8-K
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8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 22, 1995
Commission File Number 1-6563
SAFECO CORPORATION
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(Exact name of registrant as specified in its charter)
WASHINGTON 91-0742146
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(State of Incorporation) (I.R.S. Employer Identification No.)
SAFECO PLAZA, SEATTLE, WASHINGTON 98185
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(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code (206) 545-5000
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
c. EXHIBITS.
1.2 Underwriting Agreement, dated March 22, 1995, among the
Registrant and Goldman, Sachs & Co. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, related to
the Registrant's 7 7/8% Notes due April 1, 2005. (the "Notes").
4.1 Indenture, dated as of March 1, 1995, among SAFECO
Corporation, SAFECO Credit Company, Inc. and The Chase
Manhattan Bank, N.A., as Trustee.
4.2 Form of certificate for the Notes.
4.3 Officers' Certificate (without exhibits), dated March 29, 1995
establishing the terms of the Notes.
5 Opinion of Foster Pepper & Shefelman regarding the legality of
the Notes.
23.2 Consent of Foster Pepper & Shefelman (included in Exhibit 5
hereto).
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAFECO CORPORATION
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(Registrant)
BOH A. DICKEY
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Boh A. Dickey
Executive Vice President and
Dated: March 29, 1995 Chief Financial Officer
ROD A. PIERSON
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Rod A. Pierson
Senior Vice President,
Dated: March 29, 1995 Secretary and Controller
EX-1.2
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UNDERWRITING AGREEMENT
SAFECO CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
1. INTRODUCTORY. SAFECO Corporation, a Washington
corporation ("Company"), proposes to issue and sell from time to time certain
of its debt securities registered under the registration statement referred to
in Section 2(a) ("Registered Securities"). The Registered Securities will be
issued under an indenture, dated as of March 1, 1995 ("Indenture"), among the
Company, SAFECO Credit Company, Inc. and The Chase Manhattan Bank, N.A., as
Trustee, in one or more series, which series may vary as to interest rates,
maturities, redemption provisions, selling prices and other terms, with all
such terms for any particular series of the Registered Securities being
determined at the time of sale. Particular series of the Registered
Securities will be sold pursuant to a Terms Agreement referred to in Section
7, for resale in accordance with terms of offering determined at the time of
sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Securities." The firm or firms which agree to
purchase the Securities are hereinafter referred to as the "Underwriters" of
such Securities, and the representative or representatives of the
Underwriters, if any, specified in a Terms Agreement referred to in Section 3
are hereinafter referred to as the "Representatives"; PROVIDED, HOWEVER,
that if the Terms Agreement does not specify any representative of the
Underwriters, the term "Representatives", as used in this Agreement (other
than in Sections 2(b), 5(c) and 6 and the second sentence of Section 3), shall
mean the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-52863), including a
prospectus, relating to the Registered Securities has been filed with
the Securities and Exchange Commission ("Commission") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3 is hereinafter referred to as
the "Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to
reflect the terms of the Securities and the terms of offering thereof,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933 ("Act"),
including all material incorporated by reference therein, is hereinafter
referred to as the "Prospectus".
(b) On the effective date of the registration statement relating
to the Securities, such registration statement conformed in all respects
to the requirements of the Act, the Trust Indenture Act of 1939 ("Trust
Indenture Act") and the rules and regulations of the Commission ("Rules
and Regulations") and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and on the date
of each Terms Agreement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives,
if any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein.
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the
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Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree material to the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
material change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any event or
known trend or uncertainty reasonably likely to result in a material
adverse change, in or affecting the general affairs, management,
financial positions, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole.
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation.
(f) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
3. PURCHASE AND OFFERING OF SECURITIES. The obligation of
the Underwriters to purchase the Securities will be evidenced by an exchange
of telegraphic or other written communications ("Terms Agreement") at the time
the Company determines to sell the Securities. The Terms Agreement will
incorporate by reference the provisions of this Agreement, except as otherwise
provided therein, and will specify the firm or firms
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which will be Underwriters, the names of any Representatives, the principal
amount to be purchased by each Underwriter, the purchase price to be paid by
the Underwriters and the terms of the Securities not already specified in the
Indenture, including, but not limited to, interest rate, maturity, any
redemption provisions and any sinking fund requirements and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Representatives and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to offer the
Securities for sale as set forth in the Prospectus. The Securities delivered
to the Underwriters on the Closing Date may, if the Underwriters so elect, be
in the form of one or more definitive fully registered global Securities,
which will be deposited by the Representatives on behalf of the Underwriters
with The Depository Trust Company, or its nominee, for credit to the
respective accounts of the Underwriters unless otherwise directed by the
Representatives.
If the Terms Agreement provides for sales of Securities pursuant
to delayed delivery contracts, the Company authorizes the Underwriters to
solicit offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date
the Company will pay, as compensation, to the Representatives for the accounts
of the Underwriters, the fee set forth in such Terms Agreement in respect of
the principal amount of Securities to be sold pursuant to Delayed Delivery
Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers Delayed Delivery
Contracts, the Contract Securities will be deducted from the Securities to be
purchased by the several Underwriters and the aggregate principal amount of
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Securities set forth opposite each
Underwriter's name in such Terms Agreement, except to the extent that the
Representatives determine that such reduction shall be otherwise than pro rata
and so advise the Company. The Company will advise the Representatives not
later than the business day
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prior to the Closing Date of the principal amount of Contract Securities.
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees
with the several Underwriters that it will furnish to O'Melveny & Myers,
counsel for the Underwriters, one signed copy of the registration statement
relating to the Registered Securities, including all exhibits, in the form it
became effective and all amendments thereto and that, in connection with each
offering of Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and
if consented to by the Representatives, subparagraph (5)) not later than
the second business day following the execution and delivery of the
Terms Agreement.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity
to approve any such proposed amendment or supplement; and the Company
will also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of
any part thereof and will use its best efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting, if
issued.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance and the Company will
provide the Representatives with as many copies as the Representatives
may reasonably request of such amendment or supplement. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(d) As soon as practicable, but not later than 16 months, after
the date of each Terms Agreement, the Company will make generally
available to its securityholders an
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earnings statement, as defined in Rule 158(c) under the Act, covering a
period of at least 12 months beginning after the later of (i) the
effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to the
date of such Terms Agreement and (iii) the date of the Company's most
recent Annual Report on Form 10-K filed with the Commission prior to the
date of such Terms Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as are reasonably
requested.
(f) The Company will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as the
Representatives may reasonably request.
(h) The Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Securities under
the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, and preliminary
prospectus and the Prospectus and amendments and supplements thereto and
the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement Among
Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda and any other documents in
connection with the offering, purchase, sale and delivery of the
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Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as
provided in Section 4(f) hereof including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky and legal investment surveys; (iv) any
fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees
and expenses of any Trustee and any agent of any Trustee and the fees
and disbursements of counsel for any Trustee in connection with any
Indenture and the Securities; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section and Section 8 hereof,
the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any
offers they may make.
(i) For a period beginning at the time of execution of the Terms
Agreement and ending 30 days after the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell,
contract to sell or otherwise dispose of any United States
dollar-denominated debt securities issued or guaranteed by the Company
(excluding any medium-term notes issued by SAFECO Credit Company, Inc.
and guaranteed by the Company) and having a maturity of more than one
year from the date of issue.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Securities
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Ernst & Young LLP or any firm of independent auditors which
succeeds Ernst & Young LLP as the outside auditors of the Company,
confirming that they are independent auditors within the meaning of the
Act and the applicable published Rules and Regulations thereunder and
stating in effect that:
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(i) in their opinion, the financial statements and
schedules audited by them and included in the Prospectus contained
in the Registration Statement relating to the Registered
Securities, as amended at the date of such letter, comply in form
in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements of the Company included in the Prospectus,
inquiries of officials of the Company who have responsibility for
financial and accounting matters and the performance of procedures
specified by the American Institute of Certified Public
Accountants for a review of interim financial information as
described in SAS No. 71, INTERIM FINANCIAL INFORMATION, nothing
came to their attention that caused them to believe that the
unaudited financial statements, if any, included in such
prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in such prospectus;
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information (including but not limited to any earnings release
information) contained in such prospectus and the documents
incorporated therein by reference (in each case to the extent that
such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and
its subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries,
a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter;
and
(iv) on the basis of a reading of the latest available
consolidated financial statements of the Company and any
management reports of the Company showing revenues, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other records of the Company and other
procedures specified in such letter, (A) at the date of
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the latest available consolidated balance sheet of the Company, or
at a subsequent date not more than five days prior to the date of
the Terms Agreement, there was no change in the capital stock, or
any increase in short-term indebtedness or long-term indebtedness
of the Company and its consolidated subsidiaries, and (B) for the
period from the date of the latest financial statements of the
Company included in the Prospectus to a date not more than five
days prior to the date of the Terms Agreement, there was no
decrease, as compared with the corresponding period in the
previous year, in total revenues of the Company and its
consolidated subsidiaries, in each case except for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter.
For purposes of this section 5(a), unaudited fourth quarter financial
information filed under Form 8-K does not constitute financial
statements, and it is not to be implied that financial statements are
available on the date of filing of such Form 8-K.
All financial statements and schedules included in material incorporated
by reference into such prospectus shall be deemed included in such
prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, shall be contemplated by
the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position or results of operations of the Company or its
subsidiaries, the effect of which is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or delivery of the Securities
on the terms and in the manner contemplated by the Prospectus as amended
or supplemented; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company
(other than an
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announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by Federal or New York authorities; or (v)
any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of the Underwriters, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for
the Securities.
(d) The Representatives shall have received an opinion, dated
the Closing Date, of Foster Pepper & Shefelman, counsel for the Company,
to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Washington with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; each of SAFECO Insurance Company of America and SAFECO
Life Insurance Company is duly qualified to do business as a
foreign corporation in good standing in all of the jurisdictions
identified in Schedule I hereto; and each of SAFECO Insurance
Company of America and SAFECO Life Insurance Company is duly
incorporated as an insurance company authorized to do the
insurance business done by it under the laws of the State of
Washington and is duly licensed to do such business under the laws
of each of the jurisdictions identified in Schedule I hereto;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act; the Securities have been duly authorized; the
Securities other than any Contract Securities have been duly
executed, authenticated, issued and delivered; the Indenture and
the Securities other than any Contract Securities constitute, and
any Contract Securities, when executed, authenticated, issued and
delivered in the manner provided in the Indenture and sold
pursuant to Delayed Delivery Contracts, will constitute, valid and
binding obligations of the Company enforceable in accordance with
their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, liquidation, receivership,
conservatorship,
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rehabilitation and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Securities other than any
Contract Securities conform, and any Contract Securities, when so
issued and delivered and sold, will conform, to the description
thereof contained in the Prospectus;
(iii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
the Terms Agreement (including the provisions of this Agreement)
in connection with the issuance or sale of the Securities by the
Company, except for the receipt of a solicitation permit from the
Insurance Commissioner of the State of Washington (which has been
received) and except such as have been obtained and made under the
Act and the Trust Indenture Act and such as may be required under
state securities laws;
(iv) The execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts and the issuance and
sale of the Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order known to such counsel based
on a reasonable investigation of any governmental agency or body
or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties or any
agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or
by-laws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the
Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
(v) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on the
date specified therein, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and
no proceedings for that purpose have been instituted or are
pending or contemplated under
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the Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration Statement
and the Prospectus, as of the date of the Terms Agreement and the
Closing Date, and any amendment or supplement thereto, as of its
date and the Closing Date, complied as to form in all material
respects with the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations; the description in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel do not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described
as required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus; and
(vi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent accountants for the Company, and the
Representatives and counsel for the Underwriters, at which the contents
of the Registration Statement and Prospectus and related matters were
discussed, and although such counsel is not passing upon and does not
assume any responsibility for the factual accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus, such counsel shall state that on the basis of the
foregoing (relying as to materiality to a large extent upon the
representations of officers and other representatives of the Company),
no facts have come to such counsel's attention which would cause them to
believe that the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective
contained any untrue statement of any material fact or omitted to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus, as of
the date of the Terms Agreement and the Closing Date, contained any
untrue statement of any material fact or omitted to state any material
fact required to be stated therein or
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necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading (other than the
financial statements and supporting schedules and other financial
information included therein, statements in or omissions from any such
documents made in reliance upon and conformity with written information
furnished to the Company by the Underwriters through the Representatives
specifically for use therein or any statements in or omissions from that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee under the Indenture, as to which such counsel need not
comment).
In rendering the opinion to clause (iv), Foster Pepper & Shefelman
may limit their opinion as to agreements and instruments to material
agreements and instruments known to such counsel on the basis of
representations made by representatives of the Company. Foster Pepper &
Shefelman may rely as to all matters governed by New York law on the
opinion of O'Melveny & Myers referred to in Section 5(e).
(e) The Representatives shall have received from O'Melveny &
Myers, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Securities, the Registration Statement, the Prospectus
and other related matters as they may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, O'Melveny & Myers may rely as to the incorporation of the
Company and all other matters governed by Washington law upon the
opinion of Foster Pepper & Shefelman referred to above.
(f) The Representatives shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers,
to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement or of any
part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that,
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, or any event or
known trend or uncertainty reasonably likely to result in a material
adverse change, in or affecting the general affairs,
13
management, financial positions, stockholders' equity or results of
operations of the Company and its subsidiaries except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter, dated the
Closing Date, of Ernst & Young LLP or any firm of independent auditors
which succeeds Ernst & Young LLP as the outside auditors of the Company,
which reconfirms the matters set forth in their letter delivered
pursuant to subsection (a) of this Section and states in effect that:
(i) in their opinion, any financial statements or
schedules audited by them and included in the Prospectus and not
covered by their letter delivered pursuant to subsection (a) of
this Section comply in form and all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements of the Company included in the Prospectus,
inquiries of officials of the Company who have responsibility for
financial and accounting matters and the performance of procedures
specified by the American Institute of Certified Public
Accountants for a review of interim financial information as
described in SAS No. 71, INTERIM FINANCIAL INFORMATION, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with
generally accepted accounting principles applied on the
basis substantially consistent with that of the audited
financial statements included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts
set forth in the unaudited consolidated financial statements
from which it was derived or was not determined on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus; or
14
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the Closing Date,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and
consolidated subsidiaries, except for changes or increases
which the Prospectus discloses have occurred or may occur or
which are described in such letter;
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information (including but not limited to any earnings release
information) included in the Prospectus and the documents
incorporated therein by reference and not covered by their letter
delivered pursuant to subsection (a) of this Section (in each case
to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except
as otherwise specified in such letter; and
(iv) on the basis of a reading of the latest available
consolidated financial statements of the Company and any
management reports of the Company showing revenues, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other records of the Company and other
procedures specified in such letter, for the period from the date
of the latest financial statements of the Company included in the
Prospectus to a date not more than five days prior to the Closing
Date, there was no decrease, as compared with the corresponding
period in the previous year, in total revenues of the Company and
its consolidated subsidiaries, except for any decrease which the
Prospectus discloses has occurred or may occur or which is
described in such letter.
For purposes of this section 5(g), unaudited fourth quarter financial
information filed under Form 8-K does not constitute financial
statements, and it is not to be implied that financial statements are
available on the date of filing of such Form 8-K.
15
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as they reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter from any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through
the Representatives, if any, specifically for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives, if any, specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any
16
such loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to
17
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which
is the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each director of the Company, to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
7. DEFAULT OF UNDERWRITERS. If any Underwriter or
Underwriters default in their obligations to purchase Securities under the
Terms Agreement and the aggregate principal amount of the Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of the Securities, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments under this Agreement and the Terms Agreement, to
purchase the Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of the Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount of the Securities and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities by other persons are not made within 36 hours
after such default, such Terms Agreement will terminate without
18
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section.
Nothing herein will relieve a defaulting Underwriter from liability for its
default. The respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to reduction in
the respective Underwriters' obligations to purchase the principal amounts of
the Securities set forth opposite their names in the Terms Agreement as a
result of Delayed Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section
will not apply if the Terms Agreement specifies that such obligations and
agreements will not apply.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of their
respective representatives, officers or directors or any controlling person
and will survive delivery of and payment for the Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the
purchase of the Securities by the Underwriters under the Terms Agreement is
not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4 and the respective obligations
of the Company and the Underwriters pursuant to Section 6 shall remain in
effect. If the purchase of the Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 7 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 5(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements
of counsel) reasonably incurred by them in connection with the offering of the
Securities.
9. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their addresses furnished to the Company in writing for
the purpose of communications hereunder or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at SAFECO Plaza, Seattle,
Washington 98185, Attention: General Counsel.
10. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the Company and such Underwriters as are identified in
Terms Agreements and their respective successors and the officers and
directors and controlling persons
19
referred to in Section 6, and no other person will have any right or
obligation hereunder.
11. APPLICABLE LAW. This Agreement and the Terms Agreement
shall be governed by, and construed in accordance with, the laws of the State
of New York.
20
ANNEX I
(THREE COPIES OF THIS DELAYED DELIVERY CONTRACT
SHOULD BE SIGNED AND RETURNED TO THE ADDRESS
SHOWN BELOW SO AS TO ARRIVE NOT LATER THAN
9:00 A.M., NEW YORK TIME ON
_____________ __, 19__*)
DELAYED DELIVERY CONTRACT
[INSERT DATE OF INITIAL]
PUBLIC OFFERING]
SAFECO CORPORATION
c/o [GOLDMAN, SACHS, & CO.]
85 Broad Street
New York, New York 10004
Attention: ]
[MERRILL LYNCH & CO.]
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
North Tower
World Financial Center
New York, New York 10281]
Gentlemen:
The undersigned hereby agrees to purchase from SAFECO Corporation,
a Washington corporation ("Company"), and the Company agrees to sell to the
undersigned, [IF ONE DELAYED CLOSING, INSERT--as of the date hereof, for]
delivery on ________, 19__ ("Delivery Date"),]
$_________
principal amount of the Company's [INSERT TITLE OF SECURITIES]
("Securities"), offered by the Company's Prospectus dated _______, 19__ and a
Prospectus Supplement dated ________, 19__ relating thereto, receipt of copies
of which is hereby acknowledged, at ____% of the principal amount thereof plus
----------------
* INSERT DATE WHICH IS THIRD FULL BUSINESS DAY PRIOR TO CLOSING DATE
UNDER THE TERMS AGREEMENT.
I-1
accrued interest, if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
[IF TWO OR MORE DELAYED CLOSINGS, INSERT THE FOLLOWING:]
The undersigned will purchase from the Company as of the date
hereof, for delivery on the dates set forth below, Securities in the principal
amounts set forth below:
DELIVERY DATE PRINCIPAL AMOUNT
_________________________ ________________
_________________________ ________________
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to
purchase for delivery on [the/each] Delivery Date shall be made to the Company
or its order by certified or official bank check in New York Clearing House
(next day) funds in the office of ______________ at _____.M. on [the/such]
Delivery Date upon delivery to the undersigned of the Securities to be
purchased by the undersigned for delivery on such Delivery Date in definitive
fully registered global form and in such denomination and registered in such
name as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to
[the/such] Delivery Date.
It is expressly agreed that the provisions for delayed delivery
and payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on [the/each] Delivery Date
shall be subject only to the conditions that (1) investment in the Securities
shall not at [the/such] Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total principal amount of
the Securities less the principal amount thereof covered by this and other
similar Contracts. The undersigned represents that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied
I-2
by [a copy/copies] of the opinion[s] of counsel for the Company delivered to
the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in
the Company's sole discretion and, without limiting the foregoing, need not be
on a first-come, first-served basis. If this Contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered.
Yours very truly,
_________________________
(Name of Purchaser)
By ______________________
______________________
(Title of Signatory)
______________________
______________________
(Address of Purchaser)
Accepted, as of the above date.
SAFECO CORPORATION
By ____________________
(Insert Title)
I-3
SAFECO CORPORATION
("Company")
Debt Securities
TERMS AGREEMENT
March 22, 1995
SAFECO Corporation
SAFECO Plaza
Seattle, Washington 98185
Attention: General Counsel
Dear Sirs:
We offer to purchase, on and subject to the terms and conditions
of the Underwriting Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 33-52863) ("Underwriting Agreement"),
the following securities ("Securities") on the following terms:
TITLE: 7-7/8% Notes due April 1, 2005.
PRINCIPAL AMOUNT: $200,000,000.
INTEREST: 7-7/8% per annum, from March 29, 1995, payable
semiannually on April 1 and October 1, commencing
October 1, 1995, to holders of record on the
preceding March 15 or September 15, as the case
may be.
MATURITY: April 1, 2005.
OPTIONAL REDEMPTION: Not redeemable prior to April 1, 2003. Thereafter,
redeemable at the option of the Company, in whole
or in part, at 100% of the principal amount of
the Notes redeemed plus accrued interest to the
redemption date.
SINKING FUND: None.
DELAYED DELIVERY CONTRACTS: None.
PURCHASE PRICE: 98.682% of principal amount, plus
1
accrued interest, if any, from March 29, 1995.
EXPECTED REOFFERING PRICE: 99.332% of principal amount, subject to change by
the undersigned.
CLOSING: 7:00 A.M. on March 29, 1995, at the offices of
O'Melveny & Myers, 400 S. Hope Street, Los
Angeles, California 90071, in immediately
available funds.
Names and Addresses of Representatives:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner &
Smith, Incorporated
North Tower
World Financial Center
New York, New York 10281
The respective principal amounts of the Securities to be purchased
by each of the Underwriters are set forth opposite their names in Schedule A
hereto.
The provisions of the Underwriting Agreement are incorporated
herein by reference.
Please signify your acceptance of our offer by signing the
enclosed response to us in the space provided and returning it to us.
Very truly yours,
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By /s/ Goldman, Sachs & Co
--------------------------
(Goldman, Sachs & Co.)
2
SCHEDULE A
PRINCIPAL
UNDERWRITING AMOUNT
------------ ---------
Goldman, Sachs & Co. . . . . . . . . . . . $100,000,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated . . . . . . . . 100,000,000
------------
Total . . . . . . . . . . . $200,000,000
------------
------------
A-1
To: GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
We accept the offer contained in your letter dated
March 22, 1995, relating to $200,000,000 principal amount of our
7-7/8% Notes due April 1, 2005. We also confirm that, to the best of our
knowledge after reasonable investigation, the representations and warranties
of the undersigned in the Underwriting Agreement filed as an exhibit to the
undersigned's registration statement on Form S-3 (No. 33-52863) ("Underwriting
Agreement") are true and correct, no stop order suspending the effectiveness
of the Registration Statement (as defined in the Underwriting Agreement) or of
any part thereof has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the undersigned, are contemplated by the
Securities and Exchange Commission and, subsequent to the respective dates of
the most recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been no material adverse change in the
financial position or results of operations of the undersigned and its
subsidiaries except as set forth in or contemplated by the Prospectus.
Very truly yours,
SAFECO Corporation
By /s/ Boh A. Dickey
-----------------
Title: Exec. V.P. & CFO
SCHEDULE I
JURISDICTIONS
-------------
SAFECO Insurance Company of America California
Washington
Oregon
Texas
Illinois
Georgia
Missouri
Tennessee
Idaho
Connecticut
SAFECO Life Insurance Company California
Washington
Oregon
Texas
Illinois
Tennessee
Pennsylvania
Hawaii
Michigan
EX-4.1
3
INDENTURE
_____________________________
SAFECO CORPORATION
AND
SAFECO CREDIT COMPANY, INC.
TO
THE CHASE MANHATTAN BANK, N.A.
TRUSTEE
__________________
INDENTURE
DATED AS OF MARCH 1, 1995
__________________
DEBT SECURITIES ISSUABLE IN SERIES
AND MEDIUM-TERM NOTES
_____________________________
SAFECO CORPORATION; SAFECO CREDIT COMPANY, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF MARCH 1, 1995
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .609
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .609
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .608
610
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(a)
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .703(a)(2)
703(b)
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .602
703(a)(6)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . .601(a)(1)
(d)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .601(c)(2)
(d)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . .601(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .514
316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
(Definition of
"Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .502
512
-i-
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .513
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .508
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
_______________________
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
-ii-
TABLE OF CONTENTS
PAGE
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions:
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . .2
Board of Directors. . . . . . . . . . . . . . . . . . . . .2
Board Resolution. . . . . . . . . . . . . . . . . . . . . .2
Business Day. . . . . . . . . . . . . . . . . . . . . . . .2
Commission. . . . . . . . . . . . . . . . . . . . . . . . .2
Company; Companies. . . . . . . . . . . . . . . . . . . . .2
Company Request; Company Order. . . . . . . . . . . . . . .2
Corporate Trust Office. . . . . . . . . . . . . . . . . . .3
Corporation . . . . . . . . . . . . . . . . . . . . . . . .3
Defaulted Interest. . . . . . . . . . . . . . . . . . . . .3
Depositary. . . . . . . . . . . . . . . . . . . . . . . . .3
Endorse . . . . . . . . . . . . . . . . . . . . . . . . . .3
Event of Default. . . . . . . . . . . . . . . . . . . . . .3
Federal Bankruptcy Code . . . . . . . . . . . . . . . . . .3
Global Security . . . . . . . . . . . . . . . . . . . . . .3
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . .3
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . .3
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . .3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . .3
Interest Payment Date . . . . . . . . . . . . . . . . . . .3
Interest Rate . . . . . . . . . . . . . . . . . . . . . . .3
Issuing Company . . . . . . . . . . . . . . . . . . . . . .3
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . .3
Officers' Certificate . . . . . . . . . . . . . . . . . . .4
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . .4
Original Issue Date . . . . . . . . . . . . . . . . . . . .4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . .4
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . .4
Person. . . . . . . . . . . . . . . . . . . . . . . . . . .4
Predecessor Security. . . . . . . . . . . . . . . . . . . .4
Regular Record Date . . . . . . . . . . . . . . . . . . . .5
Responsible Officer . . . . . . . . . . . . . . . . . . . .5
Restricted Subsidiary . . . . . . . . . . . . . . . . . . .5
SAFECO. . . . . . . . . . . . . . . . . . . . . . . . . . .5
SAFECO Credit . . . . . . . . . . . . . . . . . . . . . . .5
Securities; Security. . . . . . . . . . . . . . . . . . . .5
-iii-
Securities Register; Securities Registrar . . . . . . . . .5
Series B Notes. . . . . . . . . . . . . . . . . . . . . . .5
Special Record Date . . . . . . . . . . . . . . . . . . . .5
Stated Maturity . . . . . . . . . . . . . . . . . . . . . .5
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . .5
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .5
Trust Indenture Act . . . . . . . . . . . . . . . . . . . .5
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . .5
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . .6
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . .6
SECTION 105. Notices, Etc. to Trustee and Companies. . . . . . . . . . .7
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . .7
SECTION 107. Conflict With Trust Indenture Act . . . . . . . . . . . . .8
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . . .8
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . .8
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . .8
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . .8
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 113. Non-Business Days . . . . . . . . . . . . . . . . . . . . .8
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . .9
SECTION 202. Form of Face of Debt Security . . . . . . . . . . . . . . 10
SECTION 203. Form of Reverse of Debt Security. . . . . . . . . . . . . 11
SECTION 204. Form of Face of Medium-Term Note. . . . . . . . . . . . . 12
SECTION 205. Form of Reverse of Medium-Term Note . . . . . . . . . . . 13
SECTION 206. Guarantee by Guarantor; Form of Guarantee . . . . . . . . 15
SECTION 207. Additional Provisions Required in Global Security . . . . 16
SECTION 208. Form of Trustee's Certificate of Authentication . . . . . 17
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . . 17
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . . 19
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . . 20
SECTION 305. Registration, Transfer and Exchange . . . . . . . . . . . 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . 21
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 23
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 310. The Series B Notes. . . . . . . . . . . . . . . . . . . . 23
-iv-
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . 24
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . 25
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . 25
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . 28
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . 29
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . 30
SECTION 508. Unconditional Right of Holders to Receive Principal
and Interest . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . 30
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . 31
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . 31
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . 31
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 32
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . 32
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . . 32
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . 33
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 34
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . 34
SECTION 604. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . 35
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . 35
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . 35
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . 36
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . 36
SECTION 610. Resignation and Removal; Appointment of Successor . . . . 36
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . 37
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 613. Preferential Collection of Claims Against a
Company . . . . . . . . . . . . . . . . . . . . . . . . . 38
-v-
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANIES
SECTION 701. Companies to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 702. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . 42
SECTION 704. Reports by Companies. . . . . . . . . . . . . . . . . . . 43
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Companies May Consolidate, Etc. Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 802. Successor Corporation Substituted . . . . . . . . . . . . 45
SECTION 803. Limitation on Lease of Properties as an Entirety. . . . . 45
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 902. Supplemental Indentures With Consent of Holders . . . . . 46
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . 47
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . 47
SECTION 905. Conformity With Trust Indenture Act . . . . . . . . . . . 47
SECTION 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest . . . . . . . . . . . . 47
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . 47
SECTION 1003. Money for Securities Payments to be Held in Trust . . . . 48
SECTION 1004. Payment of Taxes and Other Claims . . . . . . . . . . . . 49
SECTION 1005. Maintenance of Properties . . . . . . . . . . . . . . . . 49
SECTION 1006. Statement as to Compliance. . . . . . . . . . . . . . . . 49
SECTION 1007. Corporate Existence . . . . . . . . . . . . . . . . . . . 50
SECTION 1008. Limitation Upon Sales of Capital Stock of Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1009. Limitation Upon Mortgages and Liens . . . . . . . . . . . 50
SECTION 1010. Waiver of Certain Covenants . . . . . . . . . . . . . . . 51
-vi-
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of This Article . . . . . . . . . . . . . . 51
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . 51
SECTION 1103. Selection of Securities to be Redeemed. . . . . . . . . . 52
SECTION 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . . 52
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . 52
SECTION 1106. Payment of Securities Called for Redemption . . . . . . . 53
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
-vii-
INDENTURE, dated as of March 1, 1995, among SAFECO Corporation, a
Washington corporation (hereinafter called "SAFECO," and sometimes referred to
herein, as the context requires, as the "Guarantor"), SAFECO Credit Company,
Inc., a Washington corporation (hereinafter called "SAFECO Credit")
(collectively, the "Companies" and individually, the "Company"),each having a
principal office at SAFECO Plaza, Seattle, Washington 98185, and The Chase
Manhattan Bank, N.A., a national association, as Trustee (hereinafter called the
"Trustee").
RECITALS OF THE COMPANIES
The Companies have duly authorized the creation of the issue of unsecured
debt securities from time to time in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, and to provide
the terms and conditions upon which the Securities are to be authenticated,
issued and delivered the Companies have duly authorized the execution and
delivery of this Indenture.
SAFECO Credit has further authorized the issuance of an initial series of
medium-term notes pursuant to Section 310, to be known as its "Medium-Term
Notes, Series B" (the "Series B Notes"), the Series B Notes and the certificate
of authentication for the Series B Notes to be substantially in the forms set
forth herein with such variations as are in this Indenture permitted.
All things necessary to make the Securities and the Series B Notes, when
executed by the Issuing Company and authenticated and delivered hereunder and
duly issued by such Company, the valid obligations of such Company, and to make
this Indenture a valid agreement of the Companies, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles which are generally accepted at the date or time of
such computation; PROVIDED, that when two or more principles are so
generally accepted, it shall mean that set of principles consistent with
those in use by the Company;
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(5) Terms defined herein with respect to the Series B Notes and not
the Securities generally shall apply only to the Series B Notes, terms
defined herein with respect to the Securities generally shall apply to the
Series B Notes and, unless otherwise provided in the Board Resolution and
Officers' Certificate creating another series of Securities, to each other
series of Securities, and terms with respect to each series of Securities
other than the Series B Notes or the Securities generally shall be defined
in the supplemental indenture creating such series of Securities.
Certain terms, used principally in Article Six, are defined in that
Article.
"ACT" when used with respect to any Holder has the meaning specified in
Section 104.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"BOARD OF DIRECTORS" means either the board of directors or any committee
of that board duly authorized to act hereunder of the Company which is the
primary obligor of the Securities or the series thereof to which reference is
made.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the respective Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of such Company to which authority to act on behalf of the Board of Directors
has been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means every day except a day on which banking institutions
in The City of New York are authorized or required by law or executive order to
close.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on such
date.
"COMPANY" or "COMPANIES" means the Person or Persons named as the "Company"
or "Companies" in the first paragraph of this instrument until a successor
corporation or corporations shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" and "Companies" shall
mean such successor corporation or corporations.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written request
or order signed in the name of the applicable Company by the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
-2-
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in The
City of New York, or any other office designated by the Trustee, at which at any
particular time its corporate trust business shall be administered.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEPOSITARY" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 301.
"ENDORSE" means, as to any Guarantee, to set forth on the reverse of any
Security.
"EVENT OF DEFAULT," unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
Five.
"FEDERAL BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as
amended, Title 11, United States Code, and any successor statutes thereto.
"GLOBAL SECURITY" means a Security in the form prescribed in Section 207
evidencing all or part of a series of Securities, issued to the Depositary or
its nominee for such Series, and registered in the name of such Depositary or
nominee.
"GUARANTEE" means any guarantee of the Guarantor Endorsed on a Security
authenticated and delivered pursuant to this Indenture and shall include the
guarantees set forth in Section 206.
"GUARANTOR" means the Person named as "Guarantor" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Guarantor" shall
include such successor corporation.
"HOLDER" means a Person in whose name a Security is registered in the
Securities Register.
"INDENTURE" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"INTEREST PAYMENT DATE" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"INTEREST RATE" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.
"ISSUING COMPANY" means the primary obligor of the Securities or the series
thereof to which reference is made.
"MATURITY" when used with respect to any Security means 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 or otherwise.
-3-
"OFFICERS' CERTIFICATE" means a certificate signed by the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of applicable Company, and delivered to
the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be counsel for the Company
acceptable to the Trusteee, or who may be other counsel acceptable to the
Trustee.
"ORIGINAL ISSUE DATE" means the date of issuance specified as such in each
Security.
"OUTSTANDING" means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent in trust
for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 306, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands such
Securities are valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by either Company or any other obligor upon the Securities or any Affiliate of
either Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not a Company or any other obligor upon the Securities or
any Affiliate of a Company or such other obligor. Upon request of the Trustee,
the Companies shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Securities, if any, known by either Company to be
owned or held by or for the account of either Company, or any other obligor on
the Securities or any Affiliate of either Company or such obligor, and, subject
to the provisions of Section 601, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
"PAYING AGENT" means any Person authorized by the issuing Company to pay
the principal of or interest on any Securities on behalf of such Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
-4-
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means the date which is fifteen days
next preceding such Interest Payment Date (whether or not a Business Day).
"RESPONSIBLE OFFICER" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"RESTRICTED SUBSIDIARY" means SAFECO Credit Company, Inc., SAFECO Insurance
Company of America, General Insurance Company of America, First National
Insurance Company of America, SAFECO National Insurance Company, SAFECO Life
Insurance Company, any subsidiary of the foregoing, and any subsidiary of either
Company (including a subsidiary of a subsidiary), other than SAFECO Management
Corporation and GSL Corporation, which shall hereafter succeed by merger or
otherwise to a major part of the business of one of the six subsidiaries above
named.
"SAFECO" means SAFECO Corporation, a Washington corporation, and any
successor thereto.
"SAFECO CREDIT" means SAFECO Credit Company, Inc., a Washington
corporation, and any successor thereto.
"SECURITIES" or "SECURITY" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings specified in Section 305.
"SERIES B NOTES" has the meaning specified in Section 310.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY" when used with respect to any Security or any installment
of interest thereon means 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" means any corporation of which at the time of determination
either Company and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the outstanding shares of voting stock.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
905.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by a Company to the Trustee to take any
action under any provision of this Indenture, such 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
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complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance by or on behalf of
a Company with a condition or covenant provided for in this Indenture shall
include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of a Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of a Company stating that the
information with respect to such factual matters is in the possession of such
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate of opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become
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effective when such instrument or instruments are delivered to the Trustee, and,
where it is hereby expressly required, to the Companies. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the
Companies and any agent of the Trustee or the Companies, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) 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 transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANIES.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by a Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) a Company by the Trustee or by any Holder shall be sufficient for
every purpose (except as otherwise provided in Section 501 hereof)
hereunder if in writing and mailed, first class, postage prepaid, to such
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by such Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Securities Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other
-7-
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.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Companies shall bind
their successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent and their
successors and assigns and the Holders of Securities, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture, the Securities and the Guarantees shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 113. NON-BUSINESS DAYS.
In any case where any Interest Payment Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or at the
Stated Maturity, and no interest shall accrue for the period from and after such
Interest Payment Date or Stated Maturity, as the case may be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution, or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Securities may
be authenticated and delivered pursuant to such procedures acceptable to the
Trustee ("Procedures") as may be specified from time to time by Company Order.
Procedures may authorize authentication and delivery pursuant to oral
instructions of the Issuing Company or a duly authorized agent, which
instructions shall be promptly confirmed in writing.
Prior to the delivery of a Security in any such form to the Trustee for
authentication, the issuing Company shall deliver to the Trustee the following:
(a) An order of the Company in accordance with applicable Procedures
requesting the Trustee's authentication and delivery of all or a portion of
the Securities of such series;
(b) The Board Resolution by or pursuant to which such form of
Security has been approved, and the Board Resolution, if any, by or
pursuant to which the terms of the Securities of such series have been
approved, and, if pursuant to a Board Resolution, an Officer's Certificate
describing the action taken;
(c) An Officer's Certificate dated the date such certificate is
delivered to the Trustee, stating that all conditions precedent provided
for in this Indenture relating to the authentication and delivery of
Securities in such form and with such terms have been complied with; and
(d) An Opinion of Counsel stating that (i) the form of such
Securities has been duly authorized and approved in conformity with the
provisions of this Indenture; (ii) the terms of such Securities have been
duly authorized and determined in conformity with the provisions of this
Indenture, or, if such terms are to be determined pursuant to Procedures,
when so determined such terms shall have been duly authorized and
determined in conformity with the provisions of this Indenture; (iii)
Securities in such form when completed by appropriate insertions and
executed and delivered by the Issuing Company to the Trustee for
authentication in accordance with this Indenture, authenticated and
delivered by the Trustee in accordance with this Indenture within the
authorization as to aggregate principal amount established from time to
time by the Board of Directors, and sold in the manner specified in such
Opinion of Counsel, will be the valid and binding obligations of the
Issuing Company enforceable in accordance with their terms, except as may
be limited by bankruptcy, reorganization, insolvency, moratorium,
liquidation, receivership, conservatorship, rehabilitation and other
similar laws relating to or affecting creditors' rights generally, or by
general equitable principles (regardless of whether such enforceability is
in a proceeding in equity or at law); and (iv) if such Securities are
guaranteed as to payment and performance by the Guarantor, in accordance
with Section 206 hereof, such Guarantee will be the valid and binding
obligation of the Guarantor enforceable in accordance with its terms,
except as may be limited by bankruptcy, reorganization, insolvency,
moratorium,
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liquidation, receivership, conservatorship, rehabilitation and other
similar laws relating to or affecting creditors' rights generally, or by
general equitable principles (regardless of whether such enforceability is
in a proceeding in equity or at law);
PROVIDED, HOWEVER, that the Trustee shall be entitled to receive (b), (c) and
(d) only at or prior to the first request of the Issuing Company to the Trustee
to authenticate Securities of such series.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 202. FORM OF FACE OF DEBT SECURITY.
SAFECO CORPORATION
____ % [Note/Debenture] Due ____________, ____
Original Issue Date: ______________ No. _________
Principal Amount: $_________________
Interest Rate: ___________________
SAFECO CORPORATION, a Washington corporation (hereinafter called the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to _______
_____________ or registered assigns, the principal sum of _____________________
Dollars on ____________, ____, and to pay interest thereon from the Original
Issue Date, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on ____________ and _____________
in each year, commencing _________, at the rate of _____ % per annum on the
basis of a 360-day year consisting of twelve 30-day months, until the
principal hereof is paid or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest which shall be the ____________ or
____________ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the registered
Holder on such Regular Record Date, and may be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than 10 days prior to such Special Record Date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in such Indenture. Payment of the principal of and interest on this
Security will be made by check at the office or agency of the Company
maintained for that purpose in The City of New York, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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Unless the certificate of authentication hereon has been executed by The
Chase Manhattan Bank, N.A., the Trustee under the Indenture, or its successors
thereunder, by the manual signature of one of its authorized officers, this
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: __________ SAFECO CORPORATION
By ____________________________
President
Attest:
_____________________
Secretary
SECTION 203. FORM OF REVERSE OF DEBT SECURITY.
SAFECO CORPORATION
____ % [Note/Debenture] Due __________________, _____
This Security is one of a duly authorized issue of Securities of SAFECO
Corporation designated as its _____ % [Note/Debenture] Due _________________
(herein, together with certain other debt securities issued by SAFECO Credit
Company, Inc. and guaranteed by SAFECO Corporation, called the "Securities"),
limited in aggregate principal amount to $____________, issued and to be issued
under an indenture dated as of March 1, 1995 (herein called the "Indenture")
among SAFECO Corporation, SAFECO Credit Company, Inc. (collectively, the
"Companies") and The Chase Manhattan Bank, N.A., as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Companies, the
Trustee and the Holders of the Securities, and the terms upon which the
Securities are, and are to be, authenticated and delivered.
If an Event of Default shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Companies and the rights of the Holders of Securities under the Indenture at any
time by the Companies and the Trustee with the consent of the Holders of 66-2/3%
in aggregate principal amount of the Outstanding Securities of each series
affected by such amendment or modification. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of Outstanding Securities of a series, on behalf of the Holders
of the Securities of such series, to waive compliance by the Companies with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the transfer
hereof or in exchange herefor
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or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security or such other Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the time, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Security is transferable on the Security Register of the Company,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in The City of New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment for transfer, the Companies, the Trustee and any
agent of the Companies or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Companies, the Trustee nor any such agent
shall be affected by notice to the contrary.
All the terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. FORM OF FACE OF MEDIUM-TERM NOTE.
SAFECO CREDIT COMPANY, INC.
Medium-Term Note, Series ____
Original Issue Date: _____________ No. ________
Principal Amount: $ ________________
Interest Rate: ___________________
SAFECO CREDIT COMPANY, INC., a Washington corporation (hereinafter called
the "Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to _______
____________ or registered assigns, the principal sum of ____________________
Dollars on ____________, ____, and to pay interest thereon from the Original
Issue Date or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on ____________ and ____________
in each year, commencing with the Interest Payment Date immediately following
the Original Issue Date shown above at the rate per annum equal to the Interest
Rate shown above on the basis of a 360-day year consisting of twelve 30-day
months, until the principal
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hereof is paid or duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest which shall be the ____________ or ____________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in such Indenture. Payment of the
principal of and interest on this Note will be made at the office or agency of
the Company maintained for that purpose in The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by The
Chase Manhattan Bank, N.A., the Trustee under the Indenture, or its successors
thereunder, by the manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under corporate seal.
Dated: ___________ SAFECO CREDIT COMPANY, INC.
By ________________________________
President
Attest:
_____________________
Secretary
SECTION 205. FORM OF REVERSE OF MEDIUM-TERM NOTE.
SAFECO CREDIT COMPANY, INC.
Medium-Term Note, Series ___
This Note is one of a duly authorized issue of Notes of SAFECO Credit
Company, Inc., guaranteed by SAFECO Corporation (herein, together with certain
debt securities issued by SAFECO Corporation, called the "Securities"), limited
in aggregate principal amount to $__________, issued and to be issued in one or
more series under an indenture dated as of March 1, 1995 (herein called the
"Indenture") among SAFECO Corporation, SAFECO Credit Company, Inc.
(collectively, the "Companies") and The Chase Manhattan Bank, N.A., as Trustee
(herein called the "Trustee," which term
-13-
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Companies, the Trustee and the Holders of
the Securities, and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Note is one of the series designated on the
face hereof; different Notes of the series may vary as to original issue date,
amount and maturity date.
If an Event of Default shall occur and be continuing, the principal of all
the Notes of the series may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Notes of this series may not be redeemed prior to maturity.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Companies and the rights of the Holders of Securities under the Indenture at any
time by the Companies and the Trustee with the consent of the Holders of 66-2/3%
in aggregate principal amount of the Outstanding Securities of each series
affected by such amendment or modification. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of Outstanding Securities of a series, on behalf of the Holders
of the Securities of such series, to waive compliance by the Companies with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note or such other Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable on the Securities Register of the Company, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Notes of this series are exchangeable for a like aggregate principal amount
of Notes of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment for transfer, the Companies, the Trustee and any
agent of the Companies or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Companies, the Trustee nor any such agent shall
be affected by notice to the contrary.
-14-
All the terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 206. GUARANTEE BY GUARANTOR; FORM OF GUARANTEE.
The Guarantor by its execution of this Indenture hereby agrees with each
Holder of a Security issued by SAFECO Credit and authenticated and delivered by
the Trustee, and with the Trustee on behalf of each such Holder, to be
unconditionally bound by the terms and provisions of the Guarantee set forth
below and authorizes SAFECO Credit, in the name and on behalf of the Guarantor,
to confirm such Guarantee to the Holder of each such Security by its execution
and delivery of each such Security, with such Guarantee Endorsed thereon with
the facsimile signature of the Guarantor, authenticated and delivered by the
Trustee. When delivered pursuant to the provisions of Section 303 hereof,
Guarantees so set forth on the Security shall bind the Guarantor notwithstanding
the fact that such Guarantee does not bear the signature of the Guarantor.
Guarantees to be Endorsed on the Securities shall, subject to Section 201,
be substantially in the form set forth below:
GUARANTEE
For value received, SAFECO Corporation, a corporation organized under the
laws of the State of Washington (herein called the "Guarantor", which term
includes any successor corporation under the Indenture referred to in the
Security upon which this Guarantee is Endorsed), hereby unconditionally
guarantees to the Holder of the Security upon which this Guarantee is Endorsed
and to the Trustee on behalf of each such Holder the due and punctual payment of
the principal of and interest on such Security, when and as the same shall
become due and payable, whether at the Stated Maturity, by declaration of
acceleration or otherwise, according to the terms thereof and of the Indenture
referred to therein, and the performance of all obligations of SAFECO Credit
Company, Inc., a corporation organized under the laws of the State of Washington
(herein called the "Company", which term includes any successor corporation
under such Indenture) under the Indenture. In case of the failure of the
Company, punctually to make any such payment of principal or interest, or to
perform any of its obligations under the Indenture, the Guarantor hereby agrees
to cause any such payment to be made punctually when and as the same shall
become due and payable, whether at the Stated Maturity or by declaration of
acceleration or otherwise, or to fulfill the obligations of the Company under
the Indenture, and as if such payment were made, or such obligation was
performed, by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as if
it were principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Security or such Indenture, any failure
to enforce the provisions of such Security or such Indenture, or any waiver,
modification or indulgence granted to the Company with respect thereto, by the
Holder of such Security or the Trustee or any other circumstance which may
otherwise constitute a legal or equitable discharge of a surety or guarantor;
PROVIDED, HOWEVER, that the foregoing shall not be construed to limit or
restrict any defenses of the Guarantor based on a claim that the Holder has
breached any obligation under the Security, or is not in fact the Holder of such
Security. The Guarantor hereby waives notice of acceptance of or reliance on
this Guarantee, diligence, presentment, demand of payment, filing of claims with
a court in the event of merger or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest or notice with respect
to such Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by
complete performance of the obligations contained in such Security and this
Guarantee.
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The Guarantor shall be subrogated to all rights of the Holder of such
Security and the Trustee against the Company in respect of any amounts paid to
such Holder by the Guarantor pursuant to the provisions of this Guarantee;
PROVIDED, HOWEVER, that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of subrogation
until the principal of and interest on all Securities issued under such
Indenture, the payment and performance of which have been guaranteed by the
Guarantor, shall have been paid in full.
No reference herein to such Indenture and no provision of this Guarantee or
of such Indenture shall alter or impair the guarantee of the Guarantor, which is
absolute and unconditional, of the due and punctual payment of the principal of
and interest on the Security upon which this Guarantee is Endorsed.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication of such Security shall have been manually executed
by or on behalf of the Trustee under such Indenture. The Guarantor has been
duly authorized to execute this Guarantee.
All terms used in this Guarantee which are defined in such Indenture shall
have the meanings assigned to them in such Indenture.
This Guarantee shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be governed by and construed in
accordance with the laws of the State of New York.
Dated: _________ SAFECO CORPORATION
By ________________________________
President
Attest:
_____________________
Secretary
SECTION 207. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 202, 203, 204, 205 and 206, bear a legend in substantially
the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Indenture,
and no transfer of this Security (other than a transfer of this Security as
a whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary) may
be registered except in such limited circumstances. Every Security
delivered upon registration of transfer of, or in exchange for, or in lieu
of, this Global Security shall be a Global Security subject to the
foregoing, except in the limited circumstances described above.
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Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is to be made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein."
SECTION 208. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
The Chase Manhattan Bank, N.A.,
as Trustee
By ________________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series, the terms of each of
which shall be determined in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series (other than the Series B Notes, as
to which specific provision is made in Section 310):
(a) the title of the Securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under
this Indenture;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable;
(d) the Interest Rate or Rates, if any, at which the Securities of
such series shall bear interest, the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date for the interest
payable on any Interest Payment Date;
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(e) the place or places where the principal of and interest on the
Securities of such series shall be payable, the place or places where the
Securities of such series may be presented for registration of transfer or
exchange, and the place or places where notices and demands to or upon the
Companies in respect of the Securities of such series may be made;
(f) the period or periods within or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon which
the Securities of such series may be redeemed, in whole or in part, at the
option of the issuing Company;
(g) the obligation, if any, of the issuing Company to redeem, repay or
purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(h) the terms of any Guarantee of the Securities of such series;
(i) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) the modifications, if any, in the Events of Default or covenants
of the issuing Company set forth herein with respect to the Securities of
such series;
(k) the portion of the principal amount of Securities of such series
which shall be payable upon declaration of acceleration of the maturity
thereof;
(l) the additions or changes, if any, to this Indenture with respect
to the Securities of such series as shall be necessary to permit or
facilitate the issuance of the Securities of such series in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons;
(m) any index used to determine the amount of payments of principal
of and premium, if any, on the Securities of such series and the manner in
which such amounts will be determined;
(n) the issuance of a temporary Global Security representing all of
the Securities of such series and exchange of such temporary Global
Security for definitive Securities of such series;
(o) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Exchange Act or the basis on which such Global
Security may be exchanged for a definitive Security, if different from that
set forth in Section 305;
(p) the provisions, if any, relating to the conversion or exchange of
the Securities of any series into Securities of another series or into any
other debt or equity securities;
(q) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of any
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein;
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(r) the appointment of a Paying Agent or Agents for the Securities of
such series;
(s) any other terms of the Securities of such series (which terms
shall not be inconsistent with the provisions of this Indenture);
or any of the foregoing, all upon such terms as the Board of Directors may
determine.
With respect to the Securities of any series, the issuing Company shall
incorporate in or add to the general title of such Securities appropriate words,
letters or figures descriptive thereof. Each such Security shall bear upon its
face the designation so determined for the series to which it belongs.
Unless otherwise set forth, or determined in the manner provided, in the
Officers' Certificate, or established in one or more indentures supplemental
hereto, with respect to any series of Securities, the principal of and interest
on the Securities shall be payable at the office or agency of the Companies
maintained for such purpose pursuant to Section 1002; provided, however, that
interest may be payable at the option of the Companies by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be in registered form without coupons
and other than the Series B Notes, shall be issuable in denominations of $1,000
and any integral multiple thereof, unless otherwise specified in the Board
Resolution or supplemental indenture creating such series of Securities.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of a Company by its President or
one of its Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of a Company shall bind such Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Companies may deliver Securities executed by the Companies to the
Trustee for authentication; and the Trustee shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
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SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Companies may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the
tenor of the definitive Securities of such series in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as evidenced
by their execution of such Securities.
If temporary Securities of any series are issued, the issuing Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Companies in The City of New York,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the issuing Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations having the
same Original Issue Date and Stated Maturity and bearing the same Interest Rate
as such temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 305. REGISTRATION, TRANSFER AND EXCHANGE.
The Companies shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Companies shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Companies in The City of New York, the Issuing Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and bearing the same Interest
Rate.
At the option of the Holder, Securities may be exchanged for other
Securities of the same issue and series of any authorized denominations, of a
like aggregate principal amount, of the same Original Issue Date and Stated
Maturity and bearing the same Interest Rate, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the issuing Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of the issuing Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Companies or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Companies and the Securities Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing.
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No service charge shall be made for any transfer or exchange of Securities,
but the Companies may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Securities.
Notwithstanding any of the foregoing, any Global Security shall be
exchangeable pursuant to this Section 305 for Securities registered in the names
of Persons other than the Depositary for such Security or its nominee only if
(i) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as such Depositary shall direct.
Notwithstanding any other provision in this Indenture, a Global Security
may not be transferred except as a whole by the Depositary with respect to such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Neither Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article Eleven and
ending at the close of business on the day of mailing of notice of redemption,
or (b) to transfer or exchange any Security so selected for redemption in whole
or in part, except, in the case of any Security to be redeemed in part, any
portion thereof not to be redeemed.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Companies or the Trustee to save
each of them harmless, the issuing Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated,
destroyed, lost or stolen Security, and bearing a number not contemporaneously
outstanding.
If there be delivered to a Company and to the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security, and (ii) such
security or indemnity as may be required by them to save each of them and the
Guarantor harmless, then, in the absence of notice to the issuing Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
issuing Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such mutilated, destroyed, lost or stolen
Security, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, a Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, a Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
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Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the issuing Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of a
Security shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security of any series which is issued between a
Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the supplemental indenture creating the related
series of Securities.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Companies, at their
election in each case, as provided in Clause (1) or (2) below:
(1) A Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of
which interest is in default (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first class, postage
prepaid, to each Holder of a Security of such series at his address as it
appears in the Securities Register not less than 10 days prior to such
Special Record Date. The Trustee may, in its discretion, in the name and at
the expense of the Company, cause a similar notice to be published at least
once in a newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan, The
City of New York, but such publication shall not be a condition precedent
to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record
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Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following Clause
(2).
(2) A Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest
is in default may be listed, and upon such notice as may be required by
such exchange (or by the Trustee if the Securities are not listed), if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
The Companies, the Trustee and any agent of the Companies or the Trustee
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Companies, the Trustee
nor any agent of the Companies or the Trustee shall be affected by notice to the
contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly cancelled by it. A Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which such Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities shall be
destroyed by the Trustee and the Trustee shall deliver to the acquiring Company
a certificate of such destruction.
SECTION 310. THE SERIES B NOTES.
SAFECO Credit hereby creates a series of Securities entitled "Medium-Term
Notes, Series B" (the "Series B Notes") in substantially the form of the
medium-term note hereinbefore recited. The aggregate principal amount of Series
B Notes shall be limited to $50,000,000, exclusive of Series B Notes
authenticated and delivered under Sections 304, 305, 306 or 906; PROVIDED,
HOWEVER, that the authorized aggregate principal amount of Series B Notes may be
increased above such amount by a Board Resolution to such effect. The
definitive Series B Notes shall be in minimum denominations of $100,000 and in
integral multiples of $1,000 in excess thereof. The terms of the Series B Notes
shall be determined by or pursuant to an indenture supplemental hereto, a Board
Resolution, or pursuant to the Company Order or Procedures referred to in
Section 201 hereof; PROVIDED, HOWEVER, that Series B Notes shall bear interest
only at fixed rates unless otherwise provided in an indenture supplemental
hereto. Each Series B Note shall be dated the date of its authentication and
bear the Original Issue Date or the Original Issue Date of its Predecessor
Security first in time. Interest on the Series B Notes will be calculated at a
rate
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per annum based on a 360-day year of twelve months consisting of 30 days each
and will be paid semiannually on June 15 and December 15, and on the Stated
Maturity set forth on each Series B Note, except that the initial payment of
interest on any Series B Note issued between a Regular Record Date and the
related Interest Payment Date will be paid on the next succeeding Interest
Payment Date. Interest on each Series B Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Original Issue Date, until the principal of such Series B Note is paid or made
available for payment in accordance with this Indenture. The principal of and
interest on the Series B Notes shall be paid by check in such coin or currency
of the United States as at the time of payment is legal tender for payment of
public and private debts at the Corporate Trust Office of the Trustee in New
York, New York, except that (a) interest, other than interest payable on the
Stated Maturity of each Series B Note, shall be paid by check mailed to the
Person entitled thereto at such Person's address appearing in the Securities
Register, and (b) principal and interest payable on the Stated Maturity of each
Series B Note shall be paid only upon surrender of that Series B Note at the
Corporate Trust Office of the Trustee, PROVIDED, HOWEVER, that no interest shall
accrue on any Series B Note after its Stated Maturity if SAFECO Credit has made
the principal amount thereof and any accrued but unpaid interest thereon
available for payment. Payment of principal and interest on the Series B Notes
is guaranteed by SAFECO.
The Series B Notes are not subject to redemption prior to their Stated
Maturity.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to (i) any
surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of and interest on
the Securities and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights and obligations of the Trustee hereunder), and the
Trustee, on demand of and at the expense of the Companies, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Companies and
thereafter repaid to the Companies or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year,
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and the Companies, in the case of (i) or (ii) above, have deposited or
caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity;
(2) each Company has paid or caused to be paid all other sums payable
hereunder by such Company; and
(3) each Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Companies to the Trustee and any predecessor Trustee under
Section 607 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Companies acting as their own Paying Agents) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein means with respect to the Series B
Notes and, unless otherwise set forth in the Board Resolutions creating such
series of Securities, each other series of Securities, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of, or premium, if any,
on, any Security of that series at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
of a Company in this Indenture (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Companies by the Trustee or to the Companies and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default or
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breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) a default occurs under any bond, mortgage, indenture (including
this Indenture) or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness for money borrowed of a
Company or any Restricted Subsidiary, whether such indebtedness now exists
or shall hereafter be created, which default (a) is caused by a failure to
pay principal on such indebtedness prior to the expiration of the grace
period provided in such indebtedness (a "Payment Default") or (b) results
in the acceleration of such indebtedness prior to its express maturity, and
in each case, the principal amount of any such indebtedness together with
the principal amount of any other such indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $10 million or more, without such acceleration having been
rescinded, stayed or annulled, or such indebtedness having been discharged
or, in the case of indebtedness contested in good faith by a Company, a
bond, letter of credit, escrow deposit or other cash equivalent in an
amount sufficient to discharge such indebtedness having been set aside by
the Company, within a period of 10 days after there has been given, by
registered or certified mail, to the Companies by the Trustee or to the
Companies and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities a written notice specifying such event
of default and requiring the Companies to cause such acceleration to be
rescinded or annulled or to cause such indebtedness to be discharged and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry of a decree or order by a court having jurisdiction in
the premises adjudging a Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of a Company under the Federal Bankruptcy
Code or any other applicable Federal or State law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of a 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 60
consecutive days; or
(6) the institution by a Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable Federal or State law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of a Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the
taking of corporate action by a Company in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501 with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders as of such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such Notice of Default, whether or not such Holders remain
Holders after such record date; PROVIDED, that unless Holders of at least 25% in
principal amount of the Outstanding Securities of such series, or their proxies,
shall have joined in such Notice of Default prior to the day which is 90 days
after such record date, such Notice of Default shall automatically and without
further
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action by any Holder be cancelled and of no further effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after
expiration of such 90-day period, a new Notice of Default identical to a Notice
of Default which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 501.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Companies (and to the Trustee if given by Holders), and upon any such
declaration such principal shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Companies and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Companies have paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Securities of
that series,
(B) the principal of any Securities of that series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is legally
enforceable, interest upon overdue installments of interest at the
rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; PROVIDED, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in
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such notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be
cancelled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new written notice of declaration of acceleration, or rescission and
annulment thereof, as the case may be, that is identical to a written notice
which has been cancelled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions of
this Section 502. Notwithstanding anything to the contrary herein, the Trustee
shall not be deemed to have notice of defaults or Events of Default until a
Responsible Officer has received written notice of such default or Event of
Default.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Companies each covenant that if
(1) default is made in the payment of any installment of interest
on any Security when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of any Security
at the Maturity thereof, the Companies will, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal and interest,
with interest upon the overdue principal and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest at the rate borne by the Securities; and, in addition thereto, all
amounts owing the Trustee and any predecessor Trustee under Section 607.
If a Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against such Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of such Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to a Company or any other obligor upon the
Securities or the property of a Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
such Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
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(i) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee and any predecessor Trustee under Section 607 and
of the Holders allowed in such judicial proceeding,
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same, and
(iii) unless prohibited by law or applicable regulation, to vote
on behalf of the Holders in any election of a trustee in bankruptcy or
other person performing similar functions;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it and any predecessor Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding except, as aforesaid,
for the election of a trustee in bankruptcy or other person performing similar
functions.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing the Trustee and any predecessor Trustee
under Section 607, its agents and counsel be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected or to be applied by the Trustee with respect to a
series of Securities pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid upon such
series of Securities for principal and interest, in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such series of Securities for principal and interest,
respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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SECTION 507. LIMITATION ON SUITS.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more Holders of Securities 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 Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders of Securities.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right which is absolute and unconditional to receive
payment of the principal of and (subject to Section 307) interest on such
Security on the respective Stated Maturities expressed in such Security and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Companies, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that
the proceeding so directed would be unjustly prejudicial to the Holders not
joining in any such direction or would involve the Trustee in personal
liability.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
PROVIDED, that unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 512.
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SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or interest on any Security of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or interest on any Security on or after the
respective Stated Maturities expressed in such Security.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Companies each covenant (to the extent that they may lawfully do so)
that they will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Companies each (to the
extent that they may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that they will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of Holders pursuant to Section 512 relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
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SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Securities Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal of or interest
on any Security of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Holders of Securities of such series; and PROVIDED, FURTHER, that in the
case of any default of the character specified in Section 501(3) or (4) no such
notice to Holders of Securities of such series shall be given until at least 30
days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, Security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of a Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, indenture, Security or other paper or document, but the Trustee in
its discretion may make such inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Companies, personally or by agent or attorney;
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken or omitted
to be taken 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.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Companies, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Companies of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Paying Agent, Securities Registrar or any other agent of a
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Companies with the same rights it would have if it were not Trustee,
Paying Agent, Securities Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Companies.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Companies each agree
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith, arising out of or in connection with the
acceptance or administration of this trust or the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. This indemnification shall survive the
termination of this Agreement.
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As security for the performance of the obligations of the Companies under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of or interest on particular Securities.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
The trustee shall comply with the provisions of Section 301(b) of the Trust
Indenture Act regarding conflicting interests and disqualifications.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation or national association organized and doing business under the laws
of the United States of America or of any State, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority. If such corporation or national association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation or national
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Companies. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Companies.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by either Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by either Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer
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shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then, in
any such case, (i) either Company by Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Companies, by a Board Resolution,
shall promptly appoint a successor Trustee with respect to the Securities of
that or those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Companies and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee with respect to the Securities of such series and supersede
the successor Trustee appointed by the Companies. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Companies or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 514, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Companies shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Companies and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Companies or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 607. Upon request of any such successor Trustee, the
Companies shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the
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Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated, and in case any Securities shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the name
of any predecessor Trustee or in the name of such successor Trustee, and in all
cases the certificate of authentication shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate of
the Trustee shall have.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST A COMPANY.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of a
Company within three months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of
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proving that at the time such property was so received the Trustee had no
reasonable cause to believe that a default as defined in Subsection (c) of
this Section would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to set up a special account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against a Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from such Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against such Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Holders and the
holders of other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Holders and the holders
of other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
three-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such three-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist:
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(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor of the
Companies; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full
of the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means securities upon
which either Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
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(3) The term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by either Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with such Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
(5) The term "Company" means any obligor upon the Securities.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANIES
SECTION 701. COMPANIES TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Companies will furnish or cause to be furnished to the Trustee
(i) semi-annually, not more than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Companies of any such request, a
list of similar form and content as of a date not more that 15 days prior
to the time such list is furnished,
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a copy
of the form of proxy or other communication which
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such applicants propose to transmit, then the Trustee shall, within five
business days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Holders with reasonable promptness
after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Companies and the Trustee that neither the Companies nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section 702(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request under Section 702(b).
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after the first May 15 occurring subsequent to the
initial issuance of Securities hereunder and within 60 days after May 15 of each
year thereafter, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Securities Register, a brief report dated as
of such May 15 with respect to:
(1) any change in its eligibility and its qualifications under
Sections 608 and 609;
(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 310(b) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim
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a lien or charge, prior to that of the Securities, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal amount
of the Securities Outstanding on the date of such report;
(4) the amount, interest rate and maturity date of all other
indebtedness owing by the Companies (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3), (4)
or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Securities Register, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed and also with the Commission. The Companies will notify
the Trustee whenever the Securities are listed on any stock exchange.
SECTION 704. REPORTS BY COMPANIES.
The Companies will
(1) file with the Trustee, within 15 days after any Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which such Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if a Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it will file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and
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periodic information, documents and reports which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Companies with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Securities Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Companies pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANIES MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Neither Company shall consolidate with or merge into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person, and no Person shall consolidate with or merge into either Company or
convey or transfer its properties and assets substantially as an entirety to
either Company, unless:
(1) in case either Company shall consolidate with or merge into
another corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which such Company is merged or the Person which
acquires by conveyance or transfer the properties and assets of such
Company substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any state or the
District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and interest on all the Securities and the performance of every covenant
of this Indenture on the part of such Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
(3) such Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with; and the Trustee, subject to
Section 601, may rely upon such Officers' Certificate and Opinion of
Counsel as conclusive evidence that such transaction complies with this
Section 801.
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SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger by either Company with or into any other
corporation, or any conveyance or transfer by such Company of its properties and
assets substantially as an entirety to any Person in accordance with Section
801, the successor corporation formed by such consolidation or into which such
Company is merged or to which such conveyance or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, such
Company under this Indenture with the same effect as if such successor
corporation had been named as such Company herein; and in the event of any such
conveyance or transfer, the Company (which term shall for this purpose mean any
Person named as a "Company" in the first paragraph of this Indenture or any
successor corporation which shall theretofore become such in the manner
described in Section 801) shall be discharged from all obligations and covenants
under the Indenture and the Securities and may be dissolved and liquidated. Such
successor corporation may cause to be signed, and may issue either in its own
name or in the name of the Company prior to such successor, any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
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
pursuant to such provisions and any Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for that purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale or conveyance, such changes
in phraseology and form may be made in the Securities thereafter to be issued as
may be appropriate.
SECTION 803. LIMITATION ON LEASE OF PROPERTIES AS AN ENTIRETY.
Neither Company shall lease its properties and assets substantially as an
entirety to any Person.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, a Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another corporation to such
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Securities contained; or
(2) to add to the covenants of such Company, for the benefit of the
Holders of Securities of any series, to convey, transfer, assign, mortgage
or pledge any property to or with the Trustee or to surrender any right or
power herein conferred upon such Company; or
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(3) to provide for the issuance under this Indenture of Securities in
bearer form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities for Securities issued
hereunder in fully registered form, and to make all appropriate changes for
such purpose; or
(4) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that
such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provisions nor (B) modify the
right of the Holder of any such Security with respect to such provision or
(ii) shall become effective only when there are no such Securities
outstanding; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided such action shall not materially adversely
affect the interest of the Holders of Securities of any series.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Companies and
the Trustee, the Companies, when authorized by Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Outstanding Security, or reduce the
principal amount thereof or the interest thereon, or change the place of
payment, or the coin or currency in which any Outstanding Security or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each 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
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.
-46-
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the issuing Company 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 such supplemental
indenture may be prepared and executed by such Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
Each Company will duly and punctually pay the principal of and interest on
the Securities of which it is the primary obligor in accordance with the terms
of such Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Companies will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment and an office or
agency where Securities may be surrendered for transfer or exchange and where
notices and demands to or upon the Companies in respect of the Securities and
this Indenture may be served. The Companies initially appoint the Trustee,
acting through its Corporate Trust Office, as their agent for said purposes. The
Companies will give prompt written
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notice to the Trustee of any change in the location of any such office or
agency. If at any time the Companies shall fail to maintain such office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Companies hereby appoint the
Trustee their agent to receive all such presentations, surrenders, notices and
demands.
The Companies may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Companies of their obligation to maintain an office or agency in The
City of New York, for such purposes. The Companies will give prompt written
notice to the Trustee of any such designation and any change in the location of
any such office or agency.
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If a Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its failure so to act.
Whenever a Company shall have one or more Paying Agents, it will, prior to
each due date of the principal of or interest on any Securities, deposit with a
Paying Agent a sum sufficient to pay the principal or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) such
Company will promptly notify the Trustee of its failure so to act.
The Companies will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of the principal of or
interest on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(2) give the Trustee notice of any default by the Companies (or any
other obligor upon the Securities) in the making of any payment of
principal or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Companies may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Companies or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Companies or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by a
Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years
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after such principal or interest has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid on Company Request to the Company having issued
such Security, or (if then held by such Company) shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the issuing
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of such Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to such Company.
SECTION 1004. PAYMENT OF TAXES AND OTHER CLAIMS.
Each Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon such Company or any Subsidiary or
upon the income, profits or property of such Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Companies or any Subsidiary;
PROVIDED, HOWEVER, that the Companies shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1005. MAINTENANCE OF PROPERTIES.
Each Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of such Company may
be necessary so that business carried on in connection therewith may be properly
and advantageously conducted at all times; PROVIDED, HOWEVER, that nothing in
this Section shall prevent a Company from discontinuing the operation and
maintenance of any of such properties if such discontinuance is, in the judgment
of the Board of Directors of such Company, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1006. STATEMENT AS TO COMPLIANCE.
Each Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement signed by the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Controller or an
Assistant Controller of such Company, stating, as to each signer thereof, that
(1) a review of the activities of such Company during such year and
of performance under this Indenture has been made under his supervision,
and
(2) to the best of his knowledge, based on such review, (a) such
Company has fulfilled all its obligations under this Indenture throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and
status thereof, and (b) no event has occurred and is continuing which is,
or after
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notice or lapse of time or both would become, an Event of Default under
Clause (3) or (4) of Section 501, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
SECTION 1007. CORPORATE EXISTENCE.
Subject to Article Eight, each Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) of such Company and each
Restricted Subsidiary; PROVIDED, HOWEVER, that such Company shall not be
required to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of such Company or such Restricted Subsidiary and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1008. LIMITATION UPON SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
Neither Company will sell, transfer or otherwise dispose of (except to a
Restricted Subsidiary), and it will not permit any Restricted Subsidiary to
issue, sell, transfer or otherwise dispose of (except to such Company or to a
Restricted Subsidiary), any shares of capital stock of a Restricted Subsidiary,
unless the entire capital stock of such Restricted Subsidiary at the time owned
by such Company and its Restricted Subsidiaries shall be disposed of at the same
time for a consideration consisting of cash or other property, which, in the
opinion of the Board of Directors, is at least equal to the fair value thereof.
SECTION 1009. LIMITATION UPON MORTGAGES AND LIENS.
Neither Company will at any time directly or indirectly issue, assume,
guarantee or permit to exist any indebtedness secured by a mortgage, pledge,
lien or other encumbrance (any mortgage, pledge, lien or other encumbrance being
hereinafter in this Section referred to as a "lien") on any of its property or
assets, whether now owned or hereafter acquired, without making effective
provision whereby the Securities then Outstanding (and, if such Company so
elects, any other indebtedness ranking on a parity with the Securities) shall be
equally and ratably secured with any such secured indebtedness, so long as any
such other indebtedness shall be secured; PROVIDED, HOWEVER, that the foregoing
covenant shall not be applicable to the following:
(a) liens in existence at the initial date of execution of this
Indenture;
(b) liens on real estate (including liens existing in respect of such
real estate at the time of acquisition thereof) securing indebtedness in an
amount not in excess of 100% of the fair value of the real estate at the
time of creation of such indebtedness (as determined by the Board of
Directors);
(c) liens arising from the acquisition of a business as a going
concern (whether by merger, acquisition of a controlling stock interest,
acquisition of assets or otherwise) or to which assets acquired by the
Companies in partial or complete satisfaction of secured indebtedness are
subject;
(d) liens to secure the extension, renewal or replacement of any
indebtedness secured by any of the liens referred to in (a), (b) and (c)
above, provided that there shall not be an increase in the amount of
indebtedness secured by such extension, renewal or replacement; and
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(e) liens of taxes or assessments or governmental charges or levies
not then due and delinquent or the validity of which is being contested in
good faith or which are less than $1,000,000 in amount; pledges or deposits
to secure public or statutory obligations including liens and deposits
required or provided for under state insurance laws and similar regulatory
statutes; materialmen's, mechanics', carrier's, workmen's, repairmen's, or
other like liens, and pledges or deposits made in the ordinary course of
business to obtain the release of such liens; liens created by or resulting
from any litigation or legal proceeding which is being contested in good
faith by appropriate proceedings or which involve claims of less than
$1,000,000; deposits to secure (or in lieu of) surety, stay, appeal or
customs bonds; deposits to secure the payment of taxes, assessments,
customs duties or other similar charges; landlords' liens on property held
under lease; and any other liens similar to those described in this
Subsection, the existence of which does not, in the opinion of such
Company, materially impair the use by such Company of the affected property
in the operation of its business, or the value of such property for the
purpose of such business.
SECTION 1010. WAIVER OF CERTAIN COVENANTS.
A Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 1004, 1005, and 1007 to 1009, inclusive, with
respect to the Securities of any series if before or after the time for such
compliance the Holders of at least 66-2/3% in principal amount of the
Outstanding Securities of such series and of at least 66-2/3% in principal
amount of the Outstanding Securities of all series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Companies
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. APPLICABILITY OF THIS ARTICLE.
Redemption of Securities (whether by operation of a sinking fund or
otherwise) as permitted or required by any form of Security issued pursuant to
this Indenture shall be made in accordance with such form of Security and this
Article; provided, however, that if any provision of any such form of Security
shall conflict with any provision of this Article, the provision of such form of
Security shall govern. Except as otherwise set forth in the form of Security for
such series, each Security shall be subject to partial redemption only in the
amount of $1,000 or integral multiples of $1,000.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of a Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
such Company of less than all of the Securities of any particular series, the
Company shall, at least 60 days prior to the date fixed for redemption (unless a
shorter notice shall be satisfactory to the Trustee) notify the Trustee of such
date and of the principal amount of Securities of that series to be redeemed.
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SECTION 1103. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of a particular series are to be redeemed,
the Trustee shall select, in such manner as in its sole discretion it shall deem
appropriate and fair, the Securities or portions thereof of such series to be
redeemed. The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the date fixed for redemption, to each Holder of Securities to be
redeemed, at his address as it appears on the Securities Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall state:
(a) the date fixed for redemption for Securities of such series;
(b) the redemption price at which Securities of such series are to be
redeemed;
(c) if less than all outstanding Securities of such particular series are
to be redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption price at which
such Securities are to be redeemed will become due and payable upon each such
Security or portion thereof, and that interest thereon, if any, shall cease to
accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the redemption price at which such Securities are to be redeemed;
(f) that the redemption is for a sinking fund, if such is the case; and
(g) the CUSIP number of the Securities of such series, if any.
Notice of redemption of Securities to be redeemed at the election of a Company
shall be given by such Company or, at such Company's request, by the Trustee in
the name and at the expense of the Company. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. In any case, a failure to give such
notice by mail or any defect in the notice to the Holder of any Security
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to the redemption date specified in the notice of redemption given as
provided in Section 1104, the Company will deposit with the Trustee or with one
or more paying agents an amount of money sufficient to redeem on the redemption
date all the Securities so called for redemption at the applicable redemption
price.
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SECTION 1106. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section 1104, the
Securities or portions of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable redemption price. On presentation and surrender
of such Securities at a place of payment in said notice specified, the said
Securities or the specified portions thereof shall be paid and redeemed by the
applicable Company at the applicable redemption price.
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 the same series, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-53-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
SAFECO Corporation
[CORPORATE SEAL]
By /s/ R.H. Eigsti
------------------------------
Attest: R.H. Eigsti,
Chairman, Chief Executive
/s/ Rod A. Pierson Officer and President
------------------------------
Secretary
SAFECO Credit Company, Inc.
[CORPORATE SEAL]
By /s/ W.F. Meany
------------------------------
Attest: W. F. Meany,
President
/s/ Rod A. Pierson
------------------------------
Secretary
THE CHASE MANHATTAN BANK, N.A.
[CORPORATE SEAL]
By /s/ Lucy Soltis
------------------------------
Attest: Authorized Officer
/s/ John Mynttinen
------------------------------
Assistant Secretary
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 24th day of March, 1995, before me personally appeared
R.H. Eigsti, to me known to be the Chairman, Chief Executive Officer and
President of SAFECO CORPORATION, the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument
and that the seal affixed is the corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Janice Oakes Schafer
----------------------------------
Notary Public in and for the State
of Washington, residing at Seattle
My appointment expires 12-19-98
[NOTARIAL SEAL]
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 24th day of March, 1995, before me personally appeared
W. F. Meany, to me known to be the President of SAFECO CREDIT COMPANY, INC., the
corporation that executed the within and foregoing instrument, and acknowledged
said instrument to be the free and voluntary act and deed of said corporation,
for the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed is the corporate
seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
Janice Oakes Schafer
----------------------------------
Notary Public in and for the State
of Washington, residing at Seattle
My appointment expires 12-19-98
[NOTARIAL SEAL]
-55-
STATE OF NEW YORK )
) ss.
COUNTY OF KINGS )
On the 27th day of March, 1995, before me personally came
Lucy Soltis, to me known, who being by me duly sworn, did depose and
say that she resides at New Jersey, that she is a Second Vice President of
The Chase Manhattan Bank, N.A., one of the corporations described in and which
executed the foregoing instrument; that she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that she
signed her name thereto by like authority.
Denis Kelly
--------------------------------
[NOTARIAL SEAL] Notary Public, State of New York
No. 01KE5032197
Qualified in Kings County
Commission Expires 8/22/96
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EX-4.2
4
FORM OF NOTE
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES. EVERY SECURITY DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN
EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL SECURITY SHALL BE A GLOBAL SECURITY
SUBJECT TO THE FOREGOING, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SAFECO CORPORATION
7-7/8 % Note due April 1, 2005
Original Issue Date: March 29, 1995 No.________
Principal Amount: $__________ CUSIP NO. 786 429 AD2
Interest Rate: 7-7/8%
SAFECO CORPORATION, a Washington corporation (hereinafter called the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co. or registered assigns, the principal sum of _____________ Dollars on April
1, 2005, and to pay interest thereon from the Original Issue Date, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on April 1 and October 1 in each year, commencing
October 1, 1995, at the rate of 7-7/8% per annum on the basis of a 360-day year
consisting of twelve 30-day months, until the principal hereof is paid or duly
provided for. This Security (or one or more Predecessor Securities) is not
redeemable at any time prior to April 1, 2003. On and after that date, this
Security (or one or more Predecessor Securities) may be redeemed at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice mailed to each Holder to be redeemed at his or her address
appearing on the Securities Register, at a price of 100% of the principal amount
redeemed plus accrued interest to the date fixed for redemption.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date or upon redemption will, as provided in such Indenture, be
paid to the Person in whose name
-1-
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest which shall be the
March 15 or September 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holder on such Regular Record Date, and may be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in such Indenture. Payment of the principal of and interest on this
Security will be made by wire transfer of immediately available funds to an
account designated by the Person entitled thereto.
This Security is one of a duly authorized issue of Securities of SAFECO
Corporation designated as its 7-7/8% Notes due April 1, 2005 (herein called the
"Securities"), limited in aggregate principal amount to $200,000,000, issued and
to be issued under an indenture dated as of March 1, 1995 (herein called the
"Indenture") among SAFECO Corporation, SAFECO Credit Company, Inc.
(collectively, the "Companies") and The Chase Manhattan Bank, N.A., as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder of
the Companies, the Trustee and the Holders of the Securities, and the terms upon
which the Securities are, and are to be, authenticated and delivered.
If an Event of Default shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Companies and the rights of the Holders of Securities under the Indenture at any
time by the Companies and the Trustee with the consent of the Holders of 66-2/3%
in aggregate principal amount of the Outstanding Securities of each series
affected by such amendment or modification. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of Outstanding Securities of a series, on behalf of the Holders
of the Securities of such series, to waive compliance by the Companies with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Security or such other Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the time, place, and rate, and in the coin or currency, herein
prescribed.
-2-
All the terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by The
Chase Manhattan Bank, N.A., the Trustee under the Indenture, or its successors
thereunder, by the manual signature of one of its authorized officers, this
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March 29, 1995 SAFECO CORPORATION
By:
------------------------------
President
Attest:
-------------------------
Secretary
This is one of the Securities referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A., as
Trustee
By:
------------------------------
Authorized Officer
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EX-4.3
5
OFFICERS CERTIFICATE
OFFICERS CERTIFICATE
PURSUANT TO SECTIONS 102 AND 301
OF THE INDENTURE
The undersigned, Boh A. Dickey and Rodney A. Pierson, do hereby
certify that they are the duly appointed and acting Executive Vice President and
Chief Financial Officer and the Senior Vice President, Controller and Secretary,
respectively, of SAFECO CORPORATION, a Washington corporation (the "Company").
Each of the undersigned also hereby certifies, pursuant to, Sections 102 and
301 of the Indenture, dated as of March 1, 1995 (the" Indenture"), among the
Company, SAFECO Credit Company, Inc. and The Chase Manhattan Bank, N.A., as
Trustee, that:
A. There has been established pursuant to resolutions duly adopted
by the Board of Directors of the Company (a copy of such resolutions being
attached hereto as Exhibit B) a series of Securities (as that term is defined in
the Indenture) to be issued under the Indenture, with the following terms:
1. The title of the Securities of the series is "7-7/8% Notes due
April 1, 2005" (the "Notes").
2. The limit upon the aggregate principal amount of the Notes which
may be authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of, transfer of, or in
exchange for, or in lieu of other Notes pursuant to Sections 304, 305, 306,
906 or 1106 of the Indenture) is $200,000,000.
3. The date on which the principal of the Notes is payable, unless
accelerated pursuant to the Indenture, shall be April 1, 2005.
4. Interest on the Notes shall be payable to the persons in whose
name the Notes are registered at the close of business on the Regular
Record Date (as defined in the Indenture) for such interest payment, except
that interest payable on April 1, 2005 shall be payable to the persons to
whom principal is payable on such date.
5. The rate at which each of the Notes shall bear interest shall be
7-7/8% per annum. The date from which interest shall accrue for each of the
Notes shall be March 29, 1995. The Interest Payment Dates on which
interest on the Notes shall be payable are April 1 and October 1,
commencing October 1, 1995. The Regular Record Dates for the interest
payable on the Notes on any Interest Payment Date shall be the March 15 and
September 15, as the case may be, immediately preceding such Interest
Payment Date.
6. So long as the Depository (as identified below) continues to make
its Same-Day Funds Settlement System available to the Company, all payments of
principal and interest will be made in immediately available funds to the
account designated by the Depository. If the Depository's Same-Day Funds
Settlement System is no longer available to the Company, the place or places
where the principal of and interest on the Notes shall be payable is the
Corporate Trust Office of the Trustee, provided that payment of interest, other
than at Stated Maturity (as defined in the Indenture), may be made at the option
of the Company by check mailed to the address of the person entitled thereto as
such address shall appear in the Securities Register (as defined in the
Indenture).
7. The Notes will not be redeemable by the Company prior to April 1,
2003. On and after that date, the Notes may be redeemed at the option of the
Company, as a whole or in part, upon not less than 30 nor more than 60 days'
notice mailed to each Holder of Notes to be redeemed at his or her address
appearing on the Securities Register, at a price of 100% of the principal amount
of the Notes redeemed plus accrued interest to the date fixed for redemption.
8. There are no sinking fund or analogous provisions.
9. The Notes shall be issued in fully registered form in
denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000.
10. The principal amount of the Notes shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 502
of the Indenture.
11. The Notes shall be issued in the form of one Global Securities.
The Depositary for the Notes shall be The Depository Trust Company.
B. The form of the Note is attached hereto as Exhibit A.
C. The Trustee is appointed as Paying Agent (as defined in the
Indenture).
D. The foregoing form and terms of the Notes have been established
in conformity with the provisions of the Indenture.
E. The undersigned has read the provisions of Sections 301 and 303
of the Indenture and the definitions relating thereto and the resolution adopted
by the Board of Directors of the Company and delivered herewith. In the opinion
of the undersigned, he or she has made such examination or
2
investigation as is necessary to enable him or her to express an informed
opinion as to whether or not all conditions precedent provided in the Indenture
relating to the establishment, authentication and delivery of a series of
Securities under the Indenture, designated as the Notes in this Certificate, in
the form attached hereto and with the terms set forth in this Certificate, have
been complied with. In the opinion of the undersigned, all such conditions
precedent have been complied with.
F. The undersigned Secretary, by execution of this Certificate,
hereby certifies the actions taken by the Board of Directors of the Company in
determining and setting the specific terms of the Notes, and hereby further
certifies that attached hereto as Exhibits A and B, respectively, are the form
of certificate representing the Notes as duly approved by the Board of Directors
of the Company and a copy of resolutions duly adopted by the Board of Directors
of the Company on February 2, 1994, pursuant to which the terms of the Notes
set forth above have been established.
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Certificate as of the 29th day of March, 1995.
/s/ Boh A. Dickey
-----------------------------------
Boh A. Dickey
Executive Vice President
and Chief Financial Officer
/s/ Rodney A. Pierson
-------------------------------------
Rodney A. Pierson
Senior Vice President,
Controller and Secretary
3
EX-5
6
OPINION
March 28, 1995
SAFECO Corporation
SAFECO Plaza
4333 Brooklyn Avenue Northeast
Seattle, Washington 98185
Ladies and Gentlemen:
In connection with registration under the Securities Act of 1933, as
amended, of unsecured notes in the aggregate principal amount of $200,000,000
(the "Notes") of SAFECO Corporation (the "Company") and specifically with
respect to the certain Registration Statement on Form S-3 (Registration No. 33-
52863) and amendments thereto filed by the Company with the Securities and
Exchange Commission for the purpose of such registration, you have asked us to
render certain opinions in connection with the issuance of the Debt Securities.
In connection with the opinions expressed below, we have examined and are
familiar with:
(a) the form of Trust Indenture between SAFECO Corporation, SAFECO Credit
Company, Inc. and The Chase Manhattan Bank, N.A., as Trustee;
(b) the form of Note filed as an exhibit to Form 8-K and incorporated by
reference into the Registration Statement;
(c) the resolutions of the Board of Directors of the Company pertaining to
the offering of the Notes and the Registration Statement adopted at meetings of
the Board on February 2, 1994; and
(d) the Registration Statement and amendments 1, 2 and 3 thereto, the
Prospectus and the Prospectus Supplement.
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SAFECO Corporation
March 28, 1995
Page 2
Based upon the foregoing examination, and after consideration of applicable
law, it is our opinion that the Notes have been duly authorized and, when sold
and after receipt of payment therefor, will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation, receivership, conservatorship, rehabilitation and other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether such enforceability is in a
proceeding in equity or at law).
We hereby consent to the filing of this opinion as an exhibit on Form 8-K
and to the incorporation by reference of such opinion into the Registration
Statement and to the references to our firm under the caption "Legal Matters" in
the Prospectus included as part of the Registration Statement.
Very truly yours,
/s/ FOSTER PEPPER & SHEFELMAN
------------------------------------
FOSTER PEPPER & SHEFELMAN
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