECTION 10.07. 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.
SECTION 10.08. LIMITATION ON LIENS. The Company will not issue, incur,
create, assume or guarantee, and will not permit any Restricted Subsidiary to
issue, incur, create, assume or guarantee, any debt for borrowed money secured
by a mortgage, security interest, pledge, lien, charge or other encumbrance
("mortgages") upon any Principal Property of the Company or any Restricted
Subsidiary or upon any shares of stock or indebtedness of any Restricted
Subsidiary (whether such Principal Property, shares or indebtedness are now
existing or owned or hereafter created or acquired) without in any such case
effectively providing concurrently with the issuance, incurrence, creation,
assumption or guarantee of any such secured debt, or the grant of a mortgage
with respect to any such indebtedness, that the Securities (together with, if
the Company shall so determine, any other indebtedness of or guarantee by the
Company or such Restricted Subsidiary ranking equally with the Securities) shall
be secured equally and ratably with (or prior to) such secured debt. The
foregoing restriction, however, will not apply to:
(1) mortgages on property existing at the time of acquisition thereof by
the Company or any Subsidiary;
(2) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(3) mortgages on property, shares of stock or indebtedness existing at
the time of acquisition thereof by the Company or a Restricted Subsidiary or
mortgages thereon to secure the payment of all or any part of the purchase
price thereof, or mortgages on property, shares of stock or indebtedness to
secure any indebtedness for borrowed money incurred prior to, at the time of
or within 270 days after, the latest of the acquisition thereof, or, in the
case of property, the completion of construction, the completion of
improvements, or the commencement of substantial commercial operation of
such property for the purpose of financing all or any part of the purchase
price thereof, such construction, or the making of such improvements;
(4) mortgages to secure indebtedness owing to the Company or to a
Restricted Subsidiary;
(5) mortgages existing at the date of this Indenture;
(6) mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other
40
disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted Subsidiary;
(7) mortgages in favor of the United States or any State, territory or
possession thereof (or the District of Columbia), or any department, agency,
instrumentality or political subdivision of the United States or any State,
territory or possession thereof (or the District of Columbia), 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 mortgages;
(8) mortgages created in connection with the acquisition of assets or a
project financed with, and created to secure, a Nonrecourse Obligation; and
(9) extensions, renewals, refinancings or replacements of any mortgage
referred to in the foregoing clauses (1), (2), (3), (5), (6), (7) and (8)
provided, however, that any mortgages permitted by any of the foregoing
clauses (1), (2), (3), (5), (6), (7) and (8) shall not extend to or cover
any property of the Company or such Restricted Subsidiary, as the case may
be, other than the property, if any, specified in such clauses and
improvements thereto, and provided further that any refinancing or
replacement of any mortgages permitted by the foregoing clauses (7) and (8)
shall be of the type referred to in such clauses (7) or (8), as the case may
be.
Notwithstanding the restrictions set forth in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Securities,
provided that after giving effect thereto, the aggregate amount of all debt so
secured by mortgages (not including mortgages permitted under clauses (1)
through (9) above) does not exceed 10% of the Consolidated Net Tangible Assets
of the Company as most recently determined on or prior to such date.
SECTION 10.09. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The Company
will not, nor will it permit any Restricted Subsidiary to, enter into any Sale
and Lease-Back Transaction with respect to any Principal Property, other than
any such transaction involving a lease for a term of not more than three years
or any such transaction between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries, unless: (1) the Company or such Restricted
Subsidiary would be entitled to incur indebtedness secured by a mortgage on the
Principal Property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction, without
equally and ratably securing the Securities, pursuant to Section 10.08; or (2)
the Company shall apply an amount equal to the greater of the net proceeds of
such sale or the Attributable Debt with respect to such Sale and Lease-Back
Transaction within 270 days of such sale to either (or a combination of) the
retirement (other than any mandatory retirement, mandatory prepayment or sinking
fund payment or by payment at maturity) of debt for borrowed money of the
Company or a Restricted Subsidiary that matures more than 12 months after the
creation of such indebtedness or the purchase, construction or development of
other comparable property.
SECTION 10.10. LIMITATION ON SUBSIDIARY DEBT. The Company shall not permit
any Subsidiary of the Company (other than Toro Credit Company, a Minnesota
corporation, or any successor finance Subsidiary of the Company so long as Toro
Credit Company or such successor has no operating assets and is engaged solely
in financing activities) to Incur or suffer to exist any Debt except:
(1) Debt outstanding on the date of this Indenture;
(2) Debt issued to and held by the Company or a Wholly Owned Subsidiary
of the Company (provided that such Debt is at all times held by the Company
or a Person which is a Wholly Owned Subsidiary of the Company);
41
(3) Debt Incurred by a Person prior to the time (a) such Person became a
Subsidiary of the Company, (b) such Person merges into or consolidates with
a Subsidiary of the Company or (c) another Subsidiary of the Company merges
into or consolidates with such Person (in a transaction in which such Person
becomes a Subsidiary of the Company);
(4) Debt which is exchanged for, or the proceeds of which are used to
refinance or refund, any Debt permitted to be outstanding pursuant to
Clauses (1) through (3) hereof (or any extension or renewal thereof), in an
aggregate principal amount not to exceed the principal amount of the Debt so
exchanged, refinanced or refunded and provided such refinancing or refunding
Debt by its terms, or by the terms of any agreement or instrument pursuant
to which such Debt is issued (x) does not provide for payments of principal
at the stated maturity of such Debt or by way of a sinking fund applicable
to such Debt or by way of any mandatory redemption, defeasance, retirement
or repurchase of such Debt by the Company (including any redemption,
retirement or repurchase which is contingent upon events or circumstances,
but excluding any retirement required by virtue of acceleration of such Debt
upon an event of default thereunder), in each case prior to the stated
maturity of the Debt being refinanced or refunded and (y) does not permit
redemption or other retirement (including pursuant to an offer to purchase
made by the Company) of such Debt at the option of the holder thereof prior
to the stated maturity of the Debt being refinanced or refunded, other than
a redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Company) which is
conditioned upon the change of control of the Company; and
(5) Debt having a principal amount and liquidation value not in excess
of 20% of the Consolidated Net Tangible Assets of the Company in the
aggregate.
SECTION 10.11. WAIVER OF CERTAIN COVENANTS. Except as otherwise specified
as contemplated by Section 3.01 for Securities of such series, the Company may,
with respect to the Securities of any series, omit in any particular instance to
comply with any term, provision or condition set forth in any covenant provided
pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the benefit of the Holders
of such series or in any of Sections 10.08 to 10.10, inclusive, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE XI.
REDEMPTION OR REPAYMENT OF SECURITIES
SECTION 11.01. APPLICABILITY OF ARTICLE. Securities of any series which
are redeemable or repayable before their Stated Maturity shall be redeemable or
repayable in accordance with their terms and (except as otherwise specified as
contemplated by Section 3.01 for such Securities) in accordance with this
Article.
SECTION 11.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 3.01 for such Securities. In
case of any redemption at the election of the Company of less than all the
Securities of any series (including any such redemption affecting only a single
Security), 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, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption
42
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 11.03. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less
than all the Securities of any series are to be redeemed (unless all the
Securities of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Security of such series, PROVIDED that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.04. NOTICE OF REDEMPTION. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series consisting
of more than a single Security are to be redeemed, the identification (and,
in the case of partial redemption of any such Securities, the principal
amounts) of the particular Securities to be redeemed and, if less than all
the Outstanding Securities of any series consisting of a single Security are
to be redeemed, the principal amount of the particular Security to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
43
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 11.05. DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 11.06. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that, unless otherwise specified as contemplated by Section
3.01, installments of interest whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.07.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 11.07. SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
SECTION 11.08. RIGHT OF REPAYMENT. In order for any Security that is
subject to repayment at the option of the Holder to be repaid, the Paying Agent
must receive at least 30 days but not more than 60 days prior to the repayment
date (a) appropriate wire instructions and (b) either (i) the Security with the
form entitled Option to Elect Repayment (as set forth below) attached to the
Security duly completed or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder of such Security, the
principal amount of such Debenture, the portion of the principal amount of such
Security to be repaid, the certificate number or a description of the tenor and
terms of such Security, a statement that the option to elect repayment is being
exercised thereby and a guarantee that such Security to be repaid with the form
entitled Option to Elect Repayment attached to such Security duly completed will
be received by the Paying Agent not later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and such Security and
form duly completed must be received by the Paying Agent by such fifth Business
Day. Exercise of the repayment option by the Holder of such Security shall be
irrevocable, except as otherwise provided in the Board Resolution establishing
the term of the Security. The repayment option may be exercised by the Holder of
such Security for less than the entire principal amount of the Security provided
that the principal amount of the Security remaining outstanding after repayment
is an authorized denomination. No registration of, transfer or exchange of such
Security (or, in the event that such Security is to be repaid in part, the
portion of the Security to be repaid) will be permitted after exercise of a
repayment option. All questions as to the
44
validity, eligibility (including time of receipt) and acceptance of any Security
for repayment will be determined by the Company, whose determination will be
final, binding and non-appealable.
SECTION 11.09. FORM OF OPTION TO ELECT REPAYMENT. The following text shall
be attached to each Security to which the provisions of Section 11.08 apply:
FORM OF OPTION TO ELECT REPAYMENT ON ,
. I or we hereby irrevocably elect to exercise the option to have the
principal sum of together with accrued interest thereon to
, repaid by the Company on , . If less than the entire
principal amount of the Security is to be repaid specify the denomination or
denominations (which shall be in authorized denominations) of the Securities to
be issued to the Holder for the portion of the within Security not being repaid
(in the absence of any such specification, one such Security will be issued for
the portion not being repaid.
Dated: ------------------------------
Signed:
------------------------------
Signature Guarantee:
--------------------------------------
(Signature must be guaranteed by an
eligible institution within the
meaning of Rule 17A(d)-15 under the
Securities Exchange Act of 1934, as
amended)
ARTICLE XII.
SINKING FUNDS
SECTION 12.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of any
series except as otherwise specified as contemplated by Section 3.01 for such
Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities 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 such
Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.02. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.
SECTION 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The
Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to any
Securities of such series required to be made pursuant to the terms of such
Securities as and to the extent provided for by the terms of such Securities;
PROVIDED that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the Redemption Price, as specified in the
Securities so to be redeemed, for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 12.03. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 30
days prior to each sinking fund payment date for any Securities, the Company
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing sinking fund payment for such Securities pursuant to
45
the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities pursuant to Section 12.02 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 20 days prior to each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.03 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 11.04. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
11.06 and 11.07.
ARTICLE XIII.
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE. The Company may elect, at its option at any time, to have Section
13.02 or Section 13.03 applied to any Securities or any series of Securities, as
the case may be, designated pursuant to Section 3.01 as being defeasible
pursuant to such Section 13.02 or 13.03, in accordance with any applicable
requirements provided pursuant to Section 3.01 and upon compliance with the
conditions set forth below in this Article. Any such election shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
3.01 for such Securities.
SECTION 13.02. DEFEASANCE AND DISCHARGE. Upon the Company's exercise of
its option (if any) to have this Section applied to any Securities or any series
of Securities, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 13.04 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 13.04 and as more fully set forth in such Section, payments in respect
of the principal of and any premium and interest on such Securities when
payments are due, (2) the Company's obligations with respect to such Securities
under Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (3) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Company may exercise its option (if
any) to have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 13.03 applied to such
Securities.
SECTION 13.03. COVENANT DEFEASANCE. Upon the Company's exercise of its
option (if any) to have this Section applied to any Securities or any series of
Securities, as the case may be, (1) the Company shall be released from its
obligations under Section 8.01(3), Sections 10.06 through 10.10, inclusive, and
any covenants provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the
benefit of the Holders of such Securities and (2) the occurrence of any event
specified in Sections 501(4) (with respect to any of Section 8.01(3), Sections
10.06 through 10.10, inclusive, and any such covenants provided pursuant to
Section 3.01(18), 9.01(2) or 9.01(7)), 5.01(5) and 5.01(8) shall be deemed not
to be or result in an Event of Default, in each case with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 13.04 are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Section 5.01(4)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
46
SECTION 13.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of Section 13.02 or Section
13.03 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.09 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (C) a combination
thereof, in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or any such other qualifying trustee) to pay and
discharge, the principal of and any premium and interest on such Securities
on the respective Stated Maturities, in accordance with the terms of this
Indenture and such Securities. As used herein, "U.S. Government Obligation"
means (x) any security which is (i) a direct obligation of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act) as custodian with respect to any
U.S. Government Obligation which is specified in Clause (x) above and held
by such bank for the account of the holder of such depositary receipt, or
with respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, PROVIDED that (except
as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 13.02 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there has
been a change in the applicable Federal income tax law, in either case (A)
or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be subject
to Federal income tax on the same amount, in the same manner and at the same
times as would be the case if such deposit, Defeasance and discharge were
not to occur.
(3) In the event of an election to have Section 13.03 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
47
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit
or, with regard to any such event specified in Sections 5.01(6) and (7), at
any time on or prior to the 90th day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 13.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; MISCELLANEOUS PROVISIONS. Subject to the provisions of the last
paragraph of Section 10.03, all money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.06, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
13.04 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law. The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 13.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 13.04 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 13.06. REINSTATEMENT. If the Trustee or the Paying Agent is unable
to apply any money in accordance with this Article with respect to any
Securities by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 13.02 or 13.03 shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
13.05 with respect to such Securities in accordance with this Article; PROVIDED,
HOWEVER, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its
48
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
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.
THE TORO COMPANY
By
-------------------------------------------
Attest:
- ------------------------------
FIRST TRUST NATIONAL ASSOCIATION
By
-------------------------------------------
Attest:
- ------------------------------
49
State of Minnesota )
) ss.:
County of Hennepin )
On the day of , , before me personally came
, to me known, who, being by me duly sworn, did
depose and say that he is of The Toro Company, 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.
50
State of Minnesota )
) ss.:
County of Ramsey )
On the day of , , before me personally came
, to me known, who, being by me duly sworn, did
depose and say that he is of First Trust National
Association, one of the entities described in and which executed the foregoing
instrument; that he knows the seal of said entity; that the seal affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said entity; and that he signed his name thereto by like authority.
51
EXHIBIT 5
DOHERTY, RUMBLE & BUTLER
PROFESSIONAL ASSOCIATION
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
Tel: (612) 340-5555; Fax: (612) 340-5584
January 31, 1997
The Toro Company
8111 Lyndale Avenue South
Bloomington, MN 55420
Ladies and Gentlemen:
We have acted as counsel for The Toro Company, a Delaware
corporation (the "Company") in connection with the proposed shelf
registration under the Securities Act of 1933, as amended, of up to
$250,000,000 in aggregate principal amount of the Company's debt securities
(the "Debt Securities"), shares of common stock (the "Common Stock") and
warrants (the "Warrants"), and units of such securities (the "Units")
(collectively, the "Securities").
We have examined such corporate records and other documents,
including the Registration Statement on Form S-3 dated today, proposed to be
filed with the Securities and Exchange Commission (the "Registration
Statement"), and the form of Indenture (the "Indenture") between the Company
and First Trust National Association, as trustee (the "Trustee") pursuant to
which the Debt Securities will be issued, and have reviewed such matters of
law as we have deemed necessary or advisable for the purposes of this opinion.
1. The Company is a corporation duly organized and existing under
the laws of the State of Delaware.
2. When the Securities have been duly authorized by the Board of
Directors of the Company, duly executed by proper officers of the Company
and, if Debt Securities, duly authenticated by or on behalf of the Trustee
or, if Warrants, executed by a warrant agent duly appointed for the Warrants,
the Registration Statement has become effective under the Securities Act of
1933, as amended, and the Indenture has been duly executed and delivered by
the Company and the Trustee and duly qualified under the Trust Indenture Act
of 1939, as amended, and such Securities have been issued and paid for as
contemplated in the Registration Statement, including a prospectus supplement
or prospectus supplements relating to such Securities, such Securities, if
Common Stock, will be legally issued, fully paid and non-assessable, and, if
Debt Securities or Warrants, will be legally issued, valid and binding
obligations of the Company and, in the case of Debt Securities, entitled to
the benefits of the Indenture.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the prospectus
constituting a part of the Registration Statement as such prospectus may be
amended or supplemented.
Very truly yours,
DOHERTY, RUMBLE & BUTLER
PROFESSIONAL ASSOCIATION
By: DEAN R. EDSTROM
EXHIBIT 12
THE TORO COMPANY AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(unaudited)
(in thousands)
Transition
period
Year ended July 31, ended Year ended
----------------------------------------- October 31, October 31,
1992 1993 1994 1995 1995 1996
- -------------------------------------------------------------------------------------------------------------------
Earnings before income
taxes $ (34,903) $21,355 $37,050 $61,112 $6,606 $60,180
Plus: Fixed charges (1) 21,253 19,142 15,989 14,892 3,266 16,728
- -------------------------------------------------------------------------------------------------------------------
Earnings available to cover fixed charges $ --(2) $40,497 $53,039 $76,004 $9,872 $76,908
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of earnings to fixed charges --(2) 2.12 3.32 5.10 3.02 4.60
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
(1) Fixed Charges consisted of the following:
Transition
period
Year ended July 31, ended Year ended
----------------------------------------- October 31, October 31,
1992 1993 1994 1995 1995 1996
- -------------------------------------------------------------------------------------------------------------------
Interest expense $18,726 $17,150 $13,562 $11,902 $2,532 $13,590
Rentals (interest factor) 2,527 1,992 2,427 2,990 734 3,138
- -------------------------------------------------------------------------------------------------------------------
Total fixed charges $21,253 $19,142 $15,989 $14,892 $3,266 $16,728
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
(2) For fiscal year ending July 31, 1992, earnings were insufficient to cover
fixed charges by $34,903,000.
EXHIBIT 23(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Toro Company:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 31, 1997
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
THE TORO COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 41-0580470
(State of Incorporation) (I.R.S. Employer
Identification No.)
8111 Lyndale Avenue South
Bloomington, Minnesota 55420-1196
(Address of Principal Executive Offices) (Zip Code)
DEBT SECURITIES
(Title of the Indenture Securities)
GENERAL
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.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's knowledge
the obligor is not in default under any Indenture for which the Trustee acts
as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility and qualification. Each of the exhibits listed below is
incorporated by reference from registration number 22-27000.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published pursuant
to law or the requirements of its supervising or examining authority.
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee
has no reason to doubt the accuracy of any such information, it cannot accept
any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 30th day of January,
1997.
FIRST TRUST NATIONAL ASSOCIATION
[SEAL]
/s/ Richard H. Prokosch
-----------------------
Richard H. Prokosch
Trust Officer
/s/ Kathe Barrett
- -----------------
Kathe Barrett
Assistant Secretary
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that
reports of examination of the undersigned by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon its request therefor.
Dated: January 30, 1997
FIRST TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
-----------------------
Richard H. Prokosch
Trust Officer
