-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WDJbHktBWk6AdIn4FpHOOP0IYs/71REqwwfPSwhDFOT9DF6W7O9ea4CdcV8koREF Ys5/yVdY5AzHWi9BEwXGCg== 0000950115-98-000405.txt : 19980311 0000950115-98-000405.hdr.sgml : 19980311 ACCESSION NUMBER: 0000950115-98-000405 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19980310 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BETZDEARBORN INC CENTRAL INDEX KEY: 0000011884 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 231503731 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-47703 FILM NUMBER: 98561918 BUSINESS ADDRESS: STREET 1: 4636 SOMERTON RD CITY: TREVOSE STATE: PA ZIP: 19053 BUSINESS PHONE: 2153553300 MAIL ADDRESS: STREET 1: 4636 SOMERTON ROAD CITY: TREVOSE STATE: PA ZIP: 19053 FORMER COMPANY: FORMER CONFORMED NAME: BETZ LABORATORIES INC DATE OF NAME CHANGE: 19920703 S-3 1 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 1998 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 BETZDEARBORN INC. (Exact name of Registrant as specified in its charter) Pennsylvania 23-1503731 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 4636 Somerton Road Trevose, Pennsylvania 19053-6783 (215) 355-3300 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) --------------------- Linda R. Hansen, Esquire Vice President, Secretary and General Counsel BetzDearborn Inc. 4636 Somerton Road Trevose, Pennsylvania 19053-6783 (215) 355-3300 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------- Please send copies of all communications to: George L. James III Robert M. Jones, Jr., Esq. Senior Vice President and Chief Financial Officer Drinker Biddle & Reath LLP BetzDearborn Inc. Philadelphia National Bank Building 4636 Somerton Road 1345 Chestnut Street Trevose, Pennsylvania 19053-6783 Philadelphia, Pennsylvania 19107-3496
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective depending upon market conditions and other factors. --------------------- If the only securities being registered on this Form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box: [ ] If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, 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
Title of Each Proposed Class of Securities Maximum Aggregate Amount of to be Registered Offering Price (1) Registration Fee - ------------------- ------------------ ---------------- Debt Securities(2) Common Stock, $.10 par value(2) Preferred Stock, $.10 par value(2)(3) Depositary Shares(3) Warrants(4) Total........................................ $400,000,000(5)(6) $118,000
(1) Estimated for the sole purpose of computing the registration fee pursuant to Rule 457(o). (2) Also includes, as applicable, such indeterminate amounts of Debt Securities or indeterminate number of shares of Preferred Stock or Common Stock as may be issued upon conversion of or exchange for any Debt Securities or Preferred Stock that provide for conversion or exchange into other securities. (3) Also includes or represents, as applicable, such indeterminate number of Depositary Shares to be evidenced by Depositary Receipts as may be issued pursuant to a Deposit Agreement. In the event the Company elects to offer to the public fractional interests in shares of the Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons purchasing such fractional interests and shares of Preferred Stock will be issued to the Depositary under the Deposit Agreement. No separate consideration will be received for the Depositary Shares. (4) Warrants may be sold separately or with Debt Securities, Preferred Stock or Common Stock. (5) Such amount represents the total of the aggregate principal amount of the Debt Securities issued at their principal amount, the aggregate issue price (rather than the principal amount) of any Debt Securities issued at an original issue discount, the aggregate liquidation preference of any Preferred Stock, the aggregate amount used when computing the registration fee pursuant to Rule 457(c) for any Common Stock, the aggregate issue price of any Warrants and the aggregate exercise price of any Warrants. (6) No separate consideration will be received for the Debt Securities, Preferred Stock, Common Stock or the Depositary Shares issuable upon conversion of or in exchange for Debt Securities or Preferred Stock. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. 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 MARCH ___, 1998 PROSPECTUS [LOGO] U.S. $400,000,000 BETZDEARBORN INC. DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES COMMON STOCK, AND WARRANTS -------------------- BetzDearborn Inc. (the "Company") may from time to time offer together or separately, in one or more supplements to this Prospectus (each, a "Prospectus Supplement"), (i) its debt securities (the "Debt Securities"), which, unless otherwise specified in a Prospectus Supplement, will be unsecured and will rank equally with all other unsecured and unsubordinated indebtedness of the Company, (ii) shares of its common stock, par value $.10 per share (the "Common Stock"), (iii) shares of its preferred stock, par value $.10 per share (the "Preferred Stock"), which may be issued in the form of Depositary Shares (as defined herein) evidenced by Depositary Receipts (as defined herein) and (iv) warrants to purchase such securities of the Company as shall be designated by the Company at the time of the offering (the "Warrants"), in amounts, at prices and on terms to be determined at the time of offering. The Debt Securities, Preferred Stock, Common Stock, Depositary Shares and Warrants are collectively called the "Securities." The Securities offered pursuant to this Prospectus may be issued in one or more series or issuances and will be limited to U.S. $400,000,000 aggregate public offering price (or, in the case of Debt Securities, its equivalent (based on the applicable exchange rate at the time of issue) if issued with principal amounts denominated in one or more foreign currencies, or such greater amount if issued at an original issue discount, as shall result in aggregate proceeds of U.S. $400,000,000 to the Company). Certain specific terms of the particular Securities in respect of which this Prospectus is being delivered are set forth in the accompanying Prospectus Supplement including, where applicable, (i) in the case of Debt Securities, the specific designation, the aggregate principal amount, the denomination, the maturity, the premium, if any, the interest rate (which may be fixed, floating or adjustable rate), if any, the time and method of calculating payment of interest, if any, the place or places where principal of, premium, if any, and interest, if any, on such Debt Securities will be payable, the currency in which principal of, premium, if any, and interest, if any, on such Debt Securities will be payable, any terms of redemption at the option of the Company or of the holder, any sinking fund provisions, the terms for any conversion or exchange into other Securities, the initial public offering price and other specific terms, (ii) in the case of Common Stock, the aggregate number of shares offered and the initial public offering price, (iii) in the case of Preferred Stock, the specific designation, the stated value and liquidation preference per share, the aggregate number of shares offered, any dividend rights (including the method of calculating payment of dividends), the place or places where dividends will be payable, any redemption, voting and other rights, any terms for conversion or exchange into other Securities or property, the initial public offering price and other specific terms and any other terms not set forth herein, (iv) in the case of Depositary Shares, the fractional share of Preferred Stock represented by each such Depositary Share, (v) in the case of Warrants, the duration, purchase price, exercise price and detachability of such Warrants and a description of the securities for which each Warrant is exercisable and (vi) the methods of distribution and other specific terms of the Securities, as applicable. If so specified in the applicable Prospectus Supplement, Debt Securities of a series may be issued in whole or in part in the form of one or more temporary or permanent global securities ("Global Securities"). The Company's Common Stock is listed on the New York Stock Exchange under the trading symbol "BTL." Any Common Stock sold pursuant to a Prospectus Supplement will be listed on such exchange, subject to official notice of issuance. -------------------- 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 Company may sell the Securities to or through underwriters, through dealers or agents, directly to purchasers or through a combination of such methods. See "Plan of Distribution." The accompanying Prospectus Supplement sets forth the names of any underwriters, dealers or agents, if any, involved in the sale of the Securities in respect of which this Prospectus is being delivered and any applicable fee, commission or discount arrangements with them. The accompanying Prospectus Supplement states whether the Securities will be listed on any national securities exchange. If the Securities are not listed on any national securities exchange, there can be no assurance that there will be a secondary market for any such Securities. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. -------------------- The date of this Prospectus is March 10, 1998 No dealer, salesperson or other person has been authorized to give any information or make any representations, other than those contained or incorporated by reference in this Prospectus and the accompanying Prospectus Supplement, and if given or made such information or representations must not be relied upon as having been authorized by the Company or any agent, underwriter or dealer. This Prospectus and the accompanying Prospectus Supplement do not constitute an offer of any securities other than those to which they relate, or an offer to sell or a solicitation of an offer to buy those securities to which they relate in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The delivery of this Prospectus and/or the accompanying Prospectus Supplement at any time does not imply that the information herein or therein is correct as of any time subsequent to its date. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission also maintains a site on the world wide web at http://www.sec.gov that contains reports, proxy and information statements and other information filed electronically by the Company. In addition, such reports, proxy statements and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, 7th Floor, New York, New York 10005. This Prospectus constitutes a part of a registration statement on Form S-3 (together with all amendments and exhibits, the "Registration Statement") filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus and any accompanying Prospectus Supplement do not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and the Securities offered hereby, reference is made to the Registration Statement and the exhibits and the financial statements, notes and schedules filed as a part thereof or incorporated by reference therein, which may be inspected at the public reference facilities of the Commission, at the addresses set forth above. Statements made in this Prospectus and any Prospectus Supplement concerning the contents of any documents referred to herein are not necessarily complete, and in each instance are qualified in all respects by reference to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. This Prospectus contains certain statements of a forward-looking nature relating to future events or the future financial performance of the Company. Prospective investors are cautioned that such statements are only predictions and that actual events or results could differ materially. In evaluating such statements, prospective investors should specifically consider any factors identified in this Prospectus and in the documents incorporated by reference herein. The logo for "BetzDearborn" appearing on the front cover page of this Prospectus is a trademark of BetzDearborn Inc. -2- INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission pursuant to the Exchange Act are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997; (2) The description of the Company's Common Stock contained in its Registration Statement on Form 8-A dated November 23, 1992; and (3) The Company's Current Reports on Form 8-K, filed with the Commission on February 17, 1998 and March 9, 1998; All documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the termination of the offering of the Securities shall hereby be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and any accompanying Prospectus Supplement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein or in any accompanying Prospectus Supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus or any accompanying Prospectus Supplement. The Company will provide without charge to each person, including any beneficial owner, to whom this Prospectus and any accompanying Prospectus Supplement is delivered, on written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference into this Prospectus and any accompanying Prospectus Supplement (without exhibits to such documents other than exhibits specifically incorporated by reference into such documents). Requests for such copies should be directed to, Attention: Investor Relations, telephone 215-953-2355, BetzDearborn Inc., 4636 Somerton Road, Trevose, Pennsylvania 19053-6783. -3- THE COMPANY The Company's business is the engineered chemical treatment of water, wastewater and process systems operating in a wide variety of industrial and commercial applications, with particular emphasis on the chemical, petroleum refining, paper, automotive, electric utility and steel industries. The Company produces and sells a wide range of specialty chemical products, and provides the technical expertise necessary to utilize these products effectively. The Company also develops chemical treatment programs for use in boilers, cooling systems, heat exchangers, paper and petroleum process streams and both influent and effluent systems. The Company monitors changing water, process and plant operating conditions so as to prescribe the appropriate chemical treatment programs to solve problems such as corrosion, scale, deposit formation and a variety of process problems. The Company was incorporated in Pennsylvania in 1957 and has its principal executive offices at 4636 Somerton Road, Trevose, Pennsylvania 19053-6783, telephone number (215) 355-3300. USE OF PROCEEDS Except as set forth in a Prospectus Supplement, the Company intends to use the net proceeds from the sale of the Securities for general corporate purposes, which may include, without limitation, working capital, capital expenditures, investments in or loans to subsidiaries, the repayment or refinancing of debt, including outstanding commercial paper, future business acquisitions, the satisfaction of other obligations or for such other purposes as may be specified in the applicable Prospectus Supplement. -4- RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The following table sets forth the Company's consolidated ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends for the years indicated.
Year Ended December 31, ---------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- Ratio of earnings to fixed charges................... 3.7 4.1 19.2 22.8 20.4 Ratio of earnings to combined fixed charges and preferred stock dividends................................... 3.2 3.3 8.4 9.4 8.1
For purposes of calculating the ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of income from continuing operations before accounting changes, income taxes, minority interest and fixed charges. For purposes of calculating both ratios, fixed charges include interest expense, capitalized interest, amortization of debt expense and that portion of rental expense deemed to be representative of an interest factor. DESCRIPTION OF DEBT SECURITIES Except as provided in any accompanying Prospectus Supplement, the following description sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement and the extent, if any, to which such general provisions may apply to the Debt Securities will be described in the Prospectus Supplement relating to such Debt Securities. The Debt Securities will be issued under the Indenture, dated as of ________, 1998 (the "Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee"). The following statements are subject to the detailed provisions of the Indenture, a copy of which is incorporated by reference into the Registration Statement. Whenever particular provisions of the Indenture or terms defined therein are referred to herein or in the Prospectus Supplement, such provisions or terms are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by such reference. References in italics are to the Indenture. Capitalized terms used but not otherwise defined herein have the meaning given to them in the Indenture. GENERAL The Indenture does not limit the amount of debt, either secured or unsecured, that may be issued by the Company under the Indenture or otherwise. Debt Securities may be issued from time to time and will be offered to the public on terms determined by market conditions at the time of sale. The Debt Securities may be issued in one or more series with the same or various maturities, at par or a premium or with an original issue discount. -5- Reference is made to the Prospectus Supplement for the following terms of the Debt Securities offered thereby: (i) the designation of and any limit upon the aggregate principal amount of such Debt Securities; (ii) the percentage of their principal amount at which such Debt Securities will be issued; (iii) the date or dates on which such Debt Securities will mature (which may be fixed or extendible); (iv) the currency of denomination of such Debt Securities, which may be in Dollars or in any Foreign Currency or composite currency, including ECUs; (v) the designation of the currency or currencies in which payment of the principal of, and premium, if any, and the interest on, such Debt Securities will be made and whether, in the event the currency of denomination is other than Dollars but the payment of principal thereof, and premium, if any, and interest thereon is payable in Dollars, payment of the principal of, and premium, if any, or the interest on such Debt Securities, at the election of a Holder thereof, may instead be payable in the currency of denomination; (vi) the rate or rates (which may be fixed or floating) per annum, if any, at which such Debt Securities will bear interest or the method of determining such rate or rates; (vii) the times at which any such interest will be payable and the record dates with respect thereto; (viii) any index used to determine the amounts of payments of principal of, and premium, if any, and interest on such Debt Securities; (ix) any redemption or repayment terms or any other specific terms associated with such Debt Securities; and (x) the extent to which, if at all, the Debt Securities may be secured or subordinated to other obligations of the Company. One or more series of Debt Securities may be sold at a substantial discount from their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market. One or more series of Debt Securities may be floating rate debt securities. Federal income tax consequences and special considerations applicable to any such series will be described in the Prospectus Supplement relating thereto. Any series of Debt Securities may be issued in whole or in part in book-entry form. The Prospectus Supplement relating to a series of Debt Securities which may be issued in book-entry form will specify the terms and procedures relating thereto. Unless otherwise indicated in the Prospectus Supplement, Debt Securities, to the extent evidenced in registered form will be issued in denominations of $1,000 and integral multiples thereof. The Prospectus Supplement relating to a series of Debt Securities denominated in a composite currency or any Foreign Currency or Currencies will specify the denominations thereof. Unless otherwise indicated in the Prospectus Supplement relating thereto, principal, and premium, if any, and interest are to be payable at the principal corporate trust office of the Trustee in New York, New York or at any paying agency maintained at the time by the Company for such purpose. At the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as it appears on the register for Debt Securities. Debt Securities may be presented for registration of transfer or exchange at such office of the Trustee or at such other location or locations as may be established pursuant to the Indenture, subject to the limitations provided in the Indenture, without any service charge but, the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more Global Securities that will be deposited with, or on behalf of, a depositary (the "Depositary") identified in the Prospectus Supplement relating to such series. Global Securities may be issued only in fully registered form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of such Depositary or by a nominee of such Depositary to a successor Depositary or any nominee of such successor. The specific terms of the depositary arrangement with respect to a series of Debt Securities will be described in the Prospectus Supplement relating to such series. The Company anticipates that the following provisions will generally apply to depositary arrangements. Upon the issuance of a Global Security, the Depositary for such Global Security or its nominee will credit, on its book-entry registration and transfer system, the respective principal amounts of the individual Debt Securities represented by such Global Security to the accounts of persons that have accounts with such Depositary. Such accounts shall be designated by the dealers, underwriters or agents with respect to such Debt Securities or by the Company if such Debt Securities are offered and sold directly by the Company. Ownership of beneficial interests in a Global Security will be limited to persons that have accounts with the applicable Depositary ("participants") or persons that may hold interests through participants. Ownership of beneficial interests in such Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Security. So long as the Depositary for a Global Security, or its nominee, is the registered owner of such Global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such Global Security for all purposes under the Indenture. Except as provided herein, owners of beneficial interests in a Global Security will not be entitled to have any of the individual Debt Securities of the series represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of any such Debt Securities of such series in definitive form and will not be -6- considered the owners or holders thereof under the Indenture governing such Debt Securities. Payments of principal, any premium on, and any interest on, individual Debt Securities represented by a Global Security registered in the name of a Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Debt Securities. Neither the Company, the Trustee for such Debt Securities, any paying agent, nor 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 of the Global Security 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 a series of Debt Securities or its nominee, upon receipt of any payment of principal, premium or interest in respect of a permanent Global Security representing any of such Debt Securities, immediately will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security for such Debt Securities as shown on the records of such Depositary or its nominee. The Company also expects that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name." Such payments will be the responsibility of such participants. If the Depositary for a series of Debt Securities is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue individual Debt Securities of such series in exchange for the Global Security representing such series of Debt Securities. In addition, the Company may at any time and in its sole discretion, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities, determine not to have any Debt Securities of a series represented by one or more Global Securities and, in such event, will issue individual Debt Securities of such series in exchange for the Global Security or Securities representing such series of 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 Security representing Debt Securities of such series may, on terms acceptable to the Company, the Trustee and the Depositary for such Global Security, receive individual Debt Securities of such series in exchange for such beneficial interests, subject to any limitations described in the Prospectus Supplement relating to such Debt Securities. -7- In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery of individual Debt Securities of the series represented by such Global Security equal in principal amount to such beneficial interest and to have such Debt Securities registered in its name. Individual Debt Securities of such series so issued will be issued in denominations, unless otherwise specified by the Company, of $1,000 and integral multiples thereof. LIMITATION ON LIENS The Company agrees that neither it nor any Restricted Subsidiary will issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed ("Debt") secured by a mortgage, lien, pledge or other encumbrance ("Mortgages") upon any Restricted Property without effectively providing that the Debt Securities (together with, if the Company so determines, any other indebtedness or obligation then existing or thereafter created ranking equally with the Debt Securities) shall be secured equally and ratably with (or prior to) such Debt so long as such Debt shall be so secured, except that this restriction will not apply to: (a) Mortgages affecting property of a corporation existing at the time it becomes a Subsidiary or at the time it is merged into or consolidated with the Company or a Subsidiary; (b) Mortgages on property existing at the time of acquisition thereof or incurred to secure payment of the purchase price thereof or to secure Debt incurred prior to, at the -8- time of, or within 180 days after the acquisition for the purpose of financing all or part of the purchase price; (c) Mortgages on any property to secure all or part of the cost of improvement or construction thereon or Debt incurred to provide funds for such purpose in a principal amount not exceeding the cost of such improvements or construction; (d) Mortgages which secure only indebtedness owing by a Subsidiary to the Company or a Subsidiary; (e) certain Mortgage-to-government entities, including pollution control or industrial revenue bond; (f) Mortgages required by any contract or statute in order to permit the Company or a Subsidiary to perform any contract or subcontract made by it with or at the request of the United States of America, any state or any department, agency or instrumentality or political subdivision of either; and (g) subject to certain conditions, any extension, renewal or replacement of any Mortgage referred to in the foregoing clauses (a) through (f). Notwithstanding the foregoing, the Company and any one or more Restricted Subsidiaries may, without securing the Debt Securities, issue, assume or guarantee Debt which would otherwise be subject to the foregoing restrictions in an aggregate principal amount which, together with all other such Debt of the Company and its Restricted Subsidiaries which would otherwise be subject to the foregoing restrictions (not including Debt permitted to be secured under clauses (a) to (g) inclusive above) and the aggregate Value of Sale and Lease-Back Transactions (other than those in connection with which the Company has voluntarily retired Funded Debt) does not at any one time exceed 10% of the Consolidated Net Tangible Assets of the Company and its consolidated Subsidiaries. (Sections 5.03, 5.04 and 5.05). The Company agrees that if, upon any consolidation or merger of the Company with or into any other corporation, or upon any sale or conveyance of all or substantially all of its property to any other corporation, any of the Restricted Property of the Company or of any Restricted Subsidiary would thereupon become subject to any mortgage, lien or pledge, the Company will first secure the Debt Securities equally and ratably with any other obligations of the Company or any Restricted Subsidiary then entitled thereto, by a direct lien on all such property prior to all liens other than any theretofore existing thereon. (Section 12.02) The term "Restricted Property" means any of the Company's or a Subsidiary's manufacturing and processing plants for the production of specialty chemical products (other than such determined by the Board of Directors not to be a plant of material importance to the Company and its subsidiaries taken as a whole), and any shares of capital stock or indebtedness of a Restricted Subsidiary. The term "Restricted Subsidiary" means any Subsidiary which owns Restricted Property unless substantially all such Subsidiary's physical properties are located outside the continental United States. The term "Subsidiary" means any corporation at least a majority of the outstanding securities of which having ordinary voting power to elect a majority of the board of directors of such corporation is at the time owned or controlled directly or indirectly by the Company or one or more Subsidiaries or by the Company and one or more Subsidiaries. The term "Consolidated Net Tangible Assets" means the total amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (ii) all goodwill, trade names, trademarks, patents, purchased technology, unamortized debt discount and other like intangible assets, all as set forth on the most recent quarterly balance sheet of the Company and its consolidated Subsidiaries and computed in accordance with generally accepted accounting principles. (Article One) -9- EVENT RISK The Indenture does not contain any limitation on the aggregate amount of Debt that may be assumed by the Company and does not offer any credit or event risk protection to holders of Debt Securities in the event that the Company engages in or is the subject of a highly leveraged action. The Indenture provisions described under "Limitation on Liens," however, may have the effect of inhibiting the Company from engaging in, or preventing the Company from being the subject of, some types of highly leveraged transactions. LIMITATION ON SALE AND LEASE-BACK The Company agrees that neither it nor any Restricted Subsidiary will enter into any Sale and Lease-Back Transaction with respect to any Restricted Property with any person (other than the Company or a Subsidiary) unless either (a) the Company or such Restricted Subsidiary would be entitled, pursuant to the above provisions, to incur Debt in a principal amount equal to or exceeding the Value of such Sale and Lease-Back Transaction secured by a Mortgage on the property to be leased without equally and ratably securing the Debt Securities, or (b) the Company, during or immediately after the expiration of four months after the effective date of such transaction, applies to the voluntary retirement of its Funded Debt an amount equal to the greater of: (1) the net proceeds of the sale of the property leased in such transaction or (2) the fair value in the opinion of the Board of Directors of the leased property at the time such transaction was entered into (subject to credits for certain voluntary retirements of Funded Debt, including the Debt Securities). (Sections 5.04 and 5.05) MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting the Company and the Trustee, without the consent of any Holders of any series of Securities at the time outstanding, to modify the Indenture to (i) evidence the succession of another corporation to the Company and its assumption of the covenants and obligations of the Company set forth in the Indenture; (ii) expand the covenants of the Company for the protection of the Holders of any series of Securities and to make the occurrence of a default in any such additional covenants an Event of Default; (iii) convey, assign or mortgage to the Trustee any property or assets that the Company may desire or be required to convey, assign or mortgage in accordance with certain provisions of the Indenture; (iv) establish the form or terms of Securities of any series; (v) cure any ambiguity and correct any inconsistencies among provisions in the Indenture or any supplemental indenture; (vi) provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Securities of one or more series; (vii) provide for the documentation necessary for the issuance of Securities outside the United States; and (viii) conform the Indenture to the provisions of the Trust Indenture Act of 1939, as then in effect. (Section 11.01) The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than 50% in principal amount of the Debt Securities of each series affected by the modification or amendment at the time outstanding, to modify the Indenture or any supplemental indenture or the rights of the Holders of the Debt Securities; provided that no such modification may without the consent of the Holder of each outstanding Debt Security thereby affected (a) extend the fixed maturity of any Debt Security, or reduce the rate of interest of, or any premium payable upon the redemption of, any Debt Security, or extend the time of payment of principal or interest thereon or reduce the principal amount thereof or the time during which a premium is payable thereon, or change -10- the currency in which the Debt Security or any premium or interest thereon is payable, or reduce the amount of principal of an original issue discount security that would be due and payable upon acceleration or provable upon bankruptcy, change the place of payment where, or the currency or currencies or currency unit or units in which, any Debt Security or any premium or interest thereon is payable, impair the right to institute suit for the enforcement of any such payment on or after the maturity thereof, affect adversely the terms, if any, of conversion of any Debt Security into stock or other securities of the Company or of any other corporation, change any obligation of the Company, with respect to outstanding Debt Securities, to maintain an office or agency in the places and for the purposes specified in the Indenture, (b) reduce the aforesaid percentage of Debt Securities, the consent of the Holders of which is required for any such modification, or the consent of the Holders of which is required for any waiver of certain provisions of or defaults under the Indenture or (c) modify the provisions heretofore described in this paragraph, except to increase any percentage described above or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holders of all outstanding Debt Securities of such series so affected. (Section 11.02) EVENTS OF DEFAULT The Indenture defines an Event of Default with respect to a particular series of Debt Securities as being any one of the following events and such other event as may be established for the Debt Securities of such series: (a) default for 30 days in any payment of interest on such series; (b) default in any payment of principal, and premium, if any, on such series as and when the same shall become due and payable, either at Maturity, upon redemption, by declaration or otherwise; (c) default for 30 days in the payment of any sinking fund installment when due; (d) default for 90 days after appropriate notice in performance of any other covenant in the Indenture applicable to that series; (e) the acceleration of the maturity of indebtedness of the Company or its wholly-owned subsidiaries for borrowed money, other than the Debt Securities, provided that the amount due and payable by reason of such acceleration equals $25,000,000 or more; or (f) certain events of bankruptcy, insolvency or reorganization. No event of Default with respect to a particular series of Debt Securities issued under the Indenture necessarily constitutes an Event of Default with respect to any other series of Debt Securities issued thereunder. In case an Event of Default shall occur and be continuing with respect to a particular series of Debt Securities, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Debt Securities then outstanding of the series (or, in the case of defaults under (d) or (e), of the Debt Securities of all series) may declare the principal or, in the case of Debt Securities issued with original issue discount, the amount specified in the terms thereof, of such series (or of all outstanding Debt Securities, as the case may be) to be due and payable. Any Event of Default with respect to a particular series of Debt Securities may be waived by the Holders of a majority in aggregate principal amount of the outstanding Debt Securities of such series (or of the outstanding Debt Securities of all series, in the case of defaults under (d) or (e), except in each case a failure to pay principal, or premium, if any, or interest on such Debt Securities. (Section 7.01) If any Debt Securities are denominated in a coin or currency other than that of the United States, then for purposes of determining whether the Holders of the requisite principal amount of Debt Securities have taken any action as described above, the principal amount of such Debt Securities shall be deemed to be that amount of United States dollars that could be obtained for such principal amount on the basis of the spot rate of exchange into United States dollars for the currency in which such Debt Securities are denominated as of the date the taking of such action by the Holders of such requisite principal amount is evidenced to the Trustee as provided in the Indenture. -11- If any Debt Securities are original issue discount securities, then for the purposes of determining whether the Holders of the requisite principal amount of Debt Securities have taken any action described above, the principal amount of such Debt Securities shall be deemed to be the portion of such principal amount that would be due and payable at the time of the taking of such action upon a declaration of acceleration of maturity thereof. The Indenture requires the Company to file annually with the Trustee an Officers' Certificate stating whether or not the signers thereof have knowledge of any default of the Company under the Indenture and, if so, specifying each such default of which the signers have knowledge and the nature thereof. (Section 5.08) Subject to the provisions of the Indenture relating to the duties of the Trustee in case an Event of Default shall occur and be continuing, the Indenture provides that the Trustee shall be under no obligation to exercise any of its rights or powers of the Indenture at the request, order or direction of the Holders of the Debt Securities unless such Holders shall have offered to the Trustee reasonable indemnity. (Sections 7.04, 8.01 and 8.02) Subject to such provisions for indemnification and certain other rights of the Trustee, the Indenture provides that the Holders of a majority in principal amount of the outstanding Debt Securities of the particular series affected 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. (Sections 7.07 and 8.02) LIMITATION ON CONSOLIDATION, MERGER AND TRANSFER OF ASSETS The Company may not consolidate with or merge into any corporation, or convey or transfer its assets substantially as an entirety to any person, unless (a) the successor corporation or transferee is a U.S. corporation that assumes the Company's obligations on the Debt Securities and covenants under the Indenture, and certain other conditions are met, except that no such assumption will be required in any case where the Company transfers all or substantially all its assets located in the United States to one or more wholly owned Subsidiaries organized under the laws of the United States or any political subdivision thereof; (b) the Company or the successor corporation, as the case may be, is not, immediately after the merger or consolidation, or transfer of assets, in default in the performance of any covenant or condition of the Company under the Indenture; and (c) the Trustee, before executing any supplemental indenture as required, receives, and will be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel, as conclusive evidence that such consolidation, merger, conveyance or transfer complies with the foregoing provisions relating to such transaction. In the case of any such consolidation, merger, conveyance or transfer, the successor corporation will succeed to and be substituted for the Company with the same effect as if it had been named in the Indenture as the Company. (Article Twelve) To the extent any such assets constitute Restricted Property, the Subsidiary to which they were transferred would be a Restricted Subsidiary. See "Limitation on Liens." DEFEASANCE If so specified in the Prospectus Supplement with respect to Debt Securities of any series, the Company, at its option, (i) will be discharged after 91 days from any and all obligations in respect of the Debt Securities of such series (except for certain obligations to register the transfer or exchange of Debt Securities of such series, replace stolen, lost or mutilated Debt Securities of such series, maintain paying agencies, and hold moneys for payment in trust) or (ii) will not be subject to provisions of the Indenture described above under "Limitation on Liens," "Limitation on Sale and Lease-Back" and "Limitation on -12- Consolidation, Merger and Transfer of Assets" with respect to the Debt Securities of such series, in each case if the Company deposits irrevocably with the Trustee in trust, money in the currency in which the Debt Securities are payable or, in the case of Debt Securities denominated in Dollars, U.S. Government Obligations, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of or premium, if any, and interest on the Debt Securities of such series on the dates such payments are due in accordance with the terms of such Debt Securities. In case any Debt Securities of a series are to be redeemed prior to their Stated Maturity, the Company must have given the Trustee such irrevocable notices and instructions as are required for redemption pursuant to the terms of the Debt Securities of such series. To exercise any such defeasance option, the Company is required to deliver to the Trustee an Opinion of Counsel to the effect that (a) if the Debt Securities of such series are then listed on the New York Stock Exchange, such Debt Securities would not be delisted as a result of the exercise of such option and (b) the deposit and related defeasance would not cause the Holders of such series of Debt Securities to recognize income, gain or loss for United States Federal income tax purposes and that the holders of such series will be subject to United States Federal income tax in the same amounts, in the same manner and at the same times as would have been the case if such option had not been exercised. (Sections 14.01, 14.02 and 14.03) CONCERNING THE TRUSTEE The Bank of New York is the Trustee under the Indenture. The Trustee currently serves as a lender in one of the Company's existing credit facilities and may extend credit to the Company and its Subsidiaries in the future. DESCRIPTION OF CAPITAL STOCK AND DEPOSITARY SHARES AUTHORIZED AND OUTSTANDING CAPITAL STOCK Pursuant to the Restated Articles of Incorporation of the Company, the authorized capital stock of the Company is 91,000,000 shares, consisting of: (a) 1,000,000 shares of Preferred Stock, par value $.10 per share (the "Preferred Stock"), 500,000 shares of which have been designated as Series A ESOP Convertible Preferred Stock ("Series A Preferred Stock"); and (b) 90,000,000 shares of Common Stock, par value $.10 per share (the "Common Stock"). As of February 28, 1998, the Company had outstanding 29,594,943 shares of Common Stock and 474,400 shares of Series A Preferred Stock. At February 28, 1998, there were a total of 8,485,775 shares of Common Stock available for issuance (i) pursuant to the Company's various option, incentive, stock purchase and other benefit plans and (ii) upon conversion of the Series A Preferred Stock. The Company intends to seek shareholder approval at its 1998 annual meeting of shareholders to increase the total number of shares of authorized Common Stock to 250,000,000. No holder of any class of the Company's capital stock is entitled to preemptive rights. -13- In general, the classes of authorized capital stock are afforded preferences with respect to dividends and liquidation rights in the order listed above. The descriptions set forth below do not purport to be complete and are qualified in their entirety by reference to (i) the Restated Articles of Incorporation and, in the case of the Series A Preferred Stock, the Company's Statement Affecting Class or Series of Shares (the "Statement Affecting Class") and (ii) the Bylaws of the Company as currently in effect (the "Bylaws"). COMMON STOCK Subject to the preferential rights of the Series A Preferred Stock and any preferential rights of any other Preferred Stock created by the Board of Directors, each outstanding share of Common Stock is entitled to such dividends as the Board of Directors may declare from time to time out of funds legally available therefor. Except as hereinafter described, holders of both Common Stock and Preferred Stock (including the Series A Preferred Stock) are entitled to one vote for each share of Common Stock or Preferred Stock (including the Series A Preferred Stock), as applicable, but do not have any right to cumulate votes in the election of directors. If, however, dividend arrearages on the Preferred Stock accumulate in amounts specified in the Restated Articles of Incorporation, holders of the Preferred Stock have the right to elect a specified number of directors, voting as a class, to the extent specified in the Restated Articles of Incorporation. In the event of liquidation, dissolution or winding-up of the Company, holders of Common Stock will be entitled to receive on a pro rata basis any assets remaining after provision for payment of creditors and after payment of liquidation preferences to holders of the Preferred Stock (including the Series A Preferred Stock, holders of which are entitled to a liquidating distribution of $200 per share plus all accumulated and unpaid dividends thereon to the date fixed for such distribution). The Common Stock is listed on the New York Stock Exchange, under the symbol "BTL." The Common Stock Transfer Agent and Registrar is American Stock Transfer and Trust Company, New York, New York. PREFERRED STOCK Preferred Stock Subject to Issuance The Board of Directors of the Company is empowered, without approval of the shareholders, to cause the Preferred Stock to be issued in one or more series, and to determine the numbers of shares of each series and the rights, preferences and limitations of each series. The specific matters that may be determined by the Board of Directors include the dividend rights, redemption rights, liquidation preferences, if any, conversion and exchange rights, retirement and sinking fund provisions and other rights, qualifications, limitations and restrictions of any wholly unissued series of Preferred Stock (or of the entire class of Preferred Stock if none of such shares have been issued), the number of shares constituting such series and the terms and conditions of the issue thereof. The rights, preferences and limitations of any series of Preferred Stock that the Board of Directors chooses to establish will be set forth in an amendment to the Company's Restated Articles of Incorporation. The particular terms of any series of Preferred Stock offered hereby will be set forth in the Prospectus Supplement relating thereto. The description of the terms of a particular series of Preferred Stock that will be set forth in the applicable Prospectus Supplement does not purport to be complete and is qualified in its entirety by reference to the amendment to the Company's Restated Articles of Incorporation designating the terms of such series. -14- Outstanding Series A Preferred Stock Each outstanding share of the Series A Preferred Stock is entitled to cumulative, quarterly cash dividends when, as and if declared by the Board of Directors, equal to $16.00 per share per annum, and no dividends may be paid on any other class or series of stock that ranks on a parity with the Series A Preferred Stock as to dividends unless dividends on the Series A Preferred Stock are paid concurrently or prior thereto. The voting rights and liquidation preference of the Series A Preferred Stock are as described above in "Common Stock." Transfer of shares of Series A Preferred Stock may be made only to (i) any successor to the trustee of the Company's Employee Stock Ownership Plan (the "Plan") or (ii) any person, a transfer to whom would afford the Company a federal income tax deduction under section 404(k) of the Internal Revenue Code of 1986 ("Code") in the amount of the dividends paid to such person (each, a "Permitted Transferee"). Holders of the Series A Preferred Stock may convert any or all of their shares, at their option, into shares of Common Stock, at a conversion rate of 5.52 shares of Common Stock for each share of Series A Preferred Stock, subject to adjustment in the case of certain dilutive events. The Company has the right to issue cash in lieu of fractional shares. Upon conversion, the Company must issue, together with each share of Common Stock, one right to purchase Common Stock pursuant to a Rights Agreement between the Company and American Stock Transfer & Trust Company. See "Rights Agreement." Shares of Series A Preferred Stock are subject to automatic conversion in the event of transfer to any person other than a Permitted Transferee. The Series A Preferred Stock is redeemable, in whole or in part, at the option of the Company for the amount payable upon liquidation. The Series A Preferred Stock is also redeemable at the option of the holder when and to the extent necessary for such holder to (i) provide for distributions required to be made to participants under the Plan, (ii) make any payments of principal, interest or premium due and payable under any indebtedness incurred by the holder for the benefit of the Plan or (iii) meet the diversification requirements of section 404(a)(28) of the Code. The Company may pay the redemption price in cash or, except for a redemption pursuant to clause (iii), in shares of Common Stock, or a combination thereof; when the Company pays in shares, it must issue, with each such share, one right to purchase Common Stock pursuant to the Rights Agreement. In the event of a merger or similar business combination in which the Company's Common Stock is exchanged solely for, or converted into, "qualified employer securities" as defined in the Statement Affecting Class, the Series A Preferred Stock will either (i) become preferred stock of the resulting entity (with the same rights and preferences that it had before the transaction) or (ii) be converted into or exchanged for the securities or cash receivable by a holder of the number of shares of Common Stock into which the shares of Series A Preferred Stock were convertible immediately prior to the transaction. A similar provision for conversion applies to the Series A Preferred Stock in the event of a merger or similar combination in which the Company's Common Stock is exchanged for, or converted into, cash or securities that are not "qualified employer securities." If the Company enters into an agreement providing for the latter type of merger or combination, the holders of the Series A Preferred Stock may elect to redeem their shares. DEPOSITARY SHARES General -15- The Company may, at its option, elect to offer receipts for fractional interests ("Depositary Shares") in Preferred Stock, rather than full shares of Preferred Stock. In such event, receipts ("Depositary Receipts") for Depositary Shares, each of which will represent a fraction (to be set forth in the Prospectus Supplement relating to a particular series of Preferred Stock) of a share of a particular series of Preferred Stock, will be issued as described below. The shares of any series of Preferred Stock represented by Depositary Shares will be deposited under a Deposit Agreement (the "Deposit Agreement") between the Company and a U.S. bank or trust company having a combined capital and surplus of at least $50,000,000, to be named by the Company in a Prospectus Supplement (the "Depositary"). Subject to the terms of the proposed Deposit Agreement, each owner of a Depositary Share will be entitled, in proportion to the applicable fraction of a share of Preferred Stock represented by such Depositary Share, to all the rights and preferences of the Preferred Stock represented thereby (including dividend, voting, redemption, subscription and liquidation rights). The following summary of certain provisions of the proposed Deposit Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the definitive, executed Deposit Agreement, including the definitions therein of certain terms, each of which shall be incorporated herein and in the Prospectus Supplement by reference. Copies of the forms of definitive, executed Deposit Agreement and Depositary Receipt will be filed as exhibits to the Registration Statement of which this Prospectus is a part, and the following summary of the proposed terms and conditions of the Deposit Agreement and Deposit Receipt is qualified in its entirety by reference to such exhibits. Dividends and Other Distributions The Depositary will distribute all cash dividends or other cash distributions received in respect of the Preferred Stock to the record holders of Depositary Receipts relating to such Preferred Stock in proportion to the numbers of such Depositary Shares owned by such holders on the relevant record date, which will be the same date as the record date fixed by the Company for the Preferred Stock. In the event of a distribution other than in cash, the Depositary will distribute property received by it to the record holders of Depositary Receipts in an equitable manner, unless the Depositary determines that it is not feasible to make such distribution, in which case the Depositary may sell such property and distribute the net proceeds from such sale to such holders. The amount distributed in any of the foregoing cases may be reduced by any amounts required to be withheld by the Company or the Depositary on account of taxes. Withdrawal of Preferred Stock Upon surrender of Depositary Receipts at a designated office of the Depositary, the owner of the Depositary Shares evidenced thereby will be entitled to delivery at such office of certificates evidencing Preferred Stock (but only in whole shares of Preferred Stock) represented by such Depositary Shares. If the Depositary Receipts delivered by the holder evidence a number of Depositary Shares in excess of the number of whole shares of Preferred Stock to be withdrawn, the Depositary will deliver to such holder at the same time a new Depositary Receipt evidencing such excess number of Depositary Shares. -16- Redemption of Depositary Shares If a series of Preferred Stock represented by Depositary Shares is subject to redemption, the Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from the redemption, in whole or in part, of such series of Preferred Stock held by the Depositary. The redemption price per Depositary Share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock held by the Depositary, the Depositary will redeem as of the same redemption date the number of Depositary Shares representing shares of Preferred Stock so redeemed. If fewer than all the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot, pro rata or by any other equitable method as may be determined by the Depositary. Voting the Preferred Stock Upon receipt of notice of any meeting at which the holders of the Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Shares relating to such Preferred Stock. Each record holder of such Depositary Shares on the record date (which will be the same date as the record date for the Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of the Preferred Stock represented by such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the amount of the Preferred Stock represented by such Depositary Shares in accordance with such instructions, and the Company will agree to take all reasonable action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting shares of the Preferred Stock to the extent it does not receive specific instructions from the holder of Depositary Shares representing such Preferred Stock. Amendment and Termination of the Deposit Agreement The form of Depositary Receipt evidencing the Depositary Shares and any provision of the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. However, any amendment which materially and adversely alters the rights of the holders of Depositary Shares will not be effective unless such amendment has been approved by the holders of at least a majority of the Depositary Shares then outstanding. No such amendment may impair the right, subject to the terms of the Deposit Agreement, of any owner of any Depositary Shares to surrender the Depositary Receipts evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the Preferred Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. The Deposit Agreement may be terminated only if (i) all outstanding Depositary Shares have been redeemed or (ii) there has been a final distribution in respect of the Preferred Stock, including in connection with any liquidation, dissolution or winding up of the Company, and such distribution has been distributed to the holders of Depositary Receipts. Resignation and Removal of Depositary The Depositary may resign at any time by delivering to the Company notice of its election to do so, and the Company may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor Depositary and its acceptance of such appointments. Such successor Depositary must be appointed within 60 days after delivery of the notice of resignation or -17- removal and must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000. Charges of Depositary The Company will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company will pay charges of the Depositary in connection with the initial deposit of the Preferred Stock and issuance of Depositary Receipts, all withdrawals of shares of Preferred Stock by owners of the Depositary Shares and any redemption of the Preferred Stock. Holders of Depositary Receipts will pay other transfer and other taxes and governmental charges and such other charges as they are expressly provided in the Deposit Agreement to be for their accounts. Miscellaneous The Depositary will forward to holders of Depositary Receipts all reports and communications from the Company which are delivered to the Depositary and which the Company is required or otherwise determines to furnish to the holders of the Preferred Stock. The obligations of the Company and the Depositary under the Deposit Agreement will be limited to performance in good faith of the duties thereunder. Neither the Company nor the Depositary will be obligated to prosecute or defend any legal proceeding in respect of any Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished. The Company and the Depositary may rely upon written advice of counsel or accountants, or upon information provided by persons presenting Preferred Stock for deposit, holders of Depositary Receipts or other persons believed to be competent and on documents believed to be genuine. PROVISIONS OF RESTATED ARTICLES OF INCORPORATION AND BYLAWS Certain provisions of the Restated Articles of Incorporation and Bylaws of the Company may delay or make more difficult unsolicited acquisitions or changes of control of the Company. It is believed that such provisions will enable the Company to develop its business in a manner that will foster its long-term growth by affording the Board of Directors greater control in a takeover context and thus greater flexibility to negotiate with a potential acquiror. Such provisions may also have the effect of making it more difficult for third parties to cause the replacement of the current management of the Company without the concurrence of the Board of Directors. These provisions include, among others, (i) the availability of capital stock for issuance from time to time at the discretion of the Board of Directors (see "Authorized and Outstanding Capital Stock"), (ii) classified Board of Directors, (iii) the ability of the Board of Directors to increase the size of the board and to appoint directors to fill newly created directorships, (iv) supermajority voting requirements and (v) business combinations with interested shareholders. The descriptions set forth herein of such provisions do not purport to be complete and are qualified in their entirety by reference to the Restated Articles of Incorporation and the Bylaws, which have been filed as exhibits to the Registration Statement of which this Prospectus is a part and incorporated herein by reference. -18- Classified Board of Directors The Company's Bylaws provide that the Board of Directors be divided into three classes as nearly equal in number as possible, whose three-year terms of office expire at different times in annual succession. A classified board makes it more difficult for shareholders to change a majority of the directors. Number of Directors; Filling of Vacancies; Removal of Directors The Bylaws of the Company limit the total number of directors to 13 and provide that newly-created directorships resulting from any increase in the authorized number of directors or any vacancy shall be filled by a vote of a majority of directors then in office. Accordingly, the Board of Directors of the Company may be able to prevent any shareholder from obtaining majority representation on the Board of Directors by increasing the size of the board and filling the newly created directorships with its own nominees. The entire Board of Directors, any class thereof or any individual director may be removed by a vote of shareholders only for cause, and new directors may be elected at the same meeting. The Board of Directors may remove any director who (i) has been judicially declared of unsound mind, (ii) has been convicted of an offense punishable by imprisonment for more than one year or (iii) does not accept the office within 60 days of notice of his or her selection. Supermajority Voting Requirements The Company's Bylaws require that any proposal to change the number, classification or term of office of directors must receive the affirmative vote of at least 75% of all shares outstanding as of the record date for the meeting at which such proposal is to be voted on. In addition, any proposal relating to the foregoing 75% share approval requirement must receive the affirmative vote of at least 75% of all shares outstanding. The Company's Restated Articles of Incorporation require, in regard to the vote of the shareholders for (i) approval of any plan of merger or consolidation, (ii) the sale of all or substantially all the Company's assets or (iii) the adoption of any amendment to the section of the Articles of Incorporation setting forth this requirement, not only the approval of the holders of a majority of the outstanding Common Stock and Preferred Stock (voting together), but also the approval of at least two-thirds of the shares (regardless of class) represented in person or by proxy at the particular meeting. Business Combinations with Interested Shareholders The Company's Restated Articles of Incorporation generally prohibit business combinations with interested shareholders unless certain terms and conditions are satisfied, which terms and conditions are substantially similar to those set forth in the "business combination" provisions of the Pennsylvania Business Corporation Law described below. See "Description of Capital Stock -- Pennsylvania Business Corporation Law." -19- PENNSYLVANIA BUSINESS CORPORATION LAW Certain provisions of the Pennsylvania Business Corporation Law of 1988 (the "PBCL") may have the effect of deterring, delaying or preventing an attempt by a third party to acquire control of the Company. The "control transactions" provisions in Sections 2541 through 2548 of the PBCL require that any person or group that acquires at least 20% of the voting power of a corporation (a "Controlling Person or Group") give notice of such acquisition to the other shareholders of the corporation. The corporation's shareholders are entitled to demand payment of the fair value of their shares from the Controlling Person or Group. The definition of "Controlling Person or Group" excludes from calculation of the 20% requirement, inter alia, (i) shares held continuously since January 1983, (ii) shares acquired by gift, inheritance or bequest from a person who had acquired the shares prior to January 1983, (iii) shares acquired pursuant to a stock split, dividend, reclassification or similar recapitalization, (iv) shares acquired by an underwriter pursuant to a firm commitment underwriting registered under the Securities Act of 1933, as amended, and (v) shares held by agents, brokers, nominees, trustees and other similar record holders for beneficial owners either who do not possess 20% of the voting power of the corporation or who otherwise satisfy one of the foregoing exceptions. The "business combination" provisions in Sections 2551 through 2556 of the PBCL prohibit the Company from engaging in any business combination (which is defined broadly to include mergers, consolidations, share exchanges, divisions and sales or other dispositions of assets having a value in excess of 10% or more of the assets, market value or earning power or net income of the corporation) with an "interested shareholder" or an affiliate thereof unless (A) the business combination or the acquisition of shares in which a person becomes an interested shareholder is approved by the Board of Directors before the shareholder becomes an "interested shareholder," (B) the interested shareholder owns 80% of the corporation's outstanding voting shares and the business combination satisfies certain "fair price" criteria and is approved by the holders of a majority of the remaining shares, (C) the business combination is approved by all of the holders of the Company's Common Stock, (D) the holders of a majority of the voting shares (excluding those held by the interested shareholder) approve the business combination at a meeting held no earlier than five years after the interested shareholder's share acquisition date or (E) the business combination is approved at a shareholders' meeting called for such purpose no earlier than five years after the interested shareholder's share acquisition date and satisfies certain "fair price" criteria. An "interested shareholder" is any beneficial owner of 20% or more of the voting shares of a corporation, or an affiliate of the corporation who was at any time within the five-year period prior to the date in question a beneficial owner of 20% or more of the voting shares of the corporation, but does not include shareholders who were interested shareholders prior to the date of the adoption of these provisions by the Company. The "control share" provisions in Sections 2561 through 2568 of the PBCL deprive any of a corporation's "Control shares" of their voting rights unless the holders of a majority of the voting power of the corporation vote to restore such rights in two separate votes as follows: (i) all voting shares of the corporation and (ii) all shares of the corporation other than those held by the Company's executive officers or directors who are also officers, certain employee stock plans and the person acquiring the Control shares. Control shares are those voting shares the acquisition of voting power over which would confer on the person acquiring them, when added to all voting power of the person over other voting shares of the corporation, the ability to cast in an election of directors, for the first time, a percentage of the voting power of the corporation that falls within any of the following ranges: (i) at least 20% but -20- less than 33 1/3%; (ii) at least 33 1/3% but less than 50%; or (iii) at least 50%. In calculating such percentage, the following shares are excluded: (i) voting shares beneficially owned continuously since January 1988; (ii) voting shares beneficially owned that were acquired by gift, inheritance or bequest from a person who had beneficially owned the shares prior to January 1988; and (iii) shares acquired pursuant to a stock split, dividend or other similar distribution. The "disgorgement" provisions in Sections 2571 through 2576 of the PBCL permit a corporation to recover from "controlling persons" any profit realized by such controlling persons from the disposition of any equity security of the corporation if the equity securities (i) were sold within 18 months after such persons became "controlling persons" and (ii) had been acquired by the controlling persons within 24 months prior, or 18 months subsequent to, the date on which the controlling persons became "controlling persons." A controlling person is anyone who has, offers to acquire, or publicly discloses the intention to acquire, 20% of the voting power of the corporation, or anyone who publicly discloses the intention to acquire control of a corporation through any means. The provisions provide a safe harbor for shareholders who would be deemed "controlling persons" by reason of voting or giving a proxy or consent, under certain circumstances evidencing the lack of any intention on the part of such shareholders to change or influence control of the corporation. In addition to the above, the PBCL expressly permits directors of a corporation to consider the interests of constituencies other than shareholders, such as employees, suppliers, customers and the community, in discharging their duties, provides that they need not, in considering the best interests of the corporation, consider any particular constituency's interests (including the interests of shareholders) as the dominant or controlling interest, and provides that directors do not violate their fiduciary duty by relying on shareholders' rights plans or other anti-takeover provisions of the PBCL. RIGHTS AGREEMENT On September 8, 1988, the Board of Directors of the Company declared a dividend distribution of one Right for each outstanding share of the Common Stock (the "Common Shares") to shareholders of record at the close of business on September 19, 1988. Each Right entitles the registered holder to purchase from the Company one unit consisting of one Common Share or a combination of securities and assets of equivalent value (a "Unit"), at a Purchase Price of $150.00 per Unit, subject to adjustment. The Purchase Price may be paid in cash or, if the Company permits, by the delivery of Common Shares having a value at the time of exercise equal to the Purchase Price. The description and terms of the Rights are set forth in a Rights Agreement, dated as of January 1, 1992 (the "Rights Agreement") between the Company and American Stock Transfer & Trust Company, as Rights Agent. Initially, ownership of the Rights will be evidenced by the Common Share certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. The Rights will separate from the Common Shares and a Distribution Date will occur upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 20% or more of the outstanding Common Shares (the "Stock Acquisition Date"), or (ii) such date as may be determined by the Board of Directors of the Company, which shall not be later than 65 days following the commencement of a tender offer or exchange offer that, if consummated, would result in a person or group beneficially owning 20% or more of the outstanding Common Shares. Until the Distribution Date, (i) the Rights will be evidenced by the Common Share certificates and will be transferred with and only with such Common Share certificates, (ii) new Common Share certificates issued after September 19, 1988 will contain a notation incorporating -21- the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Shares outstanding will also constitute the transfer of the Rights associated with the Common Shares represented by such certificates. The Rights are exercisable, in whole or in part, at any time after the Distribution Date and will expire at the close of business on September 19, 1998, unless earlier redeemed by the Company as described below (the "Expiration Date"). As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, and except in connection with (i) the exercise of employee stock options or stock appreciation rights, or the exercise, conversion or exchange of securities outstanding on September 19, 1988 or thereafter issued by the Company or (ii) any other benefit plan for employees or directors, Common Shares issued after September 19, 1988 and prior to the earlier of the Distribution Date or the Expiration Date will be issued with Rights. In the event that (i) the Company is the surviving corporation in a merger with an Acquiring Person and its Common Shares remain outstanding, (ii) a Person becomes the beneficial owner of 20% or more of the then outstanding Common Shares other than pursuant to (x) a tender offer or exchange offer, the price and other terms of which are fair to all shareholders, as determined by the Board of Directors taking into account all relevant factors, or (y) a merger in which the Company's Common Shares do not remain outstanding or a sale by the Company of assets or earning power aggregating more than 50% of the assets or earning power of the Company, (iii) an Acquiring Person engages in one or more "self-dealing" transactions as set forth in the Rights Agreement or (iv) during any time that there is an Acquiring Person, there occurs a reclassification of securities, a recapitalization of the Company or a merger of the Company with any of its subsidiaries, the effect of which is to increase by more than 1% the Common Shares beneficially owned by any Acquiring Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common Shares (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. In lieu of requiring payment of the Purchase Price upon exercise of the Rights following any such event, the Company may permit the holders simply to surrender the Rights, in which event they will be entitled to receive Common Shares (and other property, as the case may be), with a value of 50% of what could be purchased by payment of the full Purchase Price. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in clauses (i) - (iv) of this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person who was involved in the transaction giving rise to any such event will be null and void. If the Company does not have a sufficient number of authorized Common Shares, the Company is required to substitute value in the form of cash, property, or debt or equity securities, or a reduction of the Purchase Price, or any combination of the foregoing, in an aggregate amount equal to the value of the Common Shares that would otherwise be issuable (value for these purposes being determined after the occurrence of any of the events set forth in clauses (i) - (iv). Rights, however, are not exercisable following the occurrence of any of the events set forth above until such time as the Rights are no longer redeemable by the Company as set forth below. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination in which the Company is not the surviving corporation (other than a merger that is described in, or that follows a tender offer or exchange offer described in, the -22- preceding paragraph), (ii) any entity merges with or into the Company in a transaction in which the Company is the surviving corporation and the Common Shares of the Company are converted into or exchanged for securities of the other entity or (iii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights that previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, Common Shares of the acquiring company, the other party to the merger or the party receiving the greatest portion of the assets or earning power, as the case may be, having a value equal to two times the exercise price of the Right. Provision is made to permit surrender of the Rights in exchange for one-half of the value otherwise purchasable. The events set forth in this paragraph and in the preceding paragraph are referred to as the "Triggering Events." The Purchase Price payable upon exercise of the Rights is subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares, (ii) if holders of the Common Shares are granted certain rights or warrants to subscribe for Common Shares or for securities convertible into Common Shares at a price less than the current market price of the Common Shares, or (iii) upon the distribution to holders of the Common Shares of evidences of indebtedness, cash or assets (excluding regular quarterly dividends) or of certain subscription rights or warrants (other than those referred to in this paragraph). The number of Common Shares for which the Rights are exercisable are subject to adjustment in the event that any Person becomes an Acquiring Person. Notwithstanding the Purchase Price adjustments described above, and with certain other exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional Common Shares will be issued upon exercise of the Rights and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the last trading date prior to the date of exercise. At any time until the earlier of (i) 10 days following the Stock Acquisition Date or (ii) the expiration of the Rights Agreement on September 19, 1998, the Company may redeem all, but not less than all, of the Rights at a price of $.01 per Right. Under certain circumstances set forth in the Rights Agreement, the decision to redeem shall require the concurrence of a majority of the Continuing Directors. The Board of Directors may extend the ten-day redemption period so long as the Rights are still redeemable. Immediately upon the action of the Board of Directors ordering redemption of the Rights, with, where required, the concurrence of the Continuing Directors, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 redemption price. The term "Continuing Director" means any member of the Board of Directors of the Company who was a member of the Board prior to the date of the Rights Agreement, and any person who is subsequently elected to the Board if such person is recommended or approved by a majority of the Continuing Directors, but in either case shall not include an Acquiring Person, or an affiliate or associate of an Acquiring Person, or any representative of the foregoing entities. Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Shares (or other consideration) of the Company or for common shares of the acquiring company as set forth above. -23- Other than those provisions relating to the principal economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board (in certain circumstances, with the concurrence of the Continuing Directors) in order to cure any ambiguity, to make changes that do not adversely affect the interest of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire the Company without conditioning the offer 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 of the Company because (i) the Board of Directors (under certain circumstances, with the concurrence of the Continuing Directors) may, at its option, at any time prior to the close of business on the earlier of (a) the tenth day following the Stock Acquisition Date or (b) September 19, 1998, redeem all but not less than all of the then outstanding Rights at $.01 per Right, and (ii) in any event, the Rights Agreement does not apply to an offer which the Board of Directors determines provides fair value to all shareholders. The Board of Directors may, as discussed above, extend the ten-day redemption period so long as the Rights are still redeemable. The foregoing description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement. The Company plans to adopt a new Rights Agreement, which will become effective upon the expiration of the existing Rights Agreement in September 1998. Except for an increase of the Purchase Price payable upon exercise of the Rights to $250.00 per Unit, the new Rights Agreement will be similar in all material respects to the Company's existing Rights Agreement. DESCRIPTION OF WARRANTS The Company may issue Warrants, including Warrants to purchase Debt Securities ("Debt Warrants"), Preferred Stock, Common Stock or other of its securities. Warrants may be issued independently or together with any such securities of the Company and may be attached to or separate from such securities of the Company. The Warrants are to be issued under warrant agreements (each a "Warrant Agreement") to be entered into between the Company and a bank or trust company, as warrant agent (the "Warrant Agent"), all as shall be set forth in the Prospectus Supplement relating to Warrants being offered pursuant thereto. The description of the terms of the Warrants that is set forth below, and the description of the terms of the Warrants that will be set forth in the applicable Prospectus Supplement, do not purport to be complete and are qualified in their entirety by reference to the Warrant Agreement and warrant certificate relating to such Warrants. DEBT WARRANTS The applicable Prospectus Supplement will describe the terms of Debt Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants and the warrant certificates representing such Debt Warrants, including the following: (i) the specific designation of such Debt Warrants; (ii) the Debt Securities of the Company for which such Debt Warrants are exercisable; (iii) the aggregate number of such Debt Warrants; (iv) the principal amount of Debt Securities purchasable upon exercise of each Debt -24- Warrant, and the price or prices at which such Debt Warrants will be issued; (v) the procedures and conditions relating to the exercise of such Debt Warrants; (vi) the designation and terms of any related Debt Securities of the Company with which such Debt Warrants are issued, and the number of such Debt Warrants issued with each such Debt Security; (vii) the date, if any, on and after which such Debt Warrants and the related securities of the Company will be separately transferable; (viii) the date on which the right to exercise such Debt Warrants shall commence, and the date on which such right shall expire; (ix) the maximum or minimum number of such Debt Warrants which may be exercised at any time; (x) if applicable, a discussion of material United States Federal income tax considerations; (xi) the offering price of the Debt Warrants; (xii) the nature of any antidilution provisions applicable to the Debt Warrants; (xiii) any other terms of such Debt Warrants and terms, procedures and limitations relating to the exercise of such Debt Warrants; and (xiv) the terms of the securities of the Company purchasable upon exercise of such Debt Warrants. Prior to the exercise of their Debt Warrants, holders of Debt Warrants exercisable for Debt Securities will not have any of the rights of holders of the Debt Securities purchasable upon such exercise and will not be entitled to payments of principal of (or premium, if any) or interest, if any, on the Debt Securities purchasable upon such exercise. OTHER WARRANTS The Company may issue other Warrants. The applicable Prospectus Supplement will describe the following terms of any such other Warrants in respect of which this Prospectus is being delivered: (i) the title of such Warrants; (ii) the securities (which may include Preferred Stock or Common Stock) for which such Warrants are exercisable; (iii) the price or prices at which such Warrants will be issued; (iv) if applicable, the designation and terms of the Preferred Stock or Common Stock with which such Warrants are issued, and the number of such Warrants issued with each such share of Preferred Stock or Common Stock; (v) if applicable, the date on and after which such Warrants and the related Preferred Stock or Common Stock will be separately transferable; (vi) if applicable, a discussion of material United States Federal income tax considerations; (vii) the offering price of the Warrants; (viii) the nature of any antidilution provisions applicable to the Warrants; and (ix) any other terms of such Warrants, including terms, procedures and limitations relating to the exchange and exercise of such Warrants. The applicable Prospectus Supplement will also set forth (a) the amount of securities called for by such Warrants, and, if applicable, the amount of Warrants outstanding, and (b) information relating to provisions, if any, for a change in the exercise price or the expiration date of such Warrants and the kind, frequency and timing of any notice to be given. Prior to the exercise of their Warrants for shares of Preferred Stock or Common Stock, holders of such Warrants will not have any rights of holders of the Preferred Stock or Common Stock purchasable upon such exercise and will not be entitled to dividend payments, if any, or voting rights of the Preferred Stock or Common Stock purchasable upon such exercise. EXERCISE OF WARRANTS Each Warrant will entitle the holder thereof to purchase for cash or other consideration such principal amount or such number of securities of the Company at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the Prospectus Supplement relating to the Warrants offered thereby. Warrants may be exercised as set forth in the Prospectus Supplement relating to the Warrants offered thereby at any time up to the close of business on the expiration date set forth in such Prospectus Supplement. After the close of business on the expiration date (or such later expiration date as may be extended by the Company), unexercised Warrants will become void. -25- Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the Warrant Agent or any other office indicated in the applicable Prospectus Supplement, the Company will, as soon as practicable, forward the securities purchasable upon such exercise. If less than all of the Warrants represented by such warrant certificate are exercised, a new warrant certificate will be issued for the remaining Warrants. MODIFICATIONS The Debt Warrant Agreement and the terms of the Debt Warrants and the Debt Warrant Certificates may be amended by the Company and the Debt Warrant Agent, without the consent of the holders, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision therein or in any other manner which the Company may deem necessary or desirable and which will not adversely affect the interests of the holders of Debt Warrants in any material respect. -26- PLAN OF DISTRIBUTION The Company may sell any of the Securities being offered hereby in any one or more of the following ways from time to time: (i) to or through underwriters; (ii) through agents; (iii) through dealers; (iv) directly to purchasers; or (v) through a combination of such methods. The distribution of the Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Sales of Common Stock offered hereby may be effected from time to time in one or more transactions on the New York Stock Exchange or in negotiated transactions or a combination of such methods of sale, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at other negotiated prices. Offers to purchase Securities may be solicited by agents designated by the Company from time to time. Any such agent involved in the offer or sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the applicable Prospectus Supplement. Unless otherwise indicated in such Prospectus Supplement, any such agent will be acting on a reasonable best efforts basis for the period of its appointment. Any such agent may be deemed to be an underwriter, as that term is defined in the Securities Act, of the Securities so offered and sold. If Securities are sold by means of an underwritten offering, the Company will execute an underwriting agreement with an underwriter or underwriters at the time an agreement for such sale is reached, and the names of the specific managing underwriter or underwriters, as well as any other underwriters, the respective amounts underwritten and the terms of the transaction, including commissions, discounts and any other compensation of the underwriters and dealers, if any, will be set forth in the applicable Prospectus Supplement which will be used by the underwriters to make resales of the Securities in respect of which this Prospectus is being delivered to the public. If underwriters are utilized in the sale of any Securities in respect of which this Prospectus is being delivered, such Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined by the underwriters at the time of sale. Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more underwriters. If any underwriter or underwriters are utilized in the sale of the Securities, unless otherwise indicated in the applicable Prospectus Supplement, the underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters with respect to a sale of Securities will be obligated to purchase all such Offered Securities if any are purchased. If a dealer is utilized in the sale of the Securities in respect of which this Prospectus is delivered, the Company will sell such Securities to the dealer as principal. The dealer may then resell such Securities to the public at varying prices to be determined by such dealer at the time of resale, or, if so agreed, between such dealer and the Company, at a fixed offering price. Any such dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the Securities so offered and sold. The name of the dealer and the terms of the transaction will be set forth in the Prospectus Supplement relating thereto. -27- Offers to purchase Securities may be solicited directly by the Company and the sale thereof may be made by the Company directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the Prospectus Supplement relating thereto. Securities may also be offered and sold, if so indicated in the applicable Prospectus Supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms ("remarketing firms"), acting as principals for their own accounts or as agents for the Company. Any remarketing firm will be identified and the terms of its agreement, if any, with the Company and its compensation will be described in the applicable Prospectus Supplement. Remarketing firms may be deemed to be underwriters, as that term is defined in the Securities Act, in connection with the Securities remarketed thereby. If so indicated in the applicable Prospectus Supplement, the Company may authorize agents and underwriters to solicit offers by certain institutions to purchase Securities from the Company at the public offering price set forth in the applicable Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on the date or dates stated in the applicable Prospectus Supplement. Such delayed delivery contracts will be subject to any conditions set forth in the applicable Prospectus Supplement, which will set forth the commission payable for solicitation of such contracts. The underwriters and other persons soliciting such contracts will have no responsibility for the validity or performance of any such contracts. Agents, underwriters, dealers and remarketing firms may be entitled under relevant agreements with the Company to indemnification by the Company against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that such agents, underwriters, dealers and remarketing firms may be required to make in respect thereof. The terms and conditions of such indemnification will be described in the applicable Prospectus Supplement. Agents, underwriters, dealers and remarketing firms, and their affiliates, may be customers of, engage in transactions with, or perform services for, the Company and its subsidiaries in the ordinary course of business. Each series of Securities will be a new issue and, other than the Common Stock which is listed on the New York Stock Exchange, will have no established trading market. The Company may elect to list any series of Securities on an exchange and, in the case of the Common Stock, on any additional exchange, but, unless otherwise specified in the applicable Prospectus Supplement, the Company shall not be obligated to do so. Any underwriters to whom Securities are sold by the Company for public offering and sale may make a market in such Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. Therefore, no assurance can be given as to the liquidity of the trading market for any of the Securities. Any underwriter may engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Exchange Act. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the Securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the Underwriters to reclaim a selling concession from a syndicate member when the Securities originally sold by such syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the Securities to be higher than it would otherwise be in the absence of such transactions. These transactions, if commenced, may be discontinued at any time. -28- LEGAL MATTERS Unless otherwise specified in a Prospectus Supplement relating to particular Securities, the validity of the Securities offered hereby will be passed upon for the Company by Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania. Certain legal matters will be passed upon for any underwriters, dealers or agents, if any, by counsel named in the applicable Prospectus Supplement. EXPERTS The consolidated financial statements and schedule of BetzDearborn Inc. appearing in BetzDearborn Inc.'s Annual Report (Form 10-K) for the year ended December 31, 1997 and incorporated herein by reference have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements and schedule are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. -29- ================================================================================ No person is authorized in connection with any offering made hereby to give any information or to make any representation not contained herein and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or the Underwriters. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Securities offered hereby, nor does it constitute an offer to sell or a solicitation of an offer to buy any of the Securities offered hereby to any person in any jurisdiction in which it is unlawful to make such an offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any date subsequent to the date hereof. --------------------------- TABLE OF CONTENTS Page Available Information......................................................... Incorporation of Certain Documents by Reference............................... The Company................................................................... Use of Proceeds............................................................... Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends................................................... Description of Debt Securities................................................ Description of Capital Stock and Depositary Shares........................................................ Description of Warrants....................................................... Plan of Distribution.......................................................... Legal Matters................................................................. Experts....................................................................... --------------------------- $400,000,000 Debt Securities Common Stock Preferred Stock Depository Shares Warrants BETZDEARBORN INC. --------------------------- PROSPECTUS MARCH 10, 1998 ================================================================================ -30- PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION00,000,000 The following table sets forth the expenses (otherbthancunderwriting discounts and commissions) expected to be incurred in connection with the issuanceoandtdistribution of the securities being registered. Except for the Securities and Exchange Commission filingrfee,tall amounts shown are estimates: Registration Fee...................................................... $118,000 Rating Agency Fees.................................................... * Accounting Fees and Expenses.......................................... * Legal Fees and Expenses............................................... * Blue Sky Fees and Expenses (including legal fees)..................... * Printing and Engraving Expenses....................................... * Fees and Expenses of Trustees......................................... * NYSE Listing Fee...................................................... * Transfer Agent and Registrar.......................................... * Miscellaneous......................................................... * -------- Total............................................................ $ * ======== - ---------------------- * To be filed by amendment. II-1 ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS INDEMNIFICATION Third Party Actions. The Company's Bylaws provide that the Company shall indemnify any director or officer of the Company who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that he or she is or was an authorized representative of the Company, which means a director, officer, employee or agent of the Company, or a person who is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interest of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Derivative Actions. The Company's Bylaws also provide that the Company shall indemnify any director or officer of the Company who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he or she is or was an authorized representative of the Company, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the Company and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Company unless and only to the extent that a court shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to such expenses as the court shall deem proper. Employees and Agents. Authorized representatives of the Company who neither were nor are directors or officers of the Company, who have been successful on the merits or otherwise in defense of any action, suit or proceeding covered by the other indemnification provisions of the Bylaws or in defense of any claim, issue or matter therein, are entitled to indemnification by the Company against expenses (including attorneys' fees) actually and reasonably incurred by them in connection therewith. The Company also has discretion to indemnify such authorized representatives in any other circumstances to any extent if the Company would be required by the other indemnification provisions of the Bylaws to indemnify such authorized representatives in such circumstances to such extent if they were or had been directors or officers of the Company. Expense of Litigation. Expenses incurred by any director, officer, employee or agent in defending a civil or criminal action, suit or proceeding covered by the indemnification provisions of the Bylaws may be paid by the Company in advance of final disposition of such action, suit or proceeding II-2 upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined such person is not entitled to be indemnified by the Company. Bylaw Provisions Not Exclusive. The provisions of the Bylaws relating to indemnification and the liability of directors are not exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any other provision of the Bylaws, or any agreement, vote of shareholders, vote of directors or otherwise both as to acts or failure to act of such person in his or her official capacity and as to acts or failure to act in another capacity while holding office. The Company has the fullest authority to indemnify any such director, officer, employee or agent permitted under the laws of the Commonwealth of Pennsylvania; provided, however, that no indemnification is available in any case where the act or failure to act giving rise to the claim for indemnification is finally determined by a court to have constituted willful misconduct or recklessness. LIMITATION OF LIABILITY Pursuant to the Company's Bylaws, no director, including a director who is also an officer, of the Company shall be personally liable for monetary damages for any action taken, or any failure to take any action in his or her capacity as a director, including his or her duties as a member of any committee of the Board of Directors upon which he or she may serve unless: (i) the director has breached or failed to perform his or her duties as a director in good faith, in a manner he or she reasonably believed to be in the best interest of the Company and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances; and (ii) such breach or failure to perform his or her duties constitutes self-dealing, willful misconduct or recklessness. Absent a breach by a director of his or her duty as a fiduciary to the Company, lack of good faith, or self-dealing, the acts of or failure to act by a director in his or her capacity as a director shall be presumed to be in the best interest of the Company. In addition, the PBCL permits the Company to provide similar indemnification to employees and agents who are not directors or officers. The determination of whether an individual meets the applicable standard of conduct may be made by the disinterested directors, independent legal counsel or the shareholders. The PBCL also permits indemnification in connection with a proceeding brought by or in the name of the Company to procure a judgment in its favor. The Company maintains directors' and officers' liability insurance that covers the officers and directors of the Company. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act"), may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 ITEM 16. EXHIBITS The following Exhibits are filed as part of this Registration Statement:
Number Exhibit - ------ ------- 1.1 Form of Debt Security Underwriting Agreement** 1.2 Form of Equity Underwriting Agreement** 1.3 Form of Distribution Agreement** 3.1 Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3 to the Company's Report on Form 10-K for the fiscal year ended December 31, 1988) (SEC File No. 0-2085) 3.3 Bylaws of the Company (incorporated herein by reference to Exhibit 3 to the Company's Report on Form 10-K for the fiscal year ended December 31, 1988) (SEC File No. 0-2085) 4.1 Statement Affecting Class or Series of Shares of the Company, dated June 19, 1989 4.2 Specimen of Common Stock Certificate (incorporated herein by reference to Item 2 of the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission on November 23, 1992) (SEC File No. 1-11558) 4.3 Form of Preferred Stock Certificate** 4.4 Form of Indenture between the Company and The Bank of New York, as Trustee 4.5 Form of Debt Securities** 4.6 Form of Warrants** 4.7 Form of Warrant Agreement** 4.8 Form of Deposit Agreement** 4.9 Form of Depositary Receipt** 4.10 Rights Agreement, dated as of January 1, 1992, between the Company and American Stock Transfer and Trust Company (incorporated herein by reference to Exhibit 1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 15, 1988) (SEC File No. 0-2085) 4.11 Rights Agreement, dated as of February 11, 1998, between the Company and American Stock Transfer and Trust Company (incorporated herein by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997) 5 Opinion of Drinker Biddle & Reath LLP as to legality of the Securities* 12 Statement re: Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends 23.1 Consent of Ernst & Young LLP 23.3 Consent of Drinker Biddle & Reath LLP (contained in their opinion to be filed by amendment as Exhibit 5) 24 Powers of attorney (on signature page hereof) 25 Form T-1 Statement of Eligibility of The Bank of New York, as Trustee under the Indenture
- ---------------------- * To be filed by amendment. II-4 ** The form or forms of Debt Security Underwriting Agreement, Equity Underwriting Agreement, Distribution Agreement, Preferred Stock Certificate, Debt Securities, Warrant, Warrant Agreement, Deposit Agreement and Depositary Receipts with respect to each particular offering of Debt Securities, Common Stock, Preferred Stock, Warrants or Depositary Receipts, as applicable, will be filed as an exhibit to a Report on Form 8-K and incorporated herein by reference. ITEM 17. UNDERTAKINGS (a) Rule 415 Offering. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings incorporating Subsequent Exchange Act Documents by Reference. The undersigned registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the II-5 Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Request for Acceleration of Effective Date. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (i) Rule 430A. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Trevose, Commonwealth of Pennsylvania, on the 9th day of March, 1998. BETZDEARBORN INC. By: /s/ William R. Cook ----------------------------- William R. Cook Chairman, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints George L. James III and Linda R. Hansen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, to sign any or all amendments and supplements to this Registration Statement on Form S-3 (including but not limited to post-effective amendments and prospectus supplements) and any subsequent Registration Statements to be filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended (the "Securities Act") (or any successor thereto), for the purpose of registering under the Securities Act and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 9th day of March, 1998.
Signature Title - --------- ----- /s/ William R. Cook Chairman, President and Chief Executive - -------------------------------- Officer (Principal Executive Officer) William R. Cook II-7 /s/ George L. James III Senior Vice President and Chief Financial Officer - -------------------------------- (Principal Financial and Accounting Officer) George L. James III /s/ John W. Boyer, Jr. Director - -------------------------------- John W. Boyer, Jr. /s/ Patrick F. Brennan Director - -------------------------------- Patrick F. Brennan /s/ Carolyn S. Burger Director - -------------------------------- Carolyn S. Burger /s/ John G. Drosdick Director - -------------------------------- John G. Drosdick /s/ Alan R. Hirsig Director - -------------------------------- Alan R. Hirsig /s/ John F. McCaughan Director - -------------------------------- John F. McCaughan /s/ John Quarles Director - -------------------------------- John Quarles /s/ John A. H. Shober Director - -------------------------------- John A. H. Shober /s/ Geoffrey Stengel, Jr. Director - -------------------------------- Geoffrey Stengel, Jr. /s/ Robert L. Yohe Director - -------------------------------- Robert L. Yohe
II-8 EXHIBIT INDEX
Number Exhibit - ------ ------- 1.1 Form of Debt Security Underwriting Agreement** 1.2 Form of Equity Underwriting Agreement** 1.3 Form of Distribution Agreement** 3.1 Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3 to the Company's Report on Form 10-K for the fiscal year ended December 31, 1988) (SEC File No. 0-2085) 3.3 Bylaws of the Company (incorporated herein by reference to Exhibit 3 to the Company's Report on Form 10-K for the fiscal year ended December 31, 1988) (SEC File No. 0-2085) 4.1 Statement Affecting Class or Series of Shares of the Company, dated June 19, 1989 4.2 Specimen of Common Stock Certificate (incorporated herein by reference to Item 2 of the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission on November 23, 1992) (SEC File No. 1-11558) 4.3 Form of Preferred Stock Certificate** 4.4 Form of Indenture between the Company and The Bank of New York, as Trustee 4.5 Form of Debt Securities** 4.6 Form of Warrants** 4.7 Form of Warrant Agreement** 4.8 Form of Deposit Agreement** 4.9 Form of Depositary Receipt** 4.10 Rights Agreement, dated as of January 1, 1992, between the Company and American Stock Transfer and Trust Company (incorporated herein by reference to Exhibit 1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 15, 1988) (SEC File No. 0-2085) 4.11 Rights Agreement, dated as of February 11, 1998, between the Company and American Stock Transfer and Trust Company (incorporated herein by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997) 5 Opinion of Drinker Biddle & Reath LLP as to legality of the Securities* 12 Statement re: Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends 23.1 Consent of Ernst & Young LLP 23.3 Consent of Drinker Biddle & Reath LLP (contained in their opinion to be filed by amendment as Exhibit 5) 24 Powers of attorney (on signature page hereof) II-9 25 Form T-1 Statement of Eligibility of The Bank of New York, as Trustee under the Indenture
- ---------------------- * To be filed by amendment. ** The form or forms of Debt Security Underwriting Agreement, Equity Underwriting Agreement, Distribution Agreement, Preferred Stock Certificate, Debt Securities, Warrant, Warrant Agreement, Deposit Agreement and Depositary Receipts with respect to each particular offering of Debt Securities, Common Stock, Preferred Stock, Warrants or Depositary Receipts, as applicable, will be filed as an exhibit to a Report on Form 8-K and incorporated herein by reference. II-10 EX-4.1 2 STATEMENT AFFECTING CLASS OR SERIES OF SHARES STATEMENT AFFECTING CLASS OR SERIES OF SHARES OF BETZ LABORATORIES, INC. In compliance with the requirements of Section 602 of the Pennsylvania Business Corporation Law approved the 5th day of May, 1933, P.L. 364, as amended, the undersigned corporation hereby certifies under its corporate seal that: 1. The name of the Corporation is Betz Laboratories, Inc. 2. The resolution establishing and designating the new series Preferred Shares and fixing and determining the relative rights and preferences of such series, set forth in full is as follows: There is hereby established a series of Preferred Shares authorized by Article 5th of the Articles of Incorporation of the Corporation (such class of Preferred Shares being hereinafter called "Preferred Stock"). The voting rights, designation, preferences, qualifications, privileges, limitations, options, conversion rights and other special rights, if any, of such series not set forth in the Articles of Incorporation of the Corporation are as follows: Section 1. Designation and Amount; Special Purpose Restricted Transfer Issue. (A) The shares of such series shall be designated as "Series A ESOP Convertible Preferred Stock" ("Series A Preferred Stock") and the number of shares constituting such series shall be 500,030. (B) Shares of Series A Preferred Stock shall be issued originally to Mellon Bank, N.A., as trustee (the "Trustee") of the Employee Stock Ownership Plan of the Corporation (the "Plan"). The Series A Preferred Stock shall be transferable without consequence to any successor trustee under the Plan or to any other person if the Corporation would be allowed a deduction for federal income tax purposes, pursuant to Section 404(k) of the Internal Revenue Code of 1986 or any successor provision, in the full amount of the dividends paid on the Series A Preferred Stock to such other person. Such transferee is hereinafter referred to as a permitted transferee under the Plan. All references to the holder of shares of Series A Preferred Stock shall mean the Trustee or any permitted transferee under the Plan. In the event of any transfer of record ownership of shares of Series A Preferred Stock to any person other than a permitted transferee under the Plan, the shares of Series A Preferred Stock so transferred, upon such transfer and without any further action by the Corporation or the holder thereof, shall be automatically converted into Common Shares of the Corporation (hereinafter referred to as shares of Common Stock) on the terms otherwise provided for the conversion of shares of Series A Preferred Stock into shares of Common Stock pursuant to Section 5 hereof and no such transferee shall have any of the voting rights, preferences, qualifications, privileges, limitations, options, conversion -2- rights and other special rights, if any, ascribed to shares of Series A Preferred Stock hereunder but, rather, only the powers and rights pertaining to the Common Stock into which such shares of Series A Preferred Stock shall be so converted. In the event of such a conversion, the transferee of the shares of Series A Preferred Stock shall be treated for all purposes as the record holder of the shares of Common Stock into which such shares of Series A Preferred Stock have been automatically converted as of the date of such transfer and shall be deemed, for purposes of Section 5 hereof, to have surrendered the certificates for the Series A Preferred Stock so converted. Certificates representing shares of Series A Preferred Stock shall bear a legend to reflect the foregoing provisions. Notwithstanding the foregoing provisions of this paragraph (B) of Section 1, shares of Series A Preferred Stock (i) may be converted into shares of Common Stock as provided by Section 5 hereof and the shares of Common Stock issued upon such conversion may be transferred by the holder thereof as permitted by law (and the certificates therefor shall be so legended) and (ii) shall be redeemable by the Corporation upon the terms and conditions provided by Sections 6, 7 and 8 hereof. Section 2. Dividends and Distributions. (A) Subject to the provisions for adjustment hereinafter set forth, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available -3- therefor, cash dividends ("Preferred Dividends") in an amount per share equal to $16.00 per share per annum, and no more, payable quarterly in arrears, one-quarter on the 14th day of September, one-quarter on the 14th day of December, one-quarter on the 14th day of March and one-quarter on the 14th day of June of each year (each a "Dividend Payment Date") commencing on September 14, 1989, to holders of record at the start of business on such Dividend Payment Date. In the event that any Dividend Payment Date shall fall on any day other than a "Business Day" (as hereinafter defined), the dividend payment otherwise due on such Dividend Payment Date shall be paid on the Business Day immediately preceding such Dividend Payment Date to holders of record at the start of business on such Business Day. Preferred Dividends shall be cumulative on outstanding shares of Series A Preferred Stock from the date of issuance of such shares of Series A Preferred Stock. Preferred Dividends shall accrue on a daily basis whether or not the Corporation shall have the legal ability to declare dividends, but Preferred Dividends accrued after issuance on the shares of Series A Preferred Stock for any period less than a full quarterly period between Dividend Payment Dates shall be computed on the basis of a 360-day year of 30-day months. Accrued but unpaid Preferred Dividends shall cumulate as of the Dividend Payment Date on which they first become payable, but no interest shall accrue on accumulated but unpaid Preferred Dividends. -4- (B) So long as any shares of Series A Preferred Stock shall be outstanding, no dividend shall be declared or paid or set apart for payment on any other class or series of stock ranking on a parity with the Series A Preferred Stock as to dividends unless there shall also be or have been declared and paid on the Series A Preferred Stock dividends for all dividend payment periods of the Series A Preferred Stock ending on or before the dividend payment date of such parity stock, ratably in proportion to the respective amounts of dividends accumulated and unpaid through such dividend period on the Series A Preferred Stock and accumulated and unpaid on such parity stock through the dividend payment period on such parity stock next preceding such dividend payment date. In the event that full cumulative dividends on the Series A Preferred Stock have not been declared and paid or set apart for payment when due, the Corporation shall not declare or pay or set apart for payment any dividends or make any other distributions on, or make any payment on account of the purchase, redemption or other retirement of, any other class of stock or series thereof of the Corporation ranking, as to dividends or as to distributions in the event of a liquidation or dissolution of the Corporation, junior to the Series A Preferred Stock until full cumulative dividends on the Series A Preferred Stock shall have been paid or declared and set apart for payment; provided, however, that the foregoing shall not apply to (i) any dividend payable solely in any shares of any stock ranking, as to dividends and as to distributions in the event of a liquidation -5- or dissolution of the Corporation, junior to the Series A Preferred Stock or (ii) the acquisition of shares of any stock ranking, as to dividends or as to distributions in the event of a liquidation or dissolution of the Corporation, junior to the Series A Preferred Stock in exchange solely for shares of any other stock ranking, as to dividends and as to distributions in the event of a liquidation or dissolution of the Corporation, junior to the Series A Preferred Stock. Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the voting rights provided for in Article 5th - Part I, Section 5 of the Corporation's Articles of Incorporation. Section 4. Liquidation or Dissolution. (A) Upon any voluntary or involuntary liquidation or dissolution of the Corporation, the holders of Series A Preferred Stock shall be entitled to receive out of assets of the Corporation which remain after satisfaction in full of all valid claims of creditors of the Corporation and which are available for payment to stockholders, and subject to the rights of the holders of any stock of the Corporation ranking senior to or on a parity with the Series A Preferred Stock in respect of distributions upon liquidation or dissolution of the Corporation, before any amount shall be paid or distributed among the holders of Common Stock or any other shares ranking junior to the Series A Preferred Stock in respect of distributions upon liquidation or dissolution of the Corporation, liquidating distributions in the -6- amount of $200 per share, plus an amount equal to all accumulated and unpaid dividends thereon to the date fixed for distribution, and no more. If upon any liquidation or dissolution of the Corporation, the amounts payable with respect to the Series A Preferred Stock and any other stock ranking as to any such distribution on a parity with the Series A Preferred Stock are not paid in full, the holders of the Series A Preferred Stock and such other stock shall share ratably in any distribution of assets in proportion to the full respective preferential amounts to which they are entitled. (B) Neither the consolidation of the Corporation with or the merger of the Corporation with or into any other corporation or corporations, nor the consolidation of any other corporation with or the merger of any other corporation with or into the Corporation, nor the sale, lease, exchange or other transfer of all or any portion of the assets of the Corporation, shall be deemed to be a liquidation or dissolution of the Corporation for purposes of this Section 4, but the holders of Series A Preferred Stock shall nevertheless be entitled in the event of any such merger or consolidation to the rights, if any, provided by Section 8 hereof. (C) Written notice of any voluntary or involuntary liquidation or dissolution of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable to holders of Series A Preferred Stock in such circumstances shall be payable, shall be given by first- -7- class mail, postage prepaid, mailed not less than twenty (20) days prior to any payment date stated therein, to the holders of Series A Preferred Stock, at the address shown on the books of the Corporation or any transfer agent for the Series A Preferred Stock. Section 5. Conversion into Common Stock. (A) A holder of a share or shares of Series A Preferred Stock shall be entitled, at any time prior to the close of business on the date fixed for redemption of such shares pursuant to Sections 6, 7 and 8 hereof, to cause any or all of such shares to be converted into shares of Common Stock, initially at a conversion rate equal to 2.76 shares of Common Stock for each share of Series A Preferred Stock so converted, which conversion rate is subject to adjustment as the Conversion Price is adjusted as hereinafter provided. For purposes hereof the term "Conversion Price" shall initially mean the amount obtained by dividing $200 by 2.76 and thereafter shall be adjusted as hereinafter provided. (B) Any holder of a share or shares of Series A Preferred Stock desiring to convert such share or shares into shares of Common Stock shall surrender the certificate or certificates representing the shares of Series A Preferred Stock being converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto), at the principal executive office of the Corporation or the offices of the transfer agent for the Series A -8- Preferred Stock or such office or offices in the continental United States of an agent for conversion as may from time to time be designated by notice to the holders of the Series A Preferred Stock by the Corporation or the transfer agent for the Series A Preferred Stock, accompanied by written notice of conversion. Such notice of conversion shall specify (i) the number of shares of Series A Preferred Stock to be converted and the name or names in which such holder wishes the certificate or certificates for Common Stock and for any shares of Series A Preferred Stock not to be so converted to be issued and (ii) the address to which such holder wishes delivery to be made of such new certificates to be issued upon such conversion. (C) Upon surrender of a certificate representing a share or shares of Series A Preferred Stock for conversion, the Corporation shall issue and send by hand delivery (with receipt to be acknowledged) or by first class mail, postage prepaid, to the holder thereof or to such holder's designee, at the address designated by such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled upon conversion. In the event that there shall have been surrendered a certificate or certificates representing shares of Series A Preferred Stock only part of which are to be converted, the Corporation shall issue and deliver to such holder or such holder's designee a new certificate or certificates representing the number of shares of Series A Preferred Stock which shall not have been converted. -9- (D) The issuance by the Corporation of shares of Common Stock upon a conversion of shares of Series A Preferred Stock into shares of Common Stock made at the option of the holder thereof shall be effective as of the earlier of (i) the delivery to such holder or such holder's designee of the certificates representing the shares of Common Stock issued upon conversion thereof or (ii) the commencement of business on the second business day after the surrender of the certificate or certificates for the shares of Series A Preferred Stock to be converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto) as provided herein. On and after the effective date of conversion, the person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock, but no allowance or adjustment shall be made in respect of dividends payable to holders of Common Stock if the record date for such dividends is prior to such effective date. The Corporation shall not be obligated to pay to such persons any dividends which shall have been declared and shall be payable to holders of shares of Series A Preferred Stock on a Dividend Payment Date if such Dividend Payment Date for such dividend is subsequent to the effective date of conversion of such shares. (E) The Corporation shall not be obligated to deliver to holders of Series A Preferred Stock any fractional share of shares of Common Stock issuable upon any conversion of such -10- shares of Series A Preferred Stock, but in lieu thereof may make a cash payment in respect thereof in any manner permitted by law. (F) Whenever the Company shall issue shares of Common Stock upon conversion of shares of Series A Preferred Stock as contemplated by this Section 5, the Company shall issue together with each such share of Common Stock one right to purchase Common Stock of the Company (or other securities in lieu thereof) pursuant to the Rights Agreement dated as of September 8, 1988 between the Company and Mellon Bank (East) N.A., as Rights Agent, as such agreement may be from time to time amended (the "Rights Agreement"), or any rights issued to holders of Common Stock of the Company in addition thereto or in replacement therefor, whether or not such rights shall be exercisable at such time, but only if such rights are issued and outstanding and held by other holders of Common Stock of the Company at such time and have not expired. (G) The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of shares of Series A Preferred Stock as herein provided, free from any preemptive rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series A Preferred Stock then outstanding. Nothing contained herein shall preclude the Corporation from issuing shares of Common Stock held in its treasury upon the conversion of shares of Series A Preferred Stock into Common Stock pursuant to the -11- terms hereof. The Corporation shall use its best efforts to obtain and keep in force such governmental or regulatory permits or other authorizations as may be required by law, and shall comply with all requirements as to registration or qualification of the Common Stock, in order to enable the Corporation lawfully to issue and deliver to each holder of record of Series A Preferred Stock such number of shares of its Common Stock as shall from time to time be sufficient to effect the conversion of all shares of Series A Preferred Stock then outstanding and convertible into shares of Common Stock. Section 6. Redemption at the Option of the Corporation. (A) The Series A Preferred Stock shall be redeemable to the extent provided in this Section 6 and in Sections 7 and 8 below and not otherwise. (B) The Series A Preferred Stock shall be redeemable, in whole or in part, at the option of the Corporation at any time on or after June 19, 1992, for the amount payable in respect of such shares upon liquidation of the Corporation pursuant to Section 4 hereof. Payment of the redemption price shall be made by the Corporation in cash or shares of Common Stock, or a combination thereof, as permitted by paragraph (E) of this Section 6. From and after the date fixed for redemption, dividends on shares of Series A Preferred Stock called for redemption shall cease to accrue, such shares shall no longer be deemed to be outstanding and all rights in respect of such shares shall cease, except the right to receive the redemption price. -12- If less than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the Corporation shall either redeem a portion of the shares of each holder determined pro rata based on the number of shares held by each holder or shall select the shares to be redeemed by lot, as may be determined by the Corporation. (C) The Corporation may, at its option, elect to redeem any or all of the shares of Series A Preferred Stock notwithstanding that such redemption takes place prior to June 19, 1992 for the amount payable in respect of such shares upon liquidation of the Corporation pursuant to Section 4 hereof, which amount shall be payable by the Corporation in cash or shares of Common Stock, or a combination thereof, as permitted by paragraph (E) of this Section 6, upon the occurrence of any of the following events: (i) In the event of a change in the federal tax law of the United States of America which has the effect of precluding the Corporation from claiming all or any portion of the tax deductions for dividends paid on the Series A Preferred Stock when such dividends are used as provided under Section 404(k)(2) of the Internal Revenue Code of 1986, as amended and in effect on the date shares of Series A Preferred Stock are initially issued; (ii) In the event the last reported sales prices, regular way, of a share of Common Stock, as reported on the principal national securities exchange on which such stock is listed or admitted to trading that is also the principal market for the Common Stock or, if the principal market -13- for the Common Stock is not a national securities exchange, on the National Market System of the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if the Common Stock is not quoted on such National Market System, the average of the closing bid and asked prices in the over-the-counter market as reported by NASDAQ, for at least twenty (20) trading days within a period of thirty (30) consecutive trading days ending within five (5) days of the notice of redemption, equals or exceeds one hundred fifty percent (150%) of the Conversion Price in effect during such period (giving effect in making such calculation to any adjustments required by Section 9 hereof); or (iii) In the event that the Plan is terminated in accordance with its terms. (D) Unless otherwise required by law, the Corporation shall cause notice of any redemption under this Section 6 to be sent to the holders of Series A Preferred Stock at the address shown on the books of the Corporation or any transfer agent for the Series A Preferred Stock by first class mail, postage prepaid, mailed not less than thirty (30) days nor more than sixty (60) days prior to the redemption date. Each such notice shall state: (i) the redemption date; (ii) the total number of shares of the Series A Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the -14- redemption price; (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date; and (vi) the conversion rights of the shares to be redeemed, the period within which conversion rights may be exercised, which period shall not end prior to the redemption date, and the Conversion Price and number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Stock at the time. Upon surrender of the certificate for any shares so called for redemption and not previously converted (properly endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the date fixed for redemption and at the redemption price set forth in this Section 6. (E) The Corporation, at its option, may make payment of the redemption price payable upon any redemption of shares of Series A Preferred Stock in cash or in shares of Common Stock, or in a combination of such shares and cash, any such shares of Common Stock to be valued for such purposes at their Fair Market Value (as defined in paragraph (H) of Section 9 hereof). Whenever the Company shall issue shares of Common Stock in payment of all or a portion of the redemption price pursuant to this paragraph, the Company shall issue together with each such share of Common Stock one right to purchase Common Stock of the Company (or other securities in lieu thereof) pursuant to the Rights Agreement, or any rights issued to holders of Common Stock of the Company in addition thereto or in replacement therefor, -15- whether or not such rights shall be exercisable at such time, but only if such rights are issued and outstanding and held by other holders of Common Stock of the Company at such time and have not expired. Section 7. Redemption at the Option of the Holder. Shares of Series A Preferred Stock shall be redeemed by the Corporation at the option of the holder at any time and from time to time when and to the extent necessary: (i) for such holder to provide for distributions required to be made to participants under, or to satisfy an investment election provided to participants in accordance with, the Plan, or any successor plan; (ii) for such holder to make any payments of principal, interest or premium due and payable (whether scheduled or upon acceleration) under the Note Purchase Agreement among the Trustee, Prudential Insurance Company of America or one of its affiliates or any successor lender (collectively, the "Lender") and the Corporation or any other indebtedness incurred by the holder for the benefit of the Plan; or (iii) for such holder to meet the diversification requirements set forth in Section 404(a)(28) of the Internal Revenue Code as amended. Such shares shall be redeemed by the Corporation for cash or, except for a redemption pursuant to clause (iii) above, if the Corporation so elects, in shares of Common Stock or a combination of such shares and cash, any such shares of Common Stock to be valued (as defined in paragraph (H) of Section 9 hereof), at a redemption price equal to the Fair Market Value (as defined in paragraph (H) -16- of Section 9 hereof) of the shares of Series A Preferred Stock to be redeemed, upon written notice by the holder to the Corporation, given not less than five (5) business days prior to the date fixed by the holder in such notice for such redemption, setting forth (i) the redemption date; (ii) the number of shares of Series A Preferred Stock to be redeemed; (iii) the reason for the redemption; and (iv) the holder's certification that the reason for the redemption and the extent of the redemption are proper under this Section 7. If the Company makes payment of all or a portion of the redemption price in shares of Common Stock, the holder shall be entitled to receive, together with each share of Common Stock, one right to purchase Common Stock (or other securities in lieu thereof) as provided in Section 6(E) hereof. Section 8. Consolidation, Merger, etc. (A) In the event that the Corporation shall consummate any consolidation or merger or similar business combination pursuant to which the outstanding shares of the Corporation's Common Stock are by operation of law exchanged solely for or changed, reclassified or converted solely into stock of the Corporation or any successor or resulting corporation or other enterprise that constitutes "employer securities" with respect to a holder of Series A Preferred Stock within the meaning of Section 409(e) of the Internal Revenue Code of 1986, as amended, and "qualifying employer securities" within the meaning of Section 407(e)(5) of the Employee Retirement Income Security Act of 1974, as amended, or any successor provisions of law -17- ("employer securities" and "qualified employer securities" being hereinafter collectively referred to as "qualified employer securities"), and, if applicable, for a cash payment in lieu of fractional shares, if any, the shares of Series A Preferred Stock of such holder shall, in connection with such consolidation, merger or similar business combination, be assumed by and shall become preferred stock of the Corporation or such successor or resulting corporation or other enterprise, having in respect of such corporation or other enterprise, insofar as possible, the same voting rights, designations, preferences, qualifications, privileges, limitations, options, conversion rights and other special rights, if any (including the redemption rights provided by Sections 6, 7 and 8 hereof), that the Series A Preferred Stock had immediately prior to such transaction, except that after such transaction each share of the Series A Preferred Stock shall be convertible, otherwise on the terms and conditions provided by Section 5 hereof, into the number and kind of qualified employer securities so receivable by a holder of the number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such transaction; provided, however, that if by virtue of the structure of such transaction, a holder of Common Stock is required to make an election with respect to the nature and kind of consideration to be received in such transaction, which election cannot practicably be made by the holders of the Series A Preferred Stock, then the shares of Series A Preferred Stock shall, by -18- virtue of such transaction and on the same terms as apply to the holders of Common Stock, be converted into or exchanged for the aggregate amount of stock, securities, cash or other property (payable in kind) receivable by a holder of the number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such transaction if such holder of Common Stock failed to exercise any rights or election to receive any kind or amount of stock, securities, cash or other property (other than such qualifying employer securities and a cash payment, if applicable, in lieu of fractional shares) receivable upon such transaction (provided that, if the kind or amount of qualifying employer securities receivable upon such transaction is not the same for each non-electing share, then the kind and amount so receivable upon such transaction for each non-electing share shall be the kind and amount so receivable per share by the plurality of the non-electing shares). The rights of the Series A Preferred Stock as preferred stock of any such successor or resulting corporation shall successively be subject to adjustments pursuant to Section 9 hereof after any such transaction as nearly equivalent as practicable to the adjustment provided for by such section prior to such transaction. The Corporation shall not consummate any such merger, consolidation or similar transaction unless all then outstanding shares of Series A Preferred Stock shall be assumed and authorized by the successor or resulting corporation as aforesaid. -19- (B) In the event that the Corporation shall consummate any consolidation or merger or similar business combination pursuant to which the outstanding shares of Common Stock are by operation of law exchanged for or changed, reclassified or converted into other stock or securities or cash or any other property, or any combination thereof, other than any such consideration which is constituted solely of qualifying employer securities (as referred to in paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of fractional shares, outstanding shares of Series A Preferred Stock shall, without any action on the part of the Corporation or any holder thereof (but subject to paragraph (C) of this Section 8), be automatically converted by virtue of such merger, consolidation or similar transaction immediately prior to such consummation into the number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted at such time so that each share of Series A Preferred Stock shall, by virtue of such transaction and on the same terms as apply to the holders of Common Stock, be converted into or exchanged for the aggregate amount of stock, securities, cash or other property (payable in like kind) receivable by a holder of the number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such transaction; provided, however, that if by virtue of the structure of such transaction, a holder of Common Stock is required to make an election with respect to the nature and kind of consideration to -20- be received in such transaction, which election cannot practicably be made by the holders of the Series A Preferred Stock, then the shares of Series A Preferred Stock shall, by virtue of such transaction and on the same terms as apply to the holders of Common Stock, be converted into or exchanged for the aggregate amount of stock, securities, cash or other property (payable in kind) receivable by a holder of the number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such transaction if such holder of Common Stock failed to exercise any rights of election as to the kind or amount of stock, securities, cash or other property receivable upon such transaction (provided that, if the kind or amount of stock, securities, cash or other property receivable upon such transaction is not the same for each non-electing share, then the kind and amount of stock, securities, cash or other property receivable upon such transaction for each non-electing share shall be the kind and amount so receivable per share by a 0plurality of the non-electing shares). (C) In the event the Corporation shall enter into any agreement providing for any consolidation or merger or similar business combination described in paragraph (B) of this Section 8, then the Corporation shall as soon as practicable thereafter (and in any event at least ten (10) business days before consummation of such transaction) give notice of such agreement and the material terms thereof to each holder of Series -21- A Preferred Stock and each such holder shall have the right to elect, by written notice to the Corporation, to receive, upon consummation of such transaction (if and when such transaction is consummated), from the Corporation or the successor of the Corporation, in redemption and retirement of such Series A Preferred Stock, a cash payment equal to the amount payable in respect of shares of Series A Preferred Stock upon liquidation of the Corporation pursuant to Section 4 hereof. No such notice of redemption shall be effective unless given to the Corporation prior to the close of business on the fifth business day prior to consummation of such transaction, unless the Corporation or the successor of the Corporation shall waive such prior notice, but any notice of redemption so given prior to such time may be withdrawn by notice of withdrawal given to the Corporation prior to the close of business on the fifth business day prior to consummation of such transaction. Section 9. Anti-Dilution Adjustments. (A) In the event the Corporation shall at any time or from time to time while any of the shares of the Series A Preferred Stock are outstanding (i) pay a dividend or make any other distribution in respect of the Common Stock in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock into a greater number of shares or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, in each case whether by reclassification of shares, recapitalization of the Corporation (including a recapitalization -22- effected by a merger or consolidation to which Section 8 hereof does not apply) or otherwise, the Conversion Price in effect immediately prior to such action shall be adjusted by multiplying such Conversion Price by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event, and the denominator of which is the number of shares of Common Stock outstanding immediately after such event. An adjustment made pursuant to this paragraph 9(A) shall be given effect, upon payment of such a dividend or other distribution, as of the record date for the determination of stockholders entitled to receive such dividend or distribution (on a retroactive basis) and in the case of a subdivision or combination shall become effective immediately as of the effective date thereof. (B) In the event that the Corporation shall at any time or from time to time while any of the shares of Series A Preferred Stock are outstanding issue to holders of shares of Common Stock as a dividend or other distribution, including by way of a reclassification of shares or a recapitalization of the Corporation, any right or warrant to purchase shares of Common Stock (but not including as such right or warrant any security convertible into or exchangeable for shares of Common Stock) at a purchase price per share less than the Fair Market Value (as hereinafter defined) of a share of Common Stock on the date of issuance of such right or warrant, then, subject to the provisions of paragraphs (F) and (G) of this Section 9, the Conversion Price shall be adjusted by multiplying such Conversion -23- Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the number of shares of Common Stock which could be purchased at the Fair Market Value of a share of Common Stock at the time of such issuance for the maximum aggregate consideration payable upon exercise in full of all such rights or warrants, and the denominator of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the maximum number of shares of Common Stock that could be acquired upon exercise in full of all such rights and warrants whether or not such rights and warrants are fully exercisable at the time of initial issuance. (C) In the event the Corporation shall at any time or from time to time while any of the shares of Series A Preferred Stock are outstanding issue, sell or exchange shares of Common Stock (other than pursuant to any right or warrant to purchase or acquire shares of Common Stock (including as such right or warrant any security convertible into or exchangeable for shares of Common Stock) and other than pursuant to any employee or director incentive or benefit plan or arrangement or any stock option or stock incentive plan, including any employment, severance or consulting agreement, of the Corporation or any subsidiary of the Corporation heretofore or hereafter adopted or entered into) for a consideration having a Fair Market Value, on the date of such issuance, sale or exchange, less than the Fair -24- Market Value of such shares on the date of issuance, sale or exchange, then, subject to the provisions of paragraphs (F) and (G) of this Section 9, the Conversion Price shall be adjusted by multiplying such Conversion Price by a fraction the numerator of which shall be the sum of (i) the Fair Market Value of all the shares of Common Stock outstanding on the day immediately preceding the first public announcement of such issuance, sale or exchange plus (ii) the Fair Market Value of the consideration received by the Corporation in respect of such issuance, sale or exchange of shares of Common Stock, and the denominator of which shall be the product of (I) the Fair Market Value of a share of Common Stock on the day immediately preceding the first public announcement of such issuance, sale or exchange multiplied by (II) the sum of the number of shares of Common Stock outstanding on such day plus the number of shares of Common Stock so issued, sold or exchanged by the Corporation. (D) In the event the Corporation shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, issue, sell or exchange any right or warrant to purchase or acquire shares of Common Stock (including as such right or warrant any security convertible into or exchangeable for shares of Common Stock), other than any such issuance to holders of shares of Common Stock as a dividend or other distribution (including by way of a reclassification of shares or a recapitalization of the Corporation) and other than pursuant to any employee or director incentive or benefit plan or arrangement -25- or any stock option or stock incentive plan (including any employment, severance or consulting agreement) of the Corporation or any subsidiary of the Corporation heretofore or hereafter adopted or entered into, for a consideration having a Fair Market Value, on the date of such issuance, sale or exchange, less than the Non-Dilutive Amount (as hereinafter defined), then, subject to the provisions of paragraphs (F) and (G) of this Section 9, the Conversion Price shall be adjusted by multiplying such Conversion Price by a fraction the numerator of which shall be the sum of (i) the Fair Market Value of all the shares of Common Stock outstanding on the day immediately preceding the first public announcement of such issuance, sale or exchange plus (ii) the Fair Market Value of the consideration received by the Corporation in respect of such issuance, sale or exchange of such right or warrant plus (iii) the Fair Market Value at the time of such issuance of the consideration which the Corporation would receive upon exercise in full of all such rights or warrants, and the denominator of which shall be the product of (I) the Fair Market Value of a share of Common Stock on the date immediately preceding the first public announcement of such issuance, sale or exchange multiplied by (II) the sum of the number of shares of Common Stock outstanding on such day plus the maximum number of shares of Common Stock which could be acquired upon exercise in full of all such rights and warrants whether or not such rights and warrants are fully exercisable at the time of initial issuance. -26- (E) In the event the Corporation shall, at any time or from time to time while any of the shares of Series A Preferred Stock are outstanding, make an Extraordinary Distribution (as hereinafter defined) in respect of the Common Stock, whether by dividend, distribution, reclassification of shares or recapitalization of the Corporation (including a recapitalization or reclassification effected by a merger or consolidation to which Section 8 hereof does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of Common Stock, the Conversion Price in effect immediately prior to such Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs (F) and (G) of this Section 9, be adjusted by multiplying such Conversion Price by the fraction the numerator of which is (i) the product of (x) the number of shares of Common Stock outstanding immediately before such Extraordinary Distribution or Pro Rata Repurchase multiplied by (y) the Fair Market Value of a share of Common Stock on the day before the ex-dividend date with respect to such Extraordinary Distribution which is paid in cash and on the distribution date with respect to an Extraordinary Distribution which is paid other than in cash, or on the applicable expiration date (including all extensions thereof) of any tender offer which is a Pro Rata Repurchase, or on the date of purchase with respect to any Pro Rata Repurchase which is not a tender offer, as the case may be, minus (ii) the Fair Market Value of the Extraordinary Distribution or the aggregate purchase price of the Pro Rata -27- Repurchase, as the case may be, and the denominator of which shall be the product of (a) the number of shares of Common Stock outstanding immediately before such Extraordinary Dividend or Pro Rata Repurchase minus, in the case of a Pro Rata Repurchase, the number of shares of Common Stock repurchased by the Corporation multiplied by (b) the Fair Market Value of a share of Common Stock on the day before the ex-dividend date with respect to an Extraordinary Distribution which is paid in cash and on the distribution date with respect to an Extraordinary Distribution which is paid other than in cash, or on the application expiration date (including all extensions thereof) of any tender offer which is a Pro Rata Repurchase or on the date of purchase with respect to any Pro Rata Repurchase which is not a tender offer, as the case may be. The Corporation shall send each holder of Series A Preferred Stock (i) notice of its intent to make any dividend or distribution and (ii) notice of any offer by the Corporation to make a Pro Rata Repurchase, in each case at the same time as, or as soon as practicable after, such offer is first communicated (including by announcement of a record date in accordance with the rules of any stock exchange on which the Common Stock is listed or admitted to trading) to holders of Common Stock. Such notice shall indicate the intended record date and the amount and nature of such dividend or distribution, or the number of shares subject to such offer for a Pro Rata Repurchase and the purchase price payable by the Corporation pursuant to such offer, as well as the Conversion Price and the -28- number of shares of Common Stock into which a share of Series A Preferred Stock may be converted at such time. (F) Notwithstanding any other provisions of this Section 9, the Corporation shall not be required to make any adjustment to the Conversion Price unless such adjustment would require an increase or decrease of at least one percent (1%) in the Conversion Price. Any lesser adjustment shall be carried forward and shall be made no later than the time of, and together with, the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least one percent (1%) in the Conversion Price. (G) If the Corporation shall make any dividend or other distribution on the Common Stock or issue any Common Stock, other capital stock or other security of the Corporation or any rights or warrants to purchase or acquire any such security, which transaction does not result in an adjustment to the Conversion Price pursuant to the foregoing provisions of this Section 9, the Board of Directors of the Corporation shall consider whether such action is of such a nature that an adjustment to the Conversion Price should equitably be made in respect of such transaction. If in such case the Board of Directors of the Corporation determines that an adjustment to the Conversion Price should be made, such adjustment shall be made effective as of such date as is determined by the Board of Directors of the Corporation. The determination of the Board of -29- Directors of the Corporation as to whether an adjustment to the Conversion Price should be made pursuant to the foregoing provisions of this paragraph 9(G), and, if so, as to what adjustment should be made and when, shall be final and binding on the Corporation and all stockholders of the Corporation. The Corporation shall be entitled to make such additional adjustments in the Conversion Price, in addition to those provided for in the foregoing provisions of this Section 9, as shall be necessary in order that any dividend or distribution in shares of capital stock of the Corporation, subdivision, reclassification or combination of shares of stock of the Corporation or any recapitalization of the Corporation shall not be taxable to the holders of the Common Stock. (H) For purposes of the provisions governing the Series A Preferred Stock, the following definitions shall apply: "Adjustment Period" shall mean the period of five (5) consecutive trading days preceding, and including, the date as of which the Current Market Price or Fair Market Value of a security is to be determined. "Board of Directors" of the Corporation shall include a duly authorized and appointed committee thereof. "Business Day" shall mean each day that is not a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. -30- "Current Market Price" of publicly traded shares of Common Stock or any other class of capital stock or other security of the Corporation or any other issuer for any day shall mean the last reported sale price, regular way, or, in the event that no sale takes place on such day, the average of the reported closing bid and asked prices, regular way, in either case as reported on the principal national securities exchange on which such security is listed or admitted to trading that is also the principal market for the Common Stock or, if the principal market for such security is not a national securities exchange, on the NASDAQ National Market System or, if such security is not quoted on such National Market System, the average of the closing bid and asked prices on each such day in the over-the-counter market as reported by NASDAQ or, if bid and asked prices for such security on any such day shall not have been reported through NASDAQ, the average of the bid and asked prices for such day as furnished by any New York Stock Exchange member firm regularly making a market in such security selected for such purpose by the Board of Directors of the Corporation, in each case, on each trading day during the Adjustment Period. "Extraordinary Distribution" shall mean any dividend or other distribution to holders of Common Stock (effected while any of the shares of Series A Preferred Stock are outstanding) (i) of cash, where the aggregate amount of such cash dividends or other cash distributions together with the amount of all cash dividends and other cash distributions made during the preceding period of -31- 12 months, when combined with the aggregate amount of all Pro Rata Repurchases (for this purpose, including only that portion of the aggregate purchase price of such Pro Rata Repurchase which is in excess of the Fair Market Value of the Common Stock repurchased as determined on the applicable expiration date (including all extensions thereof) of any tender offer or exchange offer which is a Pro Rata Repurchase, or the date of purchase with respect to any other Pro Rata Repurchase which is not a tender offer or exchange offer made during such period), exceeds twelve and one-half percent (12 1/2%) of the aggregate Fair Market Value of all shares of Common Stock outstanding on the day before the ex-dividend date with respect to such Extraordinary Distribution which is paid in cash and on the distribution date with respect to an Extraordinary Distribution which is paid other than in cash, and/or (ii) of any shares of capital stock of the Corporation (other than shares of Common Stock), other securities of the Corporation (other than securities of the type referred to in paragraphs (B) or (C) of this Section 9), evidences of indebtedness of the Corporation or any other person or any other property (including shares of any subsidiary of the Corporation) or any combination thereof. The Fair Market Value of an Extraordinary Distribution for purposes of paragraph (D) of this Section 9 shall be equal to the sum of the Fair Market Value of such Extraordinary Distribution plus the amount of any cash dividends which are not Extraordinary Distributions made during such 12-month period and not previously -32- included in the calculation of an adjustment pursuant to paragraph (D) of this Section 9. "Fair Market Value" shall mean, as to shares of Common Stock or any other class of capital stock or securities of the Corporation or any other issuer which are publicly traded, the average of the Current Market Prices of such shares or securities for each day of the Adjustment Period. The "Fair Market Value" of any security or of any other property which is not publicly traded shall mean the fair value thereof as determined by an independent investment banking or appraisal firm experienced in the valuation of such securities or property selected in good faith by the Board of Directors of the Corporation or, if no such investment banking or appraisal firm is in the good faith judgment of the Board of Directors available to make such determination, as determined in good faith by the Board of Directors of the Corporation. "Non-Dilutive Amount" in respect of an issuance, sale or exchange by the Corporation of any right or warrant to purchase or acquire shares of Common Stock (including any security convertible into or exchangeable for shares of Common Stock) shall mean the remainder of (i) the product of the Fair Market Value of a share of Common Stock on the day preceding the first public announcement of such issuance, sale or exchange multiplied by the maximum number of shares of Common Stock which could be acquired on such date upon the exercise in full of such rights and warrants (including upon the conversion or exchange of -33- all such convertible or exchangeable securities), whether or not exercisable (or convertible or exchangeable) at such date, minus (ii) the aggregate amount payable pursuant to such right or warrant to purchase or acquire such maximum number of shares of Common Stock; provided, however, that in no event shall the Non-Dilutive Amount be less than zero. For purposes of the foregoing sentence, in the case of a security convertible into or exchangeable for shares of Common Stock, the amount payable pursuant to a right or warrant to purchase or acquire shares of Common Stock shall be the Fair Market Value of such security on the date of the issuance, sale or exchange of such security by the Corporation. "Pro Rata Repurchase" shall mean any purchase of shares of Common Stock by the Corporation or any subsidiary thereof, whether for cash, shares of capital stock of the Corporation, other securities of the Corporation, evidences of indebtedness of the Corporation or any other person or any other property (including shares of a subsidiary of the Corporation), or any combination thereof, effected while any of the shares of Series A Preferred Stock are outstanding, pursuant to any tender offer or exchange offer subject to Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor provision of law, or pursuant to any other offer available to substantially all holders of Common Stock; provided, however, that no purchase of shares by the Corporation or any subsidiary thereof made in open market transactions shall be -34- deemed a Pro Rata Repurchase. For purposes of this paragraph 9(G), shares shall be deemed to have been purchased by the Corporation or any subsidiary thereof "in open market transactions" if they have been purchased substantially in accordance with the requirements of Rule 10b-18 as in effect under the Exchange Act on the date shares of Series A Preferred Stock are initially issued by the Corporation or on such other terms and conditions as the Board of Directors of the Corporation shall have determined are reasonably designed to prevent such purchases from having a material effect on the trading market for the Common Stock. (I) Whenever an adjustment to the Conversion Price of the Series A Preferred Stock is required pursuant to the terms hereof, the Corporation shall forthwith place on file with the transfer agent for the Common Stock and the Series A Preferred Stock, and with the Secretary of the Corporation, a statement signed by two officers of the Corporation stating the adjusted Conversion Price determined as provided herein and the resulting conversion rate of the Series A Preferred Stock. Such statement shall set forth in reasonable detail such facts as shall be necessary to show the reason and the manner of computing such adjustment, including any determination of Fair Market Value involved in such computation. Promptly after each adjustment to the Conversion Price of the Series A Preferred Stock, the Corporation shall mail a notice thereof and of the then -35- prevailing conversion rate to each holder of shares of the Series A Preferred Stock. Section 10. Miscellaneous. (A) All notices referred to herein shall be in writing, and all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three (3) business days after the mailing thereof if sent by registered mail (unless first-class mail shall be specifically permitted for such notice under the terms hereof) with postage prepaid, addressed: (i) if to the Corporation, to its principal executive office (Attention: Secretary) or to the transfer agent for the Series A Preferred Stock, or other agent of the Corporation designated as permitted by this Resolution or (ii) if to any holder of the Series A Preferred Stock or Common Stock, as the case may be, to such holder at the address of such holder as listed in the stock record books of the Corporation (which may include the records of any transfer agent for the Series A Preferred Stock or Common Stock, as the case may be) or (iii) to such other address as the Corporation or any such holder, as the case may be, shall have designated by notice similarly given. (B) The term "Common Stock" as used in this Resolution means the Corporation's Common Stock, par value $0.10 per share, as the same exists at the date of original issuance of the Series A Preferred Stock or any other class of stock resulting from successive changes or reclassifications of such Common Stock consisting solely of changes in par value, or from par value to -36- no par value, or from no par value to par value. In the event that, at any time as a result of an adjustment made pursuant to Section 9 hereof the holder of any share of the Series A Preferred Stock upon thereafter surrendering such share for conversion, shall become entitled to receive any shares or other securities of the Corporation other than shares of Common Stock, the Conversion Price in respect of such other shares or securities so receivable upon conversion of shares of Series A Preferred Stock shall thereafter be adjusted, and shall be subject to further adjustment from time to time, in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Common Stock contained in Section 9 hereof, and the provisions of Sections 1 through 8 and 10 hereof with respect to the Common Stock shall apply on like or similar terms to any such other shares or securities. (C) The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of shares of Series A Preferred Stock or shares of Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issuance or delivery of shares of Series A Preferred Stock or Common Stock or other securities in a name other than that in which the shares of Series A Preferred Stock with respect to -37- which such shares or other securities are issued or delivered were registered, or in respect of any payment to any person with respect to any such shares or securities other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the person otherwise entitled to such issuance, delivery or payment has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable. (D) In the event that a holder of shares of Series A Preferred Stock shall not by written notice designate the name in which shares of Common Stock to be issued upon conversion of such shares should be registered or to whom payment upon redemption of shares of Series A Preferred Stock should be made or the address to which the certificate or certificates representing such shares, or such payment, should be sent, the Corporation shall be entitled to register such shares, and make such payment, in the name of the holder of such Series A Preferred Stock as shown on the records of the Corporation and to send the certificate or certificates representing such shares, or such payment, to the address of such holder shown on the records of the Corporation. (E) The Corporation may appoint, and from time to time discharge and change, a transfer agent for the Series A Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class -38- mail, postage prepaid, to each holder of record of Series A Preferred Stock. 3. The aggregate number of shares of such series established and designated by (a) such resolution, (b) all prior statements, if any, filed under the Pennsylvania Business Corporation Law with respect thereto, and (c) any other provision of the Articles of Incorporation is 500,030. 4. The foregoing resolution was adopted, and the filing of this Statement Affecting Class or Series of Shares was authorized, by the Board of Directors of the Corporation at a duly called meeting held on the 19th day of June, 1989. IN WITNESS WHEREOF, this Corporation has caused this Statement Affecting Class or Series of Shares to be executed by a duly authorized officer and its corporate seal, duly attested by another such officer, to be hereunto affixed this 19th day of June, 1989. BETZ LABORATORIES, INC. (Corporate Seal) By: /s/ William C. Brafford ----------------------------- William C. Brafford Vice President ATTEST: /s/ Peter D. Heinz - --------------------------- Peter D. Heinz Assistant Secretary -39- EX-4.4 3 INDENTURE ================================================================================ BETZDEARBORN INC. AND THE BANK OF NEW YORK, TRUSTEE ------------------------- INDENTURE DATED AS OF , 1998 ------------------------- ================================================================================ TIE-SHEET OF PROVISIONS OF TRUST INDENTURE ACT OF 1939 WITH INDENTURE DATED AS OF _________, 1998, BETWEEN BETZDEARBORN INC. AND THE BANK OF NEW YORK, AS TRUSTEE; SECTION OF SECTION OF ACT INDENTURE -------------- ---------- 310(a)(1) and (2)....................................... 8.08 310(a)(3) and (4)....................................... Not applicable 310(b) ................................................. 8.08 and 8.09(b) 310(c) ................................................. Not applicable 311(a) and (b).......................................... 8.12 311(c) ................................................. Not applicable 312(a) ................................................. 6.01 and 6.02(a) 312(b) and (c).......................................... 6.02(b) and (c) 313(a) ................................................. 6.04(a) 313(b)(1)............................................... Not applicable 313(b)(2)............................................... 6.04(b) 313(c) ................................................. 6.04(c) 313(d) ................................................. 6.04(d) 314(a) ................................................. 6.03 314(b) ................................................. Not applicable 314(c)(1) and (2)....................................... 16.07 314(c)(3)............................................... Not applicable 314(d) ................................................. Not applicable 314(e) ................................................. 16.07 315(a), (c) and (d)..................................... 8.01 315(b) ................................................. 7.08 315(e) ................................................. 7.09 316(a)(1)............................................... 7.01 and 7.07 316(a)(2)............................................... Omitted 316(a) last sentence.................................... 9.04 316(b) ................................................. 7.04 317(a) ................................................. 7.02 317(b) ................................................. 5.07 318(a) ................................................. 16.09 - --------------- This tie-sheet is not part of the Indenture as executed. TABLE OF CONTENTS
PAGE ---- PARTIES................................................................................................................. 1 RECITAL................................................................................................................. 1 ARTICLE ONE. DEFINITIONS........................................................................... 1 SECTION 1.01. Definitions..................................................................................... 1 Authorized Newspaper.................................................................................. 1 Board of Directors.................................................................................... 2 Business Day.......................................................................................... 2 Company ............................................................................................. 2 Components............................................................................................ 2 Consolidated Net Tangible Assets...................................................................... 2 Conversion Date....................................................................................... 3 Coupon Security....................................................................................... 3 Dollar................................................................................................ 3 ECU................................................................................................... 3 European Communities.................................................................................. 3 Event of Default...................................................................................... 3 Exchange Rate......................................................................................... 3 Exchange Rate Agent................................................................................... 4 Exchange Rate Officer's Certificate................................................................... 4 Foreign Currency...................................................................................... 4 Fully Registered Security............................................................................. 4 Holder................................................................................................ 5 Indenture............................................................................................. 5 Interest ............................................................................................. 5 Interest Payment Date................................................................................. 5 Market Exchange Rate.................................................................................. 5 Maturity ............................................................................................. 6 Officers' Certificate................................................................................. 6 Opinion of Counsel.................................................................................... 6 Original Issue Date................................................................................... 6 Original Issue Discount Security...................................................................... 6 Person................................................................................................ 7 Place of Payment...................................................................................... 7 Principal Office of the Trustee....................................................................... 7 Registered Coupon Security............................................................................ 7 Registered Holder..................................................................................... 7 Registered Security................................................................................... 7 Required Currency..................................................................................... 7 Responsible Officer................................................................................... 8 Restricted Property................................................................................... 8 Restricted Subsidiary................................................................................. 8 Security or Securities outstanding.................................................................... 8 Stated Maturity....................................................................................... 9 Subsidiary............................................................................................ 9 Trustee............................................................................................... 10 Trust Indenture Act of 1939........................................................................... 10 Unregistered Security................................................................................. 10
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PAGE ---- ARTICLE TWO. THE SECURITIES AND SECURITY FORMS..................................................... 10 SECTION 2.01. Amount Unlimited: Issuable in Series........................................................... 10 SECTION 2.02. Form of Securities and of Trustee's Certificate of Authentication................................................................. 12 SECTION 2.03. Denomination, Authentication and Dating of Securities.................................................................................... 13 SECTION 2.04. Execution of Securities......................................................................... 14 SECTION 2.05. Registration, Registration of Transfer and Exchange...................................................................................... 15 SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Securities.................................................................................... 16 SECTION 2.07. Temporary Securities............................................................................ 18 SECTION 2.08. Cancellation of Securities Paid, etc............................................................ 18 SECTION 2.09. Moneys of Different Currencies to be Segregated.................................................................................... 18 SECTION 2.10. Payment to Be in Proper Currency................................................................ 18 SECTION 2.11. Payment in Currencies........................................................................... 19 SECTION 2.12. CUSIP Numbers................................................................................... 22 ARTICLE THREE. REDEMPTION OF SECURITIES.............................................................. 22 SECTION 3.01. Applicability of Article........................................................................ 22 SECTION 3.02. Notice of Redemption; Selection of Securities.................................................................................... 22 SECTION 3.03. Payment of Securities Called for Redemption..................................................... 23 ARTICLE FOUR. SINKING FUNDS......................................................................... 24 SECTION 4.01. Applicability of Article........................................................................ 24 SECTION 4.02. Satisfaction of Mandatory Sinking Fund Payments with Securities...................................................................... 24 SECTION 4.03. Redemption of Securities for Sinking Fund....................................................... 24 ARTICLE FIVE. PARTICULAR COVENANTS OF THE COMPANY................................................... 26 SECTION 5.01. Payment of Principal, Premium and Interest...................................................... 26 SECTION 5.02. Offices for Notices and Payments, etc........................................................... 26 SECTION 5.03. Limitation on Liens............................................................................. 27 SECTION 5.04. Limitation on Sale and Lease-Back............................................................... 28 SECTION 5.05. Definition of "Value.".......................................................................... 29 SECTION 5.06. Appointments to Fill Vacancies in Trustee's Office........................................................................................ 29 SECTION 5.07. Provision as to Paying Agent.................................................................... 29 SECTION 5.08. Annual Certificate to Trustee................................................................... 30 SECTION 5.09. Calculation of Original Issue Discount.......................................................... 31
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PAGE ---- ARTICLE SIX. HOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.............................. 31 SECTION 6.01. Holders Lists................................................................................... 31 SECTION 6.02. Preservation and Disclosure of Lists............................................................ 31 SECTION 6.03. Reports by the Company.......................................................................... 33 SECTION 6.04. Reports by the Trustee.......................................................................... 33 ARTICLE SEVEN. REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT............................... 34 SECTION 7.01. Events of Default............................................................................... 34 SECTION 7.02. Payment of Securities on Default; Suit Therefor...................................................................................... 37 SECTION 7.03. Application of Moneys Collected by Trustee...................................................... 39 SECTION 7.04. Proceedings by Holders.......................................................................... 40 SECTION 7.05. Proceedings by Trustee.......................................................................... 41 SECTION 7.06. Remedies Cumulative and Continuing.............................................................. 41 SECTION 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Holders............................................................... 41 SECTION 7.08. Notice of Defaults.............................................................................. 42 SECTION 7.09. Undertaking to Pay Costs........................................................................ 42 SECTION 7.10. Judgment Currency............................................................................... 43 ARTICLE EIGHT. CONCERNING THE TRUSTEE................................................................ 44 SECTION 8.01. Duties and Responsibilities of Trustee.......................................................... 44 SECTION 8.02. Reliance on Documents, Opinions, etc............................................................ 45 SECTION 8.03. No Responsibility for Recitals, etc............................................................. 46 SECTION 8.04. Trustee, Paying Agent or Registrar May Own Securities.................................................................................... 46 SECTION 8.05. Moneys to be Held in Trust...................................................................... 47 SECTION 8.06. Compensation and Expenses of Trustee............................................................ 47 SECTION 8.07. Officers' Certificate as Evidence............................................................... 47 SECTION 8.08. Eligibility; Disqualification................................................................... 48 SECTION 8.09. Resignation or Removal of Trustee............................................................... 48 SECTION 8.10. Acceptance by Successor Trustee................................................................. 49 SECTION 8.11. Succession by Merger, etc....................................................................... 51 SECTION 8.12. Limitation on Rights of Trustee as a Creditor...................................................................................... 51 ARTICLE NINE. CONCERNING THE HOLDERS................................................................ 51 SECTION 9.01. Action by Holders............................................................................... 51 SECTION 9.02. Proof of Execution by Holders................................................................... 52 SECTION 9.03. Who Deemed Absolute Owners...................................................................... 52 SECTION 9.04. Company-Owned Securities Disregarded............................................................ 53 SECTION 9.05. Revocation of Consents; Future Holders Bound.................................................... 54
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PAGE ---- ARTICLE TEN. HOLDERS' MEETINGS..................................................................... 54 SECTION 10.01. Purposes of Meetings........................................................................... 54 SECTION 10.02. Call of Meetings by Trustee.................................................................... 55 SECTION 10.03. Call of Meetings by Company or Holders......................................................... 55 SECTION 10.04. Qualification for Voting....................................................................... 55 SECTION 10.05. Regulations.................................................................................... 56 SECTION 10.06. Voting......................................................................................... 57 SECTION 10.07. No Delay of Rights by Meeting.................................................................. 57 ARTICLE ELEVEN. SUPPLEMENTAL INDENTURES............................................................... 57 SECTION 11.01. Supplemental Indentures without Consent of Holders...................................................................................... 57 SECTION 11.02. Supplemental Indentures with Consent of Holders of a Series.......................................................................... 59 SECTION 11.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures................................................................... 60 SECTION 11.04. Notation on Securities......................................................................... 60 SECTION 11.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee............................................................ 60 ARTICLE TWELVE. CONSOLIDATION, MERGER AND SALE........................................................ 61 SECTION 12.01. Company May Consolidate, etc., on Certain Terms........................................................................................ 61 SECTION 12.02. Securities to be Secured in Certain Events..................................................... 61 SECTION 12.03. Successor Corporation to be Substituted........................................................ 62 SECTION 12.04. Opinion of Counsel to be Given Trustee......................................................... 62 ARTICLE THIRTEEN. SATISFACTION AND DISCHARGE OF INDENTURE............................................... 62 SECTION 13.01. Discharge of Indenture......................................................................... 62 SECTION 13.02. Deposited Moneys to be Held in Trust by Trustee...................................................................................... 63 SECTION 13.03. Paying Agent to Repay Moneys Held.............................................................. 63 SECTION 13.04. Return of Unclaimed Moneys..................................................................... 63 ARTICLE FOURTEEN. DEFEASANCE............................................................................ 64 SECTION 14.01. Applicability of Article....................................................................... 64 SECTION 14.02. Defeasance Upon Deposit of Moneys or U.S. Government Obligations....................................................................... 64 SECTION 14.03. Deposited Moneys and U.S. Government Obligations To Be Held in Trust; Miscellaneous............................................... 66
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PAGE ---- SECTION 14.04. Repayment to Company........................................................................... 66 SECTION 14.05. Reinstatement.................................................................................. 67 ARTICLE FIFTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.............................................................. 67 SECTION 15.01. Indenture and Securities Solely Corporate Obligations.................................................................................. 67 ARTICLE SIXTEEN. MISCELLANEOUS PROVISIONS.............................................................. 67 SECTION 16.01. Provisions Binding on Company's Successors..................................................... 67 SECTION 16.02. Benefits of Indenture Restricted to Parties and Holders.................................................................................. 67 SECTION 16.03. Official Acts by Successor Corporation......................................................... 68 SECTION 16.04. Addresses for Notices, etc..................................................................... 68 SECTION 16.05. Notices to Holders: Waiver.................................................................... 68 SECTION 16.06. Governing Law.................................................................................. 69 SECTION 16.07. Evidence of Compliance with Conditions Precedent.................................................................................... 69 SECTION 16.08. Legal Holidays................................................................................. 69 SECTION 16.09. Trust Indenture Act to Control................................................................. 69 SECTION 16.10. No Security Interest Created................................................................... 70 SECTION 16.11. Table of Contents, Headings, etc............................................................... 70 SECTION 16.12. Execution in Counterparts...................................................................... 70 SECTION 16.13. Acceptance of Trust............................................................................ 70 EXHIBIT A Form of Election to Receive Payments in Foreign Currency or to Rescind Such Election
-v- INDENTURE, dated as of ___________, 1998, between BETZDEARBORN INC., a corporation duly organized and existing under the laws of Pennsylvania (the "Company"), and THE BANK OF NEW YORK, a New York banking corporation (the "Trustee"). RECITAL OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities"), as provided herein. AGREEMENT For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE. DEFINITIONS. SECTION 1.01. Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939 or which are by reference therein defined in the Securities Act of 1933, as amended, (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this Indenture. Assistant Officer: The term "Assistant Officer" shall mean a duly elected Treasurer, Assistant Treasurer, Senior Vice President, Vice President, Assistant Controller, or Secretary of the Company. Authorized Newspaper: The term "Authorized Newspaper" shall mean a newspaper of general circulation in The City of New York (and, if any Place of Payment is not in The City of New York, in each such Place of Payment) printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays. Whenever successive weekly publications in an Authorized Newspaper are authorized hereunder, they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or different Authorized Newspapers. Board of Directors: The term "Board of Directors" shall mean the Board of Directors of the Company or any committee of such Board duly authorized to act for such Board. Business Day: The term "Business Day" means any day, other than a Saturday or Sunday, that is (a) not a day on which banking institutions are authorized or required by law or regulation to be closed in The City of New York or The City of Philadelphia or, if a series of Securities is denominated in a Foreign Currency, the financial center of the country issuing such currency (which, in the case of ECUs, shall be Brussels, Belgium) and (b) if a Security has an interest rate determined with reference to the London interbank offered rate for deposits in a particular currency, any day on which dealings in deposits in such currency are transacted in the London interbank market. Company: The term "Company" shall mean BETZDEARBORN INC., a Pennsylvania corporation, and subject to the provisions of Article Twelve shall include its successors and assigns. Components: The term "Components," with respect to Foreign Currency which is a composite currency (including but not limited to the ECU), means the currency amounts that are components of such composite currency on the Conversion Date with respect to such composite currency. If the official unit of any Component currency is altered by way of combination or subdivision, the number of units of such currency as a Component shall be proportionately divided or multiplied. If two or more Component currencies are consolidated into a single currency, the amounts of those currencies as Components shall be replaced by an amount in such single currency equal to the sum of the amounts of such consolidated Component currencies expressed in such single currency, and such amount shall thereafter be a Component. If after such Conversion Date any Component currency shall be divided into two or more currencies, the amount of such currency as a Component shall be replaced by amounts of such two or more currencies, each of which shall be equal to the amount of such former Component currency divided by the number of currencies into which such Component currency was divided, and such amounts shall thereafter be Components. Consolidated Net Tangible Assets: The term "Consolidated Net Tangible Assets" shall mean the total amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any thereof which are by their terms extendible -2- or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (b) all goodwill, trade names, trademarks, patents, purchased technology, unamortized debt discount and other like intangible assets, all as set forth on the most recent quarterly balance sheet of the Company and its consolidated Subsidiaries and computed in accordance with generally accepted accounting principles. Conversion Date: The term "Conversion Date," with respect to a Foreign Currency which is a composite currency (including but not limited to the ECU), has the meaning specified in Section 2.11(d). Coupon Security: The term "Coupon Security" shall mean any Security authenticated and delivered with one or more interest coupons appertaining thereto. Dollar: The term "Dollar" or "$" means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. ECU: The term "ECU" means the European Currency Unit as defined and revised from time to time by the Council of the European Communities. European Communities: The term "European Communities" means the European Economic Community, the European Coal and Steel Community and the European Atomic Energy Community and any successor thereto. Event of Default: The term "Event of Default" shall mean any event specified in Section 7.01, continued for the period of time, if any, and after the giving of the notice, if any, therein designated. Exchange Rate: The term "Exchange Rate" means (a) if pursuant to Section 2.11(a) payment is to be made in Dollars with respect to a Security denominated in a Foreign Currency, the highest firm bid quotation for Dollars received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date (or, if no such rates are quoted on such date, the last date on which such rates were quoted), from three recognized foreign exchange dealers in New York City selected by the Exchange Rate Agent and approved by the Company (one of which may be the -3- Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on such payment date, of the aggregate amount of the Foreign Currency payable on such payment date in respect of all Securities denominated in such Foreign Currency and (b) if an Exchange Rate is to be computed for purposes of any provision other than Section 2.11(a), the rate determined pursuant to the foregoing clause (a) on such date and at such time as may be specified in the relevant provision. In the case of clause (a) above, if no such bid quotations are available, payments pursuant to Section 2.11(a) will be made in the applicable Foreign Currency, unless such Foreign Currency is unavailable due to the imposition of exchange controls (or, in the case of a composite currency, such currency ceases to be used for the purposes for which it was established as provided in Section 2.11(d)(ii)) or other circumstances beyond the Company's control, in which case the Company will be entitled to make payments in Dollars on the basis of the Market Exchange Rate for such Foreign Currency on the second Business Day prior to such payment date as provided in Section 2.11(d)(i) or (ii), as applicable. Exchange Rate Agent: The term "Exchange Rate Agent" means the New York clearing house bank designated pursuant to Section 2.01, or any successor thereto. Exchange Rate Officer's Certificate: The term "Exchange Rate Officer's Certificate," with respect to any date for the payment of principal of (and premium, if any) and interest on any series of Securities, means a certificate, signed by an officer of the Exchange Rate Agent and delivered to the Company and to the Trustee, setting forth the applicable Exchange Rate as of the second Business Day preceding the applicable payment date or such other date as provided herein, as the case may be, and the amounts payable in Dollars or Foreign Currency, as applicable, in respect of the principal of (and premium, if any) and interest on Securities denominated in Foreign Currency. Foreign Currency: The term "Foreign Currency" means a currency issued by the government of any country other than the United States of America or a composite currency based on the aggregate value of currencies of any group of countries, including but not limited to the ECU. Fully Registered Security: The term "Fully Registered Security" shall mean any Security registered as to principal and interest, if any. -4- Holder: The term "Holder," "Holder of Securities," or other similar terms, when used with respect to any Security shall mean a bearer of an Unregistered Security or a Registered Holder of a Registered Security and when used with respect to any coupon, means the bearer thereof. Indenture: The term "Indenture" shall mean this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented, and shall include the form and terms of particular series of Securities established as contemplated hereunder, provided, however, that if at any time more than one Person is acting as Trustee under this instrument, "Indenture" shall mean with respect to any one or more series of Securities for which such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of a particular series of Securities established as contemplated by Section 2.01, exclusive, however, of any provisions or terms which relate solely to one or more series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a party. Interest: The term "interest", when used with respect to any series of non-interest bearing Securities, shall mean interest payable after Maturity. Interest Payment Date: The term "Interest Payment Date", with respect to any Security, shall mean the Stated Maturity of an installment of interest on such Security. Market Exchange Rate: The term "Market Exchange Rate" shall mean (a) if pursuant to Section 2.11(d)(i) payment is to be made in Dollars with respect to a Security denominated in a Foreign Currency (other than a composite currency), the noon buying rate in New York City for cable transfers of such Foreign Currency as certified by the Federal Reserve Bank of New York on the second Business Day preceding the applicable payment date and (b) if pursuant to Section 2.11(d)(ii) payment is to be made in Dollars with respect to a Security denominated in a composite currency, for each Component of such composite currency, the Market -5- Exchange Rate determined pursuant to the foregoing clause (a) on the second Business Day preceding the applicable payment date. In the event a Market Exchange Rate as described in clause (a) or (b) above is not available, the Company will be entitled to make payments in U.S. dollars pursuant to Section 2.11(d)(i) or (ii) on the basis of the most recently available Market Exchange Rate for such Foreign Currency or each Component of such composite currency, as the case may be. Maturity: The term "Maturity", when used with respect to any Security, shall mean the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, repayment at the option of the Holder or otherwise. Officer The term "Officer" shall mean a duly elected President, or Chief Financial Officer or Controller of the Company. Officers' Certificate: The term "Officers' Certificate" shall mean a certificate signed by two Officers or by one Officer and one Assistant Officer of the Company and delivered to the Trustee. If applicable, each certificate shall include the statements provided for in Section 16.07 if and to the extent required by the provisions of such Section. Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel, who may be an employee of, or of counsel to the Company, or may be other counsel. Each such opinion shall include the statements provided for in Section 16.07 if and to the extent required by the provisions of such Section. Original Issue Date: The term "original issue date" of any Security (or portion thereof) shall mean 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: The term "Original Issue Discount Security" shall mean (a) a Security which has been issued at an issue price lower than the principal amount thereof and which provides that upon redemption or acceleration of the maturity thereof an amount less than the principal -6- amount thereof shall become due and payable and (b) any other Security which for United States federal income tax purposes would be considered an original issue discount security. Person: The term "Person" shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. Place of Payment: The term "Place of Payment" for a series of Securities shall mean the Place or Places of Payment designated for each series pursuant to Sections 2.01(5) and 5.02. Principal Office of the Trustee: The term "Principal Office of the Trustee," or other similar term, shall mean the principal corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, at which at any particular time its corporate trust business shall be administered and which on the date hereof is at 101 Barclay Street, Floor 21 West, New York, New York 10286. Registered Coupon Security: The term "Registered Coupon Security" shall mean any Coupon Security registered as to principal only. Registered Holder: The term "Registered Holder," when used with respect to a Registered Security, shall mean the person in whose name such Security is registered on the books of the Company kept for that purpose in accordance with the terms hereof. Registered Security: The term "Registered Security" shall mean any Security registered on the books of the Company. Required Currency: The term "Required Currency" means the currency in which the Securities of any series are payable, as specified by the Company pursuant to Section 2.01(13) and taking into account any election made by one or more Holders pursuant to Section 2.11(a). If, however, the Required Currency is a Foreign Currency and is unavailable for the reasons stated in Section 2.11(d)(i) or (ii), the Required Currency shall mean Dollars. -7- Responsible Officer: The term "Responsible Officer" shall mean any officer to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. Restricted Property: The term "Restricted Property" shall mean: (a) any production plant of the Company or any Subsidiary located within the United States except any such facility that in the opinion of the Board of Directors is not a principal plant of the Company and its Subsidiaries; and (b) any shares of capital stock or indebtedness of a Restricted Subsidiary. Restricted Subsidiary: The term "Restricted Subsidiary" shall mean any Subsidiary which owns any Restricted Property, except a Subsidiary substantially all the physical properties of which are located outside the continental United States of America. Security or Securities outstanding: The terms "Security" or "Securities" shall have the meaning stated in the recital of this Indenture and shall mean any Security or Securities, as the case may be, authenticated and delivered pursuant to this Indenture (including, without limitation, the Securities of any series issued in temporary or permanent global form pursuant to Section 2.01(15)); provided, however, that if at any time there is more than one Person acting as Trustee under this instrument, "Securities" with respect to the Indenture as to which such Person is Trustee shall have the meaning stated in the recital and shall more particularly mean Securities authenticated and delivered pursuant to this instrument, exclusive of Securities of any series as to which such Person is not Trustee. The term "outstanding," when used with reference to Securities or Securities of any series shall, subject to the provisions of Section 9.04, mean, as of any particular time, all such Securities authenticated and delivered by the Trustee pursuant to this Indenture, except: (a) such Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) such Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust -8- by the Company (if the Company shall act as its own paying agent), provided that if such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been mailed as provided in Article Three, or provision satisfactory to the Trustee shall have been made for mailing such notice; and (c) Securities paid pursuant to Section 2.06 and Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.06 except to the extent that a bona fide holder in due course of any such Securities shall have presented proof satisfactory to the Trustee that such holder is a bona fide holder in due course of any such Securities. In determining whether the Holders of the requisite principal amount of outstanding Securities of a series have given any request, demand, authorization, direction, notice, consent or waiver hereunder: (i) 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 determined in accordance with Section 7.01; and (ii) each Security denominated in a Foreign Currency shall be deemed to have a principal amount determined by the Exchange Rate Agent (as evidenced by a certificate of such Exchange Rate Agent) by converting the principal amount of such Security in the currency in which such Security is denominated into Dollars at the Exchange Rate as of 9:00 A.M., New York City time, on the date such request, demand, authorization, direction, notice, consent or waiver is delivered to the Trustee and, where it is hereby expressly required, to the Company (or, if there is no such rate on such date for the reasons specified in Section 2.11(d), such rate on the date specified in such Section). Stated Maturity: The term "Stated Maturity" when used with respect to any Security or any installment of interest thereon shall mean the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. Subsidiary: The term "Subsidiary" shall mean any corporation at least a majority of the outstanding securities of which having ordinary voting power to elect a majority of the board of directors of such corporation (whether or not any other class of securities has or might have voting power by reason of the happening of a contingency) is at the time owned or controlled directly or indirectly by the Company or one or more Subsidiaries or by the Company and one or more Subsidiaries. -9- Trustee: The term "Trustee" shall mean The Bank of New York, until another or a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter shall mean and include each Person who is then a Trustee hereunder; provided, however, that if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean only the Trustee with respect to the Securities of that series. Trust Indenture Act of 1939: The term "Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939 as it was in force at the date of execution of this Indenture, except as provided in Section 11.03; provided, however, that if the Trust Indenture Act of 1939 is amended after such date, the Trust Indenture Act of 1939 shall mean, to the extent required by such amendment, said Act as so amended. Unregistered Security: The term "Unregistered Security" shall mean any Security or temporary bearer Security not registered as to principal. ARTICLE TWO. THE SECURITIES AND SECURITY FORMS. SECTION 2.01. Amount Unlimited: Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. Securities may be issued in one or more series. The terms and conditions listed below, as applicable, of any series of Securities shall be established (i) in an indenture supplemental hereto, (ii) in a resolution of the Board of Directors or (iii) by an Officers' Certificate pursuant to a resolution of the Board of Directors: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of all other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 2.05, 2.06, 2.07, 3.03 or 11.04); (3) the date or dates on which the principal and premium, if any, of the Securities of the series are payable; -10- (4) the rate or rates at which the Securities of the series shall bear interest, if any, or the formula by which interest shall be calculated, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates for the determination of Holders thereof to whom interest is payable; (5) the place or places where the principal of, and premium, if any, and any interest on Securities of the series shall be payable (herein called the "Place of Payment"); provided, however, that payment of principal, premium, if any, and interest with respect to Registered Securities may be made as provided in Section 5.02; (6) the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise; (7) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which 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 integral multiple thereof, the denominations in which Securities of the series shall be issuable; (9) if other than the principal amount at Stated Maturity thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 7.01 or provable in bankruptcy pursuant to Section 7.02 or used to determine the relative voting rights of the Holders thereof pursuant to Section 10.05 or the method by which such portion of the principal amount shall be determined; (10) any Events of Default with respect to the Securities of a particular series, if not set forth herein; (11) if the rate or rate at which the Securities of the series shall bear interest is to be fixed until Maturity, provisions, if any, for the defeasance of Securities of the series; (12) (A) the currency of denomination of the Securities of any series, which may be in Dollars or any Foreign Currency, (B) if such currency of denomination is a composite currency other than the ECU, the agency or organization, if any, responsible for overseeing such composite currency and (C) if such Securities are -11- denominated in a Foreign Currency other than a composite currency, the financial center of the country issuing such Foreign Currency; (13) the designation of the currency or currencies in which payment of the principal of (and premium, if any) and interest on the Securities of the series will be made, and, if such currency or currencies is a Foreign Currency, whether payment of the principal (and premium, if any) or the interest on such Securities shall be payable in such Foreign Currency or in Dollars, and if in Dollars, whether the Holders thereof may elect instead to have such payments made in such Foreign Currency; (14) if the Securities of such series are to be denominated in a Foreign Currency, the designation of an agent for purposes of determining the amounts payable with respect to such Securities in Dollars and exchanging Foreign Currency into Dollars or Dollars into Foreign Currency, as the case may be (the "Exchange Rate Agent"), which shall be a New York clearing house bank; (15) the extent to which any Securities will be issuable in temporary or permanent global form, and the manner in which any payments on a temporary or permanent global Security will be made; (16) the form of Securities of such series; and (17) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any series issued under this Indenture shall in all respects be equally and ratably entitled to the benefits hereof with respect to such series without preference, priority or distinction on account of actual time or times of authentication and delivery or maturity of the Securities of such series. All Securities of the same series shall be substantially identical except as to denomination and except as may otherwise be provided in (i) an indenture supplemental hereto, (ii) a resolution of the Board of Directors or (iii) a certificate of an officer of the Company authorized pursuant to a resolution of the Board of Directors. SECTION 2.02. Form of Securities and of Trustee's Certificate of Authentication. The Securities of each series, the appurtenant coupons, if any, and the certificates of authentication thereon shall be in substantially the form as shall be established as provided in Section 2.01 with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange or as may be determined consistently herewith by the officers executing such -12- Securities and coupons, if any, as evidenced by their execution of the Securities and coupons, if any. The definitive Securities and coupons, if any, shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange, all as determined by the officers executing such Securities and coupons, if any, as evidenced by their execution of such Securities and coupons, if any. The form of Trustee's certificate of authentication shall be as follows: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By____________________________________ Authorized Signatory SECTION 2.03. Denomination, Authentication and Dating of Securities. The Securities of each series may be issued as Registered Securities or Unregistered Securities, as provided in the terms of such Securities and shall be issuable in the denominations of $1,000 and any integral multiple of $1,000, or such other denominations as authorized as provided in Section 2.01. Each Security shall be dated as of the date of its authentication. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication. Except as otherwise provided in this Article Two, the Trustee shall thereupon authenticate and deliver said Securities to or upon the written order of the Company, signed by the President and Chief Executive Officer, the Senior Vice President and Chief Financial Officer, its Vice President and Treasurer or one of its Assistant Treasurers. 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 8.01, shall be fully protected in relying upon: (a) A copy of the resolution or resolutions of the Board of Directors in or pursuant to which the terms and form of the Securities were established, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect as of -13- the date of such certificate, and if the terms and form of such Securities are established by an Officers' Certificate pursuant to general authorization of the Board of Directors, such Officers' Certificate; (b) an executed supplemental indenture, if any; (c) an Officers' Certificate delivered in accordance with Section 16.07; and (d) an Opinion of Counsel which shall state: (1) that the form of such Securities has been established by a supplemental indenture or by or pursuant to a resolution of the Board of Directors in accordance with Sections 2.01 and 2.02 and in conformity with the provisions of this Indenture; (2) that the terms of such Securities have been established in accordance with Section 2.01 and in conformity with the other provisions of this Indenture; (3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; and (4) that all laws and requirements in respect of the execution and delivery by the Company of such Securities have been complied with. 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 or if the Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees or vice presidents shall determine that such action would expose the Trustee to personal liability to existing Holders. SECTION 2.04. Execution of Securities. The Securities, and any coupons appertaining thereto, shall be signed in the name and on behalf of the Company manually or by facsimile by its President and Chief Executive Officer or its Senior Vice President and Chief Financial Officer and by its Vice President and Treasurer, its Secretary or one of its Assistant Secretaries, under its corporate seal (which may be printed, engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed manually by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory -14- for any purpose. Such certificate by the Trustee upon any Security executed by the Company 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. In case any officer of the Company who shall have signed any of the Securities shall cease to be such officer before the Securities so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Securities nevertheless may be authenticated and delivered or disposed of as though the person who signed such Securities had not ceased to be such officer of the Company; and any Security or coupon may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Securities or coupons, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer. SECTION 2.05. Registration, Registration of Transfer and Exchange. The Company shall keep or cause to be kept a register (herein sometimes referred to as the "registry books of the Company") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Registered Securities and the registration of transfers of Registered Securities. Any such register shall be in written form or in any other form capable of being converted into written form within a reasonable time. At all reasonable times the information contained in such register or registers shall be available for inspection by the Trustee at the office or agency to be maintained by the Company as provided in Section 5.02. Upon surrender of any Registered Security of any series for registration of transfer at the office or agency of the Company to be maintained as provided in Section 5.02, the Company shall execute, and the Trustee, upon the written authorization or request of any officer of the Company, shall authenticate and deliver, in the name of the designated transferee or transferees, at the expense of the Company, one or more new Registered Securities of such series of any authorized denominations and of a like aggregate principal amount and Stated Maturity. At the option of the Holder thereof, Securities of a series, whether Registered or Unregistered, which by their terms are registrable as to principal only or as to principal and interest, may be exchanged for Registered Coupon Securities or Fully Registered Securities of such series, as may be issued by the terms thereof. Securities so issued in exchange for other Securities shall be of any authorized denomination and of like principal amount and Stated Maturity and shall be issued upon surrender of the Securities for which they are to be exchanged and, in the case of Coupon Securities, together with all unmatured coupons and all matured coupons in default appertaining thereto, at the office of the Company provided for in Section 5.02 and upon payment, if the Company shall require, of charges provided herein. Whenever any Securities are so surrendered, -15- the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making such exchange is entitled to receive. Upon presentation for registration of any Unregistered Security of any series which by its terms is registrable as to principal, at the office or agency of the Company to be maintained as provided in Section 5.02, such Security shall be registered as to principal in the name of the Holder thereof and such registration shall be noted on such Security. Any Security so registered shall be transferable on the registry books of the Company, upon presentation of such Security at such office or agency for similar notation thereon, but such Security may be discharged from registration by being in like manner transferred to bearer, whereupon transferability by delivery shall be restored. Unregistered Securities shall continue to be subject to successive registrations and discharges from registration at the option of the Holders thereof. Unregistered Securities shall be transferable by delivery. Registration of any Coupon Security shall not affect the transferability by delivery of the coupons appertaining thereto which shall continue to be payable to bearer and transferable by delivery. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Registered Security presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company duly executed, by the Holder thereof or his attorney duly authorized in writing. Unless otherwise provided in the Securities to be transferred or exchanged, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company shall not be required (i) to issue, register the transfer of or exchange any Securities of any series for a period of 15 days next preceding the mailing of any notice of redemption of Securities of such series to be redeemed, or (ii) to register the transfer or exchange of any Securities so selected for redemption in whole or in part except, in the case of any Security to be redeemed in part, the portion thereof not to be so redeemed. SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Securities. In case any temporary or definitive Security or any coupon appurtenant to a Coupon Security shall become mutilated or be destroyed, lost or -16- stolen, the Company in its discretion may execute, and upon written authorization or request of any officer of the Company, the Trustee shall authenticate and deliver, a new Security (in the case of a Coupon Security, with coupons corresponding to the coupons appertaining to the mutilated, destroyed, lost or stolen Security or the Security with respect to which a coupon shall have become mutilated, destroyed, stolen or lost) of the same series and of like tenor and principal amount at Stated Maturity bearing a number not contemporaneously outstanding. In every case the applicant for a substituted Security shall furnish to each of the Company and the Trustee such security or indemnity as may be required by either of them, as the case may be, to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. In every case of mutilation, the applicant shall surrender to the Trustee, the mutilated Security or the Security to which the mutilated coupon appertains, in the case of a Coupon Security, with all coupons (including any mutilated coupons) appertaining thereto. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Security or coupon which has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security or coupon, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security or coupon) if the applicant for such payment shall furnish to each of the Company and the Trustee such security or indemnity as may be required by either of them, as the case may be, to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Company and the Trustee of the destruction, loss or theft of such Security or coupon and of the ownership thereof. Every substituted Security, and in the case of Coupon Securities, its appurtenant coupons, issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Security or coupon of that series is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security or coupon of that series shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities and coupons of that series duly issued hereunder. All Securities and coupons 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, destroyed, lost or stolen Securities and coupons 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. -17- SECTION 2.07. Temporary Securities. Pending the preparation of definitive Securities of any series the Company may execute and the Trustee, upon satisfaction of the provisions of Section 2.03, shall authenticate and deliver printed or lithographed temporary Securities. Temporary Securities shall be issuable in any authorized denomination, and substantially in the form of the definitive Securities of that series, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every such temporary Security of any series shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Securities of that series. Without unreasonable delay, the Company will execute and deliver to the Trustee definitive Securities of that series and thereupon any or all temporary Securities of that series may be surrendered in exchange therefor, at the office or agency of the Company in the Place of Payment for such series, and the Company shall execute and the Trustee shall authenticate and deliver in exchange for such temporary Securities an equal aggregate principal amount at Stated Maturity of definitive Securities. Such exchange shall be made by the Company at its own expense and without any charge therefor except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of that series authenticated and delivered hereunder. SECTION 2.08. Cancellation of Securities Paid, etc. Securities of any series surrendered for the purpose of payment, redemption, exchange or registration of transfer and all coupons surrendered for payment, shall, if surrendered to the Company or any paying agent, be surrendered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities or coupons shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture or of such series of Securities. The Trustee shall deliver all cancelled Securities to the Company. If the Company shall acquire any of the Securities or coupons, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities or coupons unless and until the same are surrendered to the Trustee for cancellation. SECTION 2.09. Moneys of Different Currencies to be Segregated. The Trustee shall segregate all moneys, funds and accounts held by the Trustee hereunder in one currency from any money, funds or accounts in any other currencies, notwithstanding any provision herein which would otherwise permit the Trustee to commingle such amounts. SECTION 2.10. Payment to Be in Proper Currency. The obligation of the Company to make any payment of principal of (and premium, if any) and interest on any Security shall not be discharged or satisfied by any tender by the Company, or recovery by the Trustee, in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the Trustee timely holding the -18- full amount of the Required Currency then due and payable. If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Company, and the Company shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor. The Company hereby waives any defense of payment based upon any such tender or recovery which is not in the Required Currency, or which, when exchanged for the Required Currency by the Trustee, is less than the full amount of Required Currency then due and payable. Any costs incurred by or on behalf of the Company (other than costs incurred by the Trustee that are passed on to the Company as provided above) in connection with the conversion of Dollars to any Foreign Currency pursuant to an election made by a Holder in accordance with Section 2.11(a) shall be borne by the Holder making such an election through deduction from payments required to be made to such Holder pursuant to the terms of this Indenture. SECTION 2.11. Payment in Currencies. (a) Payment of the principal of (and premium, if any) and interest on the Securities of any series, whether or not denominated in a Foreign Currency pursuant to Section 2.01(12), shall be made in Dollars, unless the Company specifies another currency or currencies pursuant to Section 2.01(13). If a series of Securities is denominated in a Foreign Currency, the amount receivable in Dollars by the Holders of such series shall be determined as provided in Section 2.11(c). Not later than one Business Day prior to each Interest Payment Date, the Trustee shall inform the Company of the total amount of the interest payments to be made by the Company on such Interest Payment Date and the currencies or currency units in which such interest payments are to be made. The Trustee shall provide monthly to the Company a list of the principal and interest to be paid on Securities of each series maturing in the next succeeding month. (b) If authorized pursuant to Section 2.01(13), any Holder of a Security of a series of Securities denominated in Foreign Currency may elect to receive payments in the Foreign Currency in which such Security is denominated pursuant to Section 2.01(12). A Holder may make such election by delivering to the Trustee: (i) a written notice thereof, substantially in the form attached hereto as Exhibit A or in such other form as may be acceptable to the Trustee, not later than the close of business on the record date immediately preceding the applicable Interest Payment Date or the fifteenth day immediately preceding the Maturity of an installment of principal, as the case may be, and (ii) wire transfer instructions as required by Section 5.02. Such election shall remain in effect with respect to such Holder until such Holder delivers to the Trustee a written notice rescinding such election, provided, however, that any such notice must be delivered to the Trustee not later than the close of business on the record date -19- immediately preceding the next Interest Payment Date or the fifteenth day immediately preceding the Maturity of an installment of principal, as the case may be, in order to be effective for the payment to be made thereon; and provided further that no such recession may be made with respect to payments to be made on any Security with respect to which notice of redemption has been given by the Company pursuant to Article Three. The Trustee shall deliver a copy of each notice received by it under this Section 2.11(b) to the Exchange Rate Agent and the Company as soon as practicable after receipt. Upon request, the Trustee will mail a copy of the form of Exhibit A to any Holder requesting a copy thereof to the address of such Holder set forth in such request. (c) For each series of Securities denominated in a Foreign Currency, the Exchange Rate Agent shall determine the amount receivable by the Holders thereof in Dollars, which amount shall equal the sum obtained by converting the applicable Foreign Currency into Dollars at the Exchange Rate. The applicable Exchange Rate shall be set forth in an Exchange Rate Officer's Certificate. The Exchange Rate Agent shall deliver to the Company and to the Trustee, not later than one Business Day prior to the date each payment is required to be made, a written notice specifying the amount of principal of (and premium, if any) and interest on such series of Securities to be paid on such payment date in Dollars and, if at least one Holder has made the election referred to in subsection (b) above to receive payments in Foreign Currency on a series of Securities denominated in a Foreign Currency, such Foreign Currency, together with a counterpart of the Exchange Rate Officer's Certificate, referred to above. (d)(i) If a Foreign Currency, other than a composite currency, in which the payment of principal of (and premium, if any) and interest on a series of Securities is required to be made is not available to the Company due to the imposition of exchange controls or other circumstances beyond the control of the Company, then with respect to each payment date occurring after the last date on which such Foreign Currency was so used, all payments with respect to the Securities of any such series shall be made in Dollars. If payment is to be made in Dollars to the Holders of any such series of Securities pursuant to the provisions of the preceding sentence, then the amount to be paid in Dollars on a payment date by the Company to the Trustee and by the Trustee or any paying agent to Holders shall be determined by the Exchange Rate Agent and shall be equal to the sum obtained by converting the applicable Foreign Currency into Dollars at the applicable Market Exchange Rate set forth in an Exchange Rate Officer's Certificate. (ii) If the ECU ceases to be used both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or is not available due to circumstances beyond the control of the Company, or if any other composite currency in which the payment of principal of (and premium, if any) and interest on a series of Securities is required to be made ceases to be used for the purposes for which it was -20- established or is not available due to circumstances beyond the control of the Company, then with respect to each payment date (the "Conversion Date") occurring after the last date on which the ECU or such other composite currency was so used, all payments with respect to the Securities of any such series shall be made in Dollars. If payment with respect to Securities of a series is to be made in Dollars pursuant to the provisions of the preceding sentence, then the amount to be paid in Dollars on a payment date by the Company to the Trustee and by the Trustee or any paying agent to Holders shall be determined by the Exchange Rate Agent and shall be equal to the sum of the amounts obtained by converting each Component of such composite currency into Dollars at its respective Market Exchange Rate set forth in an Exchange Rate Officer's Certificate, multiplied by the number of ECU or units of such other composite currency, as appropriate, that would have been so paid had the ECU or such other composite currency, as appropriate, not ceased to be so used. (e) All decisions and determinations of the Exchange Rate Agent regarding the Exchange Rate or conversion of Foreign Currency other than a composite currency into Dollars pursuant to subsection (d)(i) above or the conversion of ECU or any other composite currency into Dollars pursuant to subsection (d)(ii) shall, in the absence of manifest error, be conclusive for all purposes and irrevocably binding upon the Company, the Trustee, any paying agent and all Holders of the Securities. If a Foreign Currency, other than a composite currency, in which payment of the principal of (and premium, if any) and interest on a series of Securities is required pursuant to subsection (a) above, is not available to the Company for making payments thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company, after learning thereof, will give notice thereof to the Trustee immediately (and the Trustee promptly thereafter will give notice to the Holders in the manner provided in Section 16.05) specifying the last date on which such Foreign Currency was used for the payment of principal of (and premium, if any) or interest on such series of Securities. In the event the ECU ceases to be used both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or is not available due to circumstances beyond the control of the Company, or any other composite currency in which the principal of (and premium, if any) and interest on a series of Securities is required ceases to be used for the purposes for which it was established or is not available due to circumstances beyond the control of the Company, the Company, after learning thereof, will give notice thereof to the Trustee immediately (and the Trustee promptly thereafter will give notice to the Holders in the manner provided in Section 16.05). In the event of any subsequent change in any Component, the Company, after learning thereof, will give notice to the Trustee similarly (and the Trustee promptly thereafter will give notice to the Holders in the manner provided in Section 16.05). The Trustee shall be fully justified and protected in relying and acting upon the information so received by it from the Company and the Exchange Rate Agent and shall not otherwise -21- have any duty or obligation to determine the accuracy or validity of such information independently. SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. ARTICLE THREE. REDEMPTION OF SECURITIES. SECTION 3.01. Applicability of Article. The Company may reserve the right to redeem and pay, prior to Stated Maturity, all or any part of the Securities of any series, either by optional redemption, sinking fund or otherwise, by provision therefor in the Security for such series established pursuant to Sections 2.01 and 2.02. Redemption of Securities of any series shall be made in accordance with the terms of such Securities and, to the extent that this Article does not conflict with such terms, in accordance with this Article. SECTION 3.02. Notice of Redemption; Selection of Securities. In case the Company shall desire to exercise the right to redeem all or any part of the Securities of a series in accordance with their terms, it shall fix a date for redemption and shall mail a notice of such redemption at least 30 and not more than 60 days prior to the date fixed for redemption to each Holder of a Registered Security to be redeemed as a whole or in part at his address as the same appear on the registry books of the Company and, if Unregistered Securities are to be redeemed, shall publish a notice of redemption at least 30 and not more than 60 days prior to the date fixed for redemption in an Authorized Newspaper in the Place of Payment. If mailed in the manner herein provided, the notice shall be conclusively presumed to have been duly given, whether or not any such Holder receives such notice. 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. Each such notice of redemption shall identify the Securities to be redeemed including CUSIP numbers and shall specify the date fixed for redemption, the redemption price, the place where such Securities are to be surrendered for payment of the redemption price, which shall be the office or agency of the Company in each Place of Payment, that payment will be made upon presentation and surrender of such -22- Securities and all coupons appertaining thereto, if any, that accrued interest, if any, to the redemption date will be paid as specified in said notice, and that on and after said date, interest thereon or on the portions thereof to be redeemed will cease to accrue. In case the redemption is on account of a sinking fund, said notice shall so specify. If less than all the outstanding Securities of a series are to be redeemed, the notice of redemption shall specify the numbers of the Securities of that series to be redeemed. 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 that series in the principal amount and Stated Maturity equal to the unredeemed portion thereof will be issued. The Company shall give the Trustee notice not less than 45 days prior to the redemption date of any redemption hereunder, provided, however, that if fewer than all the Securities of a series are to be redeemed, the Company shall give the Trustee notice not less than 60 days prior to the redemption date as to the aggregate principal amount at Stated Maturity of Securities to be redeemed, and the Trustee shall select from the Securities outstanding in such manner as in its sole discretion it shall deem appropriate and fair, the Securities of that series or portions thereof to be redeemed. Securities of a series may be redeemed in part only in multiples of $1,000, except as otherwise set forth in the form of Security to be redeemed. Any notice of redemption to be mailed by the Company pursuant to this Section 3.02 may be mailed, at the Company's direction, by the Trustee in the name and at the expense of the Company. SECTION 3.03. Payment of Securities Called for Redemption. If notice of redemption has been mailed or published, as the case may be as above provided, the Securities or portions of Securities of a series with respect to which such notice has been mailed or published shall become due and payable on the date and at the place or places stated in such notice at the applicable redemption price, together with accrued interest to the redemption date and on and after said date (unless the Company shall default in the payment of such Securities at the applicable redemption price, together with accrued interest, if any, to said date) any interest on the Securities or portions of Securities of any series so called for redemption shall cease to accrue, and such Securities and portions of Securities of any series shall be deemed not to be outstanding hereunder and shall not be entitled to any benefit under this Indenture except to receive payment of the redemption price, together with accrued interest, if any, to the date fixed for redemption. On or before the Business Day preceding the redemption date specified in the notice of redemption, the Company shall deposit with the Trustee or with one or more paying agents an amount of money, in immediately available funds, sufficient to redeem on the redemption date all the Securities so called for redemption at the applicable redemption price, together with accrued interest, if any, to the date fixed for redemption. On presentation -23- and surrender of such Securities at the Place of Payment, the said Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with accrued interest, if any, to the date fixed for redemption. Upon presentation of any Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities of such series, of authorized denominations in aggregate principal amount and Stated Maturity equal to the unredeemed portion of the Security so presented. ARTICLE FOUR. SINKING FUNDS. SECTION 4.01. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.01 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." SECTION 4.02. Satisfaction of Mandatory Sinking Fund Payments with Securities. In lieu of making all or any part of any mandatory sinking fund payment with respect to any Securities of a series in cash, the Company may at its option (a) deliver to the Trustee Securities of that series theretofore purchased or otherwise acquired by the Company, or (b) receive credit for the principal amount of Securities of that series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. SECTION 4.03. Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 4.02, which Securities will accompany such -24- certificate, if not theretofore delivered, and whether the Company intends to exercise its right to make a permitted optional sinking fund payment with respect to such series. Such certificate shall also state that no Event of Default with respect to such series has occurred and is continuing. Any mandatory or optional sinking fund payment or payments made in cash plus any unused balance of any preceding sinking fund payments made in cash which shall equal or exceed $50,000 or an equivalent amount, if applicable, in a Foreign Currency (or a lesser sum if the Company shall so request) with respect to Securities of any particular series shall be applied by the Trustee on the sinking fund payment date on which such payment is made (or, if such payment is made prior to a sinking fund payment date, on the sinking fund payment date following the date of such payment) to the redemption of such Securities at the redemption price specified in such Securities for operation of the sinking fund together with accrued interest to the date fixed for redemption. Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Securities shall be added to the next cash sinking fund payment received by the Trustee for such series and, together with such payment, shall be applied in accordance with the provisions of this Section 4.03. Any and all sinking fund moneys with respect to the Securities of any particular series held by the Trustee on the last sinking fund payment date with respect to such Securities, and not held for the payment or redemption of particular Securities, shall be applied by the Trustee, to the payment of the principal of the Securities of that series at maturity. The Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in the penultimate paragraph of Section 3.02 and the Company shall cause notice of the redemption thereof to be given in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03. On each sinking fund payment date, the Company shall pay to the Trustee in immediately available funds a sum equal to all accrued interest to the date fixed for redemption on Securities to be redeemed on such sinking fund payment date pursuant to this Section 4.03. The Trustee shall not redeem any Securities of a series with sinking fund moneys or mail or publish any notice of redemption of such Securities by operation of the sinking fund for such series during the continuance of a default in payment of interest on such Securities or of any Event of Default (other than an Event of Default occurring as a consequence of this paragraph), except that if the notice of redemption of any such Securities shall theretofore have been mailed or published in accordance with the provisions hereof, the Trustee shall redeem Securities if cash sufficient for that purpose shall be deposited with the Trustee for that purpose in accordance with the terms of this Article Four. 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 -25- such sinking fund shall, during the continuance of such default or Event of Default, be held as security for the payment of all Securities of such series; provided, however, that in case such default or Event or Default shall have been cured or waived as provided herein, such moneys shall thereafter be applied on the next sinking fund payment date for such Securities on which such moneys may be applied pursuant to the provisions of this Section 4.03. ARTICLE FIVE. PARTICULAR COVENANTS OF THE COMPANY. SECTION 5.01. Payment of Principal, Premium and Interest. The Company shall duly and punctually pay or cause to be paid the principal of and premium, if any, and interest, if any, on the Securities of each series in the Required Currency in accordance with the terms thereof and this Indenture and shall comply with all other forms, agreements and conditions contained in or made in this Indenture for the benefit of such Securities. SECTION 5.02. Offices for Notices and Payments, etc. So long as any Securities of a series remain outstanding, the Company shall maintain in each Place of Payment for such series of Securities an office or agency where the Securities of that series may be presented for payment, for registration of transfer and for exchange as provided in this Indenture and where notices and demands to or upon the Company in respect of the Securities of that series or of this Indenture may be served. The Company shall give to the Trustee written notice of the location of any such office or agency and of any change of location thereof. In case the Company shall fail to maintain any such office or agency or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made at the Principal Office of the Trustee (or at any other address previously furnished in writing to the Company by the Trustee) and notices may be served at the Principal Office of the Trustee. Unless otherwise provided pursuant to Section 2.01, the Company hereby initially designates as the Place of Payment for each series of Securities, the Borough of Manhattan, The City of New York, and initially appoints the Trustee its agent for payment, for registration of transfers, for exchange of the Securities and where notices and demands may be served upon the Company. Notwithstanding any other provisions to the contrary, the Company at its option may make payment of principal, premium (if any) and interest with respect to Registered Securities by check mailed to the address of the Person entitled thereto, as such address appears on the registry books of the Company; provided, however, that in the case of a Registered Security issued between a record date and the initial Interest Payment Date relating to such record date, interest for the period beginning on the Original Issue Date and ending on such initial Interest Payment Date shall be paid on such initial Interest Payment Date to the person to whom such Registered Security shall have been originally issued. Notwithstanding the foregoing, a holder of U.S. $10,000,000 or more in -26- aggregate principal amount of Registered Securities (or a holder of the equivalent thereof in a Foreign Currency) shall be entitled to receive such payments in Dollars by wire transfer of immediately available funds, but only if appropriate wire transfer instructions have been received in writing by the Trustee not less than fifteen days prior to the applicable Interest Payment Date. Simultaneously with the election by any holder to receive payments in a Foreign Currency as provided in Section 2.11, such holder shall provide appropriate wire transfer instructions to the Trustee, and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. SECTION 5.03. Limitation on Liens. Nothing in this Indenture or in the Securities shall in any way restrict or prevent the Company or any Subsidiary from incurring any indebtedness; provided, however, that neither the Company nor any Restricted Subsidiary shall issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed (notes, bonds, debentures or other similar evidences of indebtedness for money borrowed being hereinafter in this Article Five called "Debt") secured by mortgage, lien, pledge or other encumbrance (mortgages, liens, pledges or other encumbrances being hereinafter in this Article Five called "Mortgages") upon any Restricted Property, without effectively providing that the Securities of each series then outstanding and thereafter created (together with, if the Company so determines, any other indebtedness or obligation then existing and any other indebtedness or obligation thereafter created ranking equally with the Securities then existing or thereafter created which is not subordinated to the Securities of each series) shall be secured equally and ratably with (or prior to) such Debt so long as such Debt shall be so secured, except that the foregoing provisions shall not apply to: (a) Mortgages affecting property of a corporation existing at the time it becomes a Subsidiary or at the time it is merged into or consolidated with the Company or a Subsidiary; (b) Mortgages on property existing at the time of acquisition thereof or incurred to secure payment of all or part of the purchase price thereof or to secure Debt incurred prior to, at the time of or within 180 days after acquisition thereof for the purpose of financing all or part of the purchase price thereof; (c) Mortgages on any property to secure all or part of the cost of construction or improvements thereon or Debt incurred to provide funds for any such purpose in a principal amount not exceeding the cost of such construction or improvements; (d) Mortgages which secure only an indebtedness owing by a Subsidiary to the Company or a Subsidiary; -27- (e) Mortgages in favor of the United States or any state thereof, or any department, agency, instrumentality, or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of constructing or improving the property subject thereto, including, without limitation, Mortgages to secure Debt of the pollution control or industrial revenue bond type; or (f) Mortgages required by any contract or statute in order to permit the Company or a Subsidiary to perform any contract or subcontract made by it with or at the request of the United States of America, any state or any department, agency or instrumentality or political subdivision of either; (g) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Mortgage referred to in the foregoing clauses (a) to (f) inclusive or of any Debt secured thereby, provided that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement Mortgage shall be limited to all or part of substantially the same property which secured the Mortgage extended, renewed or replaced (plus improvements on such property). Notwithstanding the foregoing provisions of this Section 5.03, the Company and any one or more Restricted Subsidiaries may issue, assume or guarantee Debt secured by Mortgages which would otherwise be subject to the foregoing restrictions in an aggregate principal amount which, together with the aggregate outstanding principal amount of all other Debt of the Company and its Restricted Subsidiaries which would otherwise be subject to the foregoing restrictions (not including Debt permitted to be secured under clauses (a) to (g) inclusive above) and the aggregate Value, as defined in Section 5.05, of the Sale and Lease-Back Transactions, as defined in Section 5.04, in existence at such time (not including Sale and Lease-Back Transactions as to which the Company has complied with Section 5.04(b)), does not at any one time exceed 10% of the Consolidated Net Tangible Assets of the Company and its consolidated Subsidiaries. SECTION 5.04. Limitation on Sale and Lease-Back. Neither the Company nor any Restricted Subsidiary shall enter into any arrangement with any Person (other than the Company or a Subsidiary), or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary for a period of more than three years of any Restricted Property which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person (other than the Company or a Subsidiary), to which funds have been or are to be advanced by such Person on the security of the leased property (in this Article Five called "Sale and Lease-Back Transactions") unless either: -28- (a) the Company or such Restricted Subsidiary would be entitled, pursuant to the provisions of Section 5.03, to incur Debt in a principal amount equal to or exceeding the Value of such Sale and Lease-Back Transaction, secured by a Mortgage on the property to be leased, without equally and ratably securing the Securities; or (b) the Company (and in any such case the Company covenants and agrees that it will do so) during or immediately after the expiration of four months after the effective date of such Sale and Lease-Back Transaction (whether made by the Company or a Restricted Subsidiary) applies to the voluntary retirement of indebtedness of the Company (including Securities, provided that Securities may only be redeemed at the redemption prices and in accordance with the other provisions of the form thereof), maturing by the terms thereof more than one year after the original creation thereof and ranking at least pari passu with the Securities (hereinafter in this Section called "Funded Debt") an amount equal to the Value of such Sale and Lease-Back Transaction, less the principal amount of Securities delivered, within four months after the effective date of such arrangement, to the Trustee for retirement and cancellation and the principal amount of other Funded Debt voluntarily retired by the Company within such four-month period, excluding retirements of Securities and other Funded Debt as a result of conversions or pursuant to mandatory sinking fund or prepayment provisions or by payment at maturity. SECTION 5.05. Definition of "Value." For purposes of Sections 5.03 and 5.04, the term "Value" shall mean, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds of the sale or transfer of the property leased pursuant to such Sale and Lease-Back Transaction or (2) the fair value, in the opinion of the Board of Directors, of such property at the time of entering into such Sale and Lease-Back Transaction, in either case divided first by the number of full years of the term of the lease and then multiplied by the number of full years of such term remaining at the time of determination, without regard to any renewal or extension options contained in the lease. SECTION 5.06. Appointments to Fill Vacancies in Trustee's Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee for any one or more series of Securities, shall appoint a Trustee, in the manner provided in Section 8.10 so that there shall at all times be a Trustee with respect to each series of Securities hereunder. SECTION 5.07. Provision as to Paying Agent. (a) If the Company appoints a paying agent other than the Trustee with respect to the Securities of any series, it shall 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 5.07: (1) that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, or interest, if any, -29- on the Securities of such series (whether such sums have been paid to it by the Company 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; and (2) that it will give the Trustee notice of any failure by the Company (or by any other obligor on the Securities of such series) to make any payment of the principal of and premium, if any, or interest, if any, on the Securities of such series when the same shall be due and payable. (b) If the Company acts as its own paying agent with respect to the Securities of any series it shall, on or prior to each due date of the principal of and premium, if any, or interest, if any, on any of the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of such Securities or the coupons appertaining thereto, as the case may be, a sum sufficient to pay such principal and premium, if any, or interest, if any, so becoming due and will notify the Trustee of any failure to take such action and of any failure by the Company (or by any other obligor under such Securities) to make any payment of the principal of and premium, if any, or interest, if any, on such Securities when the same shall become due and payable. (c) Whenever the Company has one or more paying agents with respect to the Securities of any series, it shall deposit with a paying agent (who shall make any necessary funds available to any other paying agents), on the Business Day next preceding each due date in funds available on the due date of the principal of, premium, if any, and interest, if any, on such Securities, a sum in immediately available funds sufficient to pay such principal, premium, if any, and interest, if any, so becoming due, such sum to be held in trust for the benefit of the Holders of such Securities or the coupons appertaining thereto, as the case may be, entitled to any such principal, premium and interest, and (unless such paying agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act. (d) Anything in this Section 5.07 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it, or any paying agent hereunder, as required by this Section 5.07, such sums to be held by the Trustee upon the trusts herein contained. (e) Anything in this Section 5.07 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.07 is subject to Sections 13.03 and 13.04. SECTION 5.08. Annual Certificate to Trustee. The Company shall deliver to the Trustee on or before September 1 in each year during which any Securities are outstanding hereunder (beginning with respect -30- to Securities of each series with the September 1 next following the issue date of any series of Securities) an Officers' Certificate, one of the signers of which shall be the principal executive, principal financial or principal accounting officer of the Company, stating whether or not the signers thereof have knowledge of any default of the Company under the Indenture and, if so, specifying each such default of which the signers have knowledge and the nature thereof. SECTION 5.09 Calculation of Original Issue Discount. The Company shall file or cause to be filed with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. ARTICLE SIX. HOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE. SECTION 6.01. Holders Lists. The Company shall furnish or cause to be furnished to the Trustee, with respect to the Registered Securities of each series (i) semi-annually, not later than each Interest Payment Date for such series and on dates to be determined pursuant to Section 2.01 for non-interest bearing Securities in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders, as of the respective record dates therefor, and on dates to be determined pursuant to Section 2.01 for non-interest bearing Securities, and (ii) at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days prior to the time such information is furnished; provided, however, that so long as the Trustee shall be the registrar of a series of Securities all of which are Registered Securities, such list shall not be required to be furnished in respect of that series. SECTION 6.02. Preservation and Disclosure of 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 Registered Securities of any series contained in the most recent list furnished to it as provided in Section 6.01 or received by the Trustee in its capacity as Securities registrar. The Trustee may destroy any list furnished to it as provided in Section 6.01 upon receipt of a new list so furnished. (b) In case three or more Holders of Securities of the same series (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 of such series for a period of at least -31- six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Securities of such series or with Holders of Securities of all series with respect to their rights under this Indenture or under such Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit for such purpose, then the Trustee shall, within five Business Days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 6.02, or (2) inform such applicants as to the approximate number of Holders of Securities of such series or of all series, 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 6.02 and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder of a Security of such series or of all series, 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 6.02, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the Holders of Securities of such series or of all series, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender: otherwise, the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each Holder of any Security or coupon or both, by receiving and holding the same, agrees with the Company and the Trustee that -32- neither the Company nor the Trustee nor any paying agent shall be held accountable by reason of the disclosure of the name and address of such Holder in accordance with the provisions of subsection (b) of this Section 6.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b). SECTION 6.03. Reports by the Company. (a) The Company shall file with the Trustee, within 15 days after the Company is required to file the same with the Securities and Exchange 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 said Commission may from time to time by rules and regulations prescribe) relating to the equity or debt securities of the Company which the Company may be required to file with said Commission pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and said Commission, in accordance with rules and regulations prescribed from time to time by said Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to section 13 of the 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) The Company shall file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations. (c) The Company shall transmit by mail to each Holder of Securities, in the manner and to the extent provided in Section 6.04, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 6.03 as may be required by rules and regulations prescribed from time to time by the Securities and Exchange Commission. (d) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 6.04. Reports by the Trustee. (a) The Trustee shall transmit to the Holders such reports concerning the Trustee and its -33- actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty dates after each October 15 following the date of this Indenture, deliver to Holders a brief report, dated as of such October 15, which complies with the provisions of such Section 313(a). (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange, if any, upon which the Securities are listed, with the Commission and with the Company. The Company will promptly notify the Trustee when the Securities are listed on any stock exchange and of any delisting thereof. ARTICLE SEVEN. REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT. SECTION 7.01. Events of Default. "Event of Default," whenever used herein with respect to Securities of any series means each one of the following events unless it is either inapplicable to a particular series or it is specifically deleted or modified in the supplemental indenture under which such series of Securities is issued, if any, or in the form of Security for such series: (a) default in the payment of any installment of interest upon any Security of that series or any coupon appertaining thereto when the same becomes due and payable; and continuance of such default for a period of 30 days; or (b) default in the payment of the principal of or premium, if any, on any Securities of that series as and when the same shall become due and payable either at Maturity, upon redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund installment or analogous obligation as and when the same shall become due and payable by the terms of that series, and continuance of such default for a period of 30 days; or (d) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Securities of such series or in this Indenture (other than a covenant or agreement in respect of the Securities of such series a default in the performance of which or the breach of which is elsewhere in this Section 7.01 specifically provided for or which has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than such series), and continuance of such default or breach for a period of 90 days after the date on which written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice -34- of Default" hereunder, shall have been given to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount at Stated Maturity of the Securities of that series at the time outstanding; or (e) the acceleration of the maturity of indebtedness of the Company or its wholly-owned subsidiaries for borrowed money, other than the Securities, provided that the amount due and payable by reason of such acceleration equals $25,000,000 or more; (f) if there shall be entered a decree or order by a court having jurisdiction for relief in respect of the Company under any applicable Federal or State bankruptcy law or other similar law, or appointing a receiver, trustee or liquidator, or other similar official of the Company or of any substantial part of its property, or ordering the winding-up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or (g) if the Company shall file a petition or an answer or consent seeking relief under any applicable Federal or State bankruptcy law or other similar law, or shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking possession by a receiver, trustee, custodian or other similar official of the Company or of any substantial part of its property, or the Company shall make an assignment for the benefit of creditors generally or shall admit in writing to its inability to pay its debts generally as they become due; or (h) any other event provided in the form of Security for such series, or in the supplemental indenture, Officers' Certificate or resolution of the Board of Directors under which such series of Securities is issued, if any. An Event of Default shall not occur with respect to any Securities of any series solely by reason of an Event of Default occurring with respect to Securities of a different series unless specific provision is made to that effect in the terms of the Securities of the series or in the supplemental indenture under which the series of the Securities is issued, if any, or in the form of Security for such series. If an Event of Default described in clauses (a), (b), (c) or (g) 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 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 at Stated Maturity of the Securities of such series then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by Holders), may declare the principal amount (in the case of Securities that are Original Issue Discount Securities, such principal amount as may be determined in accordance with the terms of that series) of all the Securities of such series to be due and payable immediately, and upon -35- any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Securities of such series contained to the contrary notwithstanding. If an Event of Default described in clauses (d), (e) or (f) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount at Stated Maturity of all the Securities then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by Holders), may declare the principal amount (or, if any Securities are Original Issue Discount Securities, such portion of the principal amount as may be determined in accordance with the terms of that series) of all the Securities to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Securities contained to the contrary notwithstanding. The foregoing provisions are, however, subject to the condition that if, at any time after the principal amount (in the case of Securities that are Original Issue Discount Securities, such portion of the principal amount as may be determined in accordance with the terms of that series) of the Securities of any series or of all the Securities, as the case may be, 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 Company 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 or of all of the Securities, as the case may be, and the principal of and premium, if any, on all Securities of such series or of all the Securities, as the case may be, which shall have become due otherwise than by acceleration (with interest on overdue installments of interest, to the extent that payment of such interest is enforceable under applicable law, and on such principal and premium, if any, at the rate of interest or yield to Maturity (in the case of Original Issue Discount Securities) borne by the Securities of such series or at the rates of interest or yields to Maturity of all the Securities, as the case may be, to the date of such payment or deposit) and all sums paid or advanced by the Trustee hereunder, and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any and all defaults under this Indenture, other than the nonpayment of principal of or premium, if any, or accrued interest, if any, on Securities of such series or of all of the Securities, as the case may be, which shall have become due by acceleration, shall have been remedied - then and in every such case the Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of such series or of all of the Securities, as the case may be, then outstanding, by written notice to the Company and to the Trustee, may waive all defaults with respect to that series or of all of the Securities, as the case may be, and rescind and annul such declaration and its consequences; but no waiver or rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereon. -36- If any Securities are denominated in a coin or currency other than that of the United States, then for purposes of determining whether the Holders of the requisite principal amount of Securities have taken any action as herein described, the principal amount of such Securities shall be deemed to be that amount of United States dollars that could be obtained for such principal amount on the basis of the spot rate of exchange into United States dollars for the currency in which such Securities are denominated as of the date the taking of such action by the Holders of such requisite principal amount is evidenced to the Trustee as provided in the Indenture. If any Securities are original issue discount securities, then for the purposes of determining whether the Holders of the requisite principal amount of Securities have taken any action herein described, the principal mount of such Securities shall be deemed to be the portion of such principal amount that would be due and payable at the time of the taking of such action upon a declaration of acceleration of maturity thereof. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceeding had been taken. SECTION 7.02. Payment of Securities on Default; Suit Therefor. In case (1) default shall be made in the payment of any installment of interest upon any Security of any series as and when the same shall become due and payable, and such default shall have continued for a period of 30 days, or (2) default shall be made in the payment of the principal of or premium, if any, on any Security of any series as and when the same shall have become due and payable, whether at Maturity of Securities of that series or otherwise, or (3) default is made in the making or satisfaction of any sinking fund payment or analogous obligation when the same becomes due by the terms of the Securities of any series and such default shall continue for a period of 30 days then, upon demand of the Trustee, the Company shall pay to the Trustee, for the benefit of the Holder of any such Security, the whole amount that then shall have become due and payable on any such Security for principal and premium, if any, or interest, if any, or both, as the case may be, with interest on the overdue principal and premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) on the overdue installments of interest at the rate of interest or yield to Maturity (in the case of Original Issue Discount Securities) borne by any such Security and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith. -37- In case the Company 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 actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property, wherever situated, of the Company or any other obligor upon such Securities. In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Securities of any series under any Federal or State bankruptcy law or other similar law, or in case a receiver or trustee shall have been appointed for the property of the Company or such other obligor, or in the case of any other similar judicial proceedings relative to the Company or other obligor upon the Securities of any series, or to the creditors or property of the Company or such other obligor, the Trustee (irrespective of whether the principal of any Securities of any series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.02) shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and premium, if any, and interest, if any, owing and unpaid in respect of the Securities of any series (in the case of Securities that are Original Issue Discount Securities, such principal amount as would be then due and payable upon declaration of acceleration in accordance with the terms of that series) and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents or counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Securities of any series, its or their creditors, or its or their property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee, liquidator, sequestrator or trustee in bankruptcy or reorganization is hereby authorized by each of the Holders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for compensation, expenses, disbursements and advances of the Trustee, its agents or counsel, and any other amounts due to the Trustee under Section 8.06 hereof. Nothing herein contained shall be deemed to authorize the Trustee to approve, consent, accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment, or composition affecting the Securities or the rights of any Holder thereof, or to authorize -38- the Trustee to vote in respect of the claim of any Holder in any such proceeding. All rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee without the possession of any of the Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee with respect to the Securities of any series shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the Securities in respect of which such action is taken. SECTION 7.03. Application of Moneys Collected by Trustee. Any moneys collected by the Trustee with respect to any series of Securities under this Article Seven shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such moneys on account of principal, premium, if any, or interest, if any, upon presentation of the several Securities of such series or the coupons appertaining thereto, as the case may be, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 8.06 hereof; SECOND: In case the principal of the outstanding Securities of that series shall not have become due and be unpaid, to the payment of interest on the Securities of that series, in the order of the maturity of the installments of such interest with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate of interest (or yield to maturity in the case of Original Issue Discount Securities) borne by the Securities of that series, such payments to be made ratably to the Persons entitled thereto; THIRD: In case the principal of the outstanding Securities of a series in respect of which such moneys have been collected shall have become due and payable, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Securities of that series for principal and premium, if any, and interest, if any, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon any overdue installments of interest at the rate of interest (or yield to Maturity in the case of Original Issue Discount Securities) borne by the Securities of that series, and in case such moneys shall be insufficient to pay in full the whole amounts so due and unpaid upon the Securities of that series, then to the payment of such principal and premium, if any, and interest, if any, without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or -39- of any installment of interest over any other installment of interest, or of any Security of that series over any other Security of that series, ratably to the aggregate of such principal and premium, if any, and any accrued and unpaid interest. The Holders of each series of Securities of which the Required Currency is a Foreign Currency shall be entitled to receive a ratable portion of the amount determined by the Exchange Rate Agent by converting the principal amount outstanding of such series of Securities in the Foreign Currency in which payments with respect to such series of Securities are required into Dollars at the Exchange Rate as of the date of declaration of acceleration of the Maturity of the Securities (or, if there is no such rate on such date for the reasons specified in Section 2.11(d), such rate on the date specified in such Section). FOURTH: Any surplus then remaining shall be paid to the Company or to such other Person as shall be entitled to receive it. SECTION 7.04. Proceedings by Holders. No Holder of any Security of any series or of any coupon appertaining thereto shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such Holder previously shall have given to the 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 at Stated Maturity of the Securities of that series (or, in case of an Event of Default described in clause (d), (e) or (f) of Section 7.01, 25% in aggregate principal amount of all Securities then outstanding (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in Section 2.01(9))) shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as the 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 neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Holders of a majority in principal amount at Stated Maturity of the outstanding Securities of such series, it being understood and intended, and being expressly covenanted by the Holder of every Security of that series with every other Holder of every Security of that series or coupons appertaining thereto and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder of Securities of that series or any other series or coupons appertaining thereto, or to obtain or seek to obtain priority over or preference to any other such Holder, -40- 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. Notwithstanding any other provisions in this Indenture, however, the right of any Holder of any Security or coupon to receive payment of the principal of, and premium, if any, and interest, if any, on such Security, on or after the respective Stated Maturities expressed in such Security or, in the case of redemption or repayment on or after the redemption date or repayment date, as the case may be, and to institute suit for the enforcement of any such payment on or after such respective date shall not be impaired or affected without the consent of such Holder. SECTION 7.05. Proceedings by Trustee. In case of an Event of Default hereunder, the Trustee, in its discretion, may 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 by suit in equity or by action at law or by proceeding 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 7.06. Remedies Cumulative and Continuing. All powers and remedies given by this Article Seven to the Trustee or to the Holders of Securities or coupons shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or such Holders, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 7.04, every power and remedy given by this Article Seven or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders. SECTION 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Holders. The Holders of a majority in aggregate principal amount of the Securities of all series affected (voting as one class) (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in Section 2.01(9)) 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, provided, however, that such direction shall not conflict with any rule of law or this Indenture, and provided further, that (subject to the provisions of Section 8.01) the Trustee may take any action deemed proper by the Trustee which is not inconsistent with such direction -41- and 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 or trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that the action or proceedings so directed would involve the Trustee in personal liability. Prior to any declaration accelerating the maturity of the Securities of a particular series (or all of the Securities as the case may be), the Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of that series at the time outstanding may on behalf of the Holders of all the Securities of that series waive any past default or Event of Default described in clause (a), (b), (c) or (g) of Section 7.01 (or, in the case of an event specified in clause (d), (e) or (f) of Section 7.01, the Holders of an aggregate principal amount of all the Securities then outstanding (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in Section 2.01(9))) may waive such default or Event of Default as its consequences except (1) a default in the payment of interest, if any, or premium, if any, on, or the principal of, any of the Securities or in the payment of any sinking fund installment or analogous obligation with respect to Securities or (2) in respect of a covenant or provision hereof which under Article Eleven cannot be modified or amended without the consent of the Holder of each Security outstanding of the series affected. Upon any such waiver the Company, the Trustee and the Holders of Securities of that series (or all of the Securities, as the case may be) shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 7.07, said default or Event of Default shall for all purposes of the Securities and this Indenture be deemed to have been cured and to be not continuing. SECTION 7.08. Notice of Defaults. The Trustee shall, within 90 days after the occurrence of any default hereunder with respect to Securities of any series, mail to all Holders of Securities of that series in the manner and to the extent provided in Section 6.04(c) notice of such default known to the Trustee, unless such default shall have been cured prior to the giving of such notice; provided, however, that, in the case of any default of the character specified in Section 7.01(d) with respect to Securities of such series, no such notice to Holders of Securities of such series shall be given until at least 90 days after the occurrence thereof. For the purpose of this Section, the term "default," with respect to Securities of any series, means any event which is, or after notice or lapse of time, or both, would become, an Event of Default with respect to Securities of such series. SECTION 7.09. Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security or coupon 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 -42- right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 7.09 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders, holding in the aggregate more than 10% in principal amount at Stated Maturity of the Securities outstanding of that series (or, in case of any suit relating to or arising under clause (d), (e) or (f) of Section 7.01, 10% in principal amount of all Securities outstanding (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in the definition of "Securities")) or to any suit instituted by any Holder for the enforcement of the payment of the principal of or premium, if any, or interest, if any, on any Security on or after the respective Stated Maturities expressed in such Securities (or in the case of redemption or repayment on or after the redemption date or repayment date). SECTION 7.10. Judgment Currency. If for the purpose of obtaining a judgment in any court with respect to any obligation of the Company hereunder or under any Security, it shall become necessary to convert into any other currency or currency unit (the "Judgment Currency") any amount in the currency or currency unit due hereunder or under such Security (the "Contract Currency"), then such conversion shall be made at the Conversion Rate as in effect on the date the Company shall make payment to any person in satisfaction of such judgment. If pursuant to any such judgment, conversion shall be made on a date other than the date payment is made and there shall occur a change between such Conversion Rate and the Conversion Rate as in effect on the date of payment, the Company agrees to pay such additional amounts (if any) as may be necessary to ensure that the amount paid is the amount in the Judgment Currency which, when converted at the Conversion Rate as in effect on the date of payment, is equivalent to the amount then due hereunder or under such Security in the Contract Currency. Any amount due from the Company under this Section 7.10 shall be due as a separate debt and is not to be affected by or merged into any judgment being obtained for any other sums due hereunder or in respect of any Security. In no event, however, shall the Company be required to pay more in the Contract Currency at the Conversion Rate as in effect when payment is made than the amount stated to be due hereunder or under such Security so that in any event the Company's obligations hereunder or under such Security will be effectively maintained as obligations in the Contract Currency. For purposes of this Section 7.10, "Conversion Rate" shall mean the rate determined by the Exchange Rate Agent equal to the arithmetic average of the highest firm bid quotations in the Contract Currency received by the Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable -43- payment date (or, if no such rate is quoted on such date, the last date on which such rate was quoted), from three recognized foreign exchange dealers in New York City selected by the Exchange Rate Agent and approved by the Company (one of which may be the Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on such payment date, of the aggregate amount of the Judgment Currency payable on such payment date. ARTICLE EIGHT. CONCERNING THE TRUSTEE. SECTION 8.01. Duties and Responsibilities of Trustee. 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 that series and after the curing of all Events of Default which may have occurred with respect to the Securities of that series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations with respect to such series shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of any 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 with respect to that series and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. Prior to the occurrence of an Event of Default with respect to the Securities of a series, and after the curing or waiving of all Events of Default with respect to that series which may have occurred and 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 to examine the same to determine whether or not they conform to the requirements of this Indenture. 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: (a) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and (b) 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 -44- the direction of the Holders pursuant to Section 7.07 of any series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own 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 it has reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 8.01. SECTION 8.02. Reliance on Documents, Opinions, etc. Except as otherwise provided in Section 8.01: (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a written statement signed in the name of the Company by the President and Chief Executive Officer, one of its Vice Presidents or its Treasurer (unless other evidence in respect thereof is herein specifically prescribed); and any resolution of the Board of Directors shall be sufficiently evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company; (c) Whenever in the administration of the Indenture, the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically provided) may, in the absence of bad faith on its part, rely on an Officers' Certificate; (d) the Trustee may consult with its counsel of its selection or require an Opinion of Counsel and any such advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, pursuant to the provisions of this Indenture, unless such Holders shall have offered to the -45- Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (f) 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 or rights or powers conferred upon it by this Indenture; (g) 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, bond, debenture, coupon or other paper or document, unless requested in writing to do so by the Holders of not less than a majority in principal amount at Stated Maturity of the Securities then outstanding of any series affected or of all the Securities, as the case may be; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding; (h) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (i) the Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Principal Trust Office of the Trustee, and such notice references the Securities and this Indenture. SECTION 8.03. No Responsibility for Recitals, etc. The recitals contained herein and in the Securities (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any of the Securities or coupons; provided, however, that the Trustee shall not be relieved of its duty to authenticate Securities as authorized by this Indenture. The Trustee shall not be accountable for the use or application by the Company of any Securities or the proceeds of any Securities authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. SECTION 8.04. Trustee, Paying Agent or Registrar May Own Securities. The Trustee or any paying agent or Security registrar or -46- any other agent of the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities or the coupons appertaining thereto with the same rights it would have if it were not Trustee, paying agent or Security registrar. SECTION 8.05. Moneys to be Held in Trust. Subject to the provisions of Section 13.04, all moneys received by the Trustee or any paying agent shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee and any paying agent shall be under no liability for interest on any moneys received by it hereunder except such as it may agree in writing with the Company to pay thereon. SECTION 8.06. Compensation and Expenses of Trustee. The Company shall pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed in writing between the Company and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Company shall pay or reimburse the Trustee upon its request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct. The Company shall indemnify the Trustee for, and hold it harmless against, any and all loss, liability, damage, claim or expense, including taxes (other than taxes based on the income of the Trustee) incurred without negligence or willful misconduct on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability arising in connection with its duties under this Indenture. The obligations of the Company under this Section 8.06 to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior 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. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 7.01(e) or Section 7.01(f), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law. SECTION 8.07. Officers' Certificate as Evidence. Except as otherwise provided in Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or -47- omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 8.08. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of the Trust Indenture Act of 1939 Sections 310(a)(1) and 310(a)(2) or successor provisions. The Trustee (or any affiliate thereof which has unconditionally guaranteed the obligations of the Trustee hereunder) shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with the Trust Indenture Act of 1939 Section 310(b) or successor provisions. In determining whether the Trustee has conflicting interests as defined in the Trust Indenture Act of 1939 Section 310(b)(1) or successor provisions, the provisions contained in the proviso to the Trust Indenture Act of 1939 Section 310(b)(1) or successor provisions shall be deemed incorporated herein. SECTION 8.09. Resignation or Removal of Trustee. (a) The Trustee may resign with respect to any series of Securities at any time by giving written notice of such resignation to the Company. The Company shall mail or cause to be mailed to the Holders of the applicable series of Securities notice of the resignation of the Trustee. Upon receiving such notice of resignation with respect to the applicable series of Securities, the Company shall promptly appoint a successor trustee with respect to that series by written instrument, in duplicate, executed by or pursuant to a resolution of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If a successor trustee shall not have been so appointed with respect to any series of Securities, and shall have accepted appointment within 30 days after the giving of such notice of resignation to the Holders of such series, the resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor trustee, or any Holder 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 7.09, on behalf of such Holder and all others similarly situated, petition any such court for the appointment of a successor trustee with respect to that series. 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 - -48- (1) the Trustee shall fail to comply with the provisions of subsection (a) of Section 8.08 after written request therefor by the Company or by any Holder who has been a bona fide holder of a Security or Securities of the applicable series for at least six months, or (2) 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 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 Company may remove the Trustee with respect to any one or more of such series of Securities and appoint a successor trustee of that series by written instrument, in duplicate, executed by or pursuant to order of the Board of Directors, 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 7.09, any Holder has been a bona fide Holder of a Security or Securities of that series for at least six months may, on behalf of such Holder 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 that 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 with respect to that series. (c) The Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of any series at the time outstanding may at any time remove the Trustee with respect to such series and nominate with respect to such series a successor trustee which shall be deemed appointed as successor trustee with respect to such series unless within 10 days after such nomination the Company objects thereto, in which case the Trustee so removed or any Holder of Securities of the series may, at the expense of the Company, petition any court of competent jurisdiction for appointment of a successor trustee with respect to such series upon the terms and conditions and otherwise as provided in subsection (a) of this Section 8.09. (d) Any resignation or removal of the Trustee and any appointment of a successor trustee with respect to an applicable series of Securities pursuant to any of the provisions of this Section 8.09 shall become effective upon acceptance of appointment by the successor trustee for that series as provided in Section 8.10. (e) The Company shall give notice as provided in Section 15.05 of each resignation or removal of the Trustee with respect to any series of Securities. Each notice shall include the name of such successor trustee and the address of its Principal Office and shall be given within 60 days of such event. SECTION 8.10. Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 8.09 shall execute, -49- acknowledge and deliver to the Company 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 the rights, powers, trusts, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 8.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers and trusts with respect to any series of Securities of the trustee so ceasing to act. Upon request of any successor trustee, the Company shall execute any and all instruments in writing in order more fully and certainly to vest in and confirm to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 8.06. In case of the appointment hereunder of a successor trustee with respect to the Securities of any one or more (but not all) series, the Company, the predecessor trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which shall contain (1) such provisions as shall be necessary or desirable to transfer and confirm to, and vest in each successor trustee all of the rights, powers and duties of the predecessor trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) if the retiring trustee is not retiring with respect to all Securities, it 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 (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such trustee. No successor trustee shall accept appointment as provided in this Section 8.10 unless at the time of such acceptance such successor trustee shall be eligible and qualified under the provisions of Section 8.08. Upon acceptance of appointment by a successor trustee as provided in this Section 8.10, the Company shall mail notice of the succession -50- of such trustee hereunder to all the Registered Holders of such series as the names and addresses of such Holders shall appear on the registry books of the Company and shall publish notice of such event once in an Authorized Newspaper in the Place of Payment. If the Company fails to mail such notice in the prescribed manner within 10 days after the acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company. SECTION 8.11. Succession by Merger, etc. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder provided such corporation shall be eligible and qualified under the provisions of Section 8.08 without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any 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 of any series 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 of any series either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities of any series or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or 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 8.12. Limitation on Rights of Trustee as a Creditor. If and when the Trustee shall be or become a creditor of the Company, the Trustee shall be subject to the provisions of the Trust Indenture Act of 1939 regarding the collection of claims against the Company. ARTICLE NINE. CONCERNING THE HOLDERS. SECTION 9.01. Action by Holders. (a) Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount at Stated Maturity of the Securities of any or all series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action -51- the Holders of such specified percentage have joined therein may be evidenced (A) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (B) by the record of the Holders of Securities voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article Ten, or (C) by a combination of such instrument or instruments and any such record of such a meeting of such Holders. (b) If the Company shall solicit from the Holders of any or all series any request, demand, authorization, direction, notice, consent, waiver or other act, the Company may, at its option, by or pursuant to resolution of the Board of Directors fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other act may be given before or after the record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other act, and for that purpose the Securities deemed to be outstanding shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by the Holders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. SECTION 9.02. Proof of Execution by Holders. Subject to the provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any instrument by a Holder, his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Securities of any series shall be proved by the registry books of the Company or by a certificate of the registrar of the Securities of any series. The record of any meeting of Holders of Securities may be proved in the manner provided in Section 10.06. SECTION 9.03. Who Deemed Absolute Owners. The Company, the Trustee, any paying agent, any transfer agent and any Security registrar may treat the Holder of any Unregistered Security and the Holder of any coupon, except with respect to a Fully Registered Security, whether or not the Security to which it appertained be registered, as the absolute owner of such Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes (whether or not such Security or coupon shall be overdue) and neither the Company, the Trustee, any paying agent, any transfer agent nor any Security registrar shall be affected by any notice to the contrary. The Company, the Trustee, any paying agent, -52- any transfer agent and any Security registrar may treat the person in whose name a Registered Security shall be registered upon the registry books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue) for the purpose of receiving payment of principal of, premium, if any, on and, if such Registered Security is a Fully Registered Security, interest, if any, on, such Registered Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any transfer agent nor any Security registrar shall be affected by any notice to the contrary. All such payments so made to any Holder for the time being or upon his order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon such Security. The amount of Unregistered Securities held by any Person executing any instrument or writing as a Holder, and the numbers of such Unregistered Securities, and the date of his holding the same, may be proved by the production of such Securities or by a certificate executed by any trust company, bank, banker or member of a national securities exchange (wherever situated), as depositary, if such certificate is in form satisfactory to the Trustee, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Unregistered Securities therein described; or such facts may be proved by the certificate or affidavit of the Person executing such instrument or writing as a Holder, if such certificate or affidavit is in form satisfactory to the Trustee. The Trustee and the Company may assume that such ownership of any Unregistered Security continues until (i) another certificate bearing a later date issued in respect of the same Unregistered Security is produced, or (ii) such Unregistered Security is produced by some other Person, or (iii) such Unregistered Security is registered as to principal or is surrendered in exchange for a Fully Registered Security, or (iv) such Unregistered Security has been cancelled in accordance with Section 2.08. SECTION 9.04. Company-Owned Securities Disregarded. In determining whether the Holders of the requisite aggregate principal amount at Stated Maturity of Securities have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Company or any other obligor on such Securities or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Securities shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction or consent only Securities which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Securities and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the -53- Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. SECTION 9.05. Revocation of Consents; Future Holders Bound. (a) At any time prior to but not after, the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the Holders of the percentage in aggregate principal amount at Stated Maturity 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 number, letter or other distinguishing symbol of which is shown by the evidence to be included in the Securities the Holders of which have consented to such action may, by filing written notice with the Trustee at the Principal Office of the Trustee and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Holder and all future Holders and owners of such Security and any Securities which may be issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon such Security or such other Security issued in exchange or substitution therefor. (b) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. ARTICLE TEN. HOLDERS' MEETINGS. SECTION 10.01. Purposes of Meetings. A meeting of the Holders of Securities of any or all series may be called at any time and from time to time pursuant to the provisions of this Article Ten for any of the following purposes: (a) to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article Seven; (b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article Eight; (c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.02; or (d) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount at -54- Stated Maturity of the Securities of any or all series, as the case may be, under any other provisions of this Indenture or under applicable law. SECTION 10.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of Holders of Securities of any or all series to take any action specified in Section 10.01, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine. Notice of every meeting of the Holders of Securities of any or all series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to Holders of Registered Securities of each series affected, at their addresses as they appear on the registry books of the Company, and notice to Holders of Unregistered Securities of each series affected shall be published in an Authorized Newspaper in the Place of Payment. Such notice shall be mailed or published, as the case may be, not less than 20 nor more than 90 days prior to the date fixed for the meeting. However, if all Securities of any series with respect to which the meeting is to be held are Registered Securities no notice need be given except notice by mail as hereinabove provided. Failure to receive such notice or any defect therein shall in no case affect the validity of any action taken at such meeting. Any meeting of Holders of Securities of any or all series, as the case may be, shall be valid without notice if the Holders of all such Securities outstanding, the Company and the Trustee are present in person or by proxy or shall have waived notice thereof before or after the meeting. SECTION 10.03. Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the Holders of at least 10% in aggregate principal amount at Stated Maturity of the Securities then outstanding of any or all series, as the case may be, that may be affected by the action proposed to be taken at the meeting, shall have requested the Trustee to call a meeting of Holders of Securities of any or all series, as the case may be, that may be so affected by written request setting forth in a reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders, in the amount specified, may determine the time and the place in said Borough of Manhattan for such meeting and may call such meeting to take any action authorized in Section 10.01, by mailing notice thereof as provided in Section 10.02. SECTION 10.04. Qualification for Voting. To be entitled to vote at any meeting of Holders of Securities, a Person shall (a) be a Holder of one or more Securities with respect to which such meeting is being held or (b) be a Person appointed by an instrument in writing as proxy by such a Holder. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any or all series, as the case may be, shall be the Persons entitled to vote -55- at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION 10.05. Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities, in regard to proof of the holding of Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem fit. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 10.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in principal amount at Stated Maturity of the Securities represented at the meeting. Subject to the provisions of Section 9.04, at any meeting each Holder of Securities with respect to which such meeting is being held, or proxy therefor, shall be entitled to one vote for each $1,000 (or, if such Securities are denominated in a Foreign Currency, the minimum denomination of such Securities as specified pursuant to Section 2.01(8)) in principal amount (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in Section 2.01(9)) of such Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any such Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than as a Holder of Securities or proxy therefor. At any meeting of Holders of Securities, the presence of Persons holding or representing the Securities with respect to which such meeting is being held in such aggregate principal amount sufficient to take action on the business for the transaction of which such meeting was called shall constitute a quorum, but, if less than a quorum is present, the Persons holding or representing a majority in such aggregate principal amount of such Securities represented at the meeting may adjourn such meeting with the same effect, for all intents and purposes, as though a quorum had been present. Any meeting of Holders of Securities with respect to which such meeting is being held duly called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time by vote of the Holders of a majority in such aggregate principal amount of the Securities represented at the meeting and entitled to vote, and the meeting may be held as so adjourned without further notice. -56- SECTION 10.06. Voting. The vote upon any resolution submitted to any meeting of Holders of Securities with respect to which such meeting is being held shall be by written ballots on which shall be inscribed the signatures of the Holders or of their representatives by proxy and the serial number or numbers of the Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.02. The record shall show the serial numbers of the Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 10.07. No Delay of Rights by Meeting. Nothing in this Article Ten contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders of Securities or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders of Securities under any of the provisions of this Indenture or of the Securities. ARTICLE ELEVEN. SUPPLEMENTAL INDENTURES. SECTION 11.01. Supplemental Indentures without Consent of Holders. Without the consent of any Holders of any series of Securities, the Company, when authorized by or pursuant to a resolution of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: (a) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation, pursuant to Article Twelve hereof, of the covenants, agreements and obligations of the Company herein and in the Securities contained; (b) to add to the covenants of the Company such further covenants, restrictions or conditions for the protection of the -57- Holders of any series of Securities as the Board of Directors and the Trustee shall consider to be for the protection of the Holders of such Securities, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default and shall not adversely affect the interests of the Holders of Securities of any series; (c) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of any series, any property or assets which the Company may desire or may be required to convey, transfer, assign, mortgage or pledge in accordance with the provisions of Section 5.03 or Section 12.02; (d) to establish the form or terms of Securities of any series as permitted by Section 2.01; (e) to cure any ambiguity, 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 which shall not be inconsistent with the provisions of this Indenture; provided, however, that such action shall not adversely affect the interests of the Holders of Securities of any series; or (f) 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 8.10; (g) to provide for the documentation necessary for the issuance of Securities outside the United States of America; or (h) to conform the Indenture to the provisions of the Trust Indenture Act of 1939, as then in effect. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects -58- the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section 11.01 may be executed by the Company and the Trustee without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 11.02. SECTION 11.02. Supplemental Indentures with Consent of Holders of a Series. With the consent (evidenced as provided in Section 9.01) of the Holders of not less than 50% in aggregate principal amount at Stated Maturity of the Securities at the time outstanding of each series affected by such supplemental indenture or indentures, the Company, when authorized by or pursuant to a resolution of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto 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 under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the fixed Maturity of any Security, (ii) reduce the rate of interest of, or any premium payable upon the redemption of, any Security, or extend the time of payment of principal or interest, if any, thereon or reduce the principal thereof or the time during which premium is payable thereon, (iii) change the Required Currency, (iv) 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 7.01 or the amount thereof provable in bankruptcy pursuant to Section 7.02 without the consent of the Holder of each Security so affected, (v) change the place of payment where, or the currency or currencies or currency unit or units in which, any Security or any premium or interest thereon is payable, (vi) impair the right to institute suit for the enforcement of any such payment on or after the maturity thereof, (vii) affect adversely the terms, if any, of conversion of any Security into stock or other securities of the Company or of any other corporation, (viii) change any obligation of the Company, with respect to outstanding Securities, to maintain an office or agency in the places and for the purposes specified in the Indenture, (ix) reduce the percentage in principal amount at Stated Maturity of the outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions hereof or of certain defaults hereunder and their consequences provided for in this Indenture, or (x) modify any provision of this Section 11.02 or Section 7.07 hereof except to increase any such percentage or to provide certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby. 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 -59- rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. Upon the request of the Company, accompanied by a copy of a resolution of the Board of Directors certified by its Secretary or Assistant Secretary authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Holders of such series as aforesaid, the Trustee shall join with the Company 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 Holders under this Section 11.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. SECTION 11.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures. Any supplemental indenture executed pursuant to the provisions of this Article Eleven shall comply with the Trust Indenture Act of 1939, as then in effect. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Eleven, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders of the series of Securities affected 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 11.04. Notation on Securities. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article Eleven may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee and delivered in exchange for the Securities of such series then outstanding. SECTION 11.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee. The Trustee, subject to the provisions of Sections 8.01 and 8.02, shall be entitled to receive and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental -60- indenture executed pursuant hereto is authorized and permitted by this Indenture and complies with the requirements of this Article Eleven. ARTICLE TWELVE. CONSOLIDATION, MERGER AND SALE. SECTION 12.01. Company May Consolidate, etc., on Certain Terms. (a) Subject to the provisions of Section 12.02, nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other U.S. corporation or corporations (whether or not affiliated with the Company), or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of all or substantially all the property of the Company, to any other corporation (whether or not affiliated with the Company) authorized to acquire and operate the same; provided, however, that, except as otherwise provided in Section 12.01(b) below, upon any such consolidation, merger, sale or conveyance, other than a consolidation or merger in which the Company is the continuing corporation, the due and punctual payment of the principal of and premium, if any, and interest, if any, on all of the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture and in such series to be performed by the Company, shall be expressly assumed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by the corporation (if other than the Company) formed by such consolidation, or into which the Company shall have been merged, or by the corporation which shall have acquired such property; and provided further that the Company or such successor corporation, 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. (b) Notwithstanding the provisions of Section 12.01(a), the Company may sell or convey all or substantially all its property located in the United States of America to one or more wholly owned Subsidiaries organized under the laws of the United States of America or any political subdivision thereof, and such Subsidiary or Subsidiaries will not be required to assume the performance or observance of any of the Company's obligations under this Indenture or any Securities. SECTION 12.02. Securities to be Secured in Certain Events. If, upon any consolidation or merger of the Company with or into any other corporation, or upon any sale or conveyance of all or substantially all the property of the Company to any other corporation, any of the property of the Company or of any Restricted Subsidiary would thereupon become subject to any mortgage, lien or pledge, the Company, prior to or simultaneously with such consolidation, merger, sale or conveyance, will secure the Securities of each series outstanding -61- hereunder, equally and ratably with any other obligations of the Company or any Restricted Subsidiary then entitled thereto, by a direct lien on all such property prior to all liens other than any theretofore existing thereon. SECTION 12.03. Successor Corporation to be Substituted. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest, if any, on all of the Securities of each series and the due and punctual performance of all of the covenants and conditions of this Indenture and in such series to be performed by the Company, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein and, if the Company is to be voluntarily dissolved, the Company shall thereupon be released from all obligations hereunder and under the Securities of each series. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of BetzDearborn Inc. any or all of the Securities of each series issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the other Securities of such series theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. SECTION 12.04. Opinion of Counsel to be Given Trustee. Before the Trustee shall execute any supplemental indenture required pursuant to this Article Twelve, the Trustee, subject to Sections 8.01 and 8.02, shall receive and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance and any such assumption complies with the provisions of this Article. ARTICLE THIRTEEN. SATISFACTION AND DISCHARGE OF INDENTURE. SECTION 13.01. Discharge of Indenture. When (a) the Company shall deliver to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series which shall have been destroyed, lost or stolen or in lieu of or in substitution for which other Securities shall have been -62- authenticated and delivered) and not theretofore cancelled, or (b) all the Securities of any series not theretofore cancelled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee, in trust, an amount in the Required Currency (other than funds repaid by the Trustee to the Company in accordance with Section 13.04) sufficient to pay at maturity or upon redemption all of the Securities of such series (other than any Securities of such series which shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered or which shall have been paid) not theretofore cancelled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest, if any, due or to become due to such date of maturity or redemption date, as the case may be, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect with respect to Securities of such series, and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel as required by Section 16.07 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to Securities of such series, the Company, however, hereby agreeing to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities. SECTION 13.02. Deposited Moneys to be Held in Trust by Trustee. All moneys deposited with the Trustee pursuant to Section 13.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Company if acting as its own paying agent), to the Holders of the particular Securities for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest and premium, if any. SECTION 13.03. Paying Agent to Repay Moneys Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any paying agent of the Securities (other than the Trustee) shall, upon demand of the Company, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such moneys. SECTION 13.04. Return of Unclaimed Moneys. Any moneys deposited with or paid to the Trustee for payment of the principal of (and premium, if any) or interest, if any, on Securities of any series and not applied but remaining unclaimed by the Holders of Securities of that series for two years after the date upon which the principal of, and premium, if any, or interest, if any, on such Securities, as the case may be, shall have become due and payable, shall, upon written -63- demand, be repaid to the Company by the Trustee; and the Holder of any of such Securities shall thereafter look only to the Company for any payment which such Holder may be entitled to collect, provided, however, that, before being required to make any such repayment, the Trustee may (at the cost of the Company) mail to such Holders at their last known address or cause to be published once a week for two successive weeks, in each case on any day of the week, in an Authorized Newspaper in the Place of Payment, a notice (in such form as may be deemed appropriate by the Trustee) that said moneys remain unclaimed and that, after a date named therein, any unclaimed balance of said moneys then remaining will be returned to the Company (except that with respect to presentation of Securities for payment and transfer, such term shall mean the office or agency of the Trustee in said city at which at any particular time its corporate agency business shall be conducted). ARTICLE FOURTEEN. DEFEASANCE. SECTION 14.01. Applicability of Article. If pursuant to Section 2.01 provision is made for the defeasance of Securities of a series, then the provisions of this Article shall be applicable except as otherwise specified as contemplated by Section 2.01 for Securities of such series. SECTION 14.02. Defeasance Upon Deposit of Moneys or U.S. Government Obligations. At the Company's option, either (x) the Company shall be deemed to have been Discharged (as defined below) from its obligations with respect to Securities of any series on the 91st day after the applicable conditions set forth below have been satisfied, or (y) the Company shall cease to be under any obligation to comply with any term, provision or condition set forth in Sections 5.03, 5.04, 5.08, 12.01 and 12.02 with respect to Securities of any series at any time after the applicable conditions set forth below have been satisfied: (a) the Company shall have deposited or caused to be deposited irrevocably with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series (i) money in the Required Currency in an amount, or (ii) in the case of Securities denominated in Dollars, U.S. Government Obligations (as defined below), which through the payment of interest, principal and premium, if any, in respect thereof in accordance with their terms will provide (without any reinvestment of such interest, principal or premium), not later than one day before the due date of any payment, money in an amount, or (iii) a combination of (i) and (ii), sufficient, in the opinion (with respect to (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee at or prior to the time of such deposit, to pay and discharge each installment of principal (including -64- any mandatory sinking fund payments) of, premium, if any, and interest on, the outstanding Securities of such series on the dates such installments of interest, principal or premium are due or the outstanding Securities of such series are redeemable, if applicable, pursuant to Section 14.02(b) below; (b) in case any of the Securities of such series are to be redeemed on any date prior to their Stated Maturity, the Company shall have given to the Trustee an irrevocable notice pursuant to Section 3.02 of this Indenture requiring redemption of such Securities on such date and the Company shall have given to the Trustee in form satisfactory to the Trustee irrevocable instructions to publish notice of redemption of such Securities prior to said date as provided in Section 3.02 of this Indenture; and in the event such Securities are not to be redeemed within the 60 days next succeeding the date of such deposit with the Trustee, the Company shall have given the Trustee in form satisfactory to it irrevocable instructions to publish, as soon as practicable, once in each of two successive calendar weeks in an Authorized Newspaper, a notice to the Holders of such Securities that the deposit required by Section 14.02(a) has been made with the Trustee and stating such Maturity or redemption date or dates upon which moneys are to be available for the payment of the principal of, premium, if any, and interest on such Securities. (c) the Company shall have delivered to the Trustee an Officers' Certificate certifying (i) as to whether the Securities of such series are then listed on the New York Stock Exchange and (ii) that the deposit and related defeasance would not cause the holders of such series of Securities to recognize income, gain or loss for United States Federal income tax purposes and that the Holders of such series will be subject to United States Federal income tax in the same amounts, in the same manner and at the same times as would have been the case if such option had not been exercised; (d) if the Securities of such series are then listed on the New York Stock Exchange, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Company's exercise of its option under this Section would not cause such Securities to be delisted; (e) no Event of Default or event (including such deposit) which, with notice or lapse of time, or both, would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit as evidenced to the Trustee in an Officers' Certificate delivered to the Trustee concurrently with such deposit; (f) the Company shall have paid or duly provided for payment of all amounts then due to the Trustee pursuant to Section 8.06. "Discharged" means that the Company 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 -65- obligations under this Indenture relating to the Securities of such series (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except (A) the rights of Holders of Securities of such series to receive, from the trust fund described in clause (a) above, payment of the principal of, and premium, if any, and the interest on such Securities when such payments are due, (B) the Company's obligations with respect to the Securities of such series under Sections 2.05, 2.06, 5.02 and 14.03 and (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder, including without limitation, the provisions of Section 8.06. "U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof. SECTION 14.03. Deposited Moneys and U.S. Government Obligations To Be Held in Trust; Miscellaneous. All moneys and U.S. Government Obligations deposited with the Trustee pursuant to Section 14.02 in respect of Securities of a series shall be held in trust and applied by it, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any paying agent (including the Company acting as its own paying agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon for principal, premium, if any, and interest, if any, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 14.02 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities. SECTION 14.04. Repayment to Company. After the Maturity and payment of the principal of, premium, if any, and interest on the Securities of any series for which money or U.S. Government Obligations have been deposited pursuant to Section 14.02, the Trustee and any paying agent shall promptly pay or return to the Company upon request any money and U.S. Government Obligations held by them that are not required for the payment of the principal of, premium, if any, and interest on the Securities of such series. The provisions of Section 13.04 shall apply to any money held by the Trustee or any paying agent under this Article that remains unclaimed for two years after the Maturity of any series of Securities for which money or U.S. Government Obligations have been deposited pursuant to Section 14.02. -66- SECTION 14.05. Reinstatement. If the Trustee is unable to apply any money or U.S. Government Obligations in accordance with Section 14.02 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 14.02 until such time as the Trustee is permitted to apply all such money or U.S. Government Obligations in accordance with Section 14.02. ARTICLE FIFTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS. SECTION 15.01. Indenture and Securities Solely Corporate Obligations. No recourse for the payment of the principal of or premium, if any, or interest, if any, on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture, or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities. ARTICLE SIXTEEN. MISCELLANEOUS PROVISIONS. SECTION 16.01. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. SECTION 16.02. Benefits of Indenture Restricted to Parties and Holders. 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 assigns and the Holders, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; and, subject to the provisions of Articles Nine and Fifteen, all of such covenants, conditions and provisions shall be for the sole benefit of the parties hereto and the Holders. -67- SECTION 16.03. Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company. SECTION 16.04. Addresses for Notices, etc. 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 on the Company shall be deemed to have been sufficiently given or served, for all purposes, if given or served at the office of the Treasurer at the principal office of the Company at 4636 Somerton Road, P.O. Box 3002, Trevose, PA 19053-6783 (until another address is filed by the Company with the Trustee). Any notice, direction, request of demand by any Holder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Principal Office of the Trustee, addressed to the attention of its corporate trust department. SECTION 16.05. Notices to Holders: Waiver. Where this Indenture or any Security provides for notice to Holders of any event, (a) if any of the Securities affected by such event are Registered Securities, such notice shall be sufficiently given (unless otherwise herein or in such Securities expressly provided) if in writing and mailed, first-class, postage prepaid, to each Registered Holder of such Securities, at his address as it appears on the registry books of the Company, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice, and (b) if any of the Securities affected by such event are Unregistered Securities, such notice shall be sufficiently given (unless otherwise herein or in such Securities expressly provided) if published once in an Authorized Newspaper in the Place of Payment not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of publication of any Authorized Newspaper, or by reason of any other cause, it shall be impossible to make publication of any notice in one or more Authorized Newspapers as required by any Security or this Indenture, then such method of publication or notification as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. -68- In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or otherwise, it shall be impractical to mail notice of any event to the Holders of Securities 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 satisfactory to the Trustee and the Company shall be deemed to be a sufficient giving of such notice. SECTION 16.06. Governing Law. This Indenture, each Security and any coupon appertaining thereto shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. SECTION 16.07. Evidence of Compliance with Conditions Precedent. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, ail such conditions precedent have been complied with. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (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 opinion contained in such certificate or opinion are based; (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her 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. SECTION 16.08. Legal Holidays. In any case where the date of maturity of interest on or principal of the Securities or the date fixed for redemption of any Security will not be a Business Day at the applicable Place of Payment, then payment of such interest and premium, if any, on or principal of the Securities need not be made at such Place of Payment on such date but may be made on the next Business Day at such Place of Payment with the same force and effect as if made on the date of maturity or the date fixed for redemption and no interest shall accrue for the period from and after such date. SECTION 16.09. Trust Indenture Act to Control. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by any of sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such required provision shall control. -69- SECTION 16.10. No Security Interest Created. Nothing in this Indenture or in the Securities, expressed or implied, shall be construed to create or constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction where property of the Company or its Subsidiaries is located. SECTION 16.11. Table of Contents, Headings, etc. The table of contents and the titles and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 16.12. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. SECTION 16.13. Acceptance of Trust. The Trustee hereby accepts the trusts declared and provided in this Indenture, upon the terms and conditions hereinabove set forth. IN WITNESS WHEREOF, BETZDEARBORN INC. has caused this Indenture to be signed by its President and Chief Executive Officer, its Senior Vice President and Chief Financial Officer or its Treasurer, and THE BANK OF NEW YORK, as Trustee, has caused this Indenture to be signed by one of its Vice Presidents or Assistant Vice Presidents, -70- as of the day and year first written above. BETZDEARBORN INC. By:________________________________ Title:_____________________________ THE BANK OF NEW YORK, as Trustee By:________________________________ Title:_____________________________ -71- EXHIBIT A FORM OF ELECTION TO RECEIVE PAYMENTS IN FOREIGN CURRENCY OR TO RESCIND SUCH ELECTION The undersigned, registered owner of certificate number (the "Certificate"), representing [name of series of Securities] (the "Securities") in an aggregate principal amount of , hereby elects to receive all payments in respect of the Securities in [Foreign Currency in which the Securities are denominated]. Subject to the terms and conditions set forth in the indenture under which the Securities were issued (the "Indenture"), this election shall take effect on the next record date after this election form is received by the Trustee and shall remain in effect until it is rescinded by the undersigned or until the Certificate is transferred or paid in full at Maturity. [Insert appropriate wire transfer instructions.] rescinds the election previously submitted by the undersigned to receive all payments in respect of the Securities in [Foreign Currency in which the Securities are denominated] represented by the Certificate. Subject to the terms and conditions set forth in the Indenture, this rescission shall take effect on the next record date after this election form is received by the Trustee, or, in the case of Maturity of an installment of principal, the fifteenth day immediately preceding such Maturity. The undersigned acknowledges that, except as provided in the Indenture, any costs incurred by or on behalf of the Company in connection with the conversion of Dollars into Foreign Currency shall be borne by the undersigned through deduction from payments required to be made to the undersigned pursuant to the terms of the Indenture. All capitalized terms used herein, unless otherwise defined herein, shall have the meanings assigned to them in the Indenture. ----------------------------------- (Name of Owner) ----------------------------------- (Signature of Owner) EX-12 4 COMPUTATION OF RATIOS BETZDEARBORN INC. Computation of the Ratio of Earnings to Fixed Charges and the Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Millions of Dollars)
Years Ended December 31, ------------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- RATIO OF EARNINGS TO FIXED CHARGES Earnings before income taxes and cumulative effect of accounting changes $142.9 $ 99.7 $111.6 $120.9 $104.1 Add: Interest expense 45.5 25.7 1.1 0.2 0.1 Portion of rent expense representative of interest 7.0 5.6 4.5 4.2 4.0 ------ ------ ------ ------ ------ Earnings available for fixed charges $195.4 $131.0 $117.2 $125.3 $108.2 ====== ====== ====== ====== ====== Interest expense $ 45.5 $ 25.7 $ 1.1 $ 0.2 $ 0.1 Add capitalized interest 0.4 0.4 0.5 1.1 1.2 Portion of rent expense representative of interest 7.0 5.6 4.5 4.2 4.0 ------ ------ ------ ------ ------ Fixed charges $ 52.9 $ 31.7 $ 6.1 $ 5.5 $ 5.3 ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges 3.7 4.1 19.2 22.8 20.4 ====== ====== ====== ====== ======
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Years Ended December 31, ------------------------------------------------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- Earnings before income taxes and cumulative effect of accounting changes $142.9 $ 99.7 $111.6 $120.9 $104.1 Add: Interest expense 45.5 25.7 1.1 0.2 0.1 Portion of rent expense representative of interest 7.0 5.6 4.5 4.2 4.0 ------ ------- ------ ------ ------ Earnings available for fixed charges $195.4 $ 131.0 $117.2 $125.3 $108.2 ====== ======= ====== ====== ====== Interest expense $ 45.5 $ 25.7 $ 1.1 $ 0.2 $ 0.1 Add capitalized interest 0.4 0.4 0.5 1.1 1.2 Portion of rent expense 7.0 5.6 4.5 4.2 4.0 representative of interest Preferred stock dividends 7.7 7.7 7.8 7.9 8.0 ------ ------- ------ ------ ------ Fixed charges $ 60.6 $ 39.4 $ 13.9 $ 13.4 $ 13.3 ====== ======= ====== ====== ====== Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 3.2 3.3 8.4 9.4 8.1 ====== ======= ====== ====== ======
EX-23.1 5 CONSENT OF INDEPENDENT AUDITORS CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3 No. 333-00000) and related Prospectus of BetzDearborn Inc. and to the incorporation by reference therein of our report dated February 2, 1998, with respect to the consolidated financial statements and schedule of BetzDearborn Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Philadelphia, Pennsylvania March 9, 1998 EX-25 6 FORM T-1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 - ---------------------------- ------------------- (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) ---------------------------- BETZDEARBORN INC. (Exact name of obligor as specified in its charter) Pennsylvania 23-1503731 - --------------------------------- ------------------ (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification no.) 4636 Somerton Road Trevose, Pennsylvania 19053-6783 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) ---------------------------- Debt Securities (Title of the indenture securities) ================================================================================ 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. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(a) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, 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 6th day of March, 1998. THE BANK OF NEW YORK By: /s/ VAN K. BROWN -------------------------------- Name: VAN K. BROWN Title: ASSISTANT VICE PRESIDENT -4- - -------------------------------------------------------------------------------- EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts in Thousands -------------- ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .................. $ 5,004,638 Interest-bearing balances ........................................... 1,271,514 Securities: Held-to-maturity securities ......................................... 1,105,782 Available-for-sale securities ....................................... 3,164,271 Federal funds sold and Securities purchased under agreements to resell............................................................ 5,723,829 Loans and lease financing receivables: Loans and leases, net of unearned income ............................ 34,916,196 LESS: Allowance for loan and lease losses ................... ....... 581,177 LESS: Allocated transfer risk reserve................................ 429 Loans and leases, net of unearned income, allowance, and reserve .................................................... 34,334,590 Assets held in trading accounts ....................................... 2,035,284 Premises and fixed assets (including capitalized leases) .............. 671,664 Other real estate owned ............................................... 13,306 Investments in unconsolidated subsidiaries and associated companies ........................................................... 210,685 Customers' liability to this bank on acceptances outstanding .......... 1,463,446 Intangible assets ..................................................... 753,190 Other assets .......................................................... 1,784,796 ----------- Total assets .......................................................... $57,536,995 =========== LIABILITIES Deposits: In domestic offices ................................................. $27,270,824 Noninterest-bearing ................................................. 12,160,977 Interest-bearing .................................................... 15,109,847 In foreign offices, Edge and Agreement subsidiaries, and IBFs ....... 14,687,806 Noninterest-bearing ................................................. 657,479 Interest-bearing .................................................... 14,030,327 Federal funds purchased and Securities sold under agreements to repurchase........................................................... 1,946,099 Demand notes issued to the U.S. Treasury .............................. 283,793 Trading liabilities ................................................... 1,553,539 Other borrowed money: With remaining maturity of one year or less ......................... 2,245,014 With remaining maturity of more than one year through three years....................................... 0 With remaining maturity of more than three years ....................................................... 45,664 Bank's liability on acceptances executed and outstanding .............. 1,473,588 Subordinated notes and debentures ..................................... 1,018,940 Other liabilities ..................................................... 2,193,031 ----------- Total liabilities ..................................................... 52,718,298 ----------- EQUITY CAPITAL Common stock .......................................................... 1,135,284 Surplus ............................................................... 731,319 Undivided profits and capital reserves ................................ 2,943,008 Net unrealized holding gains (losses) on available-for-sale securities .......................................................... 25,428 Cumulative foreign currency translation adjustments ................... (16,342) ----------- Total equity capital .................................................. 4,818,697 ----------- Total liabilities and equity capital .................................. $57,536,995 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot | Thomas A. Renyi | Directors Alan R. Griffith | ------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----