This Registration Statement also Constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 333-20373 and Post-Effective Amendment No. 1 to
Registration Statement No. 33-25715
As filed with the Securities and Exchange Commission on May 5, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
UNISYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-0387840
(State of Incorporation) (I.R.S. Employer Identification No.)
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
(215) 986-4011
(Address, including zip code, and telephone number, including area code,
of principal executive offices)
HAROLD S. BARRON
Senior Vice President,
General Counsel and Secretary
Unisys Corporation
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
(215) 986-5299
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
NANCY STRAUS SUNDHEIM, ESQ. RISE B. NORMAN, ESQ.
UNISYS CORPORATION SIMPSON THACHER & BARTLETT
Township Line and Union Meeting Roads 425 Lexington Avenue
Blue Bell, Pennsylvania 19424 New York, New York 10017
------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement as
determined in light of market conditions and other factors.
------------
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plan, 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, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
------------
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed
Maximum
Title of Each Class of Aggregate Amount of
Securities to be Registered Offering Registration
Price(1)(2) Fee(3)
- ------------------------------------------------------------------------------
Senior Debt Securities;
Subordinated Debt Securities;
Common Stock, par value
$.01 per share(4)(5);
Preferred Stock, par value
$1 per share (5);
Warrants $385,293,412 $113,662
==============================================================================
(1) In U.S. dollars or the equivalent thereof in foreign currencies or
foreign currency units.
(2) Estimated solely for purposes of calculating the registration fee.
(3) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering price
rather than the principal amount of any Debt Securities issued at a discount.
(4) Includes Preferred Share Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the Common
Stock.
(5) In addition to any Common Stock or Preferred Stock that may be issued
directly under this Registration Statement, there are being registered
hereunder such indeterminate number of shares of Common Stock or Preferred
Stock as may be issued upon conversion or exchange of Debt Securities or
Preferred Stock. No separate consideration will be received for any Common
Stock or Preferred Stock so issued upon conversion or exchange.
PURSUANT TO RULE 429 OF THE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO (1) A
REGISTRATION STATEMENT ON FORM S-3 (NO. 333-20373) (RELATING TO AN AGGREGATE
$450,000,000 OF SECURITIES) PREVIOUSLY FILED BY THE REGISTRANT AND DECLARED
EFFECTIVE ON FEBRUARY 18, 1997 AND (2) A REGISTRATION STATEMENT ON FORM S-3
(NO. 33-25715) (RELATING TO AN AGGREGATE $400,000,000 OF SECURITIES)
PREVIOUSLY FILED BY THE REGISTRANT AND DECLARED EFFECTIVE ON JANUARY 26, 1989.
THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO THE
REGISTRANT'S REGISTRATION STATEMENT ON FORM S-3 (NO. 333-20373) WITH RESPECT
TO THE REMAINING $115,206,588 OF UNSOLD SECURITIES THEREUNDER AND POST-
EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM
S-3 (NO. 33-25715) WITH RESPECT TO THE REMAINING $199,500,000 OF UNSOLD
SECURITIES THEREUNDER, AND SUCH POST-EFFECTIVE AMENDMENTS SHALL HEREAFTER
BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION
STATEMENT AND IN ACCORDANCE WITH SECTION 8(C) OF THE SECURITIES ACT OF 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
1
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 5, 1998
PROSPECTUS
$700,000,000
Unisys Corporation
Securities
------------
Unisys Corporation (the "Company") may offer from time to time, together
or separately, (1) its unsecured debt securities (the "Debt Securities"),
which may be either senior debt securities ("Senior Debt Securities") or
subordinated debt securities ("Subordinated Debt Securities"); (2) shares of
its Common Stock, par value $.01 per share ("Common Stock"); (3) shares of its
Preferred Stock, par value $1 per share ("Preferred Stock") and (4) warrants
or similar rights ("Warrants") to purchase Debt Securities, Common Stock or
Preferred Stock (the Debt Securities, the Common Stock, the Preferred Stock
and the Warrants are collectively referred to as the "Securities"), in
amounts, at prices and on terms to be determined at the time of offering. The
Securities offered pursuant to this Prospectus may be issued in one or more
series or issuances and will be limited to $700,000,000 aggregate offering
price (or its equivalent, if Debt Securities are issued with principal amounts
denominated in one or more foreign currencies or foreign currency units). A
Prospectus Supplement (the "Prospectus Supplement") will describe the specific
terms of the particular Securities in respect of which this Prospectus is
being delivered (the "Offered Securities"), including, where applicable (1) in
the case of Debt Securities, the specific designation (including whether
senior or subordinated and whether convertible), aggregate principal amount,
currency or currency unit for which the Debt Securities may be purchased or in
which the principal and any premium or interest is payable, maturity, premium,
if any, rate and times of payment of any interest, any terms for optional or
mandatory redemption, the terms for any conversion into Common Stock, the
initial public offering price and other special terms; (2) in the case of
Preferred Stock, the specific title and stated value, any dividend,
liquidation, redemption, voting and other rights, any terms for conversion
into Common Stock, the initial public offering price and other special terms
and (3) in the case of Warrants, the number and terms thereof, the designation
and the number of securities issuable upon exercise, the purchase price and,
where applicable, the duration and detachability thereof.
------------
SEE "RISK FACTORS" COMMENCING ON PAGE 3 FOR A DISCUSSION
OF CERTAIN FACTORS WHICH PROSPECTIVE PURCHASERS OF THE
SECURITIES SHOULD CONSIDER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The Securities will be sold either through underwriters, dealers or
agents, or directly by the Company. The accompanying Prospectus Supplement
will set forth the names of any underwriters or agents involved in the sale of
the Securities in respect of which this Prospectus is being delivered, the
proposed amounts, if any, to be purchased by underwriters and the
compensation, if any, of such underwriters or agents.
The aggregate proceeds to the Company from all Securities will be the
purchase price of Securities sold less the aggregate of agents' commissions
and underwriters' discounts and other expenses of issuance and distribution.
See "Plan of Distribution."
________________, 1998.
2
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities being
offered hereby (the "Registration Statement"). As permitted by the rules and
regulations of the Commission, this Prospectus, which constitutes a part of
the Registration Statement, does not contain certain information, exhibits and
undertakings contained in the Registration Statement. Such additional
information can be inspected at and obtained from the Commission in the manner
set forth below. For further information, reference is made to the
Registration Statement and to the exhibits thereto. Statements contained
herein concerning any documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit
to the Registration Statement. Each such statement is qualified in its
entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith is required to file periodic reports, proxy statements
and other information with the Commission relating to its business, financial
statements and other matters. Such reports, proxy statements and other
information, as well as the Registration Statement, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Regional Offices of the Commission located in the Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World
Trade Center, New York, New York 10048. Copies of such material can also be
obtained from the Commission at prescribed rates by addressing written
requests for such copies to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy
statements and other information are also available for inspection at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York, 10005. The Commission maintains a Web site, which contains reports,
proxy and information statements and other information regarding registrants
that, like the Company, file electronically with the Commission, at the
following address: http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed with the Commission pursuant to
the Exchange Act and are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997.
2. The Company's Current Reports on Form 8-K dated January 15, 1998 and
January 27, 1998.
3. The description of the Company's Common Stock contained in the
registration statement of Burroughs Corporation ("Burroughs"), the predecessor
to the Company, on Form 8-B dated May 22, 1984 (as amended on Form 8 dated May
7, 1991), filed pursuant to Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
4. The description of the Company's Preferred Share Purchase Rights contained
in the Registration Statement of Burroughs on Form 8-A dated March 11, 1986
(as amended on Forms 8 dated, respectively, April 16, 1986, July 8, 1987 and
May 7, 1991 and on Form 8-A/A dated February 26, 1996), filed pursuant to
Section 12 of the Exchange Act, including any amendment or report filed for
the purpose of updating such description.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof
and prior to the termination of the offering of the Securities shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of filing of such documents. Any statements contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein, in the
accompanying Prospectus Supplement or in any other subsequently filed document
which also is incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part hereof except as so modified or superseded.
3
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on written or oral request, copies of any or all
documents incorporated by reference herein (other than the exhibits thereto
unless such exhibits are incorporated specifically by reference therein).
Requests should be directed to Unisys Corporation, Township Line and Union
Meeting Roads, Blue Bell, Pennsylvania 19424, Attention: Financial
Communications; Telephone (215) 986-5777.
THE COMPANY
The Company is a major supplier of information services, systems and
solutions on a worldwide basis. Through its three business units, Information
Services, Computer Systems and Global Customer Services, the Company provides
systems and solutions designed to enhance the productivity, competitiveness
and responsiveness of its clients.
The Company was incorporated in February 1984 under the laws of Delaware
and is the successor by merger to Burroughs Corporation, a Michigan
corporation incorporated in 1905. In November 1986, Sperry Corporation, a
Delaware corporation incorporated in 1955, was merged with and into the
Company, and the Company's name was changed to Unisys Corporation.
The principal executive offices of the Company are located at Township
Line and Union Meeting Roads, Blue Bell, Pennsylvania 19424. The Company's
telephone number is (215) 986-4011.
RISK FACTORS
This Prospectus contains or incorporates by reference certain forward-
looking statements, as defined in the Private Securities Litigation Reform Act
of 1995. All forward-looking statements rely on assumptions and are subject
to risks, uncertainties and other factors that could cause the Company's
actual results to differ materially from expectations. These include, but are
not limited to, the risk factors set forth below. Prospective investors
should consider carefully, in addition to the other information contained and
incorporated by reference herein, the following factors before deciding to
purchase the Securities offered hereby.
COMPETITIVE MARKETPLACE
The Company operates in an industry characterized by aggressive
competition, rapid technological change, evolving technology standards and
short product life cycles. The Company's competitors include computer
hardware manufacturers, software providers and information services companies,
many of which have greater financial and other resources than the Company and
are substantially less leveraged. The Company competes primarily on the basis
of product performance, service, technological innovation and price. Future
operating results will depend on the Company's ability to design, develop,
introduce, deliver or obtain new and innovative products and services on a
timely and cost-effective basis; on its ability to mitigate the effects of
competitive pressures and volatility in the information technology and
services market on revenues, pricing and margins; and on its ability to
effectively manage the shift of its business mix away from traditional high
margin product and services offerings.
HIGH LEVERAGE AND CASH REQUIREMENTS
At December 31, 1997 and December 31, 1996, the Company had approximately
$1.7 billion and $2.3 billion principal amount of debt, respectively. Total
interest expense for 1997 and 1996 was $233.2 million and $249.7 million,
respectively. The Company's debt-to-capital ratio was 58% at December 31,
1997 and 59% at December 31, 1996.
The Company has outstanding $1.4 billion of Series A convertible
preferred stock. Dividends paid on the Series A preferred stock in 1997
amounted to $106.3 million.
The total cash requirements associated with the restructuring actions
discussed below are expected to be approximately $180 million in 1998 and a
total of $58 million in 1999 and beyond. Several factors, including foreign
4
currency fluctuations and negotiations with third parties, could cause actual
cash requirements to differ from expectations.
During 1997, net cash used for continuing operations was $207.1 million.
For the year 1996, net cash used for continuing operations was $64.6 million.
In 1996, proceeds from the issuance of debt exceeded principal payments of
debt by $373.3 million. During 1995, net cash used for continuing operations
was $412.4 million. In 1995, discontinued operations provided cash of $658.3
million, primarily from the sale of the Company's defense systems business.
In June 1997, the Company entered into a two-year $200 million revolving
credit facility replacing the prior one-year facility. The facility includes
certain financial tests that must be met as conditions to a borrowing and
provides that no amounts may be outstanding under the facility for a minimum
of 20 consecutive days in each quarter. The facility may not be used to
refinance other debt. The amount the Company may borrow at any given time is
dependent upon the amount of certain of its accounts receivable and inventory.
The Company may require continued access to financing sources to meet its
cash requirements for debt service, restructurings and operating activities.
There can be no assurance that such access will always be available to the
Company or that the Company would be permitted to incur additional
indebtedness under its then existing set of restrictive covenants.
NET LOSSES AND RESTRUCTURINGS
The Company operates in an industry characterized by ongoing dramatic
changes, including, in the case of the Company, a shift from higher margin to
lower margin products and services. In order to improve its operating
results, the Company has moved aggressively to realign its operations to
reflect the rapidly changing market for information processing products and
services. In the fourth quarter of 1997, the Company took a one-time charge
of $1.1 billion against net income. The charge included $127.0 million
principally related to the Company's decision to discontinue the manufacturing
and assembly of personal computers and low-end servers and to dispose of a
small, non-strategic technology product, the writeoff of $883.6 million in
goodwill principally related to the 1986 merger of Burroughs Corporation and
Sperry Corporation and $42.0 million related to the conversion, in December
1997, of $271.2 million of the Company's 8 1/4% convertible subordinated notes
due 2006. After this charge, the Company reported a net loss of $853.6
million for 1997. In 1995, the Company reported a net loss of $624.6 million,
which included a fourth quarter pretax restructuring charge of $717.6 million,
primarily relating to the internal realignment of the Company into three
operating units and covering work force reductions, product and program
discontinuances and consolidation of office facilities and manufacturing
capacity. For the year ended December 31, 1996, the Company reported net
income of $49.7 million. In the fourth quarter of 1996, the Company reversed
certain reserves established under the 1995 restructuring plan, due to lower-
than-anticipated costs for work force reductions. This reversal was offset by
charges of $84 million relating to the refocusing and discontinuance of
certain products and programs. The Company recorded special pretax charges of
$186.2 million in 1994, $1.2 billion in 1991, $181.0 million in 1990 and
$231.0 million in 1989. Principally due to these special charges, the Company
had net losses of $1.4 billion in 1991, $436.7 million in 1990 and $639.3
million in 1989. No assurance can be given that the Company will not
experience losses in the future.
5
SYSTEMS INTEGRATION CONTRACTS
Certain of the Company's systems integration contracts are fixed-price
contracts under which the Company assumes the risk for the delivery of the
contracted services at an agreed-upon fixed price. The Company has at times
experienced problems in performing certain of its fixed-price contracts on a
profitable basis and has provided periodically for adjustments to the cost to
complete such contracts. In the fourth quarter of 1995, the Company recorded
a pretax charge for contract losses of $129.0 million, primarily relating to a
few large multi-year, fixed-price systems integration contracts. In the first
quarter of 1997, the Company recorded charges of approximately $25 million for
additional estimated contract costs identified during the quarter. There can
be no assurance that the Company will not experience such contract performance
problems in the future, which problems could affect the Company's results of
operations.
IMPORTANCE OF INTERNATIONAL OPERATIONS
Revenue from international operations accounted for approximately 60% of
the Company's total revenue in each of the last three years. There is no
material concentration of revenues in any particular country. Due to its
foreign operations, the Company is exposed to the effects of foreign exchange
rate fluctuations on the U.S. dollar.
The Company uses foreign exchange forward contracts and options,
generally having maturities of less than nine months, to reduce such exposure.
Such contracts and options are entered into for the sole purpose of hedging
certain transactional exposures. The Company does not hold or issue financial
instruments for speculative trading purposes. In addition to fluctuations in
foreign currency exchange rates, the Company's international business could be
affected by many factors beyond its control, such as instability of foreign
economies, U.S. and foreign government laws and policies affecting trade and
investment, and governmental changes. Although the Company has not
experienced any significant problems in foreign countries arising from such
factors, there can be no assurance that such problems will not arise in the
future.
NO DIVIDENDS ON COMMON STOCK; DIVIDEND LIMITATIONS
The Company has not declared or paid any cash dividends on its Common
Stock since 1990 and does not anticipate declaring or paying dividends on the
Common Stock in the foreseeable future. Certain of the Company's debt
instruments and credit facilities contain financial covenants which limit the
payment of dividends on the Company's capital stock.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the Company will use the net proceeds from the sale of the Offered
Securities for general corporate purposes and to reduce or refinance
indebtedness.
RATIOS OF EARNINGS
The following tables set forth the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividends
for the Company for each of the years in the five-year period ended December
31, 1997.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. The ratio of earnings to combined fixed charges
and preferred stock dividends has been computed by dividing earnings by the
sum of fixed charges and preferred dividend requirements. Earnings consist of
income (loss) from continuing operations before income taxes, extraordinary
items and changes in accounting principles minus undistributed earnings of
associated companies plus fixed charges. Fixed charges consist of interest on
all indebtedness, amortization of debt issuance expenses and the portion of
rental expense representative of interest.
6
RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31
------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
* 1.28 * 1.11 2.21
- --------
* Earnings for the years ended December 31, 1997 and 1995 were
inadequate to cover fixed charges by $752.9 million and $776.1 million,
respectively.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Year Ended December 31
------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
* * * * 1.39
- --------
* Earnings for the years ended December 31, 1997, 1996, 1995 and 1994
were inadequate to cover combined fixed charges and preferred stock dividends
by $923.8 million, $97.0 million, $961.2 million and $153.6 million,
respectively.
DESCRIPTION OF THE DEBT SECURITIES
The following sets forth certain general terms and provisions of the
Indentures under which the Debt Securities are to be issued. The particular
terms of a series of Debt Securities will be set forth in the Prospectus
Supplement or Prospectus Supplements relating to such Debt Securities.
The Senior Debt Securities are to be issued under an Indenture (the
"Senior Indenture") between the Company and Bank of Montreal Trust Company, as
Trustee (the "Senior Trustee"), or under a substantially identical indenture
with a different trustee. The Subordinated Debt Securities are to be issued
under an Indenture dated as of March 1, 1996 (the "Subordinated Indenture")
between the Company and The Bank of New York, as Trustee (the "Subordinated
Trustee"), or under a substantially identical indenture with a different
trustee. The Senior Indenture and the Subordinated Indenture are sometimes
referred to individually as an "Indenture" and collectively as the
"Indentures". The Senior Trustee and the Subordinated Trustee are sometimes
referred to individually as a "Trustee" and collectively as the "Trustees".
The following are brief summaries of certain provisions of the Indentures.
The summaries do not purport to be complete and are subject to the detailed
provisions of the Indentures, copies of which are filed as exhibits to the
Registration Statement. Capitalized terms used in this Prospectus and not
otherwise defined have the meanings specified in the Indentures.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued from time to time in series.
The Senior Debt Securities will be unsecured obligations of the Company
and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The Subordinated Debt Securities will be
unsecured obligations of the Company and will be subordinated in right of
payment to all Senior Indebtedness (as defined below in "Subordination of Debt
Securities").
7
The applicable Prospectus Supplement will describe the following terms
of the Debt Securities offered thereby: (1) the title of such Debt Securities;
(2) whether such Debt Securities are Senior Debt Securities or Subordinated
Debt Securities; (3) any limit on the aggregate principal amount of such Debt
Securities; (4) the date or dates on which such Debt Securities may be issued
and are or will be payable; (5) the rate or rates per annum (which may be
fixed or variable) at which such Debt Securities will bear interest, if any,
or the method by which such rate or rates shall be determined, and the date or
dates from which such interest, if any, will accrue; (6) the date or dates on
which interest, if any, on such Debt Securities will be payable and the
regular record date or dates therefor; (7) the place or places where the
principal of, and premium, if any, and any interest on such Debt Securities
will be payable; (8) the period or periods within which, the price or prices
at which, the currency or currencies (including currency units) in which, and
the terms and conditions upon which such Debt Securities may be redeemed at
the option of the Company; (9) the obligation, if any, of the Company to
redeem, to repay or purchase such Debt Securities pursuant to any sinking fund
or analogous provisions, upon the happening of a specified event or at the
option of a holder thereof, and the period or periods within which, the price
or prices at which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased pursuant to any such
obligations; (10) whether such Debt Securities are to be issued in whole or in
part in the form of one or more Global Notes (as defined under "Denominations,
Registration and Transfer") and, if so, the identity of the depositary, if
any, for such Global Note or Notes; (11) if other than dollars, the foreign
currency or currencies (including currency units) in which the principal of,
and premium, if any, and any interest on such Debt Securities shall or may be
paid and, if applicable, whether at the election of the Company and/or the
holder, and the conditions and manner of determining the exchange rate or
rates; (12) any index used to determine the amount of payment of principal of,
and premium, if any, and any interest on such Debt Securities; (13) whether
such Debt Securities are convertible into shares of Common Stock and the terms
and conditions upon which any conversion will be effected, including the
conversion price, the conversion period and other conversion provisions; (14)
any addition to, or modification or deletion of, any Events of Default or
covenants provided for with respect to such Debt Securities and (15) any other
detailed terms and provisions of such Debt Securities which are not
inconsistent with the Indentures.
Debt Securities may be issued at or above par or with an original issue
discount. The applicable Prospectus Supplement will describe Federal income
tax consequences and other special considerations applicable to any Debt
Securities issued with original issue discount or above par.
If the purchase price of any of the Debt Securities is denominated in one
or more foreign currencies or currency units, or if the principal of or any
premium or interest on any series of Debt Securities is payable in one or more
foreign currencies or currency units, the applicable Prospectus Supplement
will describe the restrictions, elections, Federal income tax considerations,
specific terms and other information with respect to such series and such
foreign currency or currency units.
DENOMINATIONS, REGISTRATION AND TRANSFER
Debt Securities will be issued as registered securities either in
certificated form or in the form of one or more global securities (each a
"Global Note"). Debt Securities which are book-entry securities ("Book-Entry
Notes") will be issued as registered Global Notes. Unless otherwise provided
in an applicable Prospectus Supplement with respect to a series of Debt
Securities, the Debt Securities will be issued in denominations of $1,000 or
any integral multiple thereof. One or more Global Notes will be issued in
denominations or aggregate denominations equal to the aggregate principal
amount of outstanding Debt Securities of the series to be represented by such
Global Note or Notes.
8
Debt Securities of any series (other than a Book-Entry Note) may be
exchanged for other Debt Securities of the same series and of a like aggregate
principal amount and tenor of different authorized denominations. Whenever
any such Debt Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debt Securities
which the holder making the exchange is entitled to receive.
Debt Securities (other than Book-Entry Notes) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar designated by the Company
for such purpose with respect to any series of Debt Securities and referred to
in an applicable Prospectus Supplement, without service charge and upon
payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar being satisfied with the documents of title and identity of
the person making the request. The Company has appointed the Trustee under
each Indenture as Security Registrar for the applicable Debt Securities.
For a discussion of restrictions on the exchange, registration and
transfer of Global Notes, see "Global Notes".
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of, and premium, if any, and any interest on Debt
Securities will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made (1) by check mailed to the address
of the person entitled thereto as such address shall appear in the Security
Register or (2) by wire transfer to an account maintained by the person
entitled thereto. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities will be
made to the person in whose name such Debt Security is registered at the close
of business on the regular record date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee under the applicable Indenture will act as the Company's sole Paying
Agent through its principal office. Any other Paying Agents in the United
States initially designated by the Company for the offered Debt Securities
will be named in an applicable Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that the Company will be required to maintain a Paying Agent in
each Place of Payment for such series.
All moneys paid by the Company to the Trustee or a Paying Agent for the
payment of principal of, and premium, if any, and any interest on any Debt
Security that remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Company, and the holder of such Debt Security or any coupon will thereafter
look only to the Company for payment thereof.
GLOBAL NOTES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with, or on behalf of,
a depositary (a "Depositary") identified in the Prospectus Supplement relating
to such series.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
BOOK-ENTRY NOTES
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Note to be deposited with
or on behalf of a Depositary will be represented by a Global Note registered
in the name of such depositary or its nominee. Upon the issuance of a Global
9
Note, the Depositary for such Global Note will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Debt
Securities represented by such Global Note to the accounts of institutions
that have accounts with such Depositary or its nominee ("participants"). The
accounts to be credited shall be designated by the underwriters or agents of
such Debt Securities, or by the Company if such Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in such
Global Notes will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Notes will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Note. Ownership of beneficial
interests in Global Notes by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. Such limits and
such laws may impair the ability to transfer beneficial interests in a Global
Note.
So long as the Depositary, or its nominee, is the registered owner of a
Global Note, such depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented by such
Global Note for all purposes under the Indenture governing such Debt
Securities. Except as set forth below, owners of beneficial interests in such
Global Notes will not be entitled to have Debt Securities of the series
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of Debt Securities of such series in
certificated form and will not be considered the owners or holders thereof
under the applicable Indenture.
Payment of principal of, and premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Note representing such Debt
Securities. None of the Company, any Trustee, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Note for such Debt
Securities or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
The Company expects that the Depositary for Debt Securities of a series
or its nominee, upon receipt of any payment of principal, premium or interest
in respect of a Global Note, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records
of such depositary or nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Note held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name", and will be the
responsibility of such participants.
Unless and until it is exchanged in whole for Debt Securities in
certificated form, a Global Note may not be transferred except as a whole by
the Depositary for such Global Note to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor of such
depositary or a nominee of such successor. If a Depositary for Debt
Securities is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within ninety days, the
Company will issue Debt Securities in certificated form in exchange for the
Global Note or Notes representing such Debt Securities. In addition, the
Company may at any time and in its sole discretion determine not to have any
Debt Securities in registered form represented by one or more Global Notes
and, in such event, will issue Debt Securities in certificated form in
exchange for the Global Note or Notes representing such Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Note representing Debt
Securities of such series may, on terms acceptable to the Company and the
Depositary for such Global Note, receive Debt Securities of such series in
certificated form. In any such instance, an owner of a beneficial interest in
a Global Note will be entitled to physical delivery in certificated form of
Debt Securities of the series represented by such Global Note equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name.
10
CERTAIN COVENANTS APPLICABLE TO SENIOR DEBT SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to Senior Debt Securities of a series, Senior Debt Securities will
have the benefit of the following covenants contained in the Senior Indenture.
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to Subordinated Debt Securities of a series, the Subordinated Debt
Securities will not have the benefit of such covenants.
Limitation Upon Mortgages and Liens
Neither the Company nor a Subsidiary will create or assume, except in
favor of the Company or a Wholly-Owned Subsidiary, any mortgage, pledge, lien
or encumbrance upon any Principal Manufacturing Property or any stock or
indebtedness of any Subsidiary without equally and ratably securing the
outstanding Senior Debt Securities. For the purpose of providing such equal
and ratable security, the principal amount of outstanding Senior Debt
Securities issued with original issue discount shall be such portion of the
principal amount as may be specified in the terms of that series. This
limitation will not apply to certain permitted encumbrances as described in
the Senior Indenture, including (1) purchase money mortgages entered into
within specified time limits; (2) liens existing on acquired property; (3)
certain tax, materialmen's, mechanics' and judgment liens, certain liens
arising by operation of law and certain other similar liens; (4) liens in
connection with certain government contracts; (5) certain mortgages, pledges,
liens or encumbrances in favor of any state or local government or
governmental agency in connection with certain tax-exempt financings; (6)
pledges of customers' accounts or paper and (7) mortgages, pledges, liens and
encumbrances not otherwise permitted if the sum of the indebtedness thereby
secured plus the aggregate sales price of property involved in certain sale
and leaseback transactions does not exceed the greater of $250,000,000 or 5%
of Consolidated Stockholders' Equity.
Limitation Upon Sale and Leaseback Transactions
The Company and any Subsidiary will be prohibited from selling any
Principal Manufacturing Property owned on the date of the Senior Indenture
with the intention of taking back a lease thereof, other than a temporary
lease (a lease of not more than 36 months) with the intent that the use of the
property by the Company or such Subsidiary will be discontinued before the
expiration of such period, unless (1) the sum of the sale price of property
involved in sale and leaseback transactions not otherwise permitted plus all
indebtedness secured by certain mortgages, pledges, liens and encumbrances
does not exceed the greater of $250,000,000 or 5% of Consolidated
Stockholders' Equity or (2) the greater of the net proceeds of such sale or
the fair market value of such Principal Manufacturing Property (which may be
conclusively determined by the Board of Directors of the Company) are applied
within 120 days to the optional retirement of outstanding Senior Debt
Securities or to the optional retirement of other Funded Debt (as defined) of
the Company ranking on a parity with outstanding Senior Debt Securities.
Certain Definitions
Certain terms defined in the Senior Indenture and applicable to the
foregoing covenants are summarized below:
"Consolidated Stockholders' Equity" means the total stockholders' equity
of the Company and its consolidated subsidiaries which, under generally
accepted accounting principles, would appear on a consolidated balance sheet
of the Company and its subsidiaries, excluding the separate component of
stockholders' equity attributable to foreign currency translation adjustments
pursuant to "Statement of Financial Accounting Standards No. 52-Foreign
Currency Translation" or any successor provision or principle of generally
accepted accounting principles.
"Principal Manufacturing Property" means any manufacturing property
located within the United States of America (other than its territories or
possessions) owned by the Company or any Subsidiary, except for any
manufacturing property that, in the opinion of the Board of Directors, is not
of material importance to the business conducted by the Company and its
Subsidiaries, taken as a whole.
11
"Subsidiary" means any corporation of which at least a majority of the
outstanding voting stock is owned by the Company or by other Subsidiaries, but
will not include any such corporation (an "Affiliated Corporation") which (1)
does not transact any substantial portion of its business or regularly
maintain any substantial portion of its operating assets in the United States;
(2) is principally engaged in financing sales or leases of merchandise,
equipment or services by the Company, a Subsidiary or another Affiliated
Corporation; (3) is principally engaged in holding or dealing in real estate
or (4) is principally engaged in the holding of stock in, and/or the financing
of operations of, Affiliated Corporations.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at the
time, directly or indirectly, owned by the Company and/or by one or more
Wholly-Owned Subsidiaries.
CONSOLIDATION, MERGER, SALE OR LEASE OF ASSETS
Each Indenture provides that the Company, without the consent of the
holders of any of the outstanding Debt Securities, may consolidate with or
merge into, or transfer or lease its assets substantially as an entirety to,
any corporation organized under the laws of any domestic jurisdiction,
provided that (1) the successor corporation assumes the Company's obligations
under such Indenture and the Debt Securities issued thereunder; (2) after
giving effect to the transaction, no Event of Default and no event which,
after notice or lapse of time, would become an Event of Default shall have
occurred and be continuing and (3) certain other conditions are met.
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (1) failure to pay principal of or any premium
on any Debt Security of that series when due; (2) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (3)
failure to deposit any sinking fund payment in respect of any Debt Security of
that series when due; (4) failure to perform any other covenant of the Company
in the applicable Indenture (other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (5)
certain events of bankruptcy, insolvency or reorganization and (6) any other
Event of Default provided with respect to Debt Securities of that series. Such
other Events of Default, if any, will be described in the Prospectus
Supplement relating to such Debt Securities.
If any Event of Default with respect to Debt Securities of any series at
the time outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are issued with original issue discount, such
portion of the principal amount as may be specified in the terms of that
series) of all the Debt Securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
based on acceleration has been obtained, the holders of a majority in
aggregate principal amount of outstanding Debt Securities of that series may,
under certain circumstances, rescind and annul such acceleration.
The Indentures provide that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of that series.
The Company is required to furnish the Trustees annually with a statement
as to the performance by the Company of certain of its obligations under the
Indentures and as to any default in such performance.
12
MODIFICATION AND WAIVER
Each Indenture provides that the Company and the Trustee may, without the
consent of any holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of adding to the Company's covenants,
adding any additional Events of Default, establishing the form or terms of
Debt Securities or curing ambiguities or inconsistencies in such Indentures or
making other provisions; provided such action shall not adversely affect the
interests of the holders of any series of outstanding Debt Securities in any
material respect.
Modifications of and amendments to the Indentures may be made by the
Company and the Trustee with the consent of the holders of a majority (66 2/3%
in the case of the Senior Indenture) in aggregate principal amount of the
outstanding Debt Securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Debt Security affected
thereby, (1) change the stated maturity of the principal of, or any
installment of principal or interest on, any Debt Security; (2) reduce the
principal amount of, or any premium or interest on, any Debt Security; (3)
reduce the amount of principal of Debt Securities issued with original issue
discount payable upon acceleration of the maturity thereof; (4) change the
currency of payment of principal of, or any premium or interest on, any Debt
Security; (5) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (6) 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.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of
Debt Securities of that series, waive any past default under the applicable
Indenture with respect to Debt Securities of that series, except a default in
the payment of the principal of or any premium or interest on any of the Debt
Securities of such series or in respect of a covenant or provision of such
Indenture that cannot, under the terms of such Indenture, be modified or
amended without the consent of the holders of each outstanding Debt Security
affected thereby.
DEFEASANCE
Each Indenture provides that, if such provision is made applicable to the
Debt Securities of any series, the Company, at its option, will be discharged
from its obligations in respect of the outstanding Debt Securities of a series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, convert Debt Securities of such series, replace
stolen, lost or mutilated Debt Securities of such series, maintain paying
agencies and hold moneys for payment in trust) or, in the case of Senior Debt
Securities, will not be subject to certain covenants applicable to the Debt
Securities of such series, in each case if the Company deposits with the
Trustee, in trust, money or government obligations which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of, and
premium, if any, and any interest on the Debt Securities of such series on the
dates such payments are due in accordance with the terms of such Debt
Securities. To exercise any such option, the Company is required, among other
things, to deliver to the Trustee an opinion of counsel to the effect that the
deposit and related defeasance would not cause the holders of the Debt
Securities of such series to recognize income, gain or loss for United States
income tax purposes and the holders would be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if the deposit and related defeasance had not occurred.
13
CONVERSION RIGHTS
The terms on which and the prices at which Subordinated Debt Securities
of a series may be convertible into Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms will include provisions as
to whether conversion is mandatory, at the option of the holder or at the
option of the Company.
SUBORDINATION PROVISIONS
Except as described in the applicable Prospectus Supplement, the
indebtedness evidenced by the Subordinated Debt Securities will be subordinate
in right of payment to all Senior Indebtedness (as hereinafter defined).
No payment shall be made by the Company on account of principal of, and
premium, if any, or interest on the Subordinated Debt Securities or on account
of the purchase, redemption or other acquisition of the Subordinated Debt
Securities if there shall have occurred and be continuing any default in the
payment of principal, premium, if any, or interest on any Senior Indebtedness
continuing beyond the period of grace, if any, specified in the instrument
evidencing such Senior Indebtedness.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal of,
and premium, if any, and interest on the Subordinated Debt Securities is to be
subordinated to the extent provided in the Subordinated Indenture in right of
payment to the prior payment in full of all Senior Indebtedness. By reason of
this provision, in the event of the Company's dissolution or insolvency,
holders of Senior Indebtedness may receive more, ratably, and holders of
Subordinated Debt Securities may receive less, ratably, than the other
creditors of the Company.
The foregoing subordination provisions will not prevent the occurrence of
any Event of Default under the Subordinated Indenture.
The term "Senior Indebtedness" means the principal of, premium, if any,
and any interest on, and any other payment due pursuant to the terms of an
instrument (including, without limitation, fees, expenses, collection expenses
(including attorneys' fees), interest yield amounts, post-petition interest
and taxes) creating, securing or evidencing any of the following, whether
outstanding on the date of the Subordinated Indenture or thereafter incurred
or created:
(1) All indebtedness of the Company for money borrowed or constituting
reimbursement obligations with respect to letters of credit (including
indebtedness secured by a mortgage, conditional sales contract or other lien
which is (A) given to secure all or a part of the purchase price of property
subject thereto, whether given to the vendor of such property or to another,
or (B) existing on property at the time of acquisition thereof);
(2) All indebtedness of the Company evidenced by notes, debentures, bonds or
other securities;
(3) All indebtedness of others of the kinds described in either of the
preceding clauses (1) or (2) assumed by or guaranteed in any manner by the
Company or in effect guaranteed by the Company through an agreement to
purchase, contingent or otherwise; and
(4) All renewals, deferrals, increases, extensions or refundings of and
modifications to indebtedness of the kinds described in any of the preceding
clauses (1), (2) or (3);
except (A) the Subordinated Debt Securities, (B) certain outstanding
subordinated indebtedness of the Company and (C) any indebtedness, renewal,
extension or refunding that, under the provisions of the instrument creating,
evidencing, or assuming or guaranteeing it, is not superior in right of
payment to the Subordinated Debt Securities or is subordinate by its terms in
right of payment to the Subordinated Debt Securities.
14
As of December 31, 1997, the Company had Senior Indebtedness (excluding
accrued interest and premium, if any) of approximately $1.6 billion. The
amount of Senior Indebtedness may change in the future. The Subordinated
Indenture contains no limitations on the incurrence of Senior Indebtedness.
NOTICES
Notices to holders of Debt Securities will be given by mail to the
addresses of such holders as they appear in the Security Register.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
CONCERNING THE TRUSTEES
Each Trustee, or its affiliates, has normal banking relationships with
the Company. In addition, the Subordinated Trustee and Bank of Montreal, the
parent of the Senior Trustee, each participates as a lender in the Company's
revolving credit facility. The Senior Trustee also serves as trustee under
another indenture with the Company pursuant to which unsecured senior debt
securities are currently outstanding. Harris Trust Company of New York, an
affiliate of the Senior Trustee, serves as the Company's transfer agent.
DESCRIPTION OF CAPITAL STOCK
The following descriptions do not purport to be complete and are subject
to, and qualified in their entirety by reference to, the more complete
descriptions thereof set forth in (1) the Company's Certificate of
Incorporation; (2) the Company's By-Laws and (3) the Rights Agreement (as
defined below), all of which are exhibits to the Registration Statement.
The Company's authorized capital stock consists of 720,000,000 shares of
Common Stock, par value $.01 per share, and 40,000,000 shares of Preferred
Stock, par value $1 per share.
As of March 31, 1998, there were approximately 251.4 million shares of
Common Stock outstanding, and the Company had reserved approximately 80.5
million additional shares of Common Stock for issuance pursuant to various
employee benefit plans and upon the conversion of outstanding shares of
Preferred Stock and other outstanding securities.
The Board of Directors has authorized the issuance of 30.0 million shares
of Series A Cumulative Convertible Preferred Stock (the "Series A Preferred
Stock") and 1.5 million shares of Junior Participating Preferred Stock (the
"Junior Preferred Stock"). As of March 31, 1998 there were approximately 28.4
million shares of Series A Preferred Stock and no shares of Junior Preferred
Stock outstanding.
The Series A Preferred Stock ranks prior to the Common Stock and the
Junior Preferred Stock as to payment of dividends and as to distribution of
assets upon liquidation, dissolution or winding up of the Company. Unless
otherwise set forth in the applicable Prospectus Supplement, each series of
Preferred Stock offered hereby will rank on a parity with each other such
series and with the Series A Preferred Stock.
COMMON STOCK
General
Subject to the rights of the holders of shares of Preferred Stock,
holders of shares of Common Stock (1) are entitled to receive dividends when
and as declared by the Board of Directors of the Company from funds legally
available for that purpose; (2) have the exclusive right, except as otherwise
15
may be required by law, to vote for the election of directors and for all
other purposes and (3) are entitled, upon any liquidation, dissolution or
winding up of the Company, to a pro rata distribution of the assets and funds
of the Company available for distribution to stockholders. Each share of
Common Stock is entitled to one vote on all matters on which stockholders
generally are entitled to vote. Holders of shares of Common Stock do not have
preemptive rights to subscribe for additional shares of Common Stock or
securities convertible into shares of Common Stock. The Common Stock is traded
on the New York Stock Exchange and prices are reported by the New York Stock
Exchange Composite Tape under the symbol UIS. Harris Trust Company of New
York is the transfer agent for the Common Stock.
Dividend Limitations
The Company has not declared or paid any cash dividends on the Common
Stock since 1990 and does not anticipate declaring or paying dividends on the
Common Stock in the foreseeable future. In addition, the Company's most
restrictive outstanding debt instruments generally limit aggregate dividends
paid on the Company's capital stock since June 30, 1992 (other than $185
million paid in respect of dividends in arrears) to an amount no greater than
50% of cumulative consolidated net income since July 1, 1992, plus capital
contributions and proceeds of equity issuances, plus $150 million.
Preferred Share Purchase Rights and Junior Participating Preferred Stock
The Company has distributed to its stockholders one Preferred Share
Purchase Right (the "Rights") with respect to each outstanding share of Common
Stock pursuant to a Rights Agreement (the "Rights Agreement") dated as of
March 7, 1986 between the Company and Harris Trust Company of New York, as
Rights Agent. Each Right entitles the holder thereof, until the earlier of
March 17, 2001 or the redemption of the Rights, to buy one three-hundredth of
a share of the Junior Preferred Stock at an exercise price of $75. The Rights
are represented by the certificates for shares of Common Stock and will not be
exercisable, or transferable apart from the shares of Common Stock, until the
earlier of the tenth day after the announcement that a person or group has
acquired beneficial ownership of 20% or more of the shares of Common Stock (a
"20% holder") or the tenth day after a person commences, or announces an
intention to commence, an offer, the consummation of which would result in a
person beneficially owning 30% or more of the shares of Common Stock as of
such date (the earlier of such dates being called the "Distribution Date").
The Rights could then begin trading separately from the shares of Common
Stock.
In the event that the Company is acquired in a merger or other business
combination transaction, each Right will entitle its holder to purchase, at
the exercise price of the Right, that number of shares of common stock of the
surviving company which, at the time of such transaction, would have a market
value of two times the exercise price of the Right. Alternatively, if a 20%
holder were to acquire the Company by means of a reverse merger in which the
Company and its stock survive, or were to engage in certain "self-dealing"
transactions, each Right not owned by the 20% holder would become exercisable
for the number of shares of Common Stock which, at that time, would have a
market value of two times the exercise price of the Right.
The Rights are redeemable at $.01 2/3 per Right at any time prior to the
time that a person or group has acquired beneficial ownership of 20% of the
shares of Common Stock. The Rights will expire on March 17, 2001 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed by the Company in accordance with their terms. At
no time will the Rights have any voting rights.
The foregoing summary of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which is an
exhibit to the Registration Statement.
The shares of Junior Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable. Each share of Junior Preferred Stock will have
a minimum preferential quarterly dividend of $15 per share, but will be
entitled to a dividend of 300 times the aggregate dividend declared per share
of Common Stock. In the event of liquidation, the holders of the shares of
Junior Preferred Stock will receive a preferred liquidation payment of $100
per share, but will be entitled to receive an aggregate liquidation payment
per share equal to 300 times the payment made per share of Common Stock. Each
share of the Junior Preferred Stock will have 300 votes, voting together with
16
the shares of Common Stock. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged, each share of
the Junior Preferred Stock will be entitled to receive 300 times the amount
received per share of Common Stock. The Junior Preferred Stock has customary
antidilution provisions to protect the dividend, liquidation and voting rights
described above.
The purchase price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (1) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the shares of Junior Preferred Stock; (2) as a result of
the grant to holders of the shares of Junior Preferred Stock of certain rights
or warrants to subscribe for shares of Junior Preferred Stock or of securities
convertible into shares of Junior Preferred Stock (at a price, or with a
conversion price, respectively, less than the then current market price for
the shares of Junior Preferred Stock) or (3) as a result of the distribution
to holders of the shares of Junior Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends at a rate
not in excess of 125% of the rate of the last cash dividend theretofore paid
or dividends payable in shares of Junior Preferred Stock) or of subscription
rights or warrants (other than those referred to above). With certain
exceptions, no adjustment in the purchase price will be required until
cumulative adjustments require an adjustment of at least 1% in such purchase
price. The percentage of a share of Junior Preferred Stock for which a Right
is exercisable and the number of Rights outstanding are also subject to
adjustment in the event of dividends on the shares of Common Stock payable in
shares of Common Stock or subdivisions, combinations or consolidations of the
shares of Common Stock, occurring, in any case, before the Rights become
exercisable or transferable apart from the shares of Common Stock.
One Right is presently associated with each issued and outstanding share
of Common Stock. The Company will issue one Right with each share of Common
Stock issued prior to the Final Expiration Date unless, prior to such
issuance, the Rights are redeemed or become exercisable and transferable apart
from the shares of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms that the Board of Directors determines are not in the best interests
of the Company's stockholders, except pursuant to an offer conditioned on a
substantial number of Rights being acquired. The Rights should not interfere
with any merger or other business combination approved by the Board of
Directors since the Rights may be redeemed by the Company at $.01 2/3 per
Right prior to the time that a person or group has acquired beneficial
ownership of 20% or more of the shares of Common Stock.
Anti-Takeover Provisions
The Company is a Delaware corporation and subject to Section 203 of the
Delaware General Corporation Law. Generally, Section 203 prohibits a publicly
held Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the time of the
transaction in which the person became an interested stockholder, unless (1)
prior to such time, either the business combination or such transaction is
approved by the board of directors of the corporation; (2) upon consummation
of the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock or (3) on or after such time the business combination is approved
by the board and by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested stockholder. A
"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's outstanding voting stock.
The Company's Certificate of Incorporation and By-Laws contain certain
anti-takeover provisions that are intended to enhance the likelihood of
continuity and stability in the composition of the Board of Directors and that
may have the effect of delaying, deferring or preventing a future takeover or
change in control of the Company unless such takeover or change in control is
approved by the Board of Directors. Such provisions may also render the
removal of the current Board of Directors more difficult.
17
The Company's Certificate of Incorporation and By-Laws provide that the
Board of Directors shall consist of not less than 10 nor more than 20
directors (subject to any rights of the holders of shares of Preferred Stock
to elect additional directors), with the exact number to be fixed by the Board
of Directors pursuant to a resolution adopted by a majority of the entire
Board. The Board of Directors is divided into three classes of directors,
which classes are as nearly equal in number as possible. One class of
directors is elected each year for a term of three years. Directors may be
removed from office only for cause and only by the affirmative vote of the
holders of at least 80% of the voting power of all capital stock of the
Company entitled to vote generally in the election of directors (the "Voting
Stock"), voting as a single class. Subject to any rights of the holders of
shares of Preferred Stock, vacancies in the Board of Directors and newly
created directorships are filled for the unexpired term only by the vote of a
majority of the remaining directors in office. Pursuant to the Certificate of
Incorporation, advance notice of stockholder nominations for the election of
directors must be given in the manner provided in the Company's By-Laws. The
By-Laws provide that written notice of the intent of a stockholder to make a
nomination at a meeting of stockholders must be delivered to the Secretary of
the Company not less than 90 days prior to the date of the meeting, in the
case of an annual meeting, and not more than seven days following the date of
notice of the meeting, in the case of a special meeting. The notice must
contain certain background information about the nominee and the number of
shares of the Company's capital stock beneficially owned by the nominee. The
affirmative vote of the holders of 80% or more of the voting power of the then
outstanding shares of Voting Stock, voting as a single class, is required to
amend, alter or repeal the provisions of the Certificate of Incorporation and
the By-Laws discussed above.
The Company's Certificate of Incorporation also provides that certain
mergers, consolidations, sales or other transfers of assets of, issuances or
reclassifications of securities of, or adoptions of plans of liquidation by
the Company (individually, a "Business Combination") must be approved by an
affirmative vote of the holders of 80% or more of the voting power of the then
outstanding shares of Voting Stock, voting as a single class, when such action
involves a person (an "Interested Stockholder") who beneficially owns more
than 20% of the voting power of the then outstanding shares of Voting Stock,
unless certain minimum price, form of consideration and procedural
requirements (the "Fair Price Provisions") are satisfied or unless a majority
of the directors not affiliated with the Interested Stockholder approve the
Business Combination. The affirmative vote of the holders of 80% or more of
the voting power of the then outstanding shares of Voting Stock, voting as a
single class, is required to amend, alter or repeal such provisions of the
Certificate of Incorporation.
Under the Certificate of Incorporation and By-Laws, except as otherwise
required by law and subject to the rights of the holders of shares of
Preferred Stock, stockholders may not call a special meeting of stockholders.
Only the Board of Directors, pursuant to a resolution adopted by a majority of
the entire Board, may call a special meeting of stockholders. The General
Corporation Law of the State of Delaware provides that, unless specifically
prohibited by the certificate of incorporation, any action required or
permitted to be taken by stockholders of a corporation may be taken without a
meeting, without prior notice, and without a stockholder vote if a written
consent or consents setting forth the action to be taken is signed by the
holders of outstanding shares of capital stock having the requisite number of
votes that would be necessary to authorize or take such action at a meeting of
stockholders. The Company's Certificate of Incorporation requires that
stockholder action be taken at a meeting of stockholders and prohibits
stockholder action by written consent. The affirmative vote of the holders of
80% or more of the voting power of the then outstanding shares of Voting
Stock, voting as a single class, is required to amend, alter or repeal the
provisions of the Certificate of Incorporation and By-Laws discussed above.
The purpose of certain provisions of the Certificate of Incorporation and
By-Laws discussed above relating to (1) a classified Board of Directors; (2)
the removal of directors and the filling of vacancies; (3) the prohibition of
stockholder action by written consent and (4) supermajority voting
requirements for the repeal of provisions (1) through (3) is to help assure
the continuity and stability of the business strategies and policies of the
Company and to discourage certain types of transactions that involve an actual
or threatened change of control of the Company. They are designed to make it
more difficult and time-consuming to change majority control of the Board of
Directors and thus to reduce the vulnerability of the Company to an
unsolicited takeover proposal that does not contemplate the acquisition of at
least 80% of the voting power of all of the Voting Stock or to an unsolicited
proposal for the restructuring or sale of all or part of the Company.
18
Such charter and by-law provisions may make more difficult or discourage
a proxy contest, or the assumption of control, by a holder of a substantial
block of shares of Common Stock, or the removal of the incumbent Board of
Directors, and could thus increase the likelihood that incumbent directors
will retain their positions. In addition, since the Fair Price Provisions
discussed above provide that certain business combinations involving the
Company and a certain type of stockholder which do not meet specified criteria
or are not approved by supermajority vote cannot be consummated without the
approval of a majority of those directors who are not affiliated with such
stockholder, such provisions could give incumbent management the power to
prevent certain takeovers. The Fair Price Provisions may also discourage
attempts to effect a "two-step" acquisition in which a third party purchases a
controlling interest in cash and acquires the balance of the voting stock of
the Company for less desirable consideration. Under the classified board and
related provisions, the third party would not immediately obtain the ability
to control the Board of Directors through its first-step acquisition and,
under the Fair Price Provisions, having made the first-step acquisition, the
third party could not acquire the balance of the Voting Stock for a lower
price without a supermajority vote or the approval of a majority of such
unaffiliated directors.
These provisions of the Certificate of Incorporation and By-Laws help
ensure that the Board of Directors, if confronted with an unsolicited proposal
from a third party which has acquired a block of shares of Common Stock, will
have sufficient time to review the proposal and appropriate alternatives for
the Company's stockholders.
Such charter and by-law provisions are intended to encourage persons
seeking to acquire control of the Company to initiate such an acquisition
through arm's-length negotiations with the Board of Directors, who would then
be in a position to negotiate a transaction which would treat all stockholders
in substantially the same manner. Such provisions may have the effect of
discouraging a third party from making an unsolicited tender offer or
otherwise attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its stockholders. In addition,
since the provisions are designed to discourage accumulations of large blocks
of shares of Common Stock by purchasers whose objective is to have such shares
repurchased by the Company at a premium, such provisions could tend to reduce
the temporary fluctuations in the market price of Common Stock caused by such
accumulations. Accordingly, stockholders of the Company could be deprived of
certain opportunities to sell their shares at a temporarily higher market
price.
The Rights could also have the effect of delaying, deferring or
preventing a takeover or change in control of the Company. See "Common Stock-
Preferred Share Purchase Rights and Junior Participating Preferred Stock".
PREFERRED STOCK
The following description sets forth certain general terms and provisions
of the Preferred Stock to which any Prospectus Supplement may relate. Certain
other terms of a particular series of Preferred Stock will be described in the
Prospectus Supplement relating to that series. If so indicated in the
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below. The description of certain provisions of the Preferred Stock
set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Company's Certificate of Incorporation and the Certificate of Designation
relating to each such series of Preferred Stock, which will be filed with the
Commission in connection with the offering of such series of Preferred Stock.
Under the Company's Certificate of Incorporation, the Board of Directors
may, by resolution, establish series of Preferred Stock having such voting
powers, and such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as the Board of Directors may determine.
The Preferred Stock offered hereby will have the dividend, liquidation,
redemption and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular
series of Preferred Stock offered thereby for specific terms, including: (1)
the designation and stated value per share of such Preferred Stock and the
number of shares offered; (2) the amount of liquidation preference per share;
(3) the price at which such Preferred Stock will be issued; (4) the dividend
rate (or method of calculation), the dates on which dividends will be payable,
19
whether such dividends will be cumulative or noncumulative and, if cumulative,
the dates from which dividends will commence to cumulate; (5) any redemption
or sinking fund provisions; (6) any conversion rights and (7) any additional
voting, dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
The Preferred Stock offered hereby will be issued in one or more series.
The holders of Preferred Stock will have no pre-emptive rights. Preferred
Stock will be fully paid and nonassessable upon issuance against full payment
of the purchase price therefor. Unless otherwise specified in the Prospectus
Supplement relating to a particular series of Preferred Stock, each series of
Preferred Stock will, with respect to dividend rights and rights on
liquidation, dissolution and winding up of the Company, rank prior to the
Common Stock and the Junior Preferred Stock (the "Junior Stock") and on a
parity with the Series A Preferred Stock and each other series of Preferred
Stock offered hereby (the "Parity Stock").
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Company,
out of funds legally available therefor, cash dividends at such rates and on
such dates as are set forth in the Prospectus Supplement relating to such
series of Preferred Stock. Such rate may be fixed or variable or both. Each
such dividend will be payable to the holders of record as they appear on the
stock books of the Company on such record dates as will be fixed by the Board
of Directors of the Company. Dividends on any series of the Preferred Stock
may be cumulative or noncumulative, as provided in the Prospectus Supplement
relating thereto. If the Board of Directors of the Company fails to declare a
dividend payable on a dividend payment date on any series of Preferred Stock
for which dividends are noncumulative, then the right to receive a dividend in
respect of the dividend period ending on such dividend payment date will be
lost, and the Company will have no obligation to pay the dividend accrued for
that period, whether or not dividends are declared for any future period.
Dividends on shares of each series of Preferred Stock for which dividends are
cumulative will accrue from the date set forth in the applicable Prospectus
Supplement.
The Preferred Stock of each series will include customary provisions (1)
restricting the payment of dividends or the making of other distributions on,
or the redemption, purchase or other acquisition of, Junior Stock unless full
dividends, including, in the case of cumulative Preferred Stock, accruals, if
any, in respect of prior dividend periods, on the shares of such series of
Preferred Stock have been paid and (2) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have not been
paid in full upon such series and other Parity Stock.
See "Certain Provisions of Outstanding Preferred Stock" for a description
of provisions of the Company's Series A Preferred Stock that could limit the
Company's ability to pay dividends on the Preferred Stock offered hereby.
20
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will
be entitled to receive out of assets of the Company available for distribution
to stockholders, before any distribution of assets is made to holders of
Junior Stock, liquidating distributions in the amount set forth in the
Prospectus Supplement relating to such series of Preferred Stock plus an
amount equal to accrued and unpaid dividends. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the Preferred Stock of any series and any Parity Stock
are not paid in full, the holders of the Preferred Stock of such series and of
such Parity Stock will share ratably in any such distribution of assets of the
Company in proportion to the full respective preferential amounts (which may
include accumulated dividends) to which they are entitled. After payment of
the full amount of the liquidating distribution to which they are entitled,
the holders of such series of Preferred Stock will have no right or claim to
any of the remaining assets of the Company. Neither the sale of all or a
portion of the Company's assets nor the merger or consolidation of the Company
into or with any other corporation shall be deemed to be a dissolution,
liquidation or winding up, voluntarily or involuntarily, of the Company.
Redemption
The terms, if any, on which shares of a series of Preferred Stock may be
subject to optional or mandatory redemption will be set forth in the
Prospectus Supplement relating to such series.
Conversion
The terms, if any, on which shares of any series of Preferred Stock are
convertible into Common Stock will be set forth in the Prospectus Supplement
relating thereto.
Voting Rights
The holders of Preferred Stock of a series offered hereby will not be
entitled to vote except as indicated below or in the Prospectus Supplement
relating to such series of Preferred Stock or as required by applicable law.
Unless otherwise specified in the Prospectus Supplement relating to a
particular series of Preferred Stock, when and if any such series is entitled
to vote, each share in such series will be entitled to one vote.
Unless otherwise specified in the related Prospectus Supplement, holders
of shares of a series of Preferred Stock will have the following voting
rights. If, on the date used to determine stockholders of record for any
meeting of stockholders of the Company at which directors are to be elected,
dividends payable on any series of Preferred Stock offered hereby and any
other series of Parity Stock are in arrears in an amount equal to at least six
quarterly dividends, the number of directors of the Company will be increased
by two and the holders of all such series of Preferred Stock, voting as a
class without regard to series, will be entitled to elect such two additional
directors at such meeting. The affirmative vote or consent of the holders of
at least a majority of the outstanding shares of a series of Preferred Stock
and any other series of Parity Stock also being affected, voting as a single
class without regard to series, will be required for any amendment of the
Company's Certificate of Incorporation if the amendment would have a
materially adverse effect on the powers, preferences or special rights of such
series. The affirmative vote or consent of the holders of at least two-thirds
of the outstanding shares of a series of Preferred Stock and any other series
of Parity Stock, voting as a single class without regard to series, will be
required to authorize, create or issue, or increase the authorized amount of,
any class or series of capital stock ranking prior to such series of Preferred
Stock as to dividends or upon liquidation.
CERTAIN PROVISIONS OF OUTSTANDING PREFERRED STOCK
As of March 31, 1998, there were approximately 28.4 million shares of
Series A Preferred Stock outstanding. The Series A Preferred Stock accrues
quarterly cumulative dividends at the annual rate of $3.75 per share and is
entitled to receive $50 per share, plus accrued and unpaid dividends, upon
liquidation. Each share of Series A Preferred Stock is currently convertible,
at the option of the holder thereof, into 1.67 shares of Common Stock. The
21
Series A Preferred Stock prohibits the payment of cash dividends or other
distributions on, and the purchase, redemption or other acquisition of, any
shares of Junior Stock until all accrued and unpaid dividends on such
Preferred Stock have been paid. When dividends are not paid in full on the
Series A Preferred Stock, all dividends paid upon shares of such series and
Parity Stock must be paid pro rata so that the amount of dividends paid per
share on the Series A Preferred Stock and the Parity Stock bear to each other
the same ratio that accrued dividends per share on such series and the Parity
Stock bear to each other.
DESCRIPTION OF THE WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant
Agent will act solely as an agent of the Company in connection with the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following
summary of certain provisions of the Warrants does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
provisions of the Warrant Agreement that will be filed with the Commission in
connection with the offering of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Warrants for
the purchase of Debt Securities ("Debt Warrants") will describe the terms of
such Debt Warrants, including the following: (1) the title of such Debt
Warrants; (2) the offering price for such Debt Warrants, if any; (3) the
aggregate number of such Debt Warrants; (4) the designation and terms of the
Debt Securities purchasable upon exercise of such Debt Warrants; (5) if
applicable, the designation and terms of the Debt Securities with which such
Debt Warrants are issued and the number of such Debt Warrants issued with each
such Debt Security; (6) if applicable, the date from and after which such Debt
Warrants and any Debt Securities issued therewith will be separately
transferable; (7) the principal amount of Debt Securities purchasable upon
exercise of a Debt Warrant and the price at which such principal amount of
Debt Securities may be purchased upon exercise (which price may be payable in
cash, securities, or other property); (8) the date on which the right to
exercise such Debt Warrants shall commence and the date on which such right
shall expire; (9) if applicable, the minimum or maximum amount of such Debt
Warrants that may be exercised at any one time; (10) information with respect
to book-entry procedures, if any; (11) the currency or currency units in which
the offering price, if any, and the exercise price are payable; (12) if
applicable, a discussion of material United States Federal income tax
considerations; (13) the antidilution provisions of such Debt Warrants, if
any; (14) the redemption or call provisions, if any, applicable to such Debt
Warrants; and (15) any additional terms of the Debt Warrants, including terms,
procedures, and limitations relating to the exchange and exercise of such Debt
Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Warrants
for the purchase of Common Stock or Preferred Stock will describe the terms of
such Warrants, including the following: (1) the title of such Warrants; (2)
the offering price for such Warrants, if any; (3) the aggregate number of such
Warrants; (4) the designation and terms of any Preferred Stock purchasable
upon exercise of such Warrants; (5) if applicable, the designation and terms
of the Securities with which such Warrants are issued and the number of such
Warrants issued with each such Security; (6) if applicable, the date from and
after which such Warrants and any Securities issued therewith will be
separately transferable; (7) the number of shares of Common Stock or Preferred
Stock purchasable upon exercise of a Warrant and the price at which such
shares may be purchased upon exercise (which price may be payable in cash,
securities, or other property); (8) the date on which the right to exercise
such Warrants shall commence and the date on which such right shall expire;
(9) if applicable, the minimum or maximum amount of such Warrants that may be
22
exercised at any one time; (10) the currency or currency units in which the
offering price, if any, and the exercise price are payable; (11) if
applicable, a discussion of material United States Federal income tax
considerations; (12) the antidilution provisions of such Warrants, if any;
(13) the redemption or call provisions, if any, applicable to such Warrants;
and (14) any additional terms of the Warrants, including terms, procedures,
and limitations relating to the exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Offered Securities may be sold to underwriters for public offering
pursuant to terms of offering fixed at the time of sale. In addition, the
Offered Securities may be sold by the Company to other purchasers directly or
through agents. Any such underwriter or agent involved in the offer and sale
of the Offered Securities will be named in an applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company also may offer and sell the
Offered Securities in exchange for one or more of its outstanding issues of
debt securities. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Offered
Securities upon the terms and conditions as shall be set forth in an
applicable Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may
act as agents. Underwriters may sell Offered 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 (which may
be changed from time to time) from the purchasers for whom they may act as
agents.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Offered Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in an applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Offered Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Company, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Company may
authorize agents, underwriters or dealers acting as the Company's agents to
solicit offers from certain institutional investors to purchase Offered
Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on a future date or dates specified
therein. There may be limitations on the minimum amount which may be purchased
by any such institutional investor or on the portion of the aggregate amount
of the particular Offered Securities which may be sold pursuant to such
arrangements. Institutional investors to which such offers may be made, when
offered, include commercial and savings banks, insurance companies, pension
funds, investment banks, educational and charitable institutions and such
other institutions as may be approved by the Company. Each Contract will be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (1) purchase shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which the purchaser
is subject and (2) if the Offered Securities are being sold to underwriters,
the Company shall have sold to underwriters the total amount of the Offered
Securities less the amount covered by Contracts. Agents or underwriters will
have no responsibility in respect of the delivery or performance of Contracts.
23
LEGAL MATTERS
Unless otherwise indicated in an accompanying Prospectus Supplement,
certain legal matters in connection with the Offered Securities will be passed
upon for the Company by Harold S. Barron, Esq., Senior Vice President, General
Counsel and Secretary of the Company, and for any agents or underwriters by
Simpson Thacher & Bartlett. As of March 31 1998, Mr. Barron owned 70,295
shares (including 66,695 restricted shares and restricted share units) of
Common Stock and held options to purchase 229,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company at December 31, 1997
and 1996, and for each of the three years in the period ended December 31,
1997 incorporated by reference or appearing in the Company's Annual Report
(Form 10-K) for the year ended December 31, 1997, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
incorporated therein and incorporated herein by reference. Such consolidated
financial statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance upon the
reports of Ernst & Young LLP (to the extent covered by consents filed with the
Commission) given upon the authority of such firm as experts in accounting and
auditing.
NO DEALER, SALESMAN OR UNISYS
OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE $700,000,000
AFFAIRS OF THE COMPANY SINCE THE DATE
OF THIS PROSPECTUS OR ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT. NEITHER THIS
PROSPECTUS NOR ANY ACCOMPANYING PROSPECTUS UNISYS CORPORATION
SUPPLEMENT CONSTITUTES AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SECURITIES
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED
TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
___________ PROSPECTUS
TABLE OF CONTENTS
Page
Available Information 2
Information Incorporated by Reference 2
The Company 3
Risk Factors 3
Use of Proceeds 5
Ratios of Earnings 5
Description of the Debt Securities 6
Description of Capital Stock 14
Description of the Warrants 21
Plan of Distribution 22
Legal Matters 23
Experts 23 _____________, 1998
II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses,
other than underwriting discounts and commissions, to be borne by the
registrant in connection with the distribution of the Securities:
Securities and Exchange Commission Registration Fee $ 113,662
Trustees' and Transfer Agents' Fees 25,000
Printing and Engraving Expenses 175,000
Rating Agency Fees 200,000
Accounting Fees and Expenses 75,000
Blue Sky Fees and Expenses 20,000
New York Stock Exchange listing fees, if applicable 20,000
Miscellaneous Expenses 10,338
--------
Total $639,000
========
__________
All of the amounts are estimated except for the Securities and Exchange
Commission registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for, among other things:
a. permissive indemnification for expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by designated persons,
including directors and officers of a corporation, in the event such persons
are parties to litigation other than stockholder derivative actions if certain
conditions are met;
b. permissive indemnification for expenses actually and reasonably incurred
by designated persons, including directors and officers of a corporation, in
the event such persons are parties to stockholder derivative actions if
certain conditions are met;
c. mandatory indemnification for expenses actually and reasonably incurred by
designated persons, including directors and officers of a corporation, in the
event such persons are successful on the merits or otherwise in litigation
covered by a. and b. above; and
d. that the indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights which may be provided under any by-law,
agreement, stockholder or disinterested director vote, or otherwise.
The Company's Certificate of Incorporation provides that a director of
the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director except for
liability (i) for any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for paying
a dividend or approving a stock repurchase in violation of Section 174 of the
DGCL or (iv) for any transaction from which the director derived an improper
personal benefit.
The Certificate of Incorporation also provides that each person who was
or is made a party to, or is involved in, any action, suit or proceeding by
reason of the fact that he or she is or was a director or officer of the
Company (or was serving at the request of the Company as a director, officer,
employee or agent for another entity) shall be indemnified and held harmless
by the Company, to the fullest extent authorized by the DGCL, as in effect
(or, to the extent indemnification is broadened, as it may be amended) against
all expense, liability or loss reasonably incurred by such person in
connection therewith. The Certificate of Incorporation further provides that
such rights to indemnification are contract rights and shall include the right
to be paid by the Company the expenses incurred in defending the proceedings
specified above, in advance of their final disposition, provided that, if the
DGCL so requires, such payment shall only be made upon delivery to the Company
by the indemnified party of an undertaking to repay all amounts so advanced if
II-2
it shall ultimately be determined that the person receiving such payment is
not entitled to be indemnified. Persons so indemnified may bring suit against
the Company to recover unpaid amounts claimed thereunder, and if such suit is
successful, the expense of bringing such suit shall be reimbursed by the
Company. The Certificate of Incorporation provides that the right to
indemnification and to the advance payment of expenses shall not be exclusive
of any other right which any person may have or acquire under any statute,
provision of the Company's Certificate of Incorporation or By-Laws, or
otherwise. By resolution effective September 16, 1986, the Board of Directors
extended the right to indemnification provided directors and officers by the
Certificate of Incorporation to employees of the Company. The Certificate of
Incorporation also provides that the Company may maintain insurance, at its
expense, to protect itself and any of its directors, officers, employees or
agents against any expense, liability or loss, whether or not the Company
would have the power to indemnify such person against such expense, liability
or loss under the DGCL.
On April 28, 1988, at the Company's 1988 Annual Meeting of Stockholders,
the stockholders authorized the Company to enter into indemnification
agreements ("Indemnification Agreements") with its directors, and such
Indemnification Agreements have been executed with each of the directors of
the Company. The Indemnification Agreements provide that the Company shall,
except in certain situations specified below, indemnify a director against any
expense, liability or loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) incurred by the
director in connection with any actual or threatened action, suit or
proceeding (including derivative suits) in which the director may be involved
as a party or otherwise, by reason of the fact that the director is or was
serving in one or more capacities as a director or officer of the Company or,
at the request of the Company, as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other entity or enterprise.
The Indemnification Agreements require indemnification except to the
extent (i) payment for any liability is made under an insurance policy
provided by the Company, (ii) indemnification is provided by the Company under
the Certificate of Incorporation or By-Laws, the DGCL or otherwise than
pursuant to the Indemnification Agreement, (iii) the liability is based upon
or attributable to the director gaining any personal pecuniary profit to which
such director is not legally entitled or is determined to result from the
director's knowingly fraudulent, dishonest or willful misconduct, (iv) the
liability arises out of the violation of certain provisions of the Securities
Exchange Act of 1934 or (v) indemnification has been determined not to be
permitted by applicable law.
The Indemnification Agreements further provide that, in the event of a
Potential Change in Control (as defined therein), the Company shall cause to
be maintained any then existing policies of directors' and officers' liability
insurance for a period of six years from the date of a Change in Control (as
defined therein) with coverage at least comparable to and in the same amounts
as that provided by such policies in effect immediately prior to such
Potential Change in Control. In the event of a Potential Change in Control,
the Indemnification Agreements also provide for the establishment by the
Company of a trust (the "Trust"), for the benefit of each director, upon the
written request by the director. The Trust shall be funded by the Company in
amounts sufficient to satisfy any and all liabilities reasonably anticipated
at the time of such request, as agreed upon by the director and the Company.
The Indemnification Agreements also provide that no legal actions may be
brought by or on behalf of the Company, or any affiliate of the Company,
against a director after the expiration of two years from the date of accrual
of such cause of action, and that any claim or cause of action of the Company
or its affiliate shall be extinguished and deemed released unless asserted by
the timely filing of a legal action within such two year period.
The directors and officers of the Company are insured against certain
civil liabilities, including liabilities under federal securities laws, which
might be incurred by them in such capacity.
ITEM 16. EXHIBITS
See Index to Exhibits.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
II-3
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 (the "Securities Act"), unless the information required to be
included in such post-effective amendment is contained in a periodic report
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and incorporated herein
by reference;
(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, unless the information required to be included in such
post-effective amendment is contained in a periodic report filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act and
incorporated herein by reference;
(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;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the Securities offered therein, and the
offering of such Securities at that time shall be deemed to be the initial
bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any of
the Securities being registered which remain unsold at the termination of the
offering;
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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;
(5) That, for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(6) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event 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 against the registrant by such
director, officer or controlling person in connection with the Securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Whitpain, Commonwealth of
Pennsylvania, on May 4, 1998.
UNISYS CORPORATION
By:/s/Lawrence A. Weinbach
--------------------
Lawrence A. Weinbach
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Harold S. Barron, Robert H. Brust, Angus F. Smith and Lawrence A. Weinbach,
and each of them, with full power of substitution and full power to act
without the other, his or her true and lawful attorney-in-fact and agent in
his or her name, place and stead, to execute in the name and on behalf of such
person, individually and in each capacity stated below, any and all amendments
(including post-effective amendments) to this Registration Statement, any
registration statements on Form 462(b) and all documents relating thereto, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, and generally to do
all such things in his or her name and on his or her behalf in his or her
respective capacities as officers or directors of Unisys Corporation to comply
with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on MAY 4, 1998.
Signature Title
--------- -----
/s/ Lawrence A. Weinbach Chairman, President and Chief Executive
- ------------------------ Officer (principal executive officer)
Lawrence A. Weinbach and Director
/s/Robert H. Brust Senior Vice President and Chief
- ------------------ Financial Officer
Robert H. Brust (principal financial officer)
/s/ Janet M. Brutschea Haugen Vice President and Controller
- ----------------------------- (principal accounting officer)
Janet M. Brutschea Haugen
II-5
/s/ J.P. Bolduc Director
- ---------------
J.P. Bolduc
/s/ James J. Duderstadt Director
- -----------------------
James J. Duderstadt
- --------------- Director
Henry C. Duques
/s/ Gail D. Fosler Director
- ------------------
Gail D. Fosler
/s/ Melvin R. Goodes Director
- --------------------
Melvin R. Goodes
/s/ Edwin A. Huston Director
- -------------------
Edwin A. Huston
/s/ Kenneth A. Macke Director
- --------------------
Kenneth A. Macke
/s/ Theodore E. Martin Director
- ----------------------
Theodore E. Martin
/s/ Robert McClements, Jr. Director
- --------------------------
Robert McClements, Jr.
EXHIBIT INDEX
Exhibit
Number Document Description
- ------- ---------------------
1.1 Form of Underwriting Agreement Basic Provisions (with
forms of Terms Agreement attached) (incorporated by
reference to Exhibit 1.1 to the registrant's
Registration Statement on Form S-3 (Registration No.
333-08933))
1.2 Agency Agreement (to be filed as an Exhibit to a report
of the registrant pursuant to Section 13(a) or 15(d)
of the Exchange Act and incorporated herein by
reference)
4.1 Form of Senior Indenture
4.2 Form of Indenture dated as of March 1, 1996 between
Unisys Corporation and The Bank of New York
(incorporated by reference to Exhibit 4.2 to the
registrant's Current Report on Form 8-K dated March
4, 1996)
4.3 Restated Certificate of Incorporation of Unisys
Corporation (incorporated by reference to Exhibit 4.1
to the registrant's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1997)
4.4 Certificate of Amendment of Restated Certificate of
Incorporation dated April 24, 1998.
4.5 By-Laws of Unisys Corporation (incorporated by
reference to Exhibit 3 to the registrant's Quarterly
Report on Form 10-Q for the quarterly period ended
June 30, 1995)
4.6 Form of Rights Agreement dated as of March 7, 1986
between Burroughs Corporation and Harris Trust
Company of New York, as Rights Agent (incorporated by
reference to Exhibit 1 to the registrant's
Registration Statement on Form 8-A, dated March 11,
1986)
4.7 Amendment No. 1 to Rights Agreement dated as of
February 22, 1996 (incorporated by reference to
Exhibit 4 to the registrant's Current Report on Form
8-K dated February 22, 1996)
4.8 Form of Warrant Agreement (to be filed as an Exhibit
to a report of the registrant pursuant to Section
13(a) or 15(d) of the Exchange Act and incorporated
herein by reference)
5 Opinion of Harold S. Barron, Senior Vice President,
General Counsel and Secretary of Unisys Corporation
12.1 Statement of Computation of Ratio of Earnings to
Fixed Charges (incorporated by reference to Exhibit
12 to the registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997)
12.2 Statement of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends
23.1 Consent of Ernst & Young LLP (independent auditors)
23.2 Consent of Harold S. Barron (included in Exhibit 5)
24 Power of Attorney (included on pages II-4 and II-5 of
this Registration Statement)
25.1 Statement of Eligibility on Form T-1 of Bank of
Montreal Trust Company, as Senior Trustee
25.2 Statement of Eligibility on Form T-1 of The Bank of
New York, as Subordinated Trustee (incorporated by
reference to Exhibit 25(b) to the registrant's
Registration Statement on Form S-3 (Registration No.
33-64396))
UNISYS CORPORATION
AND
BANK OF MONTREAL TRUST COMPANY, as Trustee
Indenture
Dated as of __________, 199_
Cross-Reference Table*
Trust Indenture Indenture
Act Section Section
- --------------- ---------
310 (a)(1) 6.9
(a)(2) 6.9
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 6.9
(b) 6.8
(c) N.A.
311 (a) 6.13(a)
(b) 6.13(b)
(c) N.A.
312 (a) 4.1, 4.2(a)
(b) 4.2(b)
(c) 4.2(c)
313 (a) 4.4(a)
(b)(1) 4.4(a)
(b)(2) 4.4(a)
(c) 4.4(a)
(d) 4.4(b)
314 (a)(1) 4.3(a)
(a)(2) 4.3(b)
(a)(3) 4.3(c)
(a)(4) 3.5
(b) N.A.
(c)(1) 11.5
(c)(2) 11.5
(c)(3) N.A.
(d) N.A.
(e) 11.5
(f) N.A.
315 (a) 6.1
(b) 5.11
(c) 6.1
(d) 6.1
(e) 5.12
316 (a) (last sentence) 7.4
(a)(1)(A) 5.9
(a)(1)(B) 5.10
(a)(2) N.A.
(b) 5.7
(c) 5.10
317 (a)(1) 5.2
(a)(2) 5.2
(b) 3.4
318 (a) 11.7
- --------
* This Cross-Reference Table is not part of the Indenture
TABLE OF CONTENTS
PARTIES 1
RECITALS 1
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 SECURITIES 9
SECTION 2.1. Forms Generally 9
SECTION 2.2. Form of Trustee's Certificate of Authentication 9
SECTION 2.3. Amount Unlimited; Issuable in Series 10
SECTION 2.4. Authentication and Delivery of Securities 12
SECTION 2.5. Execution of Securities 14
SECTION 2.6. Certificate of Authentication 15
SECTION 2.7. Denomination and Date of Securities; Payments of
Interest 15
SECTION 2.8. Registration, Transfer and Exchange 16
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities 19
SECTION 2.10. Cancellation of Securities; Destruction Thereof 20
SECTION 2.11. Temporary Securities 20
ARTICLE 3 COVENANTS OF THE ISSUER 21
SECTION 3.1. Payment of Principal and Interest 21
SECTION 3.2. Offices for Payments, etc 22
SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee 23
SECTION 3.4. Paying Agents 23
SECTION 3.5. Written Statement to Trustee 24
SECTION 3.6. Limitation on Mortgages and Liens 25
SECTION 3.7. Limitation on Sale and Leaseback Transactions 27
ARTICLE 4 SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER
AND THE TRUSTEE 29
SECTION 4.1. Issuer to Furnish Trustee Information
as to Names and Addresses of Securityholders 29
SECTION 4.2. Preservation and Disclosure of
Securityholders' Lists 29
SECTION 4.3. Reports by the Issuer 31
SECTION 4.4. Reports by the Trustee 31
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT 32
SECTION 5.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default 32
SECTION 5.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt 35
SECTION 5.3. Application of Proceeds 38
SECTION 5.4. Suits for Enforcement 39
SECTION 5.5. Restoration of Rights on Abandonment
of Proceedings 40
SECTION 5.6. Limitations on Suits by Securityholders 40
SECTION 5.7. Unconditional Right of Securityholders
to Institute Certain Suits 41
SECTION 5.8. Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default 41
SECTION 5.9. Control by Holders of Securities 42
SECTION 5.10. Waiver of Past Defaults 42
SECTION 5.11. Trustee to Give Notice of Default 43
SECTION 5.12. Right of Court to Require Filing of
Undertaking to Pay Costs 43
ARTICLE 6 CONCERNING THE TRUSTEE 44
SECTION 6.1. Duties and Responsibilities of the
Trustee; During Default; Prior to Default 44
SECTION 6.2. Certain Rights of the Trustee 46
SECTION 6.3. Trustee Not Responsible for Recitals,
Disposition of Securities or Application
of Proceeds Thereof 47
SECTION 6.4. Trustee and Agents May Hold Securities;
Collections, etc 48
SECTION 6.5. Moneys Held by Trustee 48
SECTION 6.6. Compensation and Indemnification of
Trustee and Its Prior Claim 48
SECTION 6.7. Right of Trustee to Rely on Officers'
Certificate, etc 49
SECTION 6.8. Qualification of Trustee 49
SECTION 6.9. Persons Eligible for Appointment as Trustee 49
SECTION 6.10. Resignation and Removal; Appointment of
Successor Trustee 50
SECTION 6.11. Acceptance of Appointment by Successor Trustee 52
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee 53
SECTION 6.13. Preferential Collection of Claims
Against the Issuer 54
ARTICLE 7 CONCERNING THE SECURITYHOLDERS 59
SECTION 7.1. Evidence of Action Taken by Securityholders 59
SECTION 7.2. Proof of Execution of Instruments and
of Holding of Securities 59
SECTION 7.3. Holders to be Treated as Owners 59
SECTION 7.4. Securities Owned by Issuer Deemed Not Outstanding 60
SECTION 7.5. Right of Revocation of Action Taken 61
ARTICLE 8 SUPPLEMENTAL INDENTURES 61
SECTION 8.1. Supplemental Indentures Without
Consent of Securityholders 61
SECTION 8.2. Supplemental Indentures With Consent
of Securityholders 63
SECTION 8.3. Effect of Supplemental Indenture 65
SECTION 8.4. Documents to Be Given to Trustee 65
SECTION 8.5. Notation on Securities in Respect of
Supplemental Indentures 65
ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE 66
SECTION 9.1. Issuer May Consolidate, etc., on Certain Terms 66
SECTION 9.2. Successor Issuer Substituted 66
SECTION 9.3. Opinion of Counsel to Trustee 67
ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS 67
SECTION 10.1. Satisfaction and Discharge of Indenture 67
SECTION 10.2. Application of Trust Money 68
SECTION 10.3. Defeasance Upon Deposit of Funds or Government
Obligations 69
SECTION 10.4. Repayment of Moneys Held by Paying Agent 70
SECTION 10.5. Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Three Years 71
ARTICLE 11 MISCELLANEOUS PROVISIONS 71
SECTION 11.1. Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability 71
SECTION 11.2. Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities 71
SECTION 11.3. Successors and Assigns of Issuer Bound
by Indenture 72
SECTION 11.4. Notices and Demands on Issuer, Trustee
and Holders of Securities 72
SECTION 11.5. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein 72
SECTION 11.6. Payments Due on Saturdays, Sundays and Holidays 74
SECTION 11.7. Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939 74
SECTION 11.8. New York Law to Govern 74
SECTION 11.9. Counterparts 74
SECTION 11.10. Effect of Headings 74
SECTION 11.11. Securities in a Foreign Currency or
in ECU 74
SECTION 11.12. Judgment Currency 77
ARTICLE 12 REDEMPTION OF SECURITIES AND SINKING FUNDS 78
SECTION 12.1. Applicability of Article 78
SECTION 12.2. Notice of Full and Partial Redemption; Partial
Redemptions 78
SECTION 12.3. Payment of Securities Called for Redemption 79
SECTION 12.4. Exclusion of Certain Securities from
Eligibility for Selection for Redemption 80
SECTION 12.5 Mandatory and Optional Sinking Funds 81
1
THIS INDENTURE, dated as of ___________, 199_ between UNISYS
CORPORATION, a Delaware corporation (the "Issuer"), and BANK OF MONTREAL
TRUST COMPANY, a New York banking corporation duly organized and
existing under the laws of the State of New York, not in its individual
capacity, but solely as Trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time
of its unsecured and unsubordinated debentures, notes or other evidences
of indebtedness to be issued in one or more series (the "Securities") up
to such principal amount or amounts as may from time to time be
authorized in accordance with the terms of this Indenture and, to
provide, among other things, for the authentication, delivery and
administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done.
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the
respective holders from time to time of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939 or the definitions of which in the
Securities Act of 1933 are referred to in the Trust Indenture Act of
1939, including terms defined therein by reference to the Securities Act
of 1933 (except as herein otherwise expressly provided or unless the
context otherwise clearly requires), shall have
2
the meanings assigned to such terms in said Trust Indenture Act and in
said Securities Act as in force at the date of this Indenture. All
accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted
at the time of any computation. 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.
The terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular.
"Affiliated Corporation" means any corporation which is controlled
by the Issuer but which is not a Subsidiary of the Issuer pursuant to
the definition of the term "Subsidiary."
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its
behalf.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Issuer to
have been duly adopted by the Board of Directors and to be in full force
and effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that is
not a day on which banking institutions are authorized or required by
law or regulation to be closed (a) in the City of New York or (b) if the
currency in which the Security is denominated is other than Dollars, the
financial center of the country issuing the currency in which the
Security is denominated (which, in the case of ECU, shall be Brussels,
Belgium).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing
such duties on such date.
"Consolidated Stockholders' Equity" means, with respect to any
Person as of any date, all amounts that would
3
be included under stockholders' equity on a consolidated balance sheet
of such Person determined in accordance with generally accepted
accounting principles, excluding the separate component of stockholders'
equity attributable to foreign currency translation adjustments pursuant
to Statement of Financial Accounting Standards No. 52 - "Foreign
Currency Translation" or any successor provision or principle of
generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office of Bank of Montreal
Trust Company at the date of the execution of this Indenture is located
at 88 Pine Street, New York, New York 10005.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3
until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary hereunder,
and if at any time there is more than one such Person, "Depositary" as
used with respect to the Securities of any such series shall mean the
Depositary with respect to the Global Securities of that series.
"Dollar" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and
private debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of European Communities.
"European Communities" shall have the meaning set forth in Section
11.11(b)
"Event of Default" shall have the meaning set forth in Section 5.1.
"Foreign Currency" means a currency issued by the government of a
country other than the United States.
"Funded Debt" means any indebtedness for money borrowed, created,
issued, incurred, assumed or guaranteed which would, in accordance with
generally accepted accounting practice, be classified as long-term debt,
but in
4
any event including all indebtedness for money borrowed, whether secured
or unsecured, maturing more than one year, or extendible at the option
of the obligor to a date more than one year, after the date of
determination thereof (excluding any amount thereof included in current
liabilities).
"Global Security" means a Security evidencing all or a part of a
series of Securities, issued to the Depositary for such series in
accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.
"Holder", "holder of Securities", "Securityholder" or other similar
terms mean the person in whose name such Security is registered in the
security register kept by or on behalf of the Issuer for that purpose in
accordance with the terms hereof.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so
amended or supplemented or both, and shall include the forms and terms
of particular series of Securities established as contemplated
hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article Six) Unisys
Corporation and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by the chairman of the Board of Directors, any
vice chairman of the Board of Directors, the chief executive officer,
the president, any vice president or the treasurer of the Issuer.
"Officers' Certificate" means a certificate signed by the chairman
of the Board of Directors, any vice chairman of the Board of Directors,
the chief executive officer, the president or any vice president and by
the treasurer or any assistant treasurer or the secretary or any
assistant secretary of the Issuer and delivered to the Trustee. Each
such certificate shall include the statements provided for in Section
11.5.
"Opinion of Counsel" means an opinion in writing signed by the
general corporate counsel or such other legal
5
counsel who may be an employee of or counsel to the Issuer. Each such
opinion shall include the statements provided for in Section 11.5, if
and to the extent required thereby.
"Original Issue Date" of any Security (or portion thereof) means
the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued
(directly or indirectly) on registration of transfer, exchange or
substitution.
"Original Issue Discount Security" means any Security that 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 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when
used with reference to Securities, shall, subject to the provisions of
Section 7.4, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
of which moneys or government obligations (as provided for in
Section 10.3) in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the
Issuer) or shall have been set aside, segregated and held in trust
by the Issuer for the holders of such Securities (if the Issuer
shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given
as herein provided, or provision satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to
any such Security as to which proof satisfactory to the Trustee
and the Issuer is presented that such Security is held by a person
in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
6
In determining whether the holders of the requisite principal
amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.1.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"principal", whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and
premium, if any".
"Principal Manufacturing Property" means any manufacturing property
located within the United States (other than its territories or
possessions) and which is owned by the Issuer or any Subsidiary, other
than any such manufacturing property which, in the opinion of the Board
of Directors, is not of material importance to the business conducted by
the Issuer and its Subsidiaries, taken as a whole.
"Responsible Officer" when used with respect to the Trustee means
any officer within the Corporate Trust Department (or any successor
group of the Trustee) 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.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture, or,
as the case may be, Securities that have been authenticated and
delivered under this Indenture.
"Subsidiary" means any corporation of which at least a majority of
the outstanding stock having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation, irrespective
of whether
7
or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency, is at the time, directly or indirectly,
owned or controlled by the Issuer or by one or more Subsidiaries
thereof, or by the Issuer and one or more Subsidiaries, provided,
however, that such term shall not include any corporation controlled by
the Issuer (herein referred to as an "Affiliated Corporation") which:
(i) does not transact any substantial portion of its business or
regularly maintain any substantial portion of its operating assets
within the continental limits of the United States;
(ii) is principally engaged in the business of financing
(including, without limitation, the purchase, holding, sale or
discounting of or lending upon any notes, contracts, leases or other
forms of obligations) the sale or lease of merchandise, equipment or
services (a) by the Issuer, (b) by a Subsidiary (whether such sales or
leases have been made before or after the date when such corporation
became a Subsidiary), (c) by another Affiliated Corporation or (d) by
any corporation prior to the time when substantially all its assets have
heretofore been or shall hereafter have been acquired by the Issuer;
(iii) is principally engaged in the business of owning, leasing,
dealing in or developing real property; or
(iv) is principally engaged in the holding of stock in, and/or the
financing of operations of, an Affiliated Corporation.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall
also include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended,
as in force at the date as of which this Indenture was originally
executed.
"vice president", when used with respect to the Issuer 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 of "vice president".
8
"Wholly Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at
the time, directly or indirectly, owned by the Issuer and/or by one or
more Wholly Owned Subsidiaries.
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such
series, and calculated in accordance with accepted financial practice.
9
ARTICLE 2
SECURITIES
SECTION 2.1. FORMS GENERALLY. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as
shall be established by or pursuant to one or more Board Resolutions (as
set forth in a Board Resolution or, to the extent established pursuant
to rather than set forth in such Board Resolution, an Officers'
Certificate detailing such establishment) 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 imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required
to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities as evidenced by their execution of the Securities.
The definitive Securities may be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by
their execution of such Securities.
SECTION 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
-----------------------,
as Trustee
By
---------------------
Authorized Officer
10
SECTION 2.3. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities that 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 one or more Board Resolutions of the Board
of Directors and set forth in a Board Resolution, or to the extent
established pursuant to (rather than set forth in) such Board Resolution
in an Officers' Certificate detailing such establishment, and/or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Securities of any series,
(1) the designation of the Securities of the series (which may be part
of a series of Securities previously issued);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration and
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.8, 2.9, 2.11 or 12.3);
(3) any date on which the principal of, and premium, if any, on the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and on which a record
shall be taken for the determination of Holders to whom interest is
payable and/or the method by which such rate or rates or date or dates
shall be determined and the basis on which interest shall be calculated
if other than a 360-day year consisting of twelve 30-day months;
(5) the place or places where the principal of, and premium, if any, or
any interest on Securities of the series shall be payable (if other than
as provided in Section 3.2);
(6) the price or prices at which, the period or periods within which
and the terms and conditions upon
11
which Securities of the series may be redeemed, in whole or in part, at
the option of the Issuer, pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or repay
Securities of the series pursuant to any mandatory redemption, sinking
fund or analogous provisions or at the option of a Holder thereof and
the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any multiple of $1,000
thereafter, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(10) the currency or currencies or currency unit or currency units in
which the Securities of that series are denominated (including but not
limited to Dollars, any Foreign Currency or ECU) and the aggregate
principal amount of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon registration and transfer of, or in exchange for, or in lieu of,
other Securities of such series pursuant to this Indenture);
(11) if other than the currency or currencies or currency unit or
currency units in which the Securities of that series are denominated,
the currency or currencies or currency unit or currency units in which
payment of the principal of, premium, if any, or interest on the
Securities of such series shall or may be payable;
(12) if the principal of, premium, if any, or interest on the
Securities of such series are to be payable, at the election of the
Issuer or a holder thereof, in a currency or currencies or currency unit
or currency units other than that in which the Securities are
denominated, the period or periods
12
within which, and the terms and conditions upon which, such election may
be made;
(13) if the amount of payments of principal of, premium, if any, and
interest on the Securities of the series may be determined with
reference to an index based on a currency or currencies or currency unit
or currency units other than that in which the Securities of the series
are denominated, the manner in which such amount shall be determined;
(14) whether the Securities of the series are to be convertible or
exchangeable for other securities of the Issuer or any other Person and
the terms and conditions thereof;
(15) whether any of the Securities of the series will be issuable as
Global Securities;
(16) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
SECTION 2.4. AUTHENTICATION AND DELIVERY OF SECURITIES. The
Issuer may deliver Securities of any series executed by the Issuer to
the Trustee for authentication together with the applicable documents
referred to below in this Section, and the Trustee shall thereupon
authenticate and deliver such Securities to or upon the order of the
Issuer (contained in the Issuer Order referred to below in this
Section), or pursuant to such procedures acceptable to the Trustee and
to such recipients as may be specified from time to time by an Issuer
Order. The maturity date, Original Issue Date, interest rate and any
other terms of the Securities of such series shall be determined by or
pursuant to such Issuer Order and procedures. 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 6.1) shall be fully protected in
conclusively relying upon:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions
13
if the Securities are not to be delivered to the Issuer;
(2) any Board Resolution, Officers' Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the forms and terms of the Securities were
established;
(3) an Officers' Certificate setting forth the form and terms of the
Securities stating that the form and terms of the Securities have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture, and covering such other matters as the Trustee may reasonably
request; and
(4) an Opinion of Counsel to the effect that:
(a) the form or forms and terms of such Securities have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture, and
(b) such Securities when authenticated and delivered by the Trustee
and issued by the Issuer in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Issuer, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken by the
Issuer or if the Trustee in good faith by its board of directors or
board of trustees, executive committee, or a trust committee of
directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing
Holders.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more
Global Securities, then the Issuer shall
14
execute and the Trustee shall, in accordance with this Section and the
Issuer Order with respect to such series, authenticate and deliver one
or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of all
of the Securities of such series issued and not yet canceled, (ii) shall
be registered in the name of the Depositary for such Global Security or
Securities or the nominee of such Depositary, (iii) shall be delivered
by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be
transferred except as a whole by the Depositary to the nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at
the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934 and any other applicable statute or regulation.
SECTION 2.5. EXECUTION OF SECURITIES. The Securities
shall be signed on behalf of the Issuer by the chairman of its Board of
Directors, any vice chairman of its Board of Directors, its chief
executive officer, its president, any vice president or its treasurer.
Such signature may be the manual or facsimile signature of the present
or any future such officers. The seal of the Issuer may be (but need
not be) impressed, affixed, imprinted or otherwise reproduced on the
Securities and may be a facsimile thereof. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so
signed shall be authenticated and delivered by the Trustee or disposed
of by the Issuer, such Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security
had not ceased to be such officer of the Issuer; and any Security may be
signed on behalf of the Issuer by such
15
persons as, at the actual date of the execution of such Security, shall
be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6. CERTIFICATE OF AUTHENTICATION. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee
by the manual signature of one of its authorized officers, shall be
entitled to the benefits of this Indenture or be valid or obligatory for
any purpose. Such certificate by the Trustee upon any Security executed
by the Issuer shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and
that the holder is entitled to the benefits of this Indenture.
SECTION 2.7. DENOMINATION AND DATE OF SECURITIES; PAYMENTS
OF INTEREST. The Securities of each series shall be issuable as
registered securities without coupons and in denominations established
as contemplated by Section 2.3 or, if not so established, in
denominations of $1,000 and any multiple thereof. The Securities of
each series shall be numbered, lettered or otherwise distinguished in
such manner or in accordance with such plan as the officers of the
Issuer executing the same may determine with the approval of the Trustee
as evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its authentication.
The Securities of each series shall bear interest, if any, from the
date, and such interest shall be payable on the dates, established as
contemplated by Section 2.3.
The person in whose name any Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such
series shall be entitled to receive the interest, if any, payable on
such interest payment date notwithstanding any transfer or exchange of
such Security subsequent to the record date and prior to such interest
payment date, except if and to the extent the Issuer shall default in
the payment of the interest due on such interest payment date for such
series, in which case such defaulted interest shall be paid to the
persons in whose names Outstanding Securities for such series are
registered at the close of business on a subsequent record date (which
shall be not less than five Business Days prior
16
to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the holders of Securities
not less than 15 days preceding such subsequent record date. The term
"record date" as used with respect to any interest payment date (except
a date for payment of defaulted interest) for the Securities of any
series shall mean the date specified as such in the terms of the
Securities of such series established as contemplated by Section 2.3.
SECTION 2.8. REGISTRATION, TRANSFER AND EXCHANGE. The
Issuer will keep or cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 for each series of
Securities a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will provide for the registration of
Securities of such series and the registration of transfer of Securities
of such series. Such register shall be in written form in the English
language or in any other form capable of being converted into such form
within a reasonable time. At all reasonable times such register or
registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any
Security of any series at any such office or agency to be maintained for
the purpose as provided in Section 3.2, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series, maturity
date, interest rate and Original Issue Date in authorized denominations
for a like aggregate principal amount.
At the option of the Holder thereof, Securities of any series
(except a Global Security) may be exchanged for a Security or Securities
of such series, maturity date, interest rate and Original Issue Date of
other authorized denominations and of a like aggregate principal amount,
upon surrender of such Securities to be exchanged at the agency of the
Issuer which shall be maintained for such purpose in accordance with
Section 3.2 and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. All Securities surrendered upon
any exchange or transfer provided for in this Indenture shall be
promptly canceled and destroyed by the Trustee and the
17
Trustee will deliver a certificate of destruction thereof to the Issuer.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or
the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer
and the Trustee duly executed by, the holder or his attorney duly
authorized in writing.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Securities. No service
charge shall be made for any such transaction.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days
next preceding the first mailing of notice of redemption of Securities
of such series to be redeemed or (b) any Securities selected, called or
being called for redemption, in whole or in part, except, in the case of
any Security to be redeemed in part, the portion thereof not so to be
redeemed.
Notwithstanding any other provision of this Section 2.8,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Global Security representing all or a
portion of the Securities of a series may not be transferred except as a
whole by the Depositary for such series to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or any such
nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it
is unwilling or unable to continue as Depositary for such Securities or
if at any time the Depositary for such Securities shall no longer be
eligible under Section 2.4, the Issuer shall appoint a successor
Depositary with respect to such Securities. If a successor Depositary
for such Securities is not appointed by the Issuer within 90 days after
the Issuer receives such notice or becomes aware of such ineligibility,
the Issuer's election pursuant to Section 2.3 that such Securities be
represented by one or more Global Securities shall no longer be
effective and the Issuer will execute, and the Trustee,
18
upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without
coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or
Securities representing such Securities in exchange for such Global
Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or
more Global Securities shall no longer be represented by a Global
Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication
and delivery of definitive Securities of such series, will authenticate
and deliver, Securities of such series in definitive registered form, in
any authorized denominations, in an aggregate principal amount equal to
the principal amount of the Global Security or Securities representing
such Securities, in exchange for such Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with
respect to Securities represented by a Global Security, the Depositary
for such Global Security may surrender such Global Security in exchange
in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and
delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities in
definitive registered form, in authorized
19
denominations, such Global Security shall be canceled by the Trustee.
Securities in definitive registered form issued in exchange for a Global
Security pursuant to this Section 2.8 shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee in writing. The
Trustee shall deliver such Securities to or as directed by the Persons
in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
SECTION 2.9. MUTILATED, DEFACED, DESTROYED, LOST AND
STOLEN SECURITIES. In case any temporary or definitive Security shall
become mutilated, defaced or be destroyed, lost or stolen, the Issuer in
its discretion may execute, and upon the written request of any officer
of the Issuer, the Trustee shall authenticate and deliver, a new
Security of the same series, maturity date, interest rate and Original
Issue Date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the
Security so destroyed, lost or stolen. In every case the applicant for
a substitute Security shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or indemnity as may
be required by them to indemnify and defend and to save each of them
harmless and, in every case of destruction, loss or theft, evidence to
their satisfaction of the destruction, loss or theft of such Security
and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer 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. In case any Security which has matured or is about
to mature or has been called for redemption in full shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer may
instead of issuing a substitute Security, pay or authorize the payment
of the same (without surrender thereof except in the case of a mutilated
or defaced Security), if the applicant for such payment shall furnish to
the Issuer and
20
to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall
also furnish to the Issuer and the Trustee and any agent of the Issuer
or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, 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 (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of such series duly
authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, defaced or destroyed, lost or stolen Securities
and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with
respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.10. CANCELLATION OF SECURITIES; DESTRUCTION
THEREOF. All Securities surrendered for payment, redemption, registration
of transfer or exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or any agent of the
Issuer or the Trustee, shall be delivered to the Trustee for cancellation or,
if surrendered to the Trustee, shall be canceled by it; and no Securities
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall destroy canceled Securities
held by it and deliver a certificate of destruction to the Issuer. If the
Issuer shall acquire any of the Securities, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.11. TEMPORARY SECURITIES. Pending the
preparation of definitive Securities for any series, the Issuer may
execute and the Trustee shall authenticate and
21
deliver temporary Securities for such series (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory
to the Trustee). Temporary Securities of any series shall be issuable
as Securities, of any authorized denomination, and substantially in the
form of the definitive Securities of such series but with such
omissions, insertions and variations as may be appropriate for temporary
Securities of such series, all as may be determined by the Issuer with
the concurrence of the Trustee as evidenced by the execution and
authentication thereof. Temporary Securities may contain such reference
to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Securities of such
series may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.2, and the Trustee shall authenticate and deliver
in exchange for such temporary Securities of such series a like
aggregate principal amount of definitive Securities of the same series
of authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under
this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3.
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The
Issuer covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay or cause to be paid the principal
of, and interest on, each of the Securities of such series (together
with any additional amounts payable pursuant to the terms of such
Securities) at the place or places, at the respective times and in the
manner provided in such Securities and in this Indenture. The
interest on Securities (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only to or
upon the written order of the Holders thereof and at the option of the
Issuer may be paid (i) by mailing checks to or upon the written order of
such
22
Holders at their last addresses as they appear on the registry books of
the Issuer or (ii) by wire transfer to bank accounts maintained by such
Holders.
Notwithstanding any provisions of this Indenture and the
Securities of any series to the contrary, if the Issuer and a Holder of
any Security so agree or if expressly provided pursuant to Section 2.3,
payments of interest on, and any portion of the principal of, such
Holder's Security (other than interest payable at maturity or on any
redemption or repayment date or the final payment of principal on such
Security) shall be made by the Paying Agent, upon receipt from the
Issuer of the immediately available funds by 11:00 a.m., New York City
time (or such other time as may be agreed to between the Issuer and the
Paying Agent), directly to the Holder of such Security (by Federal funds
wire transfer or otherwise) if the Holder has delivered written
instructions to the Trustee 15 days prior to such payment date
requesting that such payment will be so made and designating the bank
account to which such payments shall be so made and in the case of
payments of principal surrenders the same to the Trustee in exchange for
a Security or Securities aggregating the same principal amount as the
unredeemed principal amount of the Securities surrendered. The Trustee
shall be entitled to rely on the last instruction delivered by the
Holder pursuant to this Section 3.1 unless a new instruction is
delivered 15 days prior to a payment date. The Issuer will indemnify
and hold each of the Trustee and any Paying Agent harmless against any
loss, liability or expense (including attorneys' fees) resulting from
any act or omission to act on the part of the Issuer or any such Holder
in connection with any such agreement or from making any payment in
accordance with any such agreement.
SECTION 3.2. OFFICES FOR PAYMENTS, ETC. The Issuer will
maintain or cause to be maintained in The City of New York, an agency
where the Securities of each series may be presented for payment, an
agency where the Securities of each series may be presented for exchange
as is provided in this Indenture and, if applicable, pursuant to Section
2.3, an agency where the Securities of each series may be presented for
registration of transfer as in this Indenture provided.
The Issuer will maintain or cause to be maintained in The City
of New York, an agency where notices and demands to or upon the Issuer
in respect of the Securities of any series or this Indenture may be
served. The Issuer will
23
give to the Trustee written notice of the location of each such agency
and of any change of location thereof.
In case the Issuer shall fail to maintain any such agency in
The City of New York, or shall fail to give such notice of the location
or of any change in the location thereof, presentations and demands may
be made and notices may be served at the Corporate Trust Office of the
Trustee.
The Issuer may from time to time designate one or more
agencies where the Securities of a series may be presented for payment,
where the Securities of that series may be presented for exchange as
provided in this Indenture and pursuant to Section 2.3 and where the
Securities of that series may be presented for registration of transfer
as in this Indenture provided, and the Issuer may from time to time
rescind any such designation, as the Issuer may deem desirable or
expedient; provided, however, that no such designation or rescission
shall in any manner relieve the Issuer of its obligation to maintain the
agencies provided for in the immediately preceding paragraphs. The
Issuer will give to the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 3.3. APPOINTMENT TO FILL A VACANCY IN OFFICE OF
TRUSTEE. The Issuer, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section
6.10, a Trustee, so that there shall at all times be a Trustee with
respect to each series of Securities hereunder.
SECTION 3.4. PAYING AGENTS. Whenever the Issuer shall
appoint a paying agent other than the Trustee with respect to the
Securities of any series, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest, if any, on the
Securities of such series (whether such sums have been paid to it
by the Issuer or by any other obligor on the Securities of such
series) in trust for the benefit of the Holders of the Securities
of such series, or of the Trustee, and
(b) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities of such
series) to make any payment of the
24
principal of or interest, if any, on the Securities of such series when
the same shall be due and payable.
The Issuer will, on or prior to each due date of the principal
of or interest on the Securities of such series, deposit with the paying
agent a sum sufficient to pay such principal or interest so becoming
due, and (unless such paying agent is the Trustee) the Issuer will
promptly notify the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent with respect
to the Securities of any Series, it will, on or before each due date of
the principal of or interest on the Securities of such series, set
aside, segregate and hold in trust for the benefit of the Holders of the
Securities of such series a sum sufficient to pay such principal or
interest so becoming due. The Issuer will promptly notify the Trustee
of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Securities
hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any
paying agent hereunder, as required by this Section, such sums to be
held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject
to the provisions of Sections 10.4 and 10.5.
SECTION 3.5. WRITTEN STATEMENT TO TRUSTEE. The Issuer
will deliver to the Trustee, within 120 days after the end of each
fiscal year, commencing with the fiscal year in which the Securities are
first issued, a written statement, signed by two of its officers (which
need not comply with Section 11.5), stating that in the course of the
performance of their duties as officers of the Issuer they would
normally have knowledge of any default by the Issuer in the performance
or fulfillment of any covenant, agreement or condition contained in this
Indenture, stating whether or not they have knowledge of any such
default and, if so, specifying each such default of which the signers
have knowledge and the nature thereof.
25
SECTION 3.6. LIMITATION ON MORTGAGES AND LIENS. The Issuer
shall not at any time, directly or indirectly, create or assume and
shall not cause or permit a Subsidiary, directly or indirectly, to
create or assume, otherwise than in favor of the Issuer or a Wholly
Owned Subsidiary, any mortgage, pledge or other lien or encumbrance upon
any Principal Manufacturing Property or any interest it may have therein
or of or upon any stock or indebtedness of any Subsidiary, whether now
owned or hereafter acquired, without making effective provision (and the
Issuer covenants that in such case it will make or cause to be made
effective provision) whereby the Securities and any other indebtedness
of the Issuer then entitled thereto shall be secured by such mortgage,
pledge, lien or encumbrance equally and ratably with any and all other
obligations and indebtedness thereby secured, so long as any such other
obligations and indebtedness shall be so secured; provided, however,
that the foregoing covenant shall not be applicable to the following:
(a)(i) any mortgage, pledge or other lien or encumbrance on any
property hereafter acquired or constructed by the Issuer or a
Subsidiary, or on which property so constructed is located, and created
prior to, contemporaneously with or within 180 days after, such
acquisition or construction or the commencement of commercial operation
of such property to secure or provide for the payment of any part of the
purchase or construction price of such property, or (ii) the acquisition
by the Issuer or a Subsidiary of such property subject to any mortgage,
pledge, or other lien or encumbrance upon such property existing at the
time of acquisition thereof, whether or not assumed by the Issuer or
such Subsidiary, or (iii) any mortgage, pledge, or other lien or
encumbrance existing on the property, shares of stock or indebtedness of
a corporation at the time such corporation shall become a Subsidiary, or
(iv) any conditional sales agreement or other title retention agreement
with respect to any property hereafter acquired or constructed; provided
that the lien of any such mortgage, pledge or other lien does not spread
to property owned prior to such acquisition or construction or to other
property thereafter acquired or constructed other than additions to such
acquired or constructed property and other than property on which
property so constructed is located, and provided, further, that if a
firm commitment from a bank, insurance company or other lender or
investor (not including the Issuer, a Subsidiary or an Affiliate of the
Issuer) for the financing of the acquisition or construction of property
is made prior to, contemporaneously
26
with or within the 180 day period hereinabove referred to, the
applicable mortgage, pledge, lien or encumbrance shall be deemed to be
permitted by this subsection (a) whether or not created or assumed
within such period;
(b) any mortgage, pledge or other lien or encumbrance created
for the sole purpose of extending, renewing or refunding any mortgage,
pledge, lien or encumbrance permitted by subsection (a) of this Section;
provided, however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured
at the time of such extension, renewal or refunding and that such
extension, renewal or refunding of any mortgage, pledge, lien or
encumbrance shall be limited to all or any part of the same property
that secured the mortgage, pledge or other lien or encumbrance extended,
renewed or refunded;
(c) liens for taxes or assessments or governmental charges or
levies not then due and delinquent or the validity of which is being
contested in good faith, and against which an adequate reserve has been
established; pledges or deposits to secure public or statutory
obligations or to secure performance in connection with bids or
contracts; materialmen's, mechanics', carrier's, workmen's, repairmen's
or other like liens, or deposits to obtain the release of such liens;
deposits to secure surety, stay, appeal or customs bonds; liens created
by or resulting from any litigation or legal proceeding which is
currently being contested in good faith by appropriate proceedings;
licenses or leases or patents, trademarks or trade names; leases and
liens, rights of reverter and other possessory rights of the lessor
thereunder; zoning restrictions, easements, rights-of-way or other
restrictions on the use of real property or minor irregularities in the
title thereto; and any other liens and encumbrances similar to those
described in this subsection, the existence of which does not, in the
opinion of the Issuer, materially impair the use by the Issuer or a
Subsidiary of the affected property in the operation of the business of
the Issuer or a Subsidiary, or the value of such property for the
purposes of such business;
(d) any contracts for production, research or development with
or for the Government, directly or indirectly, providing for advance,
partial or progress payments on such contracts and for a lien, paramount
to all other liens, upon money advanced or paid pursuant to such
contracts, or upon any material or supplies in connection
27
with the performance of such contracts to secure such payments to the
Government; and liens or other evidences of interest in favor of the
Government, paramount to all other liens, on any equipment, tools,
machinery, land or buildings hereafter constructed, installed or
purchased by the Issuer or a Subsidiary primarily for the purpose of
manufacturing or providing any product or performing any development
work, directly or indirectly, for the Government to secure indebtedness
incurred and owing to the Government for the construction, installation
or purchase of such equipment, tools, machinery, land or buildings. For
the purpose of this subsection (d), "Government" shall mean the
Government of the United States of America and any department or agency
thereof;
(e) any mortgage, pledge or other lien or encumbrance created
after the date of this Indenture on any property leased to or purchased
by the Issuer or a Subsidiary after that date and securing, directly or
indirectly, obligations issued by a State, a territory or a possession
of the United States, or any political subdivision of any of the
foregoing, or the District of Columbia, to finance the cost of
acquisition or cost of construction of such property, provided that the
interest paid on such obligations is entitled to be excluded from gross
income of the recipient pursuant to Section 103 of the Code (or any
successor to such provision) as in effect at the time of the issuance of
such obligations;
(f) any pledge of notes, chattel mortgages, leases, accounts
receivable, trade acceptances and other paper arising in the ordinary
course of business, out of installment or conditional sales to or by, or
other transactions involving title retention with, distributors, dealers
or other customers, of merchandise, equipment or services; and
(g) any mortgage, pledge or other lien or encumbrance not
otherwise permitted under this Section, provided the aggregate amount of
indebtedness secured by all such mortgages, pledges, liens or
encumbrances, together with the aggregate sale price of property
involved in sale and leaseback transactions not otherwise permitted
except under Section 3.7(a) does not exceed the greater of $250,000,000
or 5% of Consolidated Stockholders' Equity.
SECTION 3.7. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
The Issuer shall not, and shall not permit any Subsidiary to, sell or
transfer (except to the Issuer or
28
one or more Wholly Owned Subsidiaries, or both) any Principal
Manufacturing Property owned by it on the date of this Indenture with
the intention of taking back a lease of such property other than a lease
for a temporary period (not exceeding 36 months) with the intent that
the use by the Issuer or such Subsidiary of such property will be
discontinued on or before the expiration of such period unless either:
(a) the sum of the aggregate sale price of property involved in
sale and leaseback transactions not otherwise permitted under this
Section plus the aggregate amount of indebtedness secured by all
mortgages, pledges, liens and encumbrances not otherwise permitted
except under Section 3.6(g) does not exceed the greater of $250,000,000
or 5% of Consolidated Stockholders' Equity, or
(b) the Issuer within 120 days after the sale or transfer shall
have been made by the Issuer or by any such Subsidiary applies an amount
equal to the greater of (i) the net proceeds of the sale of the
Principal Manufacturing Property sold and leased back pursuant to such
arrangement or (ii) the fair market value of the Principal Manufacturing
Property sold and leased back at the time of entering into such
arrangement (which may be conclusively determined by the Board of
Directors) to the retirement of the Securities or other Funded Debt of
the Company ranking on a parity with the Securities; provided, that the
amount required to be applied to the retirement of outstanding
Securities or other Funded Debt of the Issuer pursuant to this clause
(b) shall be reduced by (1) the principal amount of any Securities
delivered within 120 days after such sale to the Trustee for retirement
and cancellation, and (2) the principal amount of any other Funded Debt
of the Issuer ranking on a parity with the Securities voluntarily
retired by the Issuer within 120 days after such sale, whether or not
any such retirement of Funded Debt shall be specified as being made
pursuant to this clause (b). Notwithstanding the foregoing, no
retirement referred to in this clause (b) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision.
29
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1. ISSUER TO FURNISH TRUSTEE INFORMATION AS TO
NAMES AND ADDRESSES OF SECURITYHOLDERS. The Issuer covenants and agrees
that it will furnish or cause to be furnished to the Trustee a list in
such form as the Trustee may reasonably require of the names and
addresses of the holders of the Securities of each series:
(a) semiannually and not more than 15 days after
each record date for the payment of interest on such
Securities, as hereinabove specified, as of such record date
and on dates to be determined pursuant to Section 2.3 for
non-interest bearing securities in each year, and
(b) at such other times as the Trustee may request
in writing, within 30 days after receipt by the Issuer of
any such request as of a date not more than 15 days prior to
the time such information is furnished,
provided that if and so long as the Trustee shall be the Security
registrar for such series, such list shall not be required to be
furnished.
SECTION 4.2. PRESERVATION AND DISCLOSURE OF
SECURITYHOLDERS' LISTS. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and
addresses of the holders of each series of Securities (i) contained in
the most recent list furnished to it as provided in Section 4.1 or (ii)
received by it in the capacity of Security registrar for such series, if
so acting. The Trustee may destroy any list furnished to it as provided
in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish
to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities of a particular series (in
which case the applicants must all
30
hold Securities of such series) or with Holders of all Securities with
respect to their rights under this Indenture or under such Securities
and such application is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the
Trustee shall, within five business days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section, or
(ii) inform such applicants as to the approximate
number of holders of Securities of such series or all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a)
of this Section, and as to the approximate cost of mailing
to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request
of such applicants, mail to each Securityholder of such series or all
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section a copy of the form of proxy
or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to
be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither
the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the holders of Securities
in accordance with the provisions of Section 4.1 or this Section,
regardless of the source from which such information was derived, and
that the Trustee shall not be
31
held accountable by reason of mailing any material pursuant to a request
made under subsection (b) of this Section.
SECTION 4.3. REPORTS BY THE ISSUER. The Issuer covenants:
(a) to file with the Trustee, within 15 days after
the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934; if
the Issuer is not required to file information, documents,
or reports pursuant to either of such Sections, then to file
with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic
information, documents, and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of
1934, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to 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
Issuer with the conditions and covenants provided for in
this Indenture as may be required from time to time by such
rules and regulations.
(c) to transmit by mail to the holders of Securities
such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to subsections
(a) and (b) of this Section as may be required to be
transmitted to such Holders by rules and regulations
prescribed from time to time by the Commission.
SECTION 4.4. REPORTS BY THE TRUSTEE. (a) Within 60 days
after each September 30, beginning with the first September 30 following
the first issuance of
32
Securities pursuant to this Indenture, the Trustee shall transmit to the
Securityholders of each series a brief report dated as of such reporting
date that complies with Section 313(a) of the Trust Indenture Act of
1939, if such a report is required pursuant to Section 313(a) of the
Trust Indenture Act of 1939. The Trustee also shall comply with Section
313(b) of the Trust Indenture Act of 1939. The Trustee shall also
transmit all reports as required by Section 313(c) of the Trust
Indenture Act of 1939.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed
by the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer
agrees to notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. EVENT OF DEFAULT DEFINED; ACCELERATION OF
MATURITY; WAIVER OF DEFAULT. "Event of Default" with respect to
Securities of any series wherever used herein, means each one of the
following events which shall have occurred and be continuing (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):
(a) default in the payment of any installment of
interest upon any of the Securities of such series as and
when the same shall become due and payable, and continuance
of such default for a period of 30 days;
(b) default in the payment of all or any part of the
principal of, or premium (if any) on, any of the Securities
of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration
or otherwise;
33
(c) default in the payment of any sinking fund
installment as and when the same shall become due and
payable by the terms of the Securities of such series;
(d) default in the performance, or breach, of any
covenant or warranty of the Issuer in respect of the
Securities of such series (other than a covenant or warranty
in respect of the Securities of such series a default in
whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such
default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Issuer
by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% in principal amount of the
Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of
Default" hereunder;
(e) a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the
Issuer in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of
the Issuer or for any substantial part of its property or
ordering the winding up or liquidation of its affairs, and
such decree or order shall remain unstayed and in effect for
a period of 60 consecutive days;
(f) the Issuer shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law,
or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any
substantial part of its property, or make any general
assignment for the benefit of creditors; or
(g) any other Event of Default provided in a
supplemental indenture or resolution of the Board
34
of Directors under which such series of Securities is issued or in
the form of Security for such series.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then, and in each and every
such case, unless the principal of all of the Securities of such series
shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the
Securities of such series then Outstanding hereunder by notice in
writing to the Issuer (and to the Trustee if given by Securityholders),
may declare the entire principal (or, if the Securities of such series
are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon, if any, to
be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal (or, if the
Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of the Securities of
any series shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of such series and the
principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest,
at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities
of such series, to the date of such payment or deposit) and such amount
as shall be sufficient to cover reasonable compensation to the Trustee,
its agents, attorneys and counsel, and all other reasonable expenses and
liabilities incurred, and all reasonable advances made, by the Trustee
except as a result of negligence or bad faith, and if any and all Events
of Default under the Indenture with respect to the Securities of that
series, other than the non-payment of the principal of Securities of
that series which shall have become due by acceleration, shall have been
cured, waived or otherwise
35
remedied as provided herein -- then and in every such case the holders
of a majority in aggregate principal amount of all the Securities of
such series then Outstanding, by written notice to the Issuer and to the
Trustee, may waive all defaults with respect to such series and rescind
and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been
accelerated and declared due and payable pursuant to the provisions
hereof, then, from and after such declaration, unless such declaration
has been rescinded and annulled, the principal amount of such Original
Issue Discount Securities shall be deemed, for all purposes hereunder,
to be such portion of the principal thereof as shall be due and payable
as a result of such acceleration, and payment of such portion of the
principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other
amounts owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.
SECTION 5.2. COLLECTION OF INDEBTEDNESS BY TRUSTEE;
TRUSTEE MAY PROVE DEBT. The Issuer covenants that in case (a) default
shall be made in the payment of any installment of interest on any of
the Securities of any series when such interest shall have become due
and payable, and such default shall have continued for a period of 30
days or (b) default shall be made in the payment of all or any part of
the principal of any of the Securities of any series when the same shall
have become due and payable, whether upon maturity of the Securities of
such series or upon any redemption or by declaration or otherwise, then
in either such case, upon demand of the Trustee, the Issuer will pay to
the Trustee for the benefit of the Holders of the Securities of such
series the whole amount that then shall have become due and payable on
all Securities of such series for principal or interest, as the case may
be (with interest to the date of such payment upon the overdue principal
and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series); and in
addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection,
36
including reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and any
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of its negligence or bad
faith.
In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action
or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment
or final decree, and may enforce any such judgment or final decree
against the Issuer or other obligor upon such Securities and collect in
the manner provided by law out of the property of the Issuer or other
obligor upon such Securities, wherever situated, the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the
Issuer or any other obligor upon the Securities under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy,
insolvency or similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer
or its property or such other obligor, or in case of any other
comparable judicial proceedings relative to the Issuer or other obligor
upon the Securities of any series, or to the creditors or property of
the Issuer or such other obligor, the Trustee, irrespective of whether
the principal of any Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the
whole amount of principal and interest (or, if the
Securities of any series are Original Issue Discount
Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in
respect of the Securities of any series, and to file such
other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any
claim for reasonable compensation to the Trustee and each
predecessor
37
Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and
of the Securityholders allowed in any judicial proceedings
relative to the Issuer or other obligor upon the Securities
of any series, or to the creditors or property of the Issuer
or such other obligor,
(b) unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the
Securities of any series in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person
performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other
property payable or deliverable on any such claims, and to
distribute all amounts received with respect to the claims
of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel,
and all reasonable expenses and liabilities incurred, and
all reasonable advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad
faith and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Securityholder any plan or reorganization, arrangement,
adjustment or composition affecting the Securities of any series or the
rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
38
All rights of action and of asserting claims under this
Indenture, or under any of the Securities of any series, may be enforced
by the Trustee without the possession of any of the Securities of such
series or the production thereof on any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of reasonable
expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be
for the ratable benefit of the holders of the Securities in respect of
which such action was taken.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee shall be
held to represent all the holders of the Securities in respect to which
such action was taken, and it shall not be necessary to make any holders
of such Securities parties to any such proceedings.
SECTION 5.3. APPLICATION OF PROCEEDS. Any moneys
collected by the Trustee pursuant to this Article in respect of any
series shall be applied in the following order at the date or dates
fixed by the Trustee and, in case of the distribution of such moneys on
account of principal or interest, upon presentation of the several
Securities in respect of which monies have been collected and stamping
(or otherwise noting) thereon the payment, or issuing Securities of such
series in reduced principal amounts in exchange for the presented
Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses applicable
to such series in respect of which monies have been
collected, including reasonable compensation to the Trustee
and each predecessor Trustee and their respective agents and
attorneys and of all reasonable expenses and liabilities
incurred, and all reasonable advances made, by the Trustee
and each predecessor Trustee except as a result of
negligence or bad faith, and all other amounts due to the
Trustees or any predecessor Trustee pursuant to Section 6.6;
39
SECOND: In case the principal of the Securities of such
series in respect of which moneys have been collected shall
not have become and be then due and payable, to the payment
of interest on the Securities of such series in default in
the order of the maturity of the installments of such
interest, with interest (to the extent that such interest
has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
THIRD: In case the principal of the Securities of such
series in respect of which moneys have been collected shall
have become and shall be then due and payable, to the
payment of the whole amount then owing and unpaid upon all
the Securities of such series for principal and interest,
with interest upon the overdue principal, and (to the extent
that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the
Securities of such series; and in case such moneys shall be
insufficient to pay in full the whole amount so due and
unpaid upon the Securities of such series, then to the
payment of such principal and interest or Yield to Maturity,
without preference or priority of principal over interest or
Yield to Maturity, or of interest or Yield to Maturity over
principal, or of any installment of interest over any other
installment of interest, or of any Security of such series
over any other Security of such series, ratably to the
aggregate of such principal and accrued and unpaid interest
or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the
Issuer or any other person lawfully entitled thereto.
SECTION 5.4. SUITS FOR ENFORCEMENT. In case an Event of
Default has occurred, has not been waived and is continuing, the Trustee
may in its discretion (but shall not
40
be obligated to) proceed to protect and enforce the rights vested in it
by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such
rights, either at law in equity or in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this
Indenture or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
SECTION 5.5. RESTORATION OF RIGHTS ON ABANDONMENT OF
PROCEEDINGS. In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case the Issuer and the
Trustee shall be restored respectively to their former positions and
rights hereunder, and all rights, remedies and powers of the Issuer, the
Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6. LIMITATIONS ON SUITS BY SECURITYHOLDERS. No
holder of any Security of any series shall have any right by virtue or
by availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise upon or
under or with respect to this Indenture, or for the appointment of a
trustee, receiver, liquidator, custodian or other similar official or
for any other remedy hereunder, unless such holder previously shall have
given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the holders of not
less than 25% in aggregate principal amount of the Securities of such
series then outstanding shall have made written request upon the Trustee
to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities
to be incurred therein or thereby and the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed
to institute any such action or proceeding and no direction inconsistent
with any such action or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to
Section 5.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every other
taker and Holder and the Trustee, that no one or more
41
Holders of Securities of any series shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable series.
For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 5.7. UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO
INSTITUTE CERTAIN SUITS. Notwithstanding any other provision in this
Indenture and any provision of any Security, the right of any Holder of
any Security to receive payment of the principal of and interest on such
Security on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 5.8. POWERS AND REMEDIES CUMULATIVE; DELAY OR
OMISSION NOT WAIVER OF DEFAULT. Except as otherwise provided in Section
5.6 and with respect to the replacement or payment of mutilated, defaced
or destroyed, lost or stolen Securities in the last sentence of Section
2.9, no right or remedy herein conferred upon or reserved to the Trustee
or to the holders of Securities 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.
No delay or omission of the Trustee or of any holder of
Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such
right or power or shall be construed to be a waiver of any such Event of
Default or an acquiescence therein; and, subject to Section 5.6, every
power and remedy given by this Indenture or by law to the Trustee or to
the holders of Securities may be exercised
42
from time to time, and as often as shall be deemed expedient, by the
Trustee or by the holders of Securities.
SECTION 5.9. CONTROL BY HOLDERS OF SECURITIES. The
Holders of a majority in aggregate principal amount of the Securities of
any series at the time Outstanding shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this
Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided
further that (subject to the provisions of Section 6.1) the Trustee
shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors, the executive committee, or a
trust committee of directors or responsible officers of the Trustee
shall determine that the action or proceedings so directed would involve
the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant
to such direction would be unduly prejudicial to the interests of
Holders of the Securities of any series not joining in the giving of
said direction, it being understood that (subject to Section 6.1) the
Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the
Trustee and which is not inconsistent with such direction or directions
by Securityholders.
SECTION 5.10. WAIVER OF PAST DEFAULTS. Prior to the
declaration of the acceleration of the maturity of the Securities of any
series as provided in Section 5.1, the Holders of a majority in
aggregate principal amount of the Securities of such series at the time
Outstanding may on behalf of the Holders of all the Securities of such
series waive any past default or Event of Default described in clause
(d), (e), (f) or (g) of Section 5.1 with respect to such series and its
consequences except a default in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the
Issuer, the Trustee and the Holders of the Securities of such series
shall be restored to their former positions and
43
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and not to
have occurred for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
The Issuer may, in the circumstances permitted by the Trust
Indenture Act of 1939, fix any day as the record date for the purpose of
determining the Holders of Securities of any series entitled to give or
take any request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders of Securities of such series
under Section 5.9 or this Section. If not set by the Issuer prior to
the first solicitation of a Holder of Securities of such series made by
any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 4.1) prior to such
first solicitation or vote, as the case may be. With regard to any
record date for action to be taken by the Holders of one or more series
of Securities, only the Holders of Securities of such series on such
date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
SECTION 5.11. TRUSTEE TO GIVE NOTICE OF DEFAUlt. The
Trustee shall, within ninety days after the occurrence of a default with
respect to the Securities of any series, give notice of all defaults
with respect to that series actually known to a Responsible Officer of
the Trustee to all Holders of then Outstanding Securities of that
series, by mailing such notice to such Holders at their addresses as
they shall appear in the registry books, unless in each case such
defaults shall have been cured before the mailing or publication of such
notice (the term "defaults" for the purpose of this Section being hereby
defined to mean any event or condition which is, or with notice or lapse
of time or both would become, an Event of Default).
SECTION 5.12. RIGHT OF COURT TO REQUIRE FILING OF
UNDERTAKING TO PAY COSTS. All parties to this Indenture
44
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 shall
not apply to any suit instituted by the Trustee, to any suit instituted
by any Securityholder or group of Securityholders of any series holding
in the aggregate more than 10% in aggregate principal amount of the
Securities Outstanding of such series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
interest on any Security on or after the due date expressed in such
Security.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE;
DURING DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any
series of Securities issued hereunder, the Trustee, prior to the
occurrence of an Event of Default with respect to the Securities of a
particular series and after the curing or waiving of all Events of
Default which may have occurred with respect to such series, undertakes
to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default actually known to
a Responsible Officer of the Trustee with respect to the Securities of a
series has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that
45
(a) prior to the occurrence of an Event of Default
with respect to the Securities of any series and after the
curing or waiving of all such Events of Default with respect
to such series which may have occurred:
(i) the duties and obligations of the
Trustee with respect to the Securities of any
Series shall be determined solely by the express
provisions of this Indenture, and the Trustee
shall not be liable except for the performance
of such duties and obligations as are
specifically set forth in this Indenture, and no
implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the
part of the Trustee, the Trustee may
conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in
the case of any such certificates or opinions
which by any provision hereof are specifically
required to be furnished to the Trustee, the
Trustee shall be under a duty only to examine
the same on their face to determine whether or
not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the holders pursuant to
Section 5.9 relating to the time, method and place of
conducting any proceeding for any remedy available
46
to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if, in its opinion, there shall
be reasonable ground for believing that the repayment of such funds or
adequate indemnity against such liability is not reasonably assured to
it.
SECTION 6.2. CERTAIN RIGHTS OF THE TRUSTEE. Subject to
Section 6.1:
(a) the Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, Officers' Certificate or any other certificate,
statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, security or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the
Issuer mentioned herein shall be sufficiently evidenced by
an Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the
Trustee by a copy thereof certified by the secretary or an
assistant secretary of the Issuer;
(c) the Trustee may consult with counsel (at the
expense of the Issuer) who may be counsel to the Issuer and
any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this
Indenture, unless such
47
Securityholders shall have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, 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, consent, order, approval,
appraisal, bond, debenture, note, security, or other paper
or document unless requested in writing so to do by the
holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then
outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee, the Trustee may require
indemnity satisfactory to it against such expenses or
liabilities as a condition to proceeding; the reasonable
expenses of every such investigation shall be paid by the
Issuer or, if paid by the Trustee or any predecessor
trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys not regularly
in its employ and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.3. TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITION OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
48
Issuer, and the Trustee assumes no responsibility for the correctness of
the same. The Trustee makes no representation as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall
not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
SECTION 6.4. TRUSTEE AND AGENTS MAY HOLD SECURITIES;
COLLECTIONS, ETC. The Trustee or any agent of the Issuer or the
Trustee, in its individual or any other capacity, may become the owner
or pledgee of Securities with the same rights it would have if it were
not the Trustee or such agent and, subject to Sections 6.8 and 6.13, if
operative, may otherwise deal with the Issuer and receive, collect, hold
and retain collections from the Issuer with the same rights it would
have if it were not the Trustee or such agent.
SECTION 6.5. MONEYS HELD BY TRUSTEE. Subject to the
provisions of Section 10.5 hereof, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated
from other funds except to the extent required by mandatory provisions
of law. Neither the Trustee nor any agent of the Issuer or the Trustee
shall be under any liability for interest on any moneys received by it
hereunder.
SECTION 6.6. COMPENSATION AND INDEMNIFICATION OF TRUSTEE
AND ITS PRIOR CLAIM. The Issuer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust) and
the Issuer covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in
connection with this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor
Trustee, its officers, directors, employees and agents for, and to hold
it, its officers, directors, employees and agents harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this
49
Indenture or the trusts hereunder and its duties hereunder, including
the costs and expenses of defending itself against or investigating any
claim of liability in the premises. The obligations of the Issuer under
this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Securities upon all
property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular
Securities, and the Securities are hereby subordinated to such senior
claim.
SECTION 6.7. RIGHT OF TRUSTEE TO RELY ON OFFICERS'
CERTIFICATE, ETC. Subject to Sections 6.1 and 6.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be provided or established prior to
taking or suffering or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the
part of the Trustee, be deemed to be conclusively provided and
established by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of gross negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture
upon the faith thereof.
SECTION 6.8. QUALIFICATION OF TRUSTEE. The Trustee is
subject to Section 310(b) of the Trust Indenture Act of 1939 regarding
disqualification of a trustee upon acquiring any conflicting interest.
In determining whether the Trustee has a conflicting interest within the
meaning of the Trust Indenture Act with respect to Securities of any
series, there shall be excluded (a) this Indenture with respect to
Securities of any series other than such series and (b) the Indenture
dated as of March 29, 1996 pursuant to which the 12% Senior Notes due
2003 of the Issuer are outstanding.
SECTION 6.9. PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE.
The Trustee for each series of Securities hereunder shall at all times
be a corporation organized and doing business under the laws of the
United States of America or of any state or the District of Columbia (or
a
50
Person permitted to act as trustee by the Commission) having a combined
capital and surplus of at least $50,000,000, and which is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, state or District of Columbia
authority. Such corporation or Person shall have a place of business in
The City of New York if there be such a corporation or Person in such
location willing to act upon reasonable and customary terms and
conditions. If such corporation or Person publishes reports of
condition at least annually, pursuant to law or to the requirements of
the aforesaid supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation or
Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. Such
corporation or Person shall not be and shall represent that it is not an
obligor on the Securities or a person directly or indirectly
controlling, controlled by, or under common control with such obligor.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR TRUSTEE. (a) The Trustee, or any trustee or trustees
hereafter appointed, may at any time resign with respect to one or more
or all series of Securities by giving written notice of resignation to
the Issuer and, if required by applicable law or regulations, by mailing
notice of such resignation to the Holders of then Outstanding Securities
of each series affected at their addresses as they shall appear on the
registry books. Upon receiving such notice of resignation, the Issuer
shall promptly appoint a successor trustee or trustees with respect to
the applicable series by written instrument in duplicate, executed by
authority of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for
the appointment of a successor trustee, or any Securityholder who has
been a bona fide Holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section
5.12, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a
51
successor trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities after
written request therefor by the Issuer or by any Securityholder
who has been a bona fide Holder of a Security or Securities of
such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a
bankrupt or insolvent, or a receiver or liquidator 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, the Issuer may remove the Trustee with respect
to the applicable series of Securities and appoint a successor trustee
for such series by written instrument, in duplicate, executed by order
of the Board of Directors of the Issuer, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.12, any
Securityholder who has been a bona fide Holder of a Security or
Securities 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 removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such
court may thereupon, after such notice, if any, as it may deem proper
and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series at the time outstanding may at
any time remove the Trustee with respect to Securities of such series
and appoint a successor
52
trustee with respect to the Securities of such series by delivering to
the Trustee so removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action in that
regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect
to any series and any appointment of a successor trustee with respect to
such series pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee
as provided in Section 6.11.
(e) The retiring Trustee shall not be liable for the acts or
omissions of any successor Trustee hereunder.
(f) Upon appointment of any successor Trustee, all fees,
charges and expenses of the retiring Trustee shall be paid.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
TRUSTEE. Any successor trustee appointed as provided in Section 6.10
shall execute and deliver to the Issuer and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee with respect to all or
any applicable series shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with
all rights, powers, duties and obligations with respect to such series
of its predecessor hereunder, with like effect as if originally named as
trustee for such series hereunder; but, nevertheless, on the written
request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to
Section 10.5, pay over to the successor trustee all moneys at the time
held by it hereunder and shall execute and deliver an instrument which,
subject to Section 6.6, need not include an indemnity by the Issuer,
transferring to such successor trustee all such rights, powers, duties
and obligations. Upon request of any such successor trustee, the Issuer
shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by
such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.6.
53
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the
predecessor Trustee and each successor trustee with respect to the
Securities of any applicable series shall execute and deliver an
indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and
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 under separate indentures.
No successor trustee with respect to any series of Securities
shall accept appointment as provided in this Section 6.11 unless at the
time of such acceptance such successor trustee shall be qualified under
the provisions of Section 6.8 and eligible under the provisions of
Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section 6.11, the Issuer shall mail notice thereof to
the Holders of Securities of each series affected, by mailing such
notice to such Holders at their addresses as they shall appear on the
registry books. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section
6.10. If the Issuer fails to mail such notice within ten days after
acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the
Issuer.
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS OF TRUSTEE. 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 the corporate trust business of the Trustee, shall be the
successor of the Trustee and all other appointments hereunder; provided,
that such corporation shall be
54
qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9 without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of
any series shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of
any predecessor Trustee and deliver such Securities so authenticated;
and, in case at that time any of the Securities of any series shall not
have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in
the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it has anywhere in the
Securities of such series or in this Indenture provided that the
certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series 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
THE ISSUER. (a) Subject to the provisions of subsection (b) of this
Section, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Issuer within three months
prior to a default, as defined in subsection (c) of this Section, or
subsequent to such a default, then, unless and until such default shall
be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities
and the Holders of other indenture securities (as defined in this
Section):
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such three
months' period and valid as against the Issuer and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in subsection (a)(2) of this
Section, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been
filed by or against the Issuer upon the date of such default; and
55
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the
beginning of such three months' period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however,
to the rights, if any, of the Issuer and its other creditors in
such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any person (other than the Issuer)
who is liable thereon, (ii) the proceeds of the bona fide sale of
any such claim by the Trustee to a third person, and (iii)
distributions made in cash, securities or other property in
respect of claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable state law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property was so
held prior to the beginning of such three months' period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property held
by it as security for any such claim, if such claim was created
after the beginning of such three months' period and such property
was received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving
that at the time such property was so received the Trustee had no
reasonable cause to believe that a default as defined in
subsection (c) of this Section would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in such paragraph (B) or (C),
as the case may be, to the extent of the fair value of such
property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three
56
months' period for property held as security at the time of such
substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created
in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such
claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the Holders of
other indenture securities in such manner that the Trustee, such
Securityholders and the Holders of other indenture securities realize,
as a result of payments from such special account and payments of
dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11
of the United States Code or applicable state law, the same percentage
of their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Issuer of the
funds and property in such special account and before crediting to the
respective claims of the Trustee, such Securityholders and the Holders
of other indenture securities dividends on claims filed against the
Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or
applicable state law, but after crediting thereon receipts on account of
the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect
to such claim, in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or
applicable state law, whether such distribution is made in cash,
securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim.
The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion
between the Trustee, such Securityholders and the Holders of other
indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and the
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in
part, to give to the provisions of this paragraph due consideration in
57
determining the fairness of the distributions to be made to the Trustee,
such Securityholders and the Holders of other indenture securities with
respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or
other property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such three months' period shall be subject to the
provisions of this subsection (a) as though such resignation or removal
had not occurred. If any Trustee has resigned or been removed prior to
the beginning of such three months' period, it shall be subject to the
provisions of this subsection (a) if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such
Trustee had continued as trustee, occurred after the beginning of
such three months' period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or removal.
(b) There shall be excluded from the operation of
subsection (a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by the
Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture for the
purpose of preserving any property which shall at any time be
subject to the lien of this Indenture or of discharging tax liens
or other prior liens or encumbrances thereon, if notice of such
advance and of the circumstances surrounding the making thereof is
given to the Securityholders at the time and in the manner
provided in this Indenture;
58
(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented or an indebtedness created as a result
of goods or securities sold in a cash transaction as defined in
subsection (c)(3) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper as
defined in subsection (c)(4) of this Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure to make
payment in full of the principal of or interest upon any of the
Securities or upon the other indenture securities when and as such
principal or interest becomes due and payable;
(2) the term "other indenture securities" shall mean
securities upon which the Issuer is an obligor (as defined in the
Trust Indenture Act of 1939) outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of subsection
(a) of this Section, and (iii) under which a default existing at
the time of the apportionment of the funds and property held in
said special account;
(3) the term "cash transaction" shall mean any transaction
in which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in currency
or in checks or other orders drawn upon banks or bankers and
payable upon demand;
59
(4) the term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Issuer for the purpose of
financing the purchase, processing, manufacture, shipment, storage
or sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon the
goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by
the Trustee simultaneously with the creation of the creditor
relationship with the Issuer arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor upon the
Securities.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a
specified percentage in principal amount of the Securityholders of any
or all series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified
percentage of Securityholders 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. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this
Article.
SECTION 7.2. PROOF OF EXECUTION OF INSTRUMENTS AND OF
HOLDING OF SECURITIES. Subject to Sections 6.1 and 6.2, the execution
of any instrument by a Securityholder or his agent or proxy may be
proved by the Security register or by a certificate of the Security
registrar.
SECTION 7.3. HOLDERS TO BE TREATED AS OWNERS. The
Issuer, the Trustee and any agent of the Issuer or the
60
Trustee may deem and treat the person in whose name any Security shall
be registered upon the Security register for such series as the absolute
owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such
Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security.
SECTION 7.4. SECURITIES OWNED BY ISSUER DEEMED NOT
OUTSTANDING. In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or all
series have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor
on the Securities with respect to which such determination is being made
or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Securities which the Trustee
knows are 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 the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor
upon the Securities or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer
or any other obligor on the Securities by delivering to the Trustee an
Officers' Certificate and Opinion of Counsel to such effect. In case of
a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish
to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or
for the account of any of the above-described persons;
61
and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 7.5. RIGHT OF REVOCATION OF ACTION TAKEN. At any
time prior to (but not after) the evidencing to the Trustee, as provided
in Section 7.1, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Securities of any or all
series, as the case may be, specified in this Indenture in connection
with such action, any Holder of a Security the serial number of which is
shown by the evidence to be included among the serial numbers of the
Securities the Holders of which have consented to such action may, by
filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by
the Holder of any Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective
of whether or not any notation in regard thereto is made upon any such
Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as
the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Issuer, the Trustee and
the Holders of all the Securities affected by such action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its
Board of Directors, and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act of 1939 as in
force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
62
(b) to evidence the succession of another corporation to
the Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations
of the Issuer pursuant to Article Nine;
(c) 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;
(d) to add to the covenants of the Issuer 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 Issuer;
(e) to add any additional Events of Default with respect
to all or any series of Securities (and, if such Event of Default
is applicable to less than all series of Securities, specifying
the series to which such Event of Default is applicable);
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture; or to make such
other provisions in regard to matters or questions arising under
this Indenture or under any supplemental indenture as the Board of
Directors may deem necessary or desirable and which, in the
opinion of the Board of Directors, shall not adversely affect the
interests of the Holders of the Securities;
(g) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination shall
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental
indenture which is adversely affected by such change in or
elimination of such provision; and
63
(h) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3.
The Trustee is hereby authorized to join with the Issuer in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer, assignment, mortgage or pledge
of any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any
of the Securities at the time outstanding, notwithstanding any of the
provisions of Section 8.2.
SECTION 8.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. With the consent (evidenced as provided in Article
Seven) of the Holders of not less than 66 2/3% in aggregate principal
amount of the Securities at the time Outstanding of all series affected
by such supplemental indenture (voting as one class), the Issuer, when
authorized by a resolution of its Board of Directors, and the Trustee
may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act of 1939 as in force at the date of execution
thereof) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of each such series; provided, that no such
supplemental indenture shall (a) extend the final maturity of any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or make the principal thereof (including
any amount in respect of original issue discount), or interest or
premium thereon payable in any coin or currency other than that provided
in the Securities or in accordance with the terms thereof, or reduce the
amount of the principal of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.1 or the amount thereof provable in bankruptcy
pursuant to Section 5.2, or impair or affect the right of any
Securityholder to institute suit for the
64
payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the Securityholder without the consent of the
Holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of
which is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected.
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 Holders of Securities of
such series, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of
Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an
assistant secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence
of the consent of Securityholders as aforesaid and other documents, if
any, required by Section 7.1, the Trustee shall join with the Issuer in
the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this Section,
the Issuer shall mail a notice thereof to the Holders of then
Outstanding Securities of each series affected thereby, by mailing a
notice thereof by first-class mail to such Holders at their addresses as
they shall appear on the Security register. Any failure of the Issuer
to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental Indenture.
65
SECTION 8.3. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the
Trustee, the Issuer and the Holders of Securities of each series
affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4. DOCUMENTS TO BE GIVEN TO TRUSTEE. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, may receive
an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this
Article 8 complies with the applicable provisions of this Indenture.
SECTION 8.5. NOTATION ON SECURITIES IN RESPECT OF
SUPPLEMENTAL INDENTURES. Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to
the provisions of this Article may bear a notation in form approved by
the Trustee upon advice of counsel for such series as to any matter
provided for by such supplemental indenture or as to any action taken at
any such meeting. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of
the Trustee (as to form) and the Board of Directors (as to form and
substance), to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by
the Trustee and delivered in exchange for the Securities of such series
then outstanding.
66
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. ISSUER MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS. The Issuer covenants that it will not merge or consolidate with
any other corporation or sell or convey all or substantially all of its
assets to any Person, unless (i) either the Issuer shall be the
continuing corporation, or the successor corporation or the Person which
acquires by sale or conveyance substantially all the assets of the
Issuer (if other than the Issuer) shall be a corporation or entity
organized under the laws of the United States of America or any state
thereof and shall expressly assume the due and punctual payment of the
principal of and interest, if any, on all the Securities, according to
their tenor, and the due and punctual performance and observance of all
of the covenants and conditions of this Indenture to be performed or
observed by the Issuer, by supplemental indenture satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation or
entity, and (ii) the Issuer or such successor corporation or entity, as
the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition.
SECTION 9.2. SUCCESSOR ISSUER SUBSTITUTED. In case of any
such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Issuer, with the same effect
as if it had been named herein. Such successor corporation may cause to
be signed, and may issue either in its own name or in the name of the
Issuer prior to such succession any or all of the Securities issuable
hereunder, which theretofore shall not have been signed by the Issuer
and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Issuer and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities, which previously
shall have been signed and delivered by the officers of the Issuer to
the Trustee for authentication, and any Securities, which such successor
corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued, shall in all
respects have the same legal rank and benefit under this Indenture as
the Securities theretofore or thereafter issued in accordance with the
terms of this
67
Indenture as though all of such Securities had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance)
may be made in the Securities thereafter to be issued as may be
appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor corporation
which shall theretofore have become such in the manner described in this
Article shall be discharged from all obligations and covenants under
this Indenture and the Securities and may be liquidated and dissolved.
SECTION 9.3. OPINION OF COUNSEL TO TRUSTEE. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an
Opinion of Counsel, prepared in accordance with Section 11.5, as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or
dissolution, complies with the applicable provisions of this Indenture.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect with respect to any
series of Securities (except as to any surviving rights of conversion or
transfer or exchange of Securities of such series expressly provided for
herein or in the form of Security for such series), and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture
as to such series, when
(1) either
(A) all Securities of that series theretofore
authenticated and delivered (other than (i) Securities of such series
which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.9, and (ii) Securities of such series
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section
68
3.4) have been delivered to the Trustee canceled or for cancellation; or
(B) all such Securities of that series not theretofore
delivered to the Trustee canceled or 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 Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount, which shall be immediately due and payable,
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee canceled or for
cancellation, for principal (and premium, if any) and interest, if any,
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 Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer with respect to the Securities of such
series; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Securities of such series have
been complied with.
SECTION 10.2. APPLICATION OF TRUST MONEY. All money deposited
with the Trustee pursuant to Section 10.1 or Section 10.3 shall be held
in trust and applied by it, in accordance with the provisions of the
series of Securities in respect of which it was deposited and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent), to the Persons
entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee; but
such money need not be
69
segregated from other funds except to the extent required by law.
SECTION 10.3. DEFEASANCE UPON DEPOSIT OF FUNDS OR GOVERNMENT
OBLIGATIONS. Unless pursuant to Section 2.3 provision is made that this
Section 10.3 shall not be applicable to the Securities of any series, at
the Issuer's option, either (a) the Issuer shall be deemed to have been
Discharged (as defined below) from its obligations with respect to any
series of Securities after the applicable conditions set forth below
have been satisfied or (b) the Issuer shall cease to be under any
obligation to comply with any term, provision or condition set forth in
Sections 3.6 and 3.7 (and any other Sections applicable to such
Securities that are determined pursuant to Section 2.3 to be subject to
this provision) with respect to any series of Securities at any time
after the applicable conditions set forth below have been satisfied:
(1) the Issuer shall have deposited or caused to be
deposited irrevocably with the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series (i) money
in an amount, or (ii) the equivalent in securities of the
government which issued the currency in which the Securities of
such series are denominated or securities issued by government
agencies backed by the full faith and credit of such government,
which through the payment of interest and principal 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 (iii) a combination of (i) and (ii), sufficient, in the
opinion (with respect to (ii) and (iii)) of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (including mandatory
sinking fund payments) and any premium of, interest on and any
repurchase obligations with respect to the outstanding securities
of such series on the dates such installments of interest or
principal or repurchase obligations are due;
(2) no Event of Default or event (including such deposit)
which with notice or lapse of time would become an Event of
Default with respect to the Securities of such series shall have
occurred and be continuing on the date of such deposit; and
70
(3) the Issuer shall have delivered to the Trustee an
Opinion of Counsel, from counsel who is not an employee of the
Issuer but which may be outside general counsel to the Issuer, to
the effect that Holders of the Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as
a result of the Issuer's exercise of its option under this Section
10.3 and will be subject to Federal income tax on the same amount
and in the same manner and at the same times as would have been
the case if such option had not been exercised, and, in the case
of Securities being Discharged, such opinion shall be based upon
at least one of the following authorities (issued, enacted or
promulgated after the date of this Indenture), substantially on
point and to the foregoing effect: (i) a public ruling of the
Internal Revenue Service, (ii) a private ruling of the Internal
Revenue Service issued to the Issuer with respect to the
Securities, (iii) a provision of the Internal Revenue Code, or
(iv) a final regulation promulgated by the Department of the
Treasury.
The term "Discharged" means that the Issuer shall be deemed to
have paid and discharged the entire indebtedness represented by,
and obligations under, the Securities of such series and to have
satisfied all the obligations under this Indenture relating to the
Securities of such series (and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging the same),
except (A) the rights of Holders of Securities to receive, from
the trust fund described in Subsection (1) above, payment of the
principal and any premium of and any interest on such Securities
when such payments are due; (B) the Issuer's obligations with
respect to such Securities under Sections 2.8, 2.9, 3.2, 3.4, 6.6
and 10.2; and (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder (including, without
limitation, its rights under Section 6.6 hereunder).
SECTION 10.4. REPAYMENT OF MONEYS HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this Indenture with
respect to Securities of any series, all moneys then held by any paying
agent under the provisions of this Indenture with respect to such series
of Securities shall, upon demand of the Issuer, be repaid to it or paid
to the Trustee and thereupon such paying agent shall be
71
released from all further liability with respect to such moneys.
SECTION 10.5. RETURN OF MONEYS HELD BY TRUSTEE AND PAYING
AGENT UNCLAIMED FOR THREE YEARS. Any moneys deposited with or paid to
the Trustee or any paying agent for the payment of the principal of or
interest on any Security of any series and not applied but remaining
unclaimed for three years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written
request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law
(as advised by counsel, pursuant to Section 6.2), be repaid to the
Issuer by the Trustee for such series or such paying agent, and the
Holder of the Security of such series shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which
such Holder may be entitled to collect, and all liability of the Trustee
or any paying agent with respect to such moneys shall thereupon cease.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.1. INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS OF ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under
or upon any obligation, covenant or agreement contained in this
Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any
past, present or future stockholder, officer or director, as such, of
the Issuer or of any successor, either directly or through the Issuer or
any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders
thereof and as part of the consideration for the issue of the
Securities.
SECTION 11.2. PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT
OF PARTIES AND HOLDERS OF SECURITIES. Nothing in this Indenture or in
the Securities, expressed or implied, shall give or be construed to give
to any person, firm or corporation, other than the parties hereto and
their successors and the Holders of the Securities any legal or
72
equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their
successors and of the Holders of the Securities.
SECTION 11.3. SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY
INDENTURE. All the covenants, stipulations promises and agreements in
this Indenture contained by or on behalf of the Issuer shall bind its
successors and assigns, whether so expressed or not.
SECTION 11.4. NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
HOLDERS OF SECURITIES. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by the
Trustee or by the Holders of Securities to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except
as otherwise specifically provided herein) addressed (until another
address of the Issuer is filed by the Issuer with the Trustee) to Unisys
Corporation, Township Line and Union Meeting Roads, Blue Bell,
Pennsylvania 19424, Attention: General Counsel. Any notice, direction,
request or demand by the Issuer or any holder of Securities to or upon
the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the
Issuer when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as
shall be reasonably satisfactory to the Issuer shall be deemed to be a
sufficient giving of such notice.
SECTION 11.5. OFFICERS' CERTIFICATES AND OPINIONS OF
COUNSEL; STATEMENTS TO BE CONTAINED THEREIN. Upon any application or
demand by the Issuer to the Trustee to take any action under any of the
provisions of this Indenture, the Issuer shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for
in this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to
73
compliance with a condition or covenant provided for in this Indenture
shall include (a) a statement that the person making such certificate or
opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or
not, in the opinion of such person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or representations with
respect to the matters upon which his certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants in the employ of the Issuer, unless
such officer or counsel, as the case may be, knows that the certificate
or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such
firm is independent.
74
SECTION 11.6. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND
HOLIDAYS. If the date of maturity of interest, if any, on or principal
of the Securities of any series or the date fixed for redemption or
repayment of any such Security shall not be a Business Day, then payment
of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 11.7. CONFLICT OF ANY PROVISION OF INDENTURE WITH
TRUST INDENTURE ACT OF 1939. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with another provision
included in this Indenture which is required to be included herein by
any of Sections 310 to 317, inclusive, of the Trust Indenture Act of
1939, such required provision shall control.
SECTION 11.8. NEW YORK LAW TO GOVERN. This Indenture and
each Security shall be deemed to be a contract under the laws of the
state of New York, and for all purposes shall be construed in accordance
with the laws of such state, except as may otherwise be required by
mandatory provisions of law.
SECTION 11.9. COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute one and the
same instrument.
SECTION 11.10. EFFECT OF HEADINGS. The Article and
Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 11.11. SECURITIES IN A FOREIGN CURRENCY OR IN ECU.
(a) Whenever for purposes of this Indenture any action may be taken by
the holders of a specified percentage in aggregate principal amount of
Securities of all series at the time outstanding and, at such time,
there are outstanding Securities of any series which are denominated in
a currency or currencies or currency unit or currency units other than
Dollars, then the principal amount of Securities of such series which
shall be deemed to be outstanding for the purpose of taking such action
shall be that amount of Dollars that could be obtained for such
principal amount based on (i) in the case of Securities
75
denominated in a foreign currency, the Market Exchange Rate in effect on
the date on which such action is to be taken (the "Determination Date")
or (ii) in the case of Securities denominated in ECU, the Official ECU
Exchange Rate (or, if ECU ceases to be used both (a) within the European
Monetary System and (b) for the settlement of transactions by public
institutions of or within the European Communities, then based on the
Dollar Equivalent of the ECU) on the Determination Date. The provisions
of this paragraph shall apply in determining the equivalent number of
votes to which each securityholder or proxy shall be entitled in respect
of Securities of a series denominated in a currency other than Dollars
in connection with any vote taken by holders of Securities pursuant to
the terms of this Indenture.
(b) For the purposes of this Section 11.11, the following
terms shall have the following meanings:
"Component Currency" means any currency which, on the
Conversion Date, was a component currency of the ECU.
"Conversion Date" means the last date on which ECU was
used either (i) within the European Monetary System or (ii)
for the settlement of transactions by public institutions of
or within the European Communities.
"Dollar Equivalent of the ECU" means the amount, as
calculated by the Trustee on each Determination Date, equal
to the sum obtained by adding together the results obtained
by converting the Specified Amount of each Component
Currency into Dollars at the Market Exchange Rate on the
Determination Date for such Component Currency.
"European Communities" means the European Economic
Community, the European Coal and Steel Community and the
European Atomic Energy Community.
"Market Exchange Rate" shall mean for any currency the
noon Dollar buying rate for that currency for cable
transfers quoted in New York City on the Determination Date
as certified for customs purposes by the Federal Reserve
Bank of New York. If such rates are not available for any
reason with respect to one or more currencies for which an
exchange rate is required, the Trustee
76
shall use without liability on its part, such quotation of the
Federal Reserve Bank of New York as of the most recent
available date, or if such quotation is unavailable,
quotations from Citibank, N.A., or if unavailable, any other
bank with combined assets of at least $500 million in New
York City or in the country of issue of the currency in
question, or such other quotations as the Issuer shall deem
appropriate. Unless otherwise specified by the Trustee, if
there is more than one market for dealing in any currency by
reason of foreign exchange regulations or otherwise, the
market to be used in respect of such currency shall be that
upon which a nonresident issuer of securities designated in
such currency would purchase such currency in order to make
payments in respect of such securities, as advised by the
Issuer.
"Official ECU Exchange Rate" applicable to any currency
with respect to any payment to be made hereunder means the
exchange rate between the ECU and such currency reported by
the Commission of the European Communities (currently based
on the rates in effect at 2:30 p.m., Brussels time, on the
relevant exchange markets) or if such exchange rate ceases
to be so reported, then such exchange rate shall be
determined by the Trustee using, without liability on its
part, quotations from Citibank, N.A., or if unavailable, any
other bank with combined assets of at least $500 million in
New York City or if such quotation is unavailable, such
other quotations as the Issuer shall deem appropriate, on
the applicable Determination Date.
"Specified Amount" of a Component Currency means the
number of units or fractions thereof which such Component
Currency represented in the ECU on the Conversion Date. If
after the Conversion Date the official unit of any Component
Currency is altered by way of combination or subdivision,
the Specified Amount of such Component Currency shall be
divided or multiplied in the same proportion. If after the
Conversion Date two or more Component Currencies are
consolidated into a single currency, the respective
Specified Amounts of such Component Currencies shall be
replaced by an amount in such
77
single currency equal to the sum of the respective Specified
Amounts of such consolidated Component Currencies expressed
in such single currency, and such amount shall thereafter be
a Specified Amount and such single currency shall thereafter
be a Component Currency. If after the Conversion Date any
Component Currency shall be divided into two or more
currencies, the Specified Amount of such Component Currency
shall be replaced by specified amounts of such two or more
currencies, the sum of which, at the market Exchange Rate of
such two or more currencies on the date of such replacement,
shall be equal to the Specified Amount of such former
Component Currency divided by the number of currencies into
which such Component Currency was divided, and such amounts
shall thereafter be Specified Amounts and such currencies
shall thereafter be Component Currencies.
(c) All decisions and determinations of the Trustee
regarding the Market Exchange Rate and the ECU Exchange Rate shall, in
the absence of manifest error, be conclusive for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12. JUDGMENT CURRENCY. The obligation of the
Issuer in respect of any sum due to any securityholder hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency")
other than the currency in which the payment is due (the "Required
Currency"), be discharged only to the extent that on the Business Day
following receipt by such securityholder of any sum adjudged to be so
due in the Judgment Currency, such securityholder may in accordance with
normal banking procedures purchase the amount originally due to such
securityholder in the Required Currency with the Judgment Currency; if
the amount of the Required Currency so purchased is less than the sum
originally due to such securityholder in the Required Currency, the
Issuer agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such securityholder against such loss, and if the
amount of the Required Currency so purchased exceeds the sum originally
due to such securityholder, such securityholder agrees to remit to the
Issuer such excess.
78
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1. APPLICABILITY OF ARTICLE. The provisions of
this Article shall be applicable to the Securities of any series which
are redeemable before their maturity or to any sinking fund for the
retirement of Securities of a series except as otherwise specified as
contemplated by Section 2.3 for Securities of such series.
SECTION 12.2. NOTICE OF FULL AND PARTIAL REDEMPTION;
PARTIAL REDEMPTIONS. Notice of redemption to the Holders of Securities
of any series to be redeemed as a whole or in part at the option of the
Issuer shall be given by mailing notice of such redemption by first
class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to such Holders of Securities of
such series at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice. Failure to give notice by mail,
or any defect in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security of
such series.
The notice of redemption to each such Holder shall specify (i)
the principal amount of each Security of such series held by such Holder
to be redeemed, (ii) the date fixed for redemption, (iii) the redemption
price (and premium, if any), (iv) the place or places of payment, (v)
that payment will be made upon presentation and surrender of such
Securities, (vi) that such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, (vii) that interest
accrued to the date fixed for redemption will be paid as specified in
such notice and (viii) that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
79
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at
the Issuer's request, by the Trustee in the name and at the expense of
the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust
as provided in Section 3.4) an amount of money sufficient to redeem on
the redemption date all the Securities of such series so called for
redemption at the appropriate redemption price, together with accrued
interest to the date fixed for redemption (and premium, if any). The
election of the Issuer to redeem any Securities shall be evidenced by a
Board Resolution in addition to any other requirements set forth
hereunder. If less than all the outstanding Securities of a series are
to be redeemed, the Issuer will deliver to the Trustee at least 60 days
(or such shorter period as shall be acceptable to the Trustee for its
convenience) prior to the date fixed for redemption an Officers'
Certificate stating the aggregate principal amount of Securities to be
redeemed.
If less than all the Securities of a series are to be
redeemed, the Trustee shall, subject to Section 12.4, select by lot
Securities of such Series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of
any Securities of such series selected for partial redemption, the
principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities of any series shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to
be redeemed.
SECTION 12.3. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If notice of redemption has been given as above provided, the
Securities or portions of Securities specified in such notice shall
become due and payable on the date and at the place stated in such
notice at the applicable redemption price (and premium, if any),
together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default
80
in the payment of such Securities at the redemption price, together with
interest accrued to said date) interest on the Securities or portions of
Securities so called for redemption shall cease to accrue shall be void,
and except as provided in Sections 6.5 and 10.5, such Securities shall
cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such Securities except the right to receive
the redemption price (and premium, if any) thereof and unpaid interest
to the date fixed for redemption. On presentation and surrender of such
Securities at a place of payment specified in said notice, said
Securities or the specified portions thereof shall be paid and redeemed
by the Issuer at the applicable redemption price (and premium, if any),
together with interest, if any, accrued thereon to the date fixed for
redemption; provided that payment of interest, if any, becoming due on
or prior to the date fixed for redemption shall be payable to the
Holders of Securities registered as such on the relevant record date
subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid
or duly provided for, bear interest from the date fixed for redemption
at the rate of interest or Yield to Maturity (in the case of an Original
Issue Discount Security) borne by the Security.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to
or on the order of the Holder thereof, at the expense of the Issuer, a
new Security or Securities of such series, of authorized denominations,
in principal amount equal to the unredeemed portion of the Security so
presented.
SECTION 12.4. EXCLUSION OF CERTAIN SECURITIES FROM
ELIGIBILITY FOR SELECTION FOR REDEMPTION. Securities shall be excluded
from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Issuer and delivered to the Trustee at least
40 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by, either (a) the Issuer or (b) an entity specifically
identified in such written statement directly or indirectly
81
controlling or controlled by or under direct or indirect common control
with the Issuer.
SECTION 12.5. MANDATORY AND OPTIONAL SINKING FUNDS. The
minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". The date on which a sinking fund
payment is to be made is herein referred to as the "sinking fund payment
date".
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the
Issuer may at its option (a) deliver to the Trustee Securities of such
series theretofore purchased or otherwise acquired (except upon
redemption pursuant to the mandatory sinking fund) by the Issuer or
receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation
pursuant to Section 2.10, (b) receive credit for optional sinking fund
payments (not previously so credited) made pursuant to this Section, or
(c) receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption
provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at
the sinking fund redemption price specified in such Securities.
On or before the forty-fifth day next preceding each sinking
fund payment date for any series, the Issuer will deliver to the Trustee
a written statement signed by an authorized officer of the Issuer (a)
specifying the portion of the mandatory sinking fund payment to be
satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to
such series have occurred (which have not been waived or cured) and are
continuing and (d) stating whether or not the Issuer intends to exercise
its right to make an optional sinking fund payment with respect to such
series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited
and
82
required to be delivered to the Trustee in order for the Issuer to be
entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such written statement (or reasonably
promptly thereafter if acceptable to the Trustee). Such written
statement shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash
payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or
before any such forty-fifth day, to deliver such written statement and
Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute, on and as of such date, the irrevocable
election of the Issuer (i) that the mandatory sinking fund payment for
such series due on the next succeeding sinking fund payment date shall
be paid entirely in cash without the option to deliver or credit
Securities of such series in respect thereof and (ii) that the Issuer
will make no optional sinking fund payment with respect to such series
as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment
date plus any unused balance of any preceding sinking fund payments made
in cash shall exceed $50,000 (or a lesser sum if the Issuer shall so
request) with respect to the Securities of any particular series, such
cash shall be applied on the next succeeding sinking fund payment date
to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 or less and the Issuer
makes no such request then it shall be carried over and invested by the
Trustee in mutual or trust fund institutions which are registered with
the Commission under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and which have underlying
investments consisting solely of and limited to United States Government
obligations until a sum in excess of $50,000 is available. The Trustee,
upon written instruction from the Issuer, shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment
date a specified principal amount of Securities of such series then
Outstanding to absorb said cash, as nearly as may be, and shall (if
requested in writing by the Issuer) inform the Issuer of the serial
numbers of the Securities of such series (or portions thereof) so
selected. Securities of any series which are (a) owned by the Issuer or
are certified by
83
the Issuer by means of an Officers' Certificate to be owned by an entity
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer, as shown by the Security
register, and not actually known to a Responsible Officer of the Trustee
to have been pledged or hypothecated by the Issuer or any such entity;
or (b) identified in an Officers' Certificate at least 60 days prior to
the sinking fund payment date as being beneficially owned by, and not
pledged or hypothecated by, the Issuer or an entity directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Issuer shall be excluded from Securities of such
series eligible for selection for redemption. The Trustee, in the name
and at the expense of the Issuer (or the Issuer, if it shall so request
the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner
provided in Section 12.2 (and with the effect provided in Section 12.3)
for the redemption of Securities of such series in part at the option of
the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added
to the next cash sinking fund payment for such series and, together with
such payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity
date of the Securities of any particular series (or earlier, if such
maturity is accelerated), which are not held for the payment or
redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to
the payment of the principal of, and interest on, the Securities of such
series at maturity.
At least one day before each sinking fund payment date, the
Issuer shall pay to the Trustee in cash or shall otherwise provide for
the payment of all interest accrued to the date fixed for redemption on
Securities to be redeemed on the next following sinking fund payment
date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or mail any notice of
redemption of Securities for such series by operation of the sinking
fund during the continuance of a default in payment of interest on such
Securities or of any Event of Default except that, where the mailing of
notice of redemption of any Securities shall theretofore have been made,
the Trustee shall redeem or cause to be redeemed such Securities,
provided that it shall
84
have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at
the time when any such default or Event of Default shall occur, and any
moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as
provided in Section 5.10 or the default cured on or before the sixtieth
day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment
date in accordance with this Section to the redemption of such
Securities.
85
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of _________________.
UNISYS CORPORATION
By
-------------------------
Name:
Title:
Attest:
By
-----------------------
Name:
Title:
BANK OF MONTREAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By
--------------------------
Name:
Title:
Attest:
By
----------------------
Name:
Title:
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
-----
Unisys Corporation, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Unisys
Corporation a resolution was duly adopted setting forth a proposed
amendment to the Restated Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Board of Directors hereby deems advisable, and
recommends that the stockholders of the Corporation approve the
amendment of the Corporation's Certificate of Incorporation to
revise the first sentence of Article IV, Section 1 to read in its
entirety as follows:
The total number of shares of all classes of stock which
the Corporation shall have authority to issue is
760,000,000 shares, divided into two classes consisting of
720,000,000 shares, of Common Stock, par value $.01 per
share ("Common Stock"), and 40,000,000 shares of Preferred
Stock, par value $1 per share ("Preferred Stock").
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, a meeting of the stockholders of said corporation was
duly called and held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware at which meeting the
necessary number of shares as required by statute were voted in favor
of the amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, Unisys Corporation has caused this
certificate to be signed by Harold S. Barron, its Senior Vice
President, General Counsel and Secretary this 24th day of April, 1998.
UNISYS CORPORATION
By /s/ Harold S. Barron
--------------------
Harold S. Barron
Senior Vice President,
General Counsel and Secretary
ATTEST:
By: /s/Ronald C. Anderson
---------------------
Ronald C. Anderson
Assistant Secretary
May 5, 1998
Unisys Corporation
Township Line and Union Meeting Roads
P. O. Box 500
Blue Bell, PA 19424
RE: Registration Statement on Form S-3
Gentlemen:
I am Senior Vice President, General Counsel and Secretary of Unisys
Corporation, a Delaware corporation (the "Company"), and have represented the
Company, with assistance from attorneys under my supervision in the Company's
Office of the General Counsel (the "Unisys Attorneys"), in connection with the
preparation of a Registration Statement on Form S-3 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the
"Commission") in connection with the registration under the Securities Act of
1933, as amended (the "Act"), of $385,293,412 in the aggregate of the
Company's (a) debt securities (the "Debt Securities"), (b) common stock, par
value $.01 per share, and associated preferred share purchase rights (the
"Common Stock"), (c) preferred stock, par value $1 per share (the "Preferred
Stock") and (d) warrants to purchase Debt Securities, Preferred Stock or
Common Stock (the "Warrants" and collectively with the Debt Securities, the
Common Stock and the Preferred Stock, the "Securities"). The Registration
Statement will also constitute Post-Effective Amendment No. 1 to a
Registration Statement on Form S-3 (No. 333-20373) previously filed by the
Company and declared effective on February 19, 1997 and Post-Effective
Amendment No. 1 to a Registration Statement on Form S-3 (No. 33-25715)
previously filed by the Company and declared effective on January 26, 1989.
Pursuant to Rule 429 of the rules and regulations of the Commission under the
Act, the prospectus contained in the Registration Statement is a combined
prospectus that also relates to an additional $314,706,588 of securities
remaining unsold under such Registration Statements (Nos. 333-20373 and 33-
25715).
In connection with this opinion, I or the Unisys Attorneys have reviewed (a)
the Registration Statement, (b) the Indentures (the "Indentures") pursuant to
which the Debt Securities are to be issued, (c) the Company's Certificate of
Incorporation and (d) the Company's By-laws. In addition, I or the Unisys
Attorneys have examined such corporate records of the Company, such
certificates of public officials, officers and representatives of the Company
and such other certificates and instruments and have made such investigations
of law as I or they have deemed appropriate for purposes of giving the
opinions hereinafter expressed.
With respect to the opinions set forth below, I have assumed that, when the
Securities are issued, sold and delivered by the Company, neither the terms of
the Securities at the time of such issuance, sale and delivery nor any change
in any law or regulation relating to or affecting the Company at the time of
such issuance, sale and delivery will affect the legality, validity or binding
nature of the Securities. I have also assumed that the Securities will be
issued, sold and delivered in a manner consistent with the Delaware General
Corporation Law and the Company's Certificate of Incorporation and By-laws as
in effect at the time of such issuance, sale and delivery. With respect to
the opinions set forth in paragraphs 2 and 3 below, I have assumed that the
Company will have a sufficient number of shares of Common Stock and Preferred
Stock, respectively, authorized for issuance and that the consideration
received by the Company upon issuance of the shares of Common Stock and
Preferred Stock, respectively, will be at least equal to the par value of such
shares.
Based upon the foregoing and subject to the limitations set forth below, I am
of the opinion that:
1. When (a) the terms of the Debt Securities have been established in
accordance with the applicable Indenture and the resolutions of the
Company's Board of Directors authorizing the creation, issuance and sale of
the Debt Securities, (b) the Debt Securities have been executed and
authenticated in accordance with the terms of the applicable Indenture and
(c) the Debt Securities have been issued, sold and delivered as described
in the Registration Statement and any prospectus supplement relating
thereto (and, in the case of Debt Securities issuable upon conversion or
exercise of other Securities, in accordance with the terms of such Security
or the instrument governing such Security providing for such conversion or
exercise), and in accordance with the terms of the applicable Indenture,
the Debt Securities will be legal, valid and binding obligations of the
Company, enforceable in accordance with their terms except as may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of creditors'
rights and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2. The Common Stock when (a) authorized or reserved for issuance by, or in
accordance with, appropriate resolutions of the Company's Board of
Directors and (b) issued, sold and delivered as described in the
Registration Statement and any prospectus supplement relating thereto (and,
in the case of shares of Common Stock issuable upon conversion or exercise
of other Securities, in accordance with the terms of such Security or the
instrument governing such Security providing for such conversion or
exercise) will be validly issued, fully paid and non-assessable.
3. When (a) the number and terms of any particular series of Preferred Stock
have been established in accordance with the resolutions of the Company's
Board of Directors authorizing the issuance and sale of Preferred Stock,
(b) a certificate of designations conforming to the Delaware General
Corporation Law regarding such series has been filed with the Secretary of
State of the State of Delaware and (c) the Preferred Stock of such series
has been issued, sold and delivered as described in the Registration
Statement and any prospectus supplement relating thereto (and, in the case
of shares of Preferred Stock issuable upon conversion or exercise of other
Securities, in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion or exercise), and in
accordance with the terms of such series, the Preferred Stock of such
series will be validly issued, fully paid and non-assessable.
4. When (a) the terms of the Warrants have been established in accordance with
the resolutions of the Company's Board of Directors authorizing the
creation, issuance and sale of the Warrants, (b) the Warrant Agreement or
Agreements relating to the Warrants have been duly authorized and validly
executed and delivered by the Company and the Warrant Agent appointed by
the Company, (c) the Warrants or certificates representing the Warrants
have been executed and countersigned in accordance with the applicable
Warrant Agreement and (d) the Warrants have been issued, sold and delivered
as described in the Registration Statement, any prospectus supplement
relating thereto and the applicable Warrant Agreement, the Warrants will be
validly issued.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to me under the caption "Legal
Matters" in the prospectus contained therein. In giving such consent, I do
not thereby admit that I am an expert with respect to any part of the
Registration Statement, including this exhibit, within the meaning of the term
"expert" as used in the Act or the rules and regulations issued thereunder.
I am admitted to practice in the State of New York. This opinion is limited
to the laws of that State, the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
Very truly yours,
Harold S. Barron
cg
Exhibit 12.2
UNISYS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
($ in millions)
Years Ended December 31
1997 1996 1995
1994 1993
---- ---- ---- -
- --- ----
Income (loss) from continuing
operations before income taxes $(758.8) $ 93.7 $(781.1) $
14.6 $370.9
Add (deduct) share of loss (income)
of associated companies 5.9 (4.9) 5.0
16.6 14.5
------- ------- ------- --
- ---- ------
Subtotal (752.9) 88.8 (776.1)
31.2 385.4
------- ------- ------- --
- ---- ------
Interest expense (net of interest
capitalized) 233.2 249.7 202.1
203.7 241.7
Amortization of debt issuance
expenses 6.7 6.3 5.1
6.2 6.6
Portion of rental expense
representative of interest 56.2 59.2 65.3
65.0 70.5
------- ------- ------- --
- ---- ------
Total Fixed Charges 296.1 315.2 272.5
274.9 318.8
------- ------- ------- --
- ---- ------
Earnings (loss) from continuing
operations before income taxes,
fixed charges and preferred
stock dividend requirements $(456.8) $404.0 $(503.6)
$306.1 $704.2
======= ======= =======
====== ======
Amounts charged to income $ 296.1 $315.2 $ 272.5
$274.9 $318.8
Preferred stock dividend requirements 170.9 185.8 185.1
184.8 187.1
-------- ------- ------- --
- ---- ------
Total fixed charges and preferred
stock dividend requirements $ 467.0 $501.0 $ 457.6
$459.7 $505.9
======== ======= =======
====== ======
Ratio of earnings to fixed charges
and preferred stock dividends * * *
* 1.39
======== ======= =======
====== ======
* Earnings for the years ended December 31, 1997, 1996, 1995, and 1994 were
inadequate to cover fixed charges and preferred stock dividends by
$923.8 million, $97.0 million, $961.2 million, and $153.6 million,
respectively.
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statements (Form S-3 for the registration of $385,293,412 of
Securities, Post-Effective Amendment No. 1 to Form S-3 No. 333-20373, and
Post-Effective Amendment No. 1 to Form S-3 No. 33-25715) and related combined
prospectus of Unisys Corporation for $700,000,000 of Securities and to the
incorporation by reference therein of our reports dated January 15, 1998
(except for the fourth paragraph of Note 9 as to which the date is
February 5, 1998), with respect to the consolidated financial statements of
Unisys Corporation incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1997 and the related financial statement
schedule included therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
May 5, 1998
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of a trustee Pursuant to
Section 305(b) ____
BANK OF MONTREAL TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-4941093
(Jurisdiction of incorporation or organization (I.R.S. employer
if not a US national bank) identification no.)
88 Pine Street, Wall Street Plaza
New York, New York 10005
(Address of principal executive offices) (Zip code)
Mark F. McLaughlin
Bank of Montreal Trust Company
88 Pine Street , Wall Street Plaza, New York, NY 10005
(212) 701-7602
(Name, address and telephone number of agent for service)
--------------------------------------
UNISYS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 38-0387840
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Township Line and Union Meeting Roads
P.O. Box 500
Blue Bell, PA 19424
(Address of principal executive offices)
--------------------------------------
Senior Debentures
(Title of the indenture securities)
===============================================================================
- 2 -
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York
33 Liberty Street, New York NY 10045
State of New York Banking Department
2 Rector Street, New York, NY 10006
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such affiliation.
The obligor is not an affiliate of the trustee.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
1. Copy of Organization Certificate of Bank of Montreal Trust Company to
transact business and exercise corporate trust powers; incorporated herein
by reference as Exhibit "A" filed with Form T-1 Statement, Registration No.
33-46118.
2. Copy of the existing By-Laws of Bank of Montreal Trust Company;
incorporated herein by reference as Exhibit "B" filed with Form T-1
Statement, Registration No. 33-80928.
3. The consent of the Trustee required by Section 321(b) of the Act;
incorporated herein by reference as Exhibit "C" with Form T-1
Statement, Registration No. 33-46118.
4. A copy of the latest report of condition of Bank of Montreal Trust
Company published pursuant to law or the requirements of its
supervising or examining authority, attached hereto as Exhibit "D".
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Bank of Montreal Trust Company, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 27th day
of April, 1998.
BANK OF MONTREAL TRUST COMPANY
By /s/ Therese Gaballah
--------------------
Therese Gaballah
Vice President
EXHIBIT D
STATEMENT OF CONDITION
BANK OF MONTREAL TRUST COMPANY
NEW YORK
ASSETS
Due From Banks $ 528,979
----------
Investment Securities:
State & Municipal 17,085,290
Other 100
----------
Total Securities 17,085,390
Loans and Advances
Federal Funds Sold 4,400,000
Overdrafts 10,000
---------
Total Loans and Advances 4,410,000
---------
Investment in Harris Trust, NY 8,509,571
Premises and Equipment 288,644
Other Assets 2,965,076
----------
11,763,291
----------
TOTAL ASSETS $33,787,660
===========
LIABILITIES
Trust Deposits $ 8,680,937
Other Liabilities 824,388
---------
TOTAL LIABILITIES 9,505,325
---------
CAPITAL ACCOUNTS
Capital Stock, Authorized, Issued and
Fully Paid - 10,000 Shares of $100 Each 1,000,000
Surplus 4,222,188
Retained Earnings 19,048,815
Equity - Municipal Gain/Loss 11,332
----------
TOTAL CAPITAL ACCOUNTS 24,282,335
-----------
TOTAL LIABILITIES
AND CAPITAL ACCOUNTS $33,787,660
===========
I, Mark F. McLaughlin, Vice President, of the above-named bank do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
Mark F. McLaughlin
December 31, 1997
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declared that it has been examined by us,
and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Sanjiv Tandon
Kevin O. Healey
Steven R. Rothbloom
