-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GxQJ5ogUBbySSvFdvXuhgPOYCqTe0cs9cV1ehzKfS6z0ObKYWUXeWcGDmjShVInr Z6QzTV8yP83UmowHEp22xg== 0000950124-96-000465.txt : 19960209 0000950124-96-000465.hdr.sgml : 19960209 ACCESSION NUMBER: 0000950124-96-000465 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19960208 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNDSTRAND CORP /DE/ CENTRAL INDEX KEY: 0000095395 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 361840610 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-00801 FILM NUMBER: 96513231 BUSINESS ADDRESS: STREET 1: 4949 HARRISON AVE STREET 2: P O BOX 7003 CITY: ROCKFORD STATE: IL ZIP: 61125 BUSINESS PHONE: 8152266000 S-3 1 FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1996 REGISTRATION NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ SUNDSTRAND CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 36-1840610 (State or other jurisdiction (I.R.S. Employer Identification Number) of incorporation or organization) P.O. BOX 7003 4949 HARRISON AVENUE ROCKFORD, ILLINOIS 61125-7003 (815) 226-6000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) RICHARD M. SCHILLING VICE PRESIDENT AND GENERAL COUNSEL SUNDSTRAND CORPORATION P.O. BOX 7003 4949 HARRISON AVENUE ROCKFORD, ILLINOIS 61125-7003 (815) 226-6305 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: Edward S. Best Mayer, Brown & Platt 190 S. LaSalle St. Chicago, Illinois 60603 (312) 782-0600 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement, as determined in light of market conditions. If the only securities being registered in this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / CALCULATION OF REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------
PROPOSED TITLE OF EACH MAXIMUM AGGREGATE PROPOSED MAXIMUM AMOUNT OF CLASS OF SECURITIES AMOUNT OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED TO BE REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE - ---------------------------------------------------------------------------------------------------------- Debt Securities............... $150,000,000(2) 100% $150,000,000 $51,724 - ---------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------
(1) Estimated in accordance with Rule 457 solely for purposes of determining the registration fee. (2) Or, if debt securities are issued (i) with original issue discount, such greater aggregate principal amount as shall result in an aggregate initial offering price of $150,000,000 or (ii) with a principal amount denominated in a foreign currency or currency unit, such principal amount as shall result in an aggregate offering price equivalent to $150,000,000 at the time of the offering. ------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED , 1996 $150,000,000 SUNDSTRAND CORPORATION DEBT SECURITIES --------------------- Sundstrand Corporation (the "Company" or "Sundstrand") may offer and sell from time to time its debt securities, consisting of debentures, notes and/or other unsecured evidences of indebtedness denominated in United States dollars or any other currency or currency unit (the "Debt Securities"), up to an amount resulting in net proceeds to the Company of $150,000,000. The Debt Securities may be offered in one or more separate series on terms to be determined at the time of sale. The specific designation, aggregate principal amount, denominations, currency of issue and payment, maturity, premium, if any, interest rate (which may be fixed or variable) and time of payment of any interest, terms for any redemption at the option of the Company or the holder, terms for any sinking fund payments, the initial public offering price and the other terms in connection with the offering and sale of the Debt Securities in respect of which this Prospectus is being delivered will be set forth in the accompanying Prospectus Supplement (the "Prospectus Supplement"). The Company may sell Debt Securities to or through underwriters, and may also sell Debt Securities directly to other purchasers or through agents. Such underwriters may include Goldman, Sachs & Co. or may be a group of underwriters represented by firms including such firm. Goldman, Sachs & Co. may also act as agents. See "Plan of Distribution." The names of such underwriters and the principal amounts, if any, to be purchased by them and their compensation will be set forth in the accompanying Prospectus Supplement. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- GOLDMAN, SACHS & CO. --------------------- The date of this Prospectus is , 1996. 3 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; and at the regional offices of the Commission at 7 World Trade Center, 7th Floor, New York, New York 10048 and Suite 1400, Northwestern Chicago Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material may be obtained at prescribed rates from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements and other information concerning the Company may also be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005; the Chicago Stock Exchange, Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605; and the Pacific Stock Exchange Incorporated, 301 Pine Street, San Francisco, California 94104. This Prospectus constitutes a part of a Registration Statement on Form S-3 (including all amendments thereto, the "Registration Statement") filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement and reference is hereby made to the Registration Statement and to the exhibits thereto for further information with respect to the Company and the Debt Securities. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission under the Exchange Act (File No. 1-5358) are incorporated by reference herein: (i) the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1994; (ii) the Quarterly Reports on Form 10-Q of the Company for the quarters ended March 31, June 30 and September 30, 1995; and (iii) the Current Report on Form 8-K of the Company dated November 27, 1995. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Debt Securities shall be deemed incorporated by reference herein and to be a part hereof from the date of filing such document. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or replaces such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom a Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the documents incorporated herein by reference, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents. Requests should be directed to: Investor Relations, Sundstrand Corporation, P.O. Box 7003, 4949 Harrison Avenue, Rockford, Illinois 61125-7003, telephone (815) 226-6000. 2 4 THE COMPANY The Company is engaged in the design, manufacture and sale of a variety of proprietary, technology-based components and systems for diversified international aerospace and industrial markets. The Company's mechanical, hydromechanical, electromechanical and electronic products require significant research, development engineering and processing expertise. The Company employs approximately 9,200 people and has manufacturing facilities in ten states and Puerto Rico and in France, Singapore and the United Kingdom. The Company's principal offices are located at 4949 Harrison Avenue, P.O. Box 7003, Rockford, Illinois 61125-7003; telephone (815) 226-6000. USE OF PROCEEDS Unless otherwise specified in the applicable Prospectus Supplement, the net proceeds from the sale of the Debt Securities will be used for general corporate purposes, including working capital, capital expenditures, possible acquisitions of, or investments in, businesses and assets, the possible repurchase of securities of the Company and the repayment of indebtedness. The Company has not allocated a specific portion of the net proceeds for any particular use at this time. Pending application of the net proceeds for specific purposes, such proceeds may be invested in marketable securities. RATIO OF EARNINGS TO FIXED CHARGES Set forth below is the Company's consolidated ratio of earnings to fixed charges for each of the years in the five-year period ended December 31, 1994, and the nine-month period ended September 30, 1994, and 1995.
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------- -------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges (unaudited)...................... 3.7 4.8 5.3 3.9 2.7 2.9 2.6
For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of income before income taxes and fixed charges (excluding capitalized interest). Fixed charges consist of interest on all indebtedness, amortization of debt discount and expense, and one-third of rental expense (which is deemed representative of the interest factor). 3 5 DESCRIPTION OF DEBT SECURITIES GENERAL The following description of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement (the "Offered Debt Securities") and the extent, if any, to which such general provisions may apply to the Offered Debt Securities will be described in the Prospectus Supplement relating to such Offered Debt Securities. The Debt Securities are to be issued under an indenture (the indenture, as supplemented from time to time, is referred to herein as the "Indenture") between the Company and M&I First National Bank, as trustee (the "Trustee"). The following summary of certain provisions of the Debt Securities and the Indenture does not purport to be complete and is subject to the detailed provisions of the Indenture, a copy of which is filed as an exhibit to the Registration Statement. Whenever particular provisions or defined terms in the Indenture are referred to herein, such provisions or defined terms are incorporated by reference herein. Section references used herein are references to the Indenture. The Debt Securities will be unsecured obligations of the Company and will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company. The Indenture does not limit the aggregate principal amount of the Debt Securities or of any particular series of Offered Debt Securities and provides that Debt Securities may be issued thereunder from time to time in one or more series. (Section 2.01) Unless otherwise indicated in the Prospectus Supplement relating thereto, the Offered Debt Securities will be issued in fully registered form only, without coupons, in denominations of $1,000 and any integral multiple thereof. Principal of and premium, if any, and interest, if any, will be payable, and the Offered Debt Securities may be transferred or exchanged without payment of any charge (other than any tax or other governmental charge payable in connection therewith), at the office or agency of the Trustee in West Bend, Wisconsin or New York, New York. Reference is made to the Prospectus Supplement relating to the particular series of the Offered Debt Securities for the following terms of the Offered Debt Securities: (i) the designation and aggregate principal amount of such Offered Debt Securities; (ii) the percentage of the principal amount at which such Offered Debt Securities will be issued; (iii) the date or dates on which such Offered Debt Securities will mature; (iv) the rate or rates (which may be fixed or variable) at which such Offered Debt Securities will bear interest, if any, and the date from which such interest, if any, will accrue; (v) the dates on which any such interest will be payable; (vi) the currency or currency unit in which such Offered Debt Securities are issuable and payable; (vii) any terms for redemption or for sinking fund payments; (viii) any provisions for defeasance or covenant defeasance; (ix) whether the Offered Debt Securities will be represented by one or more global securities registered in the name of a depository or its nominee and, if so, the method of transferring beneficial interests in the global securities; and (x) other specific terms associated with such Offered Debt Securities. (Section 2.01) Debt Securities may be issued under the Indenture as Original Issue Discount Securities to be offered and sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such Original Issue Discount securities will be described in the Prospectus Supplement relating thereto. "Original Issue Discount Security" means any security which provides for the declaration of acceleration of the maturity of an amount less than the principal amount thereof upon the occurrence of an Event of Default and the continuation thereof. (Section 1.01) CERTAIN COVENANTS OF THE COMPANY LIMITATION ON SECURED DEBT. The Indenture provides that, so long as any of the Debt Securities remain outstanding, the Company will not, nor will it permit any Restricted Subsidiary (as defined below) 4 6 to issue, assume or guarantee any indebtedness for money borrowed (herein referred to as "Debt") if such Debt is secured by a mortgage, security interest, pledge, lien or other encumbrance (herein referred to as a "mortgage") upon any Principal Property (as defined below), or on any shares of stock or indebtedness of any Restricted Subsidiary (whether such Principal Property, shares of stock or indebtedness are now owned or hereafter acquired) without in any such case effectively providing that the Debt Securities (together with, if the Company shall so determine, any other indebtedness of or guaranteed by the Company or such Restricted Subsidiary ranking equally with the Debt Securities then existing or thereafter created) shall be secured equally and ratably with such Debt so long as such Debt shall be so secured, except that the foregoing restrictions shall not apply to: (i) mortgages on property, shares of stock or indebtedness (herein referred to as "property") of any corporation existing at the time such corporation becomes a Restricted Subsidiary; (ii) mortgages on property existing at the time of acquisition thereof or mortgages to secure all or part of the purchase price of such property or to secure Debt incurred prior to, at the time of, or within 180 days after, the later of the acquisition, completion of construction or commencement of commercial operation of such property for the purpose of financing the purchase price of such property or construction or improvements thereon, provided that the mortgage shall not apply to property theretofore owned by the Company or any Restricted Subsidiary other than real property substantially unimproved for the use intended by the Company or such Restricted Subsidiary; (iii) mortgages on property of a Restricted Subsidiary securing Debt owing to the Company or another Restricted Subsidiary; (iv) mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company or a Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation or firm as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary, provided that any such mortgages do not attach to or affect property theretofore owned by the Company or such Restricted Subsidiary; (v) mortgages on property owned or leased by the Company or a Restricted Subsidiary in favor of the United States of America, any State, any other country, or any political subdivision of any of the foregoing or in favor of the holders of securities issued by any such entity, pursuant to any contract or statute (including mortgages to secure Debt of the pollution control or industrial revenue bond type) or to secure any indebtedness incurred for the purpose of financing the cost of construction of the property subject to such mortgages; (vi) mortgages existing at the date of the Indenture; (vii) certain landlords' liens; (viii) mortgages to secure partial, progress, advance or other payments or any Debt incurred for the purpose of financing all or part of the purchase price or cost of construction, development or substantial repair, alteration or improvement of the property subject to such mortgage if the commitment for such financing is obtained within one year after the later of completion of or the placing into operation of such constructed, developed, repaired, altered or improved property; (ix) mortgages arising in connection with contracts with or made at the request of the United States, any State, or any department, agency or instrumentality of any of the foregoing; (x) mechanics' and similar liens arising in the ordinary course of business in respect of obligations not due or being contested in good faith; (xi) mortgages arising from deposits with or the giving of any form of security to any governmental authority required as a condition to the transaction of business or exercise of any privilege, franchise or license; (xii) mortgages for taxes, assessments or governmental charges or levies not yet delinquent or which, if delinquent, are being contested in good faith; (xiii) mortgages (including judgment liens) arising from legal proceedings being contested in good faith and, in the case of judgment liens, so long as execution thereof is stayed; or (xiv) any extension, renewal or replacement (or successive extensions, renewals, or replacements), in whole or in part, of any mortgage referred in the foregoing clauses (i) to (xiii), inclusive. Notwithstanding the above, the Company and one or more Restricted Subsidiaries may, without securing the Debt Securities, issue, assume or guarantee Debt which would otherwise be subject to the foregoing restrictions, provided that after giving effect thereto the aggregate amount of such Debt then outstanding (not including secured Debt permitted under the foregoing exceptions) at such time does not exceed 10% of the Consolidated Net Tangible Assets (as defined in the Indenture) of the Company as calculated on the basis of its latest consolidated quarterly financial statements. (Section 4.05) LIMITATION ON SALE AND LEASEBACK. Sale and leaseback transactions by the Company or any Restricted Subsidiary of any Principal Property (except for temporary leases for a term of not more than 5 7 three years and except for leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries) are prohibited unless: (a) the Company or such Restricted Subsidiary would be entitled to issue, assume or guarantee Debt secured by the Principal Property involved at least equal in amount to the Attributable Debt (as defined below) in respect of such transaction without equally and ratably securing the Debt Securities (provided that such Attributable Debt shall thereupon be deemed to be Debt subject to the provisions of Sections 4.05), or (b) an amount in cash equal to such Attributable Debt is applied to the retirement (other than any mandatory retirement) of long-term non-subordinated Debt of the Company or long-term Debt of a Restricted Subsidiary. Attributable Debt is defined as the present value (discounted at an appropriate rate) of the obligation of a lessee for rental payments during the remaining term of any lease. (Section 4.06) CONSOLIDATION OR MERGER. The consolidation or merger of the Company with or into any other corporation or corporations (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party, or the sale, conveyance or lease of all or substantially all the property of the Company to any other corporation (whether or not affiliated with the Company) is permitted; provided, however, that in any such event, other than a merger in which the Company is the surviving corporation, the due and punctual payment of principal and interest on the Debt Securities and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed by the Company, shall be expressly assumed, by supplemental indenture, satisfactory in form to the Trustee, by the corporation formed by such consolidation or into which the Company shall have been merged or by the corporation which shall have acquired or leased such property. (Section 11.01) CERTAIN DEFINITIONS The term "Subsidiary" is defined to mean any corporation which is consolidated in the Company's accounts and any corporation of which at least a majority of the outstanding stock having voting power under ordinary circumstances to elect a majority of the board of directors of said corporation shall at the time be directly or indirectly owned by the Company, by the Company and one or more Subsidiaries, or by one or more Subsidiaries. (Section 1.01) The term "Restricted Subsidiary" is defined to mean any Subsidiary (i) substantially all the property of which is located within the United States of America, (ii) which owns a Principal Property, and (iii) in which the Company's direct or indirect investment exceeds 2% of the consolidated assets of the Company as shown on its latest quarterly consolidated financial statements; provided, however, that the term "Restricted Subsidiary" does not include any Subsidiary which is principally engaged in certain types of leasing and financing activities. (Section 1.01) The term "Principal Property" is defined to mean any manufacturing plant or facility which is located within the United States of America and is owned by the Company or any Restricted Subsidiary, unless the Board of Directors of the Company (or any duly authorized committee thereof) by resolution declares that such plant or facility, together with all other plants and facilities previously so declared, is not of material importance to the total business conducted by the Company and its Restricted Subsidiaries as an entirety. (Section 1.01) EVENTS OF DEFAULT An Event of Default with respect to any series of Debt Securities will be defined as being: (a) default in payment of interest on any Debt Securities of that series that continues for 30 days; (b) default in payment of principal of (or premium, if any, on) any Debt Securities of that series as and when the same becomes due, or default in the making of any Sinking Fund payment with respect to that series; (c) default by the Company in the performance of any of the other covenants or agreements in the Indenture relating to Debt Securities of that series which shall not have been remedied within a period of 60 days after notice to the Company by the Trustee or holders of at least 25% in aggregate principal amount of Stated Maturity of the Debt Securities of such series then outstanding; (d) certain events of 6 8 bankruptcy, insolvency or reorganization of the Company; or (e) default under other indebtedness of the Company for borrowed money having unpaid principal in excess of the greater of (i) $10,000,000 or (ii) 2% of the Company's Consolidated Net Tangible Assets, which indebtedness shall be or be declared due prior to the date it would otherwise become due and payable and such acceleration not being rescinded or annulled within 60 days after notice to the Company by the Trustee or holders of at least 25% in aggregate principal amount at Stated Maturity of the Debt Securities of such series then outstanding. (Section 6.01) Additional Events of Default may be prescribed for the benefit of holders of certain series of Debt Securities. (Section 10.01) The Indenture provides that the Trustee shall, with certain exceptions, notify the holders of Debt Securities of each series of any Event of Default known to it within 90 days after the occurrence thereof. (Section 6.07) The Indenture provides that if an Event of Default with respect to any series of Debt Securities shall have occurred and be continuing, either the Trustee or the holders of at least 25% in aggregate principal amount at Stated Maturity of Debt Securities of such series then outstanding may declare the principal amount (or, if the Debt Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all the Debt Securities of that series to be due and payable immediately, but upon certain conditions such declaration may be annulled and past defaults (except, unless theretofore cured, a default in payment of principal of or interest or premium on Debt Securities of that series) may be waived by the holders of a majority in aggregate principal amount at Stated Maturity of the Debt Securities of such series then outstanding. (Sections 6.01 and 6.06) Subject to the provisions of the Indenture relating to the duties of the Trustee in case an Event of Default with respect to any series of Debt Securities shall occur and be continuing, the Trustee shall be under no obligation to exercise any of the rights or powers in the Indenture at the request or direction of any of the holders of that series, unless such holders shall have offered to the Trustee reasonable security or indemnity. (Sections 7.01 and 7.02) Subject to such provisions for security or indemnification and certain limitations contained in the Indenture, the holders of a majority in aggregate principal amount at Stated Maturity of the Debt Securities of each series affected by an Event of Default and then outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee under the Indenture or exercising any trust or power conferred on the Trustee with respect to the Debt Securities of that series. (Section 6.06) The Indenture requires the annual filing by the Company with the Trustee of a certificate as to the absence of any defaults under the Indenture. (Section 4.07) No holder of any Debt Securities of any series will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such holder shall have previously given the Trustee written notice of an Event of Default with respect to Debt Securities of that series and unless also the holders of at least 25% in aggregate principal amount at Stated Maturity of the then outstanding Debt Securities of that series shall have made written request of, and offered reasonable indemnity to, the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the holders of a majority in aggregate principal amount at Stated Maturity of the outstanding Debt Securities of that series a direction inconsistent with such request and the Trustee shall have failed to institute such proceeding within 60 days of such request. However, any right of a holder of any Debt Security to receive payment of the principal of (and premium, if any) and any interest on such Debt Security on or after the due dates expressed in such Debt Security or to institute suit for the enforcement of any such payment on or after such dates shall not be impaired or affected without the consent of such holder. (Section 6.04) DEFEASANCE AND COVENANT DEFEASANCE The Company will have the option, if specified in the Prospectus Supplement relating to any series of Debt Securities, either (A) to defease and be discharged from any and all obligations in respect of the Debt Securities of any series (except for certain obligations to register the transfer or exchange of Debt Securities of such series, to replace stolen, lost or mutilated Debt Securities of such series, to maintain paying agencies and to hold monies for payment in trust) or (B) to be released from complying with its 7 9 obligations in respect of the Debt Securities of such series under Sections 4.05 (Limitation on Secured Debt) and 4.06 (Limitations on Sales and Leaseback), and Section 6.01(c) (described in clause (c) under "Events of Default") with respect to Sections 4.05 and 4.06 shall not be deemed to be an Event of Default under the Indenture and the Debt Securities of such series, upon the deposit with the Trustee, in trust, for such purpose, of money and/or U.S. Government Obligations (as defined) which through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of (and premium, if any) and each installment of interest on the Debt Securities of such series on the scheduled due dates of such payments in accordance with the terms of the Indenture and the Debt Securities of such series. In any such case, such a trust may only be established if, among other things, the Company has delivered to the Trustee an opinion of counsel (who may be an employee of or counsel for the Company) to the effect that (i) the holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred, and (ii) the Debt Securities of such series, if then listed on the New York Stock Exchange, Inc., will not be delisted as a result of such deposit and such defeasance. In the event of a defeasance as provided in clause (A) above, holders of Debt Securities of any series would be able to look only to the trust fund established for payment of principal of and interest on their series of Debt Securities until maturity. (Section 12.01) MODIFICATIONS, AMENDMENTS AND WAIVERS IN RESPECT OF THE INDENTURE The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in principal amount of the Debt Securities of each series affected at the time outstanding, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture or any supplemental indenture with respect to the Debt Securities of such series or modifying in any manner the rights of the holders of the Debt Securities of such series; provided that no such supplemental indenture may (i) extend the stated Maturity of any Debt Security, reduce the rate or extend the time of payment of any interest thereon, reduce the principal amount thereof, reduce any premium payable upon redemption, reduce the amount of an Original Issue Discount Security that would be due upon a declaration of acceleration, modify provisions relating to amount or regularity of mandatory sinking fund payments or make the principal amount thereof payable in any money other than United States legal tender for the payment of public and private debts, without the consent of the holder of each Debt Security so affected, or (ii) reduce the aforesaid percentage of Debt Securities of such series, the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all Debt Securities of such series then outstanding. (Sections 10.01 and 10.02) CONCERNING THE TRUSTEE The Company maintains lines of credit and has customary banking relationships with M&I Marshall and Ilsley Bank, a sister bank of M&I First National Bank, the Trustee under the Indenture. PLAN OF DISTRIBUTION The Company may sell Debt Securities to or through underwriters and also may sell Debt Securities directly to other purchasers or through agents. Such underwriters may include Goldman, Sachs & Co. or may be a group of underwriters represented by such firm. Such firm may also act as an agent. The distribution of the Offered Debt Securities may be effected from time to time in one or more transactions at a fixed price or prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Prospectus Supplement will describe the method of distribution of the Offered Debt Securities. 8 10 In connection with a sale of Debt Securities, underwriters may receive compensation from the Company or from purchasers of Debt Securities for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell Debt Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions, or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of Debt Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such underwriter or agent will be identified, and any such compensation will be described, in the Prospectus Supplement. Under agreements which may be entered into by the Company, underwriters, dealers and agents who participate in the distribution of Debt Securities may be entitled to indemnification by the Company against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters, dealers or agents may be required to make in respect thereof. LEGAL OPINIONS Certain legal matters will be passed upon for the Company by Richard M. Schilling, Vice President and General Counsel of the Company, and for any underwriters or agents by Mayer, Brown & Platt. EXPERTS The consolidated financial statements of Sundstrand Corporation incorporated by reference in the Company's Annual Report (Form 10-K) for the year ended December 31, 1994, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon incorporated by reference therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 9 11 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities registered hereby, other than underwriting discounts and commissions: Securities and Exchange Commission registration fee............... $ 51,724 Blue sky fees and expenses........................................ 5,000 Trustee fees and expenses......................................... 20,000 Printing and engraving fees....................................... 25,000 Accounting fees and expenses...................................... 25,000 Legal Fees........................................................ 5,000 Rating agency fees................................................ 100,000 Miscellaneous..................................................... 18,276 -------- Total........................................................ $250,000 ========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of Delaware provides that a corporation created thereunder may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was a director or officer of such corporation or is or was serving at the request of such corporation as a director or officer of another corporation or other enterprise against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, subject to certain limitations referred to therein. Article Sixteenth of the Company's Restated Certificate of Incorporation provides that no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law. Article VI of the Company's By-Laws provides for indemnification of directors and officers as follows: The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, or any other applicable laws, as from time to time in effect, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Corporation or a division thereof, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. The provisions of this Article shall be deemed to be a contract between the Corporation and each director or officer who serves in any such capacity at any time while this Article and the relevant provisions of the General Corporation Law of Delaware or other applicable law, if any, are in effect, and any repeal or modification of any such law or of this Article shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, and with respect to the Employee Retirement Income Security Act of II-1 12 1974, or any other applicable laws, as from time to time in effect, indemnify any officer, director or employee of the Corporation or an affiliated corporation, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was serving at the request of the Corporation as an individual Trustee, Committee member, administrator or fiduciary of a pension or other benefit plan for employees of the Corporation, or of an affiliated corporation or other enterprise. Persons who are not covered by the foregoing provisions of this Article and who are or were employees or agents of the Corporation or a division thereof, or are or were serving at the request of the Corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the Board of Directors of the Corporation. The indemnification provided or permitted by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled by law or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article. The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, or any other applicable laws, as from time to time in effect, pay expenses, including attorneys' fees, incurred in defending any action, suit or proceeding, in advance of the final disposition of such action, suit or proceeding, to any person who is or was a party or is threatened to be made a party to any such threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation, upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized by applicable laws. ITEM 16. EXHIBITS A list of exhibits is set forth in the Exhibit Index appearing elsewhere in this Registration Statement and is incorporated herein by reference. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum II-2 13 aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d)(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Rockford, Illinois on February 5, 1996. SUNDSTRAND CORPORATION By: /s/ Paul Donovan ---------------------------------- Its: Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and as of February 5, 1996.
SIGNATURE TITLE - ----------------------------------- ----------------------------------------------------- * President and Chief Executive Officer and Director - ----------------------------------- Robert H. Jenkins * Executive Vice President and Chief Financial Officer - ----------------------------------- Paul Donovan * Vice President and Controller - ----------------------------------- DeWayne J. Fellows * Chairman of the Board - ----------------------------------- Don R. O'Hare * Director - ----------------------------------- J.P. Bolduc * Director - ----------------------------------- Gerald Grinstein * Director - ----------------------------------- Charles Marshall Director - ----------------------------------- Klaus H. Murmann * Director - ----------------------------------- Donald E. Nordlund
II-4 15
SIGNATURE TITLE - ----------------------------------- ----------------------------------------------------- * Director - ----------------------------------- Thomas G. Pownall * Director - ----------------------------------- John A. Puelicher * Director - ----------------------------------- Ward Smith * Director - ----------------------------------- Robert J. Smuland * Director - ----------------------------------- Berger G. Wallin *By: /s/ Paul Donovan ----------------------------- Paul Donovan, Attorney-in-Fact
II-5 16 EXHIBIT INDEX
EXHIBIT SEQUENTIAL NUMBER DESCRIPTION PAGE NO. - ------ ------------------------------------------------------------------------- ---------- 1.1 Form of Underwriting Agreement 4.1 Form of Indenture between the Company and M&I First National Bank, as Trustee 4.2 Form of Debt Security (included in Exhibit 4.1 as Schedule A to the Indenture) 5.1 Opinion of Richard M. Schilling 12.1 Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of Ernst & Young LLP 23.2 Consent of Richard M. Schilling (included in Exhibit 5.1) 24.1 Powers of Attorney 25.1 Statement of Eligibility on Form T-1 of M&I First National Bank
II-6 EX-1.1 2 UNDERWRITING AGREEMENT 1 EXHIBIT 1.1 SUNDSTRAND CORPORATION DEBT SECURITIES UNDERWRITING AGREEMENT , 199 Goldman, Sachs & Co. As representatives of the several Underwriters named in Schedule I to the related Pricing Agreement, 85 Broad Street New York, New York 10004 Dear Sirs: From time to time Sundstrand Corporation, a Delaware corporation (the "Company"), proposes to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the securities specified therein) certain of its debt securities (the "Securities") specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the "Designated Securities"). The terms and rights of any particular issuance of Designated Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to the indenture (the "Indenture") identified in such Pricing Agreement. 1. Particular sales of Designated Securities may be made from time to time to the Underwriters of such Securities, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as its or their representative. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated Securities, the initial public offering price of such Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters and the principal amount of such Designated Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint. 2 2. The Company represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement in respect of the Securities has been filed with the Securities and Exchange Commission (the "Commission") (the "Initial Registration Statement"); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration Statement") filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became effective upon filing, no other document with respect to the Initial Registration Statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or a Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act, being hereinafter called a "Preliminary Prospectus"; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the Initial Registration Statement at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, being hereinafter collectively called the "Registration Statement"; the prospectus relating to the Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and incorporated by reference in such Preliminary Prospectus or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Initial Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Securities in the form in which it is first filed, or transmitted for filing, with the Commission pursuant to Rule 424 under the Act, including any documents incorporated by reference therein as of the date of such filing or mailing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make -2- 3 the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities; (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities; (d) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock [, OTHER THAN [DISCLOSE ANY CHANGES],] or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus; (e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; (f) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (g) The Securities have been duly authorized, and, when Designated Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities, such Designated Securities will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized and duly qualified under the Trust Indenture Act and, at the Time of Delivery (as defined in Section 4 hereof) the Indenture will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture conforms, and the Designated Securities will conform, to the descriptions thereof in the Prospectus as amended or supplemented with respect to such Designated Securities; (h) The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture, this Agreement and any Pricing Agreement, and the -3- 4 consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation, as amended, or the By-Laws of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the other transactions contemplated by this Agreement or any Pricing Agreement or the Indenture except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters; (i) Other than as set forth or contemplated 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; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and (j) Neither the Company nor any of its affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes. 3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented. 4. Designated Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by certified or official bank check or checks, payable to the order of the Company or, if set forth in the Pricing Agreement, wire transfer to the account specified by the Company in the funds specified in such Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the "Time of Delivery" for such Securities. 5. The Company agrees with each of the Underwriters of any Designated Securities: (a) To prepare the Prospectus as amended or supplemented in relation to the applicable Designated Securities in a form approved by the Representatives, which approval shall not be unreasonably withheld, and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to such Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement -4- 5 to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Securities and prior to the Time of Delivery for such Securities which shall be disapproved by the Representatives for such Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with copies of the Prospectus as amended or supplemented in New York City in such quantities as the Representatives may reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c)), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158); and (e) During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the later of (i) the termination of trading restrictions for such Designated Securities, as notified to the Company by the Representatives and (ii) the Time -5- 6 of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Designated Securities, without the prior written consent of the Representatives. 6. The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the 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, Section 8 and Section 11 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. 7. The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Mayer, Brown & Platt, counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to the incorporation of the Company, the Indenture, the Designated Securities, the Registration Statement, the Prospectus as amended or supplemented and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Richard M. Schilling, Vice President and General Counsel of the Company, or other counsel for the Company satisfactory to the Representatives, shall have furnished to the Representatives their written opinion (a draft of each such opinion is attached as Exhibit 1 hereto), -6- 7 dated the Time of Delivery for such Designated Securities, in form and substance satisfactory to the Representatives, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Prospectus as amended or supplemented; (ii) Each of Dosapro-Milton Roy S.A., The Falk Corporation, Sullair Europe S.A., Milton Roy Company, Sullair Corporation, Sundstrand Pacific Aerospace Pte Ltd., and Sundstrand Pacific Holdings (Pte) Ltd. have been duly incorporated and are validly existing as corporations in good standing (where appropriate under applicable laws) under the laws of their respective jurisdictions of incorporation, with corporate power and authority to own their respective properties and conduct their respective businesses as described in the Prospectus as amended or supplemented or, if not so described, as presently conducted; (iii) The Company is duly qualified as a foreign corporation for the transaction of business and is in good standing in all jurisdictions in which the failure to be so qualified would have a material adverse effect on the Company; (iv) The Company has an authorized capitalization as set forth in the Prospectus as amended or supplemented and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non- assessable; (v) To the best of such counsel's knowledge and other than as set forth or contemplated in the Prospectus, there are no legal or governmental proceedings, other than routine litigation arising in the ordinary course, 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; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (vi) This Agreement and the Pricing Agreement with respect to the Designated Securities have been duly authorized, executed and delivered by the Company; (vii) The Designated Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Designated Securities and the Indenture conform to the descriptions thereof in the Prospectus as amended or supplemented; (viii) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture has been duly qualified under the Trust Indenture Act; (ix) The issue and sale of the Designated Securities and the compliance by the Company with all of the provisions of the Designated Securities, the Indenture, this Agreement and the Pricing Agreement with respect to the Designated Securities and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default -7- 8 under, any indenture, mortgage, deed of trust, loan agreement or other material agreement or material instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation, as amended, or the By-Laws of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its properties; (x) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Designated Securities or the consummation by the Company of the transactions contemplated by this Agreement or such Pricing Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Securities by the Underwriters; (xi) The statements set forth in the Prospectus under the captions "Description of Securities," and "Description of Notes" insofar as they purport to constitute a summary of the terms of the Securities and under the captions "Plan of Distribution" and "Underwriting," insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete; (xii) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and (xiii) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the Time of Delivery for the Designated Securities (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; except for those referred to in the opinion in subsection (x) of this Section 7(c), such counsel has no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under -8- 9 which they were made, not misleading or that, as of the Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and such counsel does not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required. (d) On the date of the Pricing Agreement for such Designated Securities, at a time prior to the execution of the Pricing Agreement with respect to such Designated Securities and at the Time of Delivery for such Designated Securities, the Representatives, Ernst & Young, independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement, shall have furnished to the Representatives a letter, dated the effective date of the Registration Statement or the date of the most recent report filed with the Commission containing financial statements and incorporated by reference in the Registration Statement, if the date of such report is later than such effective date, and letters dated as of such date of the Pricing Agreement and Time of Delivery, respectively, to the effect set forth in Annex II hereto, and with respect to such letter dated such Time of Delivery, as to such other matters as the Representatives may reasonably request and in form and substance satisfactory to the Representatives (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Exhibit 2 hereto and a draft of the form letter to be delivered on the effective date of any post-effective amendment to the Registration Statement and as of each Time of Delivery is attached as Exhibit 3 hereto); (e) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented and (ii) since the respective dates as of which information is given in the Prospectus as amended or supplemented there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, the effect of which, in any such case described in Clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented; (f) On or after the date of the Pricing Agreement relating to the Designated Securities (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; (g) On or after the date of the Pricing Agreement relating to the Designated Securities there shall not have occurred any of the following: (i) a suspension or material limitation in trading in -9- 10 securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal, New York or Illinois State authorities; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this Clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented; or (v) the occurrence of any material adverse change in the existing financial, political or economic conditions in the United States or elsewhere which, in the judgment of the Representatives, would materially and adversely affect the financial markets or the market for the Designated Securities and other debt securities; (h) The Company shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Securities a certificate or certificates of officers of the Company satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such other matters as the Representatives may reasonably request; and (i) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities. (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and -10- 11 any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged, untrue statement of a material fact or, the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been -11- 12 required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint. (e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Designated Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Designated Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities. (b) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Securities which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of Designated Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or -12- 13 the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter with respect to the Designated Securities covered by such Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if for any other reason Designated Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but the Company shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Section 6 and Section 8 hereof. 12. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement. All statements, requests, notices and agreements hereunder shall be in writing and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement: Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of each Pricing Agreement. As used herein, "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 15. This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York. 16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. -13- 14 If the foregoing is in accordance with your understanding, please sign and return six counterparts hereof. Very truly yours, SUNDSTRAND CORPORATION By ___________________________ Accepted as of the date hereof: GOLDMAN, SACHS & CO. _________________________________ (Goldman, Sachs & Co.) On behalf of each of the Underwriters -14- 15 ANNEX I Pricing Agreement Goldman, Sachs & Co. As Representatives of the several Underwriters named in Schedule I hereto, 85 Broad Street New York, New York 10004 , 199 Dear Sirs: Sundstrand Corporation, a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated , 199 (the "Underwriting Agreement"), between the Company on the one hand and Goldman, Sachs & Co. on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Securities specified in Schedule II hereto (the "Designated Securities"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions have been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty with respect to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed, or in the case of a supplement mailed for filing, with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto. If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall 16 be submitted to the Company for examination, upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. Very truly yours, SUNDSTRAND CORPORATION By ________________________________ Accepted as of the date hereof: GOLDMAN, SACHS & CO. ___________________________________ (Goldman, Sachs & Co.) On behalf of each of the Underwriters -2- 17 SCHEDULE I
Principal Amount of Designated Securities to be Underwriter Purchased ----------- ------------ Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ [Names of other Underwriters] . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-3- 18 SCHEDULE II Title of Designated Securities: Aggregate principal amount: Price to Public: Purchase Price by Underwriters: Form of Designated Securities: Specified funds for payment of purchase price: Indenture: Maturity: Interest Rate: Interest Payment Dates: Redemption Provisions: Restriction on Refunding: Sinking Fund Provisions: Defeasance: Time of Delivery: Closing Location: Names and addresses of Representatives: -4- 19 ANNEX II Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules audited (and, if applicable, financial forecasts and/or pro forma financial information) or examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, financial forecasts and/or condensed financial statements derived from audited financial statements of the Company for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representative or representatives of the Underwriters (the "Representatives") such term to include an Underwriter or Underwriters who act without any firm being designated as its or their representatives and are attached hereto; (iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included in the Company's quarterly report on Form 10-Q incorporated by reference into the Prospectus as indicated in their reports thereon copies of which are attached hereto; and on the basis of specified procedures including inquiries of officials of the Company who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statements referred to in paragraph (vi)(A)(i) below comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations, nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (iv) The unaudited selected financial information with respect to the consolidated results of operations and financial position of the Company for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for five such fiscal years which were included or incorporated by reference in the Company's Annual Reports on Form 10-K for such fiscal years; (v) They have compared the information in the Prospectus under selected captions with the disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such letter nothing came to their attention as a result of the foregoing procedures that caused them to believe that this information does not conform in all material respects with the disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K; (vi) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements 20 of the Company and its subsidiaries, inspection of the minute books of the Company and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of the Company and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) (i) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included or incorporated by reference in the Company's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published rules and regulations, or (ii) any material modifications should be made to the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus or included in the Company's Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus for them to be in conformity with generally accepted accounting principles; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in Clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Company's Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets or stockholders' equity or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (F) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of -2- 21 the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (vii) In addition to the audit referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain specified procedures, not constituting an audit in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of the Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives or in documents incorporated by reference in the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of the Company and its subsidiaries and have found them to be in agreement. All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus (including the documents incorporated by reference therein) as defined in the Underwriting Agreement as of the date of the letter delivered on the date of the Pricing Agreement for purposes of such letter and to the Prospectus as amended or supplemented (including the documents incorporated by reference therein) in relation to the applicable Designated Securities for purposes of the letter delivered at the Time of Delivery for such Designated Securities. -3- EX-4.1 3 INDENTURE BETWEEN THE COMPANY & M&I 1 EXHIBIT 4.1 ================================================================================ SUNDSTRAND CORPORATION AND M&I FIRST NATIONAL BANK AS TRUSTEE _____________________ INDENTURE DATED AS OF FEBRUARY 15, 1996 _____________________ ================================================================================ 2 SUNDSTRAND CORPORATION CROSS REFERENCE SHEET*/ [This Cross Reference Sheet shows the location in the Indenture of the provisions inserted pursuant to Sections 310-318(a), inclusive, of the Trust Indenture Act of 1939, as amended.]
SECTIONS OF TRUST INDENTURE ACT THE INDENTURE - ------------------- --------------- 310(a)(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable 310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08 and 7.10 310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13(a) and (c)(1) and (2) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13(b) (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable 312(a), 5.01 and 5.02(a) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(a) and (b) (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(c) 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 (b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 (c)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable (c)(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.05 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.05 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable 315(a)(c)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08 316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable (last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 8.04 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.06 317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.07
__________________________________ */ THE CROSS REFERENCE SHEET IS NOT PART OF THE INDENTURE. 3 TABLE OF CONTENTS Page ---- PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 RECITALS: Purpose of Indenture . . . . . . . . . . . . . . . . . . . . . . . 1 Form of Security . . . . . . . . . . . . . . . . . . . . . . . . . 1 Form of Trustee's Certificate of Authentication . . . . . . . . . 1 Compliance with legal requirements . . . . . . . . . . . . . . . . 1 Purpose of and consideration for Indenture . . . . . . . . . . . . 1 ARTICLE ONE DEFINITIONS Section 1.01. Certain Terms Defined . . . . . . . . . . . . . . . 1 Attributable Debt . . . . . . . . . . . . . . . . . . . . 2 Authorized Newspaper . . . . . . . . . . . . . . . . . . . 2 Board of Directors . . . . . . . . . . . . . . . . . . . . 2 Business Day . . . . . . . . . . . . . . . . . . . . . . . 2 Certified Board Resolution . . . . . . . . . . . . . . . . 2 Company . . . . . . . . . . . . . . . . . . . . . . . . . 3 Company Direction . . . . . . . . . . . . . . . . . . . . 3 Consolidated Net Tangible Assets . . . . . . . . . . . . . 3 Corporate Trust Office . . . . . . . . . . . . . . . . . . 3 Defaulted Interest . . . . . . . . . . . . . . . . . . . . 3 Depositary . . . . . . . . . . . . . . . . . . . . . . . . 3 ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Global Security . . . . . . . . . . . . . . . . . . . . . 4 Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Indenture . . . . . . . . . . . . . . . . . . . . . . . . 4 Interest Payment Date . . . . . . . . . . . . . . . . . . 5 Officers' Certificate . . . . . . . . . . . . . . . . . . 5 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 5 Original Issue Discount Security . . . . . . . . . . . . . 5 Outstanding . . . . . . . . . . . . . . . . . . . . . . . 5 Principal Property . . . . . . . . . . . . . . . . . . . . 6 Record Date . . . . . . . . . . . . . . . . . . . . . . . 6 Responsible Officer . . . . . . . . . . . . . . . . . . . 6 Restricted Subsidiary . . . . . . . . . . . . . . . . . . 7 Sale and Lease-Back Transaction . . . . . . . . . . . . . 7 Security or Securities . . . . . . . . . . . . . . . . . . 7 i 4 Security Register and Security Registrar . . . . . . . . . 7 Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . 7 Stated Maturity . . . . . . . . . . . . . . . . . . . . . 7 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 8 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 8 Trust Indenture Act of 1939 . . . . . . . . . . . . . . . 8 ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE OF SECURITIES Section 2.01. Amount Unlimited; Establishment of Series . . . . . . . 8 Section 2.02. Form of Securities and Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . 10 Section 2.03. Denomination, Authentication and Dating of Securities . . 10 Section 2.04 Execution of Securities . . . . . . . . . . . . . . . . . 13 Section 2.05. Registration of Transfer and Exchange . . . . . . . . . . 14 Section 2.06. Temporary Securities . . . . . . . . . . . . . . . . . . 16 Section 2.07. Mutilated, Destroyed, Lost or Stolen Securities . . . . . 16 Section 2.08. Cancellation of Surrendered Securities . . . . . . . . . 17 Section 2.09. Provisions of Indenture and Securities for the Sole Benefit of the Parties and the Holders . . . . . 17 Section 2.10 Computation of Interest . . . . . . . . . . . . . . . . 18 ARTICLE THREE REDEMPTION OF SECURITIES -- SINKING FUND Section 3.01. Applicability of Article . . . . . . . . . . . . . . . . 18 Section 3.02. Notice of Redemption; Selection of Securities . . . . . 18 Section 3.03. When Securities Called for Redemption Become Due and Payable . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 3.04. Sinking Fund . . . . . . . . . . . . . . . . . . . . . . 20 Section 3.05 Use of Acquired Securities to Satisfy Sinking Fund Obligations . . . . . . . . . . . . . . . . . . . . 21 Section 3.06 Effect of Failure to Deliver Officers' Certificate or Securities . . . . . . . . . . . . . . . . . . . . . 21 Section 3.07 Manner of Redeeming Securities . . . . . . . . . . . . 21 Section 3.08 Sinking Fund Moneys to Be Held as Security During Continuance of Event of Default; Exceptions . . . . . 22 ii 5 ARTICLE FOUR PARTICULAR COVENANTS OF THE COMPANY Section 4.01. Payments of Principal of (and Premium, if any) and Interest on Securities . . . . . . . . . . . . . . . . 22 Section 4.02. Maintenance of Offices or Agencies for Registration of Transfer, Exchange and Payment of Securities and for Service on the Company . . . . . . . . . . . . . . 23 Section 4.03. Appointment to Fill a Vacancy in the Office of Trustee . . . . 23 Section 4.04. Duties of Paying Agents, etc . . . . . . . . . . . . . . . . . 23 Section 4.05. Limitation on Secured Debt . . . . . . . . . . . . . . . . . . 24 Section 4.06 Limitation on Sale and Lease-Back . . . . . . . . . . . . . . 27 Section 4.07. Statement by Officers as to Default . . . . . . . . . . . . . 28 Section 4.08. Further Instruments and Acts . . . . . . . . . . . . . . . . . 28 ARTICLE FIVE HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE Section 5.01. Company to Furnish Trustee Information as to Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . 28 Section 5.02. Preservation of Information; Communications to Holders . . . . 29 Section 5.03. Reports by Company . . . . . . . . . . . . . . . . . . . . . . 30 Section 5.04. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 31 ARTICLE SIX REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . 33 Section 6.02. Collection of Indebtedness by Trustee, etc . . . . . . . . . . 35 Section 6.03. Application of Moneys Collected by Trustee . . . . . . . . . . 37 Section 6.04. Limitation on Suits by Holders . . . . . . . . . . . . . . . . 38 Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of Default . . . . . . . . . . . . . 38 Section 6.06. Rights of Holders of Majority in Principal Amount of Securities of Any Series to Direct Trustee and to Waive Default . . . . . . . . . . . . . . . . . . . . . 39 Section 6.07. Trustee to Give Notice of Default Known to It, But May Withhold Such Notice in Certain Circumstances . . . 39 Section 6.08. Requirement of an Undertaking to Pay Costs in Certain Suits Under the Indenture or Against the Trustee . . . . . . 40
iii 6 Section 6.09. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . 40 ARTICLE SEVEN CONCERNING THE TRUSTEE Section 7.01. Certain Duties and Responsibilities . . . . . . . . . . . . . 40 Section 7.02. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . 42 Section 7.03. Trustee Not Liable for Recitals in Indenture or in Securities. 43 Section 7.04. Trustee, Paying Agent or Security Registrar May Own Securities . . . . . . . . . . . . . . . . . . . . . . . . . 43 Section 7.05. Moneys Received by Trustee to Be Held in Trust . . . . . . . . 43 Section 7.06. Compensation and Reimbursement . . . . . . . . . . . . . . . . 43 Section 7.07 Right of Trustee to Rely on an Officers' Certificate Where No Other Evidence Specifically Prescribed . . . . . . 44 Section 7.08. Disqualification of Trustee; Conflicting Interests . . . . . . 44 Section 7.09. Requirements for Eligibility of Trustee . . . . . . . . . . . 44 Section 7.10. Resignation and Removal of Trustee . . . . . . . . . . . . . . 45 Section 7.11. Acceptance by Successor to Trustee . . . . . . . . . . . . . . 46 Section 7.12. Successor to Trustee by Merger, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . 47 Section 7.13. Preferential Collection of Claims Against Company . . . . . . 48 Section 7.14 Appointment of Additional and Separate Trustees . . . . . . . 51 ARTICLE EIGHT CONCERNING THE HOLDERS Section 8.01. Evidence of Action by Holders . . . . . . . . . . . . . . . . 54 Section 8.02. Proof of Execution of Instruments and of Holding of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 54 Section 8.03. Who May Be Deemed Owner of Securities . . . . . . . . . . . . 55 Section 8.04. Securities Owned by Company or Controlled or Controlling Companies Disregarded for Certain Purposes . . . . . . . . . 55 Section 8.05. Instruments Executed by Holders Bind Future Holders . . . . . 55 Section 8.06 Record Date for Determination of Holders Entitled to Vote . . 56 ARTICLE NINE HOLDERS' MEETINGS AND CONSENTS Section 9.01. Purposes for Which Meeting May Be Called . . . . . . . . . . . 56 Section 9.02. Manner of Calling Meetings . . . . . . . . . . . . . . . . . . 57 Section 9.03. Call of Meetings by Company or Holders . . . . . . . . . . . . 57
iv 7 Section 9.04. Who May Attend and Vote at Meetings . . . . . . . . . . . . . 57 Section 9.05. Regulations May Be Made by Trustee . . . . . . . . . . . . . . 57 Section 9.06. Manner of Voting at Meetings and Record to Be Kept . . . . . . 58 Section 9.07. Written Consent in Lieu of Meetings . . . . . . . . . . . . . 58 Section 9.08. No Delay of Rights by Meeting . . . . . . . . . . . . . . . . 59 ARTICLE TEN SUPPLEMENTAL INDENTURES Section 10.01. Purposes for Which Supplemental Indentures May be Entered into Without Consent of Holders . . . . . . . . . . 59 Section 10.02. Modification of Indenture with Consent of Holders 66-2/3% in Principal Amount of Securities . . . . . . . . . 61 Section 10.03. Effect of Supplemental Indentures . . . . . . . . . . . . . . 62 Section 10.04. Securities May Bear Notation of Changes by Supplemental Indentures . . . . . . . . . . . . . . . . . . 62 ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE, CONVEYANCE OR LEASE Section 11.01. Company May Consolidate, etc., on Certain Terms . . . . . . . 62 Section 11.02. Successor Corporation to be Substituted . . . . . . . . . . . 63 Section 11.03. Opinion of Counsel and Officers' Certificate to Be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 63 ARTICLE TWELVE DISCHARGE OF INDENTURE AND DEFEASANCE Section 12.01. Termination of Company's Obligations . . . . . . . . . . . . 64 Section 12.02. Application of Trust Deposit . . . . . . . . . . . . . . . . 67 Section 12.03. Repayment to Company . . . . . . . . . . . . . . . . . . . . 67 ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES Section 13.01. Incorporators, Stockholders, Officers, Directors and Employees of Company Exempt from Individual Liability . 67
v 8 ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS Section 14.01. Successors and Assigns of Company Bound by Indenture . . . . 68 Section 14.02. Acts of Board, Committee or Officer of Successor Corporation Valid . . . . . . . . . . . . . . . . . . . . . 68 Section 14.03. Required Notices or Demands . . . . . . . . . . . . . . . . . 68 Section 14.04. Indenture and Securities to be Construed in Accordance with the Laws of the State of New York . . . . . . . . . . 69 Section 14.05. Officers' Certificate and Opinion of Counsel to be Furnished upon Application or Demand by the Company . . . . 69 Section 14.06. Payments Due on Holidays . . . . . . . . . . . . . . . . . . 69 Section 14.07. Provisions Required by Trust Indenture Act of 1939 to Control . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Section 14.08. Indenture May be Executed in Counterparts . . . . . . . . . . 70 Section 14.09. Separability Clause . . . . . . . . . . . . . . . . . . . . . 70
vi 9 INDENTURE, dated as of the 15th day of February, 1996, between SUNDSTRAND CORPORATION, a corporation incorporated under the laws of Delaware (the "Company"), party of the first part, and M&I FIRST NATIONAL BANK, a banking corporation incorporated under the laws of New York (the "Trustee"), party of the second part. WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes and other evidences of indebtedness (hereinafter referred to as the "Securities"), to be issued in one or more series in an unlimited amount as provided in this Indenture. WHEREAS, the text of the Securities is to be substantially in the form attached hereto as Schedule A, with such specific terms, additions or omissions as may be determined pursuant to an Officers' Certificate or a supplemental indenture as contemplated in Section 2.01 hereof. WHEREAS, the Trustee's certificate of authentication for the Securities is to be substantially in the form attached hereto as Schedule B. WHEREAS, all acts and things necessary to make this Indenture a valid agreement of the Company have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: In consideration of the premises and of the sum of One Dollar duly paid by the Trustee to the Company at the execution and delivery of these presents, the receipt whereof is hereby acknowledged, the Company and the Trustee covenant and agree with each other, for the equal and proportionate benefit of all Holders from time to time of the Securities, as follows: ARTICLE ONE DEFINITIONS Section 1.01. Certain Terms Defined. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto and of any Officers' Certificate establishing the terms of a particular series of Securities as herein provided shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939, or which are by reference therein defined in the Securities Act of 1933 (except as herein otherwise expressly provided or unless the context 10 otherwise requires), shall have the meanings assigned to such terms in the Trust Indenture Act of 1939 and in such Securities Act as in force as of the date of this Indenture. Attributable Debt: The term "Attributable Debt" shall have the meaning specified in Section 4.06. Authorized Newspaper: The term "Authorized Newspaper" shall mean a newspaper printed in the English language and customarily published at least once a day on each Business Day in each calendar week and of general circulation in the Borough of Manhattan, The City and State of New York, whether or not such newspaper is published on Saturdays, Sundays and legal holidays. Whenever, under the provisions of this Indenture, two or more publications of a notice or other communication are required or permitted, such publications may be in the same or different authorized newspapers. If, because of temporary or permanent suspension of publication or general circulation of any newspaper or for any other reason, it is impossible or impracticable to publish any notices required by this Indenture in the manner herein provided, then such publication in lieu thereof or such other notice as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. Board of Directors: The term "Board of Directors," when used with reference to the Company, shall mean the Board of Directors of the Company or any executive committee of such Board to which the powers of such Board have lawfully been delegated. Business Day: The term "Business Day" means, except as may otherwise be provided in the form of Securities of any particular series, with respect to any Place of Payment, any day, other than a Saturday or Sunday, that is not a legal holiday, or a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of West Bend or in that Place of Payment, or with respect to Securities denominated in a Foreign Currency, the capital city of the country of such Foreign Currency, or with respect to Securities denominated in ECU, Brussels, Belgium. Certified Board Resolution: The term "Certified Board Resolution" shall mean one or more resolutions certified by the Secretary or any Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification, which are delivered to the Trustee. 2 11 Company: The term "Company" shall mean SUNDSTRAND CORPORATION and, subject to the provisions of Article Eleven, shall mean its successors and assigns from time to time hereafter. Company Direction: The term "Company Direction" shall mean a written direction, order or instruction, signed in the name of the Company by its Chairman of the Board or its President or any Vice President and by its Treasurer or its Secretary or any Assistant Treasurer or any Assistant Secretary and delivered to the Trustee. Consolidated Net Tangible Assets: The term "Consolidated Net Tangible Assets" means, as of any particular time, the total amount of assets (less applicable reserves) after deducting therefrom (a) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and excluding current maturities of long-term indebtedness) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense, and other like intangible assets, all as shown in the latest quarterly consolidated balance sheet of the Company contained in the Company's then most recent annual report to stockholders or quarterly report filed with the Securities and Exchange Commission, as the case may be, except that assets shall include an amount equal to the Attributable Debt in respect of any Sale and Lease-Back Transaction not capitalized on such balance sheet. Corporate Trust Office: The term "Corporate Trust Office," or other similar term, shall mean the principal office of the Trustee in the City of West Bend, at which at any particular time its corporate trust business shall be principally administered or, if no such office is maintained, such other office of the Trustee as shall be designated. The Corporate Trust Office on the date hereof is located at 321 North Main Street, P.O. Box 1980, West Bend, Wisconsin 53095, Attention: Corporate Trust and Agency Group. Defaulted Interest: The term "Defaulted Interest" shall have the meaning specified in Section 2.03. Depositary: The term "Depositary" shall mean, with respect to the Securities of any series issuable or issued in the form of one or more Global Securities, a clearing agency registered under the 3 12 Securities Exchange Act of 1934 and any other applicable statute or regulation designated as Depositary by the Company pursuant to Section 2.01 until a successor Depositary shall have become such pursuant to Section 2.05, and thereafter "Depositary" shall mean or include each person who is then a Depositary hereunder, and if at any time there is more than one such person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Global Securities of that series. ECU: The term "ECU" means the European Currency Unit as defined and revised from time to time by the Council of the European Communities. Event of Default: The term "Event of Default" shall mean any event specified in Section 6.01, continued for the period of time, if any, and after the giving of the notice, if any, therein designated. Global Security: The term "Global Security" means a Security bearing the legend prescribed in Section 2.03 and issued in definitive form without coupons, evidencing all or a part of an issuance of Securities of any series, and issued to the Depositary for such series in accordance with Section 2.03. Holder: The term "Holder," with respect to a registered Security, shall mean any person in whose name such Security shall be registered on the Security Register and, with respect to an unregistered Security, shall mean the bearer thereof. Indenture: The term "Indenture" shall mean this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented, and shall include the terms of particular series of Securities established as contemplated hereunder; provided, however, that if at any time more than one Trustee is serving as such under this instrument, "Indenture" shall mean, with respect to any one or more series of Securities for which any such Trustee is serving, this Indenture as originally executed or as amended or supplemented as herein provided, exclusive, however, of any provisions or terms which relate solely to one or more series of Securities for which such Trustee is not serving, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted with respect to a particular series of Securities executed and delivered after such Trustee had become a Trustee hereunder but with respect to which series such Trustee was not serving as Trustee. 4 13 Interest Payment Date: The term "Interest Payment Date" shall mean the date on which an installment of interest on any series of Securities shall become due and payable, as therein or herein provided. Officers' Certificate: The term "Officers' Certificate" shall mean a certificate signed by any two of the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, provided that one of the officers signing the Officers' Certificate shall be the Chairman of the Board, or the President, or any Vice President (which Vice President, if executing any Officers' Certificate delivered pursuant to Section 2.01, shall be the chief financial officer of the Company, or, if no such Vice President exists, a Vice President having similar responsibility as to financial matters), which complies with Section 14.05 and is delivered to the Trustee. Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel, who may be an employee of, or counsel to, the Company. Each such opinion shall include (except as otherwise provided in this Indenture) the statements provided for in Section 14.05. Original Issue Discount Security: The term "Original Issue Discount Security" shall mean any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Stated Maturity thereof pursuant to Section 6.01. Outstanding: The term "outstanding," when used with reference to Securities of any series, subject to the provisions of Section 8.04, shall mean, as of any particular time, all Securities of such series authenticated by the Trustee and delivered under this Indenture, except: (a) Securities of such series theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities of such series or portions thereof for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided that, if such Securities or portions thereof are to be redeemed, notice 5 14 of such redemption shall have been given as in Article Three provided or provision satisfactory to the Trustee shall have been made for giving such notice; (c) Securities of such series in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07; and (d) Securities of any series the indebtedness in respect to which has been discharged in accordance with Section 12.01(a). Principal Property: The term "Principal Property" shall mean any manufacturing plant or facility which is located within the United States of America and is owned by the Company or any Restricted Subsidiary, except any such plant or facility which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Company and its Restricted Subsidiaries as an entirety and which, when taken together with all other plants and facilities as to which such a declaration has been made, are so declared by the Board of Directors to be not of material importance to the total business conducted by the Company and its Restricted Subsidiaries as an entirety. Record Date: The term "Record Date," as used with respect to any Interest Payment Date, shall mean the close of business on the 15th day of the month preceding the month in which an Interest Payment Date occurs, if such Interest Payment Date is the 15th day of such month, in each case whether or not a Business Day, or such other dates with respect to a particular series of Securities, as may be specified in the instrument establishing such series, so long as such Record Date is not less than 15 days prior to the applicable Interest Payment Date. Responsible Officer: The term "Responsible Officer," when used with respect to the Trustee, shall mean any officer within the Corporate Trust and Agency Group (or any successor group of the Trustee), including any Vice President, any Assistant Vice President, any Assistant Secretary, or any other Officer or Assistant Officer of the Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers to whom any corporate trust matter is referred at the Trustee's corporate trust office because of his knowledge of and familiarity with the particular subject. 6 15 Restricted Subsidiary: The term "Restricted Subsidiary" shall mean any Subsidiary (i) substantially all the property of which is located within the United States of America, (ii) which owns a Principal Property, and (iii) in which the Company's investment, direct or indirect and whether in the form of equity, debt or advances, as shown on the consolidating balance sheet used in the preparation of the latest quarterly consolidated financial statements of the Company preceding the date of determination, is in excess of 2% of the total consolidated assets of the Company as shown on such quarterly consolidated financial statements; provided, however, that the term "Restricted Subsidiary" shall not include any Subsidiary which is principally engaged in leasing or in financing installment receivables or which is principally engaged in financing the Company's operations outside the continental United States of America. Sale and Lease-Back Transaction: The term "Sale and Lease-Back Transaction" shall have the meaning specified in Section 4.06. Security or Securities: The terms "Security" or "Securities" shall have the meaning stated in the recital of this Indenture and shall mean any Security or such Securities, as the case may be, authenticated and delivered pursuant to this Indenture; provided, however, that if at any time there is more than one Trustee serving under this Indenture, "Securities" with respect to this Indenture, as to which such Trustee is serving, shall have the meaning stated in the recital and shall more particularly mean Securities authenticated and delivered pursuant to this Indenture, exclusive of Securities of any series as to which such Trustee is not serving as Trustee. Security Register and Security Registrar: The terms "Security Register" and "Security Registrar," with respect to any series of Securities, shall have the respective meanings specified in Section 2.05. Sinking Fund: The term "Sinking Fund" shall mean any fund established by the Company for redemption of the Securities of any series prior to Stated Maturity. Stated Maturity: The term "Stated Maturity," when used with respect to any Security, shall mean the date on which the last payment of principal of such Security is due and payable in accordance with the terms thereof. 7 16 Subsidiary: The term "Subsidiary" shall mean any corporation which is consolidated in the Company's accounts and any corporation of which at least a majority of the outstanding stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Company, or by one or more Subsidiaries, or by the Company and one or more Subsidiaries. Trustee: The term "Trustee" shall mean M&I First National Bank until a successor Trustee shall have become such pursuant to the applicable provisions hereof, and thereafter "Trustee" shall mean or include all Trustees hereunder and, subject to the provisions of Article Seven, shall also include its successors and assigns and, unless the context otherwise requires, shall also include any co-trustee or co-trustees or separate trustee or trustees appointed pursuant to Section 7.14. Trust Indenture Act of 1939: The term "Trust Indenture Act of 1939" (except as herein otherwise expressly provided) shall mean the Trust Indenture Act of 1939 as in force on the date of this Indenture. ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE OF SECURITIES Section 2.01. Amount Unlimited; Establishment of 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. All Securities of any one series shall be substantially identical except as to denomination and except as the Company in an Officers' Certificate delivered pursuant to this Section 2.01 or in any supplemental indenture may otherwise provide. The Securities may bear interest at such lawful rate or rates, from such date or dates, shall mature at such time or times, may be redeemable at such price or prices and upon such terms, including, without limitation, out of proceeds from the sale of other Securities, or other indebtedness of the Company, and may contain and/or be subject to such other terms and provisions as shall be determined by the Company in accordance with the authority granted in one or more resolutions of the Board of Directors reasonably acceptable to the Trustee and set forth in an Officers' Certificate or a supplemental indenture, which instrument shall establish with respect to each series of Securities: 8 17 (1) the designation of the Securities of such series, which shall distinguish the Securities of one series from all other Securities; (2) the limit upon the aggregate principal amount at Stated Maturity of the Securities of such series which may be authenticated and delivered under this Indenture (not including Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Sections 2.05, 2.06, 2.07, 3.02 or 10.04); (3) the rate at which the Securities of such series shall bear interest, if any, or the formula by which interest shall accrue, the dates from which interest shall accrue, and the Interest Payment Dates on which such interest shall be payable; (4) the Stated Maturity of the Securities of such series; (5) the period or periods within which, 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 Company; (6) the obligation, if any, of the Company to redeem or purchase Securities of such series pursuant to a sinking, purchase or analogous fund and the period or periods within which, the price or prices at which, and the terms and conditions upon which the Securities of such series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (7) if other than the principal amount at Stated Maturity, the portion of the principal amount at Stated Maturity of the Securities of such series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01; (8) if other than denominations of $1,000 and any multiple thereof, the denominations in which Securities of such series shall be issuable; (9) any changes in, omissions from or additions to the form of Security to be used to evidence ownership of Securities of such series; (10) any terms with respect to conversion of the Securities of such series, warrants attached thereto or terms pursuant to which warrants may exist; (11) the place or places where the principal of (and premium, if any) and interest on the Securities of such series shall be payable; (12) any additional office or agencies maintained pursuant to Section 4.02; 9 18 (13) whether the Securities of such series shall be issued as registered Securities or as unregistered Securities, with or without coupons; provided that no Securities will be issued as unregistered Securities if such issuance would violate applicable law; (14) whether Article Twelve hereof, including, without limitation, Section 12.01(a) and (b) thereof, is applicable to the Securities; (15) whether any Securities are to be Original Issue Discount Securities; (16) if other than United States dollars, the currency or currencies, including composite currencies, in which payments of interest or principal are payable with respect to the Securities of the series; (17) if the amount of payments of principal of or interest on the Securities of any series may be determined with reference to the differences in the price of or rate of exchange between any indexes, currencies or commodities, the manner in which such amounts shall be determined; (18) whether any Securities of the series shall be issued as, or exchanged for, in whole or in part, one or more Global Securities and, in such case, (i) the terms upon which interests in such Global Security or Securities shall be exchangeable by the Company or the holder thereof for definitive Securities and (ii) the identity of the Depositary for such Global Security or Securities; and (19) any other terms of the Securities of such series (which term shall not be inconsistent with the provisions of this Indenture). Section 2.02. Form of Securities and Trustee's Certificate of Authentication. The Securities and the Trustee's certificate of authentication to be borne by such Securities shall be substantially in the respective forms thereof set forth in Schedules A (or a form established by or pursuant to a Certified Board Resolution) and B to this Indenture with such specific terms, additions or omissions as may be determined pursuant to an Officers' Certificate or a supplemental indenture as contemplated in Section 2.01 hereof, in each case with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture (the provisions of which shall be appropriate to reflect the terms of each series of Securities, including the currency or denomination, which may be United States dollars, foreign currency or ECU) or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Securities may be listed, or to conform to usage. Section 2.03. Denomination, Authentication and Dating of Securities. The Securities of each series may be issued as registered Securities or, if provided by the terms of the instrument 10 19 establishing such series of Securities, as unregistered Securities, with or without coupons. The Securities of each series shall be issuable in denominations of $1,000 and any integral multiple of $1,000, unless otherwise provided by the terms of the instrument establishing such series of Securities. Each Security shall be dated as of the date of its authentication. If the Company shall establish pursuant to Section 2.01 that the Securities of a series may be issued in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section 2.03, authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of the outstanding Securities to be represented by such Global Security or Securities, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions and (iv) shall bear a legend substantially to the following effect: "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." At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Direction for authentication and delivery of such Securities, and the Trustee shall thereupon authenticate and deliver such Securities in accordance with such Company Direction. Prior to the issuance of Securities of any series, the Trustee shall be entitled to receive and, subject to Section 7.01, shall be fully protected in relying upon: (1) a Certified Board Resolution pursuant to which the issuance of the Securities of such series is authorized; (2) an executed supplemental indenture, if any; (3) an Officer's Certificate, if any, delivered in accordance with Section 2.01 and an Officers' Certificate as to the absence of any Event of Default or any event which with notice or lapse of time or both could become an Event of Default; and (4) an Opinion of Counsel of the Company which in substance shall state that: (i) the form and the terms of the Securities of such series have been established in conformity with the provisions of this Indenture; 11 20 (ii) the Securities of such series have been duly authorized and, when executed and authenticated in accordance with the provisions of this Indenture and subject to any other reasonable and customary conditions specified in such Opinion of Counsel, will constitute legal, valid and binding obligations of the Company entitled to the benefits of this Indenture; (iii) the registration statement, if any, relating to the Securities of such series and any amendments thereto has become effective under the Securities Act of 1933 and, to the best knowledge of such counsel, no stop order suspending the effectiveness of such registration statement, as amended, has been issued and no proceedings for that purpose have been instituted or threatened; (iv) no consent, approval, authorization or order of any court or governmental agency or body in the United States is required for the issuance of the Securities of such series, except such as have been obtained and such as may be required under the blue sky laws of any jurisdiction in the United States in connection with the purchase and distribution of the Securities of such series; (v) neither the issue nor sale of the Securities of such series will conflict with, result in a breach of or constitute a default under the terms of any indenture or other agreement or instrument known to such counsel and to which the Company or any of its Subsidiaries is a party or is bound, or any order or regulation known to such counsel to be applicable to the Company or any of its Subsidiaries of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Company or any of its Subsidiaries; (vi) the authentication and delivery of the Securities of such series by the Trustee in accordance with the Company Direction so to do, and the Company's execution and delivery of the Securities of such series, will not violate the terms of this Indenture; and (vii) such other opinions as shall be reasonably requested by the Trustee. The Trustee shall have the right to decline to authenticate and deliver any Securities of such series (A) if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or (B) if the Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees and/or responsible officers shall determine that such action would expose the Trustee to personal liability to Holders of outstanding Securities of any series. So long as there is no existing default in the payment of interest on registered Securities of any series, all such Securities authenticated by the Trustee after the close of business on the Record Date for the payment of interest on any Interest Payment Date relating thereto and prior 12 21 to such Interest Payment Date shall be dated the date of authentication but shall bear interest from such Interest Payment Date; provided, however, that if and to the extent that the Company shall default in the interest due on such Interest Payment Date, then any such Securities shall bear interest from the next preceding Interest Payment Date relating to such Security with respect to which interest has been paid or duly provided for on such Securities, from the date from which interest shall accrue as such date is set forth in the instrument establishing the terms of such Securities. The person in whose name any Security is registered at the close of business on any Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date notwithstanding the cancellation of such Security upon any registration of transfer or exchange thereof subsequent to such Record Date and prior to such Interest Payment Date, except if and to the extent the Company shall default in the payment of the interest due on such Interest Payment Date, in which case such defaulted interest (herein called "Defaulted Interest") shall be paid to the persons in whose names outstanding Securities of such series are registered at the close of business on a subsequent record date selected by the Trustee, which shall not be less than five Business Days preceding the date of payment of such Defaulted Interest, established for such purpose by notice given by mail or on behalf of the Company to Holders of such Securities not less than 15 days preceding such subsequent record date. Such notice shall be given to the persons in whose names such outstanding Securities of such series are registered at the close of business on the third Business Day preceding the date of the mailing of such notice. Section 2.04 Execution of Securities. The Securities and coupons appertaining thereto, if any, shall be signed on behalf of the Company by its Chairman or its President or any Vice President and by its Secretary or Assistant Secretary under its corporate seal. Such signatures may be the manual or facsimile signatures of the present or any future such authorized officers and may be imprinted or otherwise reproduced on the Securities and such coupons. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Securities and such coupons. Only such Securities as shall bear thereon a Trustee's certificate of authentication substantially in the form provided for in Schedule B, signed manually by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. The Trustee's certificate of authentication on any Security executed by the Company shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder. In case any officer of the Company who shall have signed any of the Securities or such coupons shall cease to be such officer before the Securities or such coupons so signed shall have been authenticated by the Trustee and delivered or disposed of by the Company, such Securities and such coupons nevertheless may be authenticated and delivered or disposed of as though the person who signed such Securities and such coupons had not ceased to be such officer of the Company; and any Security or such coupons may be signed on behalf of the Company by such 13 22 persons as, at the actual date of the execution of such Security or such coupons, shall be the proper officers of the Company, although at the date of such Security or such coupons or of the execution of this Indenture any such person was not such officer. Section 2.05. Registration of Transfer and Exchange. The Company shall keep, at an office or agency maintained by the Company in accordance with the provisions of Section 4.02, a register for each series of registered Securities (such register being herein referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall register Securities of such series and shall register the transfer of such Securities as in this Article Two provided. At all reasonable times the Security Register shall be open for inspection by the Trustee. Upon due presentment for registration of transfer of any such Security at such office or agency, or such other offices or agencies as the Company may designate, the Company shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of authorized denominations, of the same series and of like aggregate principal amount at Stated Maturity. Unless and until otherwise determined by the Company by resolution of its Board of Directors, the Security Register for the purpose of registration, exchange or registration of transfer of registered Securities shall be kept at the Corporate Trust Office and, for this purpose, the Trustee shall be designated the "Security Registrar." At the option of the Holder, Securities of any series may be exchanged for Securities of the same series of like aggregate principal amount at Stated Maturity and of other authorized denominations. Securities to be so exchanged shall be surrendered at the offices or agencies to be maintained by the Company as provided in Section 4.02, and the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor the Security or Securities which the Holder making the exchange shall be entitled to receive. All Securities presented or surrendered for registration of transfer, exchange, redemption or payment shall (if so required by the Company or the Security Registrar) be duly endorsed or be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company and the Trustee, duly executed by the Holder or his attorney duly authorized in writing. No service charge shall be made for any exchange or registration of transfer or Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company shall not be required (a) to issue, register the transfer of or exchange any Securities of any series for a period of 15 days next preceding any selection of Securities of such series to be redeemed or (b) to register the transfer of or exchange any Securities of such series selected, called or being called for redemption. 14 23 Notwithstanding any other provision of this Section 2.05 to the contrary, unless and until it is exchanged in whole or in part for Securities in definitive registered form without coupons, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary. If at any time the Depositary for the Securities of a series represented by one or more Global Securities notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for such Securities shall no longer be eligible under Section 2.01, the Company shall appoint a successor Depositary with respect to the Securities. If (i) the Depositary for Securities of a series represented by one or more Global Securities is at any time unwilling or unable to continue as Depositary or the Depositary for the Securities of such series ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor Depositary is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility or (ii) the Company executes and delivers to the Trustee an order to the effect that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities, then the Company's election pursuant to Section 2.01 that the Securities of such series be represented by one or more Global Securities shall no longer be effective with respect to the Securities of such series, and the Company will execute, and the Trustee, upon receipt of an order of the Company for the authentication and delivery of definitive Securities of such series, will authenticate and deliver Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such Securities in exchange for such Global Security or Securities. If specified by the Company pursuant to Section 2.01 with respect to a series of Securities represented by a Global Security, the Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form without coupons on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee upon receipt of an order for the authentication and delivery of definitive Securities of such series shall authenticate and deliver, without service charge, (i) to the person specified by such Depositary a new Security or Securities of the same series, of any authorized denominations as requested by such person, in an aggregate principal amount equal to and in exchange for such person's beneficial interest in the Global Security; and 15 24 (ii) to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above. Upon the exchange of a Global Security for Securities in definitive registered form without coupons, in authorized denominations, such Global Security shall be cancelled by the Trustee. Securities in definitive registered form without coupons issued in exchange for a Global Security pursuant to this Section 2.05 shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to or as directed by the persons in whose names such Securities are so registered. Section 2.06. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute and deliver and the Trustee, upon Company Direction and the satisfaction of the conditions set forth in Section 2.03 hereof, shall authenticate and deliver temporary Securities (printed, lithographed or typewritten) of any authorized denomination and substantially in the form of the definitive Securities, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Temporary Securities may be issued without a recital of the specific redemption prices, if any, applicable to such Securities and may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. The Company shall execute and furnish definitive Securities as soon as practicable, and thereupon any or all temporary Securities may be surrendered in exchange therefor at the Corporate Trust Office, and the Trustee shall authenticate and deliver in exchange for such temporary Securities a like aggregate principal amount at Stated Maturity of definitive Securities of the same series. Until so exchanged, the temporary Securities shall be entitled to the same benefits under this Indenture as definitive Securities authenticated and delivered hereunder. Section 2.07. Mutilated, Destroyed, Lost or Stolen Securities. In case any temporary or definitive Security and, in the case of a definitive Security, coupons appertaining thereto, if any, shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon Company Direction the Trustee shall authenticate and deliver, a new Security or such coupons of the same series bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security or such coupons, or in lieu of and in substitution for the Security or such coupons so destroyed, lost or stolen. In every case, the applicant for a substituted Security or such coupons shall furnish to the Company, and to the Security Registrar and any paying agent, such security or indemnity as may be required by them to save each of them harmless from all risk, however remote, and, in every case of destruction, 16 25 loss or theft, the applicant shall also furnish to the Company, and to the Trustee and any paying agent, evidence to their satisfaction of the destruction, loss or theft of such Security or such coupons and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon Company Direction. Upon the issuance of any substituted Security or such coupons, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Security which has matured or is about to mature or which has been called for redemption shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substituted Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish the Company and any paying agent with such security or indemnity as either may require to save it harmless from all risk, however remote, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company of the destruction, loss or theft of such Security and of the ownership thereof. Every substituted Security of any series or coupon issued pursuant to the provisions of this Section 2.07 by virtue of the fact that any Security or coupon is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security or coupon shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series or coupons duly issued and delivered hereunder. All Securities and coupons shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities and coupons and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. Section 2.08. Cancellation of Surrendered Securities. All Securities surrendered for payment, redemption (whether through the operation of a Sinking Fund or otherwise), registration of transfer or exchange, and all coupons surrendered for payment, shall, if surrendered to any person other than the Trustee, be delivered to the Trustee for cancellation by it or, if surrendered to the Trustee, shall be cancelled by it, and all Securities delivered to the Trustee in discharge or satisfaction in whole or in part of any Sinking Fund payment (referred to in Section 3.04) shall be cancelled by the Trustee, and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee will destroy cancelled Securities and coupons and deliver a certificate of destruction to the Company unless requested otherwise. If the Company shall acquire any of the Securities or coupons, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness or rights represented by such Securities or coupons unless and until the same are delivered or surrendered to the Trustee for cancellation. Section 2.09. Provisions of Indenture and Securities for the Sole Benefit of the Parties and the Holders. Nothing in this Indenture or in the Securities, expressed or implied, shall give 17 26 or be construed to give to any person, firm or corporation, other than the parties hereto and the Holders of the Securities, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained, all its covenants, conditions and provisions being for the sole benefit of the parties hereto and the Holders. Section 2.10 Computation of Interest. Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE THREE REDEMPTION OF SECURITIES -- SINKING FUND Section 3.01. Applicability of Article. The Company may become obligated, or reserve the right, to redeem and pay, prior to Stated Maturity, all or any part of the Securities of any series, either by optional redemption, Sinking Fund or otherwise, by provision therefor in the instrument establishing such series of Securities pursuant to Section 2.01 or in the Securities of such series. Redemption of any series shall be made in accordance with the terms of such Securities and to the extent that this Article does not conflict with such terms, in accordance with this Article. Section 3.02. Notice of Redemption; Selection of Securities. In case the Company shall exercise the right or be obligated to redeem Securities as provided for in the first sentence of Section 3.01, it shall fix a date for redemption (unless, by the terms of the instrument establishing such series of Securities or the terms of such Securities, such date is fixed), and it or, at its request, the Trustee, in the name of and at the expense of the Company, shall give notice of such redemption to the Holders of the Securities to be redeemed as a whole or in part, with respect to registered Securities, by mailing a notice of such redemption not less than 20 nor more than 60 days prior to the date fixed for redemption to their last addresses as they shall appear upon the Security Register and, with respect to unregistered Securities, by publishing in an authorized newspaper notice of such redemption on two separate days, each of which is not less than 20 nor more than 60 days prior to the date fixed for redemption. Any notice which is mailed or published, as the case may be, in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder actually receives such notice. In any case, failure duly to give notice by mail, or any defect in the notice, to the Holder of any registered Security of any series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series. In case, by reason of the suspension of or irregularities in regular mail service, it shall be impractical to mail notice of any event to Holders of registered Securities when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving 18 27 such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities are to be redeemed, and shall state that payment of the redemption price of the Securities or portions thereof to be redeemed, together with interest accrued to the date fixed for redemption, will be made at the offices or agencies to be maintained by the Company in accordance with the provisions of Section 4.02 upon presentation and surrender of such Securities and that, on and after such date, interest thereon or on the portions thereof to be redeemed will cease to accrue. If less than all the Securities of any series are to be redeemed, the notice to the Holders of Securities to be redeemed shall specify the Securities to be redeemed. In case any Security is to be redeemed in part only, such notice shall state the portion of the principal amount thereof to be redeemed and shall state that, on and after the redemption date, upon surrender of such Security, a new Security or Securities of the same series in authorized denominations and in a principal amount at Stated Maturity equal to the unredeemed portion thereof will be issued. If less than all the Securities of any series are to be redeemed, the Company shall give the Trustee written notice, at least 15 days prior to the date on which notice is to be given to the Holders of such Securities (or such shorter period acceptable to the Trustee), as to the aggregate principal amount at Stated Maturity of Securities of such series to be redeemed, which shall be an integral multiple of $1,000, and thereupon the Trustee shall select, in such manner as it shall deem appropriate and fair, the Securities of such series to be redeemed in part and shall thereafter promptly notify the Company in writing of the numbers of the Securities so to be redeemed and, in the case of Securities to be redeemed in part only, the principal amount at Stated Maturity so to be redeemed. Section 3.03. When Securities Called for Redemption Become Due and Payable. If the Company has fixed a date for redemption pursuant to Section 3.02, the Securities or portions of Securities specified in the notice provided in Section 3.02 shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after such date fixed for redemption (unless the Company shall default in the payment of such Securities at the redemption price, together with interest accrued to the date fixed for redemption) interest on the Securities or portions of Securities so called for redemption shall cease to accrue. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in such notice, such Securities shall be paid and redeemed by the Company at the applicable redemption price, together with interest accrued to the dated fixed for redemption; provided, however, that installments of interest becoming due on the date fixed for redemption on Securities which are in registered form shall be payable to the Holders of such Securities or of one or more previous such Securities evidencing all or a portion of the same debt as that evidenced by such particular Securities, registered as such on the relevant Record Dates according to their terms and the provisions of Section 2.03. 19 28 Upon presentation of any Security which is redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, at the expense of the Company, a new Security or Securities of the same series in authorized denominations and in a principal amount at Stated Maturity equal to the unredeemed portion of the Security so presented. Section 3.04. Sinking Fund. In the event that the instrument establishing the terms of a particular series shall provide for a Sinking Fund, the Company covenants that as and for a Sinking Fund for the redemption of Securities of such series, so long as any of the Securities of such series are outstanding: (a) It will pay to the Trustee or to a paying agent (or, if the Company is acting as its own paying agent, segregate and hold in trust as provided in Section 4.04), on or before each date set forth as a Sinking Fund payment date (each such date is herein called a "Sinking Fund payment date") in the instrument establishing such series, a sum in cash sufficient to retire on each such date, at the Sinking Fund redemption price provided for in such instrument and upon the conditions, if any, applicable thereto as specified in such instrument, the principal amount of such Securities as specified in such instrument, together with interest accrued to the Sinking Fund payment date. Each sum payable as provided in this paragraph (a) is herein called a "mandatory Sinking Fund payment." (b) If the instrument establishing any series of Securities so provides, and upon the terms provided herein, the Company may elect to pay to the Trustee or to a paying agent (or, if the Company is acting as its own paying agent, segregate and hold in trust as provided in Section 4.04), on or before any Sinking Fund payment date with respect to a particular series of Securities, an additional sum in cash sufficient to retire on such Sinking Fund payment date, at the Sinking Fund redemption price, up to any additional principal amount of Securities, together with interest accrued to the Sinking Fund payment date set forth in such instrument. Any sum payable as provided in this paragraph (b) is herein called an "optional Sinking Fund payment." Any such election by the Company shall be evidenced by an Officers' Certificate, delivered to the Trustee not later than 60 days (or such shorter period acceptable to the Trustee) preceding such Sinking Fund payment date, which certificate shall set forth the amount of the optional Sinking Fund payment which the Company then elects to pay. The Company's election, so evidenced, shall be irrevocable and the Company shall, upon delivery of such certificate to the Trustee, become bound to pay or segregate and hold in trust as aforesaid on or before such Sinking Fund payment date the amount specified in such certificate. Unless otherwise provided in the instrument establishing such series, any such right to make an optional Sinking Fund payment shall be noncumulative and shall in no event relieve the Company of its obligation set forth in paragraph (a) of this Section 3.04. 20 29 All moneys paid or segregated and held in trust pursuant to this Section 3.04 shall be applied on the Sinking Fund payment date in respect of which such payment or segregation was made to the redemption of Securities as provided in this Article Three. Section 3.05 Use of Acquired Securities to Satisfy Sinking Fund Obligations. In lieu of making all or any Sinking Fund payment in cash as may be required by Section 3.04(a), the Company may, not later than 60 days (or such shorter period acceptable to the Trustee) preceding any applicable Sinking Fund payment date relating to a particular series of Securities, deliver to the Trustee for cancellation Securities of such series theretofore acquired by the Company (otherwise than through the use of Sinking Fund moneys pursuant to Section 3.07) and not theretofore made the basis for the reduction of any Sinking Fund payment with respect to such series, accompanied by an Officers' Certificate stating the Company's election to use such Securities to reduce the amount of such Sinking Fund payment with respect to such series (specifying the amount of the reduction of each such payment) and certifying that such Securities have not theretofore been acquired pursuant to Section 3.07 or made the basis for a reduction of any Sinking Fund payment with respect to such series. Securities so delivered shall be credited against the Sinking Fund payment due on such Sinking Fund payment date at the Sinking Fund redemption price thereof. Section 3.06 Effect of Failure to Deliver Officers' Certificate or Securities. In case of a failure of the Company, at or before the time provided above, to deliver any Officers' Certificate as may be required by Section 3.05, together with any Securities of the particular series required by Section 3.05, the Company shall not be permitted to make any such reduction of the amount of the Sinking Fund payment with respect to such series payable on such Sinking Fund payment date. Section 3.07 Manner of Redeeming Securities. The Securities of any series to be redeemed from time to time through the operation of any Sinking Fund relating to such series, as in Section 3.04 provided, shall be selected by the Trustee for redemption in the manner provided in Section 3.02, and notice thereof shall be given by the Trustee to the Company, and the Company hereby irrevocably authorizes the Trustee, in the name of and at the expense of the Company, to give notice on behalf of the Company of the redemption of such Securities, all in the manner and with the effect in this Article Three specified, except that, in addition to the matters required to be included in such notice by Section 3.02, such notice shall also state that the Securities therein designated for redemption are to be redeemed through operation of such Sinking Fund. Such Securities shall be so redeemed and paid in accordance with such notice in the manner and with the effect provided in Sections 3.02 and 3.03. Notwithstanding the foregoing, if at any time the amount of cash to be paid into any Sinking Fund with respect to a particular series of Securities on any next succeeding Sinking Fund payment date for such series, together with any unused balance of any preceding Sinking Fund payment or payments with respect to such series which shall not, in any case, include funds held by the Trustee for Securities of such series which previously have been called for 21 30 redemption, shall not exceed in the aggregate $100,000, the Trustee, unless requested by the Company, shall not select Securities for or give notice of the redemption of Securities through the operation of the Sinking Fund with respect to such series on the next succeeding Sinking Fund payment date. Such unused balance of moneys deposited in the Sinking Fund with respect to a particular series of Securities shall be added to the next Sinking Fund payment for such series to be made in cash or, at the request of the Company, shall be applied at any time or from time to time to the purchase of Securities of such series, by public or private purchase, in the open market or otherwise. Section 3.08 Sinking Fund Moneys to Be Held as Security During Continuance of Event of Default; Exceptions. Unless all Securities of any series then outstanding are to be redeemed, neither the Trustee nor any paying agent shall redeem any Securities of such series with Sinking Fund moneys if such person shall at the time have knowledge of the continuance of any Event of Default with respect to such series, except that where the mailing or publication of notice of redemption of any such Securities shall theretofore have been made, the Trustee or any paying agent, if sufficient funds shall have been deposited with it for such purpose, shall redeem such Securities. However, the Company itself shall not redeem any such Securities with Sinking Fund moneys during the continuance of any Event of Default with respect to such series. The Trustee shall not mail or publish any notice of redemption if it shall at the time have knowledge of the continuance of any Event of Default with respect to such series. Except as aforesaid, any moneys in the Sinking Fund with respect to such series at such time and any moneys thereafter paid into the Sinking Fund shall during such continuance be held as security for the payment of all Securities of that series; provided, however, that in case such Event of Default with respect to such series shall have been waived as permitted by this Indenture or otherwise cured, such moneys shall thereafter be held and applied in accordance with the provisions of this Article Three. ARTICLE FOUR PARTICULAR COVENANTS OF THE COMPANY Section 4.01. Payments of Principal of (and Premium, if any) and Interest on Securities. The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest, if any, on Securities of each series at the place, at the time or times and in the manner provided in the instrument establishing such series and in the Securities of such series. The interest on the Securities, if any, shall be payable (subject to the provisions of Section 2.03) only to or upon the written order of the Holders thereof or, in the case of unregistered Securities with coupons, the Holders of coupons relating thereto. Any installment of interest on registered Securities of any series may, at the Company's option be paid by mailing checks for such interest payable to or upon the written order of the person entitled thereto pursuant to Section 2.03 to the address of such person as it appears on the Security Register. 22 31 In the case of Global Securities, each installment of interest on the Securities of any series shall be made by wire transfer of immediately available funds if appropriate wire transfer instructions in writing have been received by the Trustee not less than 15 days prior to the Interest Payment Date. Section 4.02. Maintenance of Offices or Agencies for Registration of Transfer, Exchange and Payment of Securities and for Service on the Company. As long as any of the Securities of any series remain outstanding, the Company will maintain one or more offices or agencies in the City of West Bend, and at such other locations as the Company may from time to time designate for any series of Securities, where such Securities may be presented for registration of transfer and exchange as in this Indenture provided, where such Securities or of this Indenture may be served. The Corporate Trust Office shall be such office in the City of West Bend. The City of West Bend and the Trustee shall be the agent of the Company in the City of West Bend for all of the foregoing purposes, unless the Company shall designate and maintain some other office and agency for such purposes and give the Trustee written notice of the location thereof. The Company will give to the Trustee notice of the location of each such office or agency and of any change of location thereof. Section 4.03. Appointment to Fill a Vacancy in the Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee for any one or more series of Securities, will appoint, in the manner provided in Section 7.10, a Trustee so that there shall at all times be a Trustee with respect to each series of Securities hereunder. Section 4.04. Duties of Paying Agents, etc. (a) The Company shall cause each paying agent, if any, other than the Trustee, for any series of Securities, to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04, that: (1) it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of such series (whether such sums have been paid to it by the Company or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series; (2) it will give the Trustee notice of any failure by the Company (or by any other obligor on the Securities of such series) to make any payment of the principal of (or premium, if any) or interest on the Securities of such series when the same shall be due and payable; (3) it will at any time during the continuance of an Event of Default with respect to such series of Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by it as such agent; and 23 32 (4) it will give the Trustee prompt written notice of any change of address of any Holder of the Securities. Whenever the Company has one or more paying agents for any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on Securities of such series, deposit with such paying agent or agents a sum sufficient to pay such principal (and premium, if any) or interest on such Securities so becoming due. (b) if the Company shall act as its own paying agent for any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest, including dates fixed for redemption (including Sinking Fund payment dates), on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series a sum sufficient to pay such principal (and premium, if any) or interest on such Securities so becoming due. The Company will promptly notify the Trustee of any failure by the Company to take such action or the failure by any other obligor on the Securities of such series to make any payment of the principal of (or premium, if any) or interest on the Securities of such series when the same shall be due and payable. (c) Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying agent hereunder, as required by this Section 4.04, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such paying agent. (d) Anything in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 4.04 is subject to the provisions of Section 12.03. Section 4.05. Limitation on Secured Debt. (a) The Company will not, nor will it permit any Restricted Subsidiary to, issue, assume or guarantee any indebtedness for money borrowed (hereinafter in this Article Four called "Debt"), secured by a mortgage, security interest, pledge, lien or other encumbrance (mortgages, security interests, pledges, liens and other encumbrances being hereinafter in this Article Four called "mortgage" or "mortgages") upon any Principal Property of the Company or any Restricted Subsidiary or upon any shares of stock or indebtedness of any Restricted Subsidiary (whether such Principal Property, shares of stock or indebtedness are now owned or hereafter acquired) without in any such case effectively providing concurrently with the issuance, assumption or guaranty of any such Debt that the Securities (together with, if the Company shall so determine, any other indebtedness of or guaranteed by the Company or such Restricted Subsidiary ranking equally with the Securities and then existing or thereafter created) shall be secured equally and ratably with (or, at the option of the Company, prior to) such Debt so long as such Debt shall be so secured; provided, however, that the foregoing restrictions shall not apply to Debt secured by 24 33 (i) mortgages on property, shares of stock or indebtedness (hereinafter in this Article Four called "property") of any corporation existing at the time such corporation becomes a Restricted Subsidiary; (ii) mortgages on property existing at the time of acquisition of the affected property by the Company or a Restricted Subsidiary, or mortgages to secure the payment of all or any part of the purchase price of such property upon the acquisition of such property by the Company or a Restricted Subsidiary or to secure any Debt incurred by the Company or a Restricted Subsidiary prior to, at the time of, or within 180 days after the later of the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operation of such property, which Debt is incurred for the purpose of financing all or any part of the purchase price thereof or construction or improvements thereon; provided, however, that in the case of any such acquisition, construction or improvement the mortgage shall not apply to any property theretofore owned by the Company or a Restricted Subsidiary, other than, in the case of any such construction or improvement, any real property on which the property so constructed or the improvement is located which, in the opinion of the Board of Directors, was, prior to such construction or improvement, substantially unimproved for the use intended by the Company or such Restricted Subsidiary; (iii) mortgages on property of a Restricted Subsidiary securing Debt owing to the Company or to another Restricted Subsidiary; (iv) mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company or a Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation or firm as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary; provided, however, that any such mortgages do not attach to or affect property theretofore owned by the Company or such Restricted Subsidiary; (v) mortgages on property owned or leased by the Company or a Restricted Subsidiary in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country or any political subdivision thereof, or in favor of holders of securities issued by any such entity, pursuant to any contract or statute (including, without limitation, mortgages to secure Debt of the pollution control or industrial revenue bond type), or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of construction of the property subject to such mortgages; 25 34 (vi) mortgages existing at the date of this Indenture; (vii) landlords' liens on fixtures located on premises leased by the Company or a Restricted Subsidiary in the ordinary course of business; (viii) mortgages on property of the Company or a Restricted Subsidiary to secure partial, progress, advance or other payments or any Debt incurred for the purpose of financing the cost of construction, development, or substantial repair, alteration or improvement of the property subject to such mortgages if the commitment for the financing is obtained not later than one year after the later of the completion of or the placing into operation (exclusive of test and start-up periods) of such constructed, developed, repaired, altered or improved property; (ix) mortgages arising in connection with contracts and subcontracts with or made at the request of the United States of America, or any state thereof, or any department, agency or instrumentality of the United States or any state thereof; (x) mechanics', materialmen's, carriers' or other like liens arising in the ordinary course of business (including construction of facilities) in respect of obligations which are not due or which are being contested in good faith; (xi) any mortgage arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulations, which is required by law or governmental regulation as a condition to the transaction of any business, or the exercise of any privilege, franchise or license; (xii) mortgages for taxes, assessments or governmental charges or levies not yet delinquent or mortgages for taxes, assessments or governmental charges or levies already delinquent but the validity of which is being contested in good faith; (xiii) mortgages (including judgment liens) arising in connection with legal proceedings so long as such proceedings are being contested in good faith and, in the case of judgment liens, execution thereon is stayed; or (xiv) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part of any mortgage referred to in the foregoing clauses (i) to (xiii), inclusive, provided, however, that the principal amount of Debt secured or securable thereby shall not exceed the principal amount of Debt so secured or securable at the time of such extension, renewal or replacement mortgage, and that such extension, renewal or replacement mortgage 26 35 shall be limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property). (b) Notwithstanding the foregoing provisions of this Section 4.05, the Company and any one or more Restricted Subsidiaries may issue, assume or guarantee Debt secured by mortgage which would otherwise be subject to the foregoing restrictions in an aggregate amount which, together with all other Debt of the Company and its Restricted Subsidiaries which (if originally issued, assumed or guaranteed at such time) would otherwise be subject to the foregoing restrictions (not including Debt permitted to be secured under clauses (i) through (xiv) above), does not at the time exceed 10% of Consolidated Net Tangible Assets, as shown on the latest quarterly consolidated financial statements of the Company preceding the date of determination. Section 4.06 Limitation on Sale and Lease-Back. The Company will not, nor will it permit any Restricted Subsidiary to, enter into any arrangement with any person providing for the leasing by the Company or any Restricted Subsidiary of any Principal Property of the Company or any Restricted Subsidiary (whether such Principal Property is now owned or hereafter acquired) (except for temporary leases for a term of not more than three years and except for leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries), which Principal Property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such person (herein referred to as a "Sale and Lease-Back Transaction"), unless (a) the Company or such Restricted Subsidiary would be entitled, pursuant to the provisions of Section 4.05, to issue, assume or guarantee Debt secured by a mortgage upon such Principal Property at least equal in amount to the Attributable Debt in respect of such arrangement without equally and ratably securing the Securities, provided, however, that from and after the date on which such arrangement becomes effective the Attributable Debt in respect of such arrangement shall be deemed for all purposes under Sections 4.05 and 4.06 to be Debt subject to the provisions of Section 4.05 or (b) the Company shall apply an amount in cash equal to the Attributable Debt in respect of such arrangement to the retirement (other than any mandatory retirement or by way of payment at maturity), within 120 days of the effective date of any such arrangement, of Debt of the Company or any Restricted Subsidiary (other than Debt owned by the Company or any Restricted Subsidiary and other than Debt of the Company which is subordinated to the Securities) which by its terms matures at or is extendible or renewable at the option of the obligor to a date more than twelve months after the date of the creation of such Debt. The term "Attributable Debt" shall mean the present value (discounted at the actual percentage rate inherent in such arrangement as determined in good faith by the Company, compounded semiannually) of the obligation of a lessee for rental payments during the remaining term of any lease (including any period for which such lease has been extended). Such rental payments shall not include amounts payable by the lessee for maintenance and repairs, insurance, taxes, assessments and similar charges and for contingent rents (such as those based on sales). In case of any lease which is terminable by the lessee upon the payment of a penalty, such rental 27 36 payments shall also include such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated. Any determination of any actual percentage rate inherent in any such arrangement made in good faith by the Company shall be binding and conclusive, and the Trustee shall have no duty with respect to any determination made under this Section 4.06. Section 4.07. Statement by Officers as to Default. The Company will deliver to the Trustee, on or before a date not more than four months after the end of each of its fiscal years ending after the date hereof during which any Securities are outstanding, an Officers' Certificate stating that neither of the signers thereof has any knowledge, after due investigation, of the existence of any Event of Default, or any event which could with the passage of time or notice mature into an Event of Default, by the Company under this Indenture or stating that they have knowledge of the existence of such an event of which the signers have knowledge and the nature thereof. Section 4.08. Further Instruments and Acts. The Company will, upon request of the Trustee, execute and deliver such further instruments and do such further acts as may reasonably be necessary or proper to carry out more effectually the purposes of this Indenture. ARTICLE FIVE HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE Section 5.01. Company to Furnish Trustee Information as to Names and Addresses of Holders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee with respect to each series of Securities: (a) semiannually, not more than 15 days after each Record Date for the payment of interest, and not less than 15 days before each interest payment, if any, with respect to such series of Securities (or, in the case of any series of Securities not having semiannual Record Dates, semiannually on the dates determined pursuant to Section 2.01 for such series), a list, in such form as the Trustee may reasonably require of the names and addresses of the Holders of such series as of such Record Date; and (b) at such other time as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the date such list is furnished; except that, so long as the Trustee is the Security Registrar with respect to such series of Securities, no such list need be furnished under this Section 5.01. 28 37 Section 5.02. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of Holders (1) contained in the most recent list furnished to it as provided in Section 5.01 and (2) received by it in the capacity of paying agent or Security Registrar (if so acting) hereunder. The Trustee may destroy any list furnished to it with respect to Securities of any series as provided in Section 5.01 upon receipt of a new list with respect to such series so furnished. (b) In case three or more Holders of registered Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each applicant has owned a Security of such series for a period of at least six months preceding the date of such application and such application states that the applicants desire to communicate with other Holders of Securities of such series with respect to their rights under this Indenture or under the Securities of such series, and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 5.02, or (2) inform such applicants as to the approximate number of Holders of Securities of such series whose names and addresses appear in the information preserved at the time by the Trustee, in accordance with the provisions of subsection (a) of this Section 5.02, and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each such Holder whose name and address appears in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 5.02, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of such Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If such 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, such 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 29 38 with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each and every Holder, by receiving and holding any Security, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any Security Registrar nor any paying agent 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 the provisions of subsection (b) of this Section 5.02, regardless of the source from which such information was derived, and that Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b). Section 5.03. Reports by Company. (a) The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as said Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with such Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then to file with the Trustee and such Commission, in accordance with rules and regulations prescribed from time to time by such Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. (b) The Company covenants and agrees to file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by such Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in its Indenture and the Securities as may be required from time to time by such rules and regulations. (c) The Company covenants and agrees to transmit to the Holders of Securities within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in subsection (c) of Section 5.04, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 5.03 as may be required by rules and regulations prescribed from time to time by the Securities and Exchange Commission. (d) The Company covenants to furnish to the Trustee, not less often than annually, a brief certificate from the principal executive officer, principal financial officer, principal treasurer or principal accounting officer of the Company as to his or her knowledge of the 30 39 Company's compliance with all conditions and covenants under this Indenture. For purposes of this paragraph, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. Section 5.04. Reports by Trustee. (a) On or before May 15, 1996, and on or before May 15th in every year thereafter, so long as any Securities of any series, are outstanding hereunder, the Trustee shall transmit to the Holders of Securities of each such series as hereinafter in this Section 5.04 provided, and to the Company a brief report dated as of the preceding March 15th, with respect to any of the following events which may have occurred within the previous 12 months (but if no such event has occurred within such period no report need be transmitted): (1) its eligibility under Section 7.09 and its qualifications under Section 7.08, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections, a written statement to such effect; (2) the creation of or any material change to a relationship specified in paragraphs (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 a lien or charge, prior to that of the Securities of such series, 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 one-half of one percent of the principal amount at Stated Maturity of Securities of such series outstanding on the date of such report; (4) the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities of such series) 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 paragraph (2), (3), (4) or (6) of subsection (b) of Section 7.13; (5) 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 of such series which the Trustee has not previously reported; and 31 40 (7) any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported and which in its opinion materially affects any of the Securities of such series, except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 6.07. (b) The Trustee shall transmit to Holders of Securities of each series, as hereinafter provided, and to the Company 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 the provisions of subsection (a) of this Section 5.04 (or if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Securities of such series 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 ten percent or less of the principal amount at Stated Maturity of Securities of such series outstanding at such time, such report to be transmitted within 90 days after such time. (c) Reports to Holders pursuant to this Section 5.04 shall be transmitted by mail: (1) to all Holders of Registered Securities of each series entitled thereto, as the names and addresses of such Holders appear upon the Security Register with respect to such series; (2) such Holders as have, within two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and (3) except in the case of reports pursuant to subsection (b) of this Section 5.04, to each Holder whose name and address is preserved at the time by the Trustee, as provided in Section 5.02. (d) A copy of each such report shall, at the time of such transmission to such Holders, be filed by the Trustee with each stock exchange upon which the Securities of such series are listed and also with the Securities and Exchange Commission. The Company agrees to notify the Trustee when and as the Securities of any series become listed on any stock exchange. 32 41 ARTICLE SIX REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT Section 6.01. Events of Default. In case one or more of the following Events of Default (unless it is either inapplicable to a particular series or it is specifically deleted from or modified in the instrument establishing such series and the form of Security for such series) shall have occurred and be continuing with respect to any series of Securities, that is to say: (a) default in the payment of any installment of interest upon any Security of such series as and when the same shall become due and payable and continuance of such default for a period of 30 days; or (b) default in the payment of principal of (or premium, if any, on) the Securities of such series as and when the same shall become due and payable either at Stated Maturity, upon redemption (whether through the operation of a Sinking Fund or otherwise), by declaration or otherwise, or default in the making of any mandatory Sinking Fund payment or optional Sinking Fund payment; or (c) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Securities of such series, or in this Indenture contained and relating to such series, for a period of 60 days after the date on which written notice specifying such failure and requiring the Company to remedy the same shall have been given by registered or certified mail to the Company by the Trustee, or to the Company and the Trustee by the Holder of at least twenty-five percent in aggregate principal amount at Stated Maturity of the Securities of such series at the time outstanding; or (d) the Company shall make an assignment for the benefit of creditors, or shall file a petition in bankruptcy, or the Company shall be adjudicated insolvent or bankrupt, or shall petition or shall apply to any court having jurisdiction in the premises for the appointment of a receiver, trustee, liquidator or sequestrator of, or for, the Company or any substantial portion of the property of the Company; or the Company shall commence any proceeding relating to the Company or any substantial portion of the property of the Company under any insolvency, reorganization, arrangement, or readjustment of debt, dissolution, winding-up, adjustment, composition or liquidation law or statute of any jurisdiction, whether now or hereafter in effect (hereinafter in this subsection (d) called "Proceeding"); or if there shall be commenced against the Company any Proceeding and an order approving the petition shall be entered, or such Proceeding shall remain undischarged for a period of 60 days; or a receiver, trustee, liquidator or sequestrator of, or for, the Company or any substantial portion of the property of the Company shall be appointed and shall not be discharged within a period of 60 days; or the Company by any act shall indicate consent to or approval of or acquiescence in any Proceeding or the appointment of a receiver, trustee, liquidator or sequestrator of, or for, the Company or any substantial portion of the property of the Company; provided that a resolution or order for 33 42 winding-up the Company with a view to its consolidation, amalgamation or merger with another company or the transfer of its assets as a whole, or substantially as a whole, to such other company as provided in Section 11.01 shall not make the rights and remedies herein enforceable under this subsection (d) of Section 6.01 if such last-mentioned company shall, as a part of such consolidation, amalgamation, merger or transfer, and within 60 days from the passing of the resolution or the date of the order, comply with the conditions to that end stated in Section 11.01; or (e) default under any other indebtedness of the Company for money borrowed having unpaid principal in excess of the greater of (a) $10,000,000 or (b) 2 percent of the Company's Consolidated Net Tangible Assets or under any indenture or other instrument under which any such indebtedness having unpaid principal in excess of the greater of (a) $10,000,000 or (b) 2 percent of the Company's Consolidated Net Tangible Assets has been issued or by which it is governed, whether now existing or hereafter created, which results in such other indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, without such acceleration being rescinded or annulled within 60 days after the date on which written notice specifying such default and requiring the Company to remedy the same shall have been given by registered or certified mail to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least twenty-five percent in aggregate principal amount at Stated Maturity of the Securities of such series at the time outstanding; then and in each and every such case, so long as such Event of Default with respect to such series shall not have been remedied or waived, unless the principal of all Securities of such series shall have already become due and payable, either the Trustee or the Holders of not less than twenty-five percent in aggregate principal amount at Stated Maturity of the Securities of such series then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Holders), may declare the principal (or, in the case of Original Issue Discount Securities, such principal amount as may be determined in accordance with the terms thereof) of all the Securities of such series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Securities of such series contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of the Securities of such series (or, in the case of Original Issue Discount Securities, such principal amount as may be determined in accordance with the terms thereof) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest, if any, upon all the Securities of such series and the principal of (and premium, if any, on) any and all Securities of such series which shall have become due otherwise than by such acceleration (with interest upon such principal (and premium, if any), and to the extent that payment of such interest is enforceable under 34 43 applicable law, upon overdue installments of interest at the rate borne by the Securities of such series (or, in the case of Original Issue Discount Securities, at the yield to Stated Maturity) to the date of such payment or deposit), and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith, and any and all defaults under this Indenture, other than the nonpayment of the principal of Securities of such series which shall have become due by such acceleration, shall have been remedied -- then and in every such case the Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of such series then outstanding, by written notice to the Company and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. In case the Trustee or any Holders shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee or such Holders, then and in every such case the Company, the Trustee and such Holders shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken. Section 6.02. Collection of Indebtedness by Trustee, etc. The Company covenants that (1) in case default shall be made in the payment of any installment of interest on any Securities of any series, as and when the same shall become due and payable, and such default shall have continued for a period of 60 days, or (2) in case default shall be made in the payment of the principal of (or premium, if any, on) any Securities of any series when the same shall have become due and payable, whether at the Stated Maturity of the Securities of such series or upon redemption (whether through the operation of a Sinking Fund or otherwise) or upon declaration or otherwise -- then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Holders of the Securities of such series, the whole amount that then shall have become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate borne by the Securities of such series (or, in the case of Original Issue Discount Securities, at the yield to Stated Maturity); and, in addition thereto, such further amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered 35 44 to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of such series and collect in the manner provided by law out of the property of the Company or other obligor upon the Securities of such series wherever situated the moneys adjudged or decreed to be payable. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization or other similar judicial proceedings relative to the Company, its creditors, or its property, the Trustee (irrespective of whether the principal of the Securities of any series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02) shall, if permitted by law, be entitled and empowered to file and prove a claim or claims for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities of such series to which the Trustee or the Holders of the Securities of such series shall be entitled, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of such Holders hereunder or on the Securities of such series allowed in such judicial proceedings, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amount payable to the Trustee for compensation and expenses, including counsel fees; and any trustee in bankruptcy or receiver is hereby authorized by each of such Holders to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders, to pay the Trustee any amount due to it for compensation and expenses, including counsel fees, incurred by it to the date of such payment. Nothing herein contained shall be deemed to authorize or empower the Trustee, except in accordance with action taken under Article Nine, to consent to or accept or adopt, on behalf of any Holder, any plan of reorganization or readjustment of the Company affecting the Securities of any series or the rights of any Holder thereof, or to authorize or empower the Trustee to vote in respect of the claim of any such Holder in any such proceedings. All rights of action and of asserting claims under this Indenture, or under any Securities of any series, may be enforced by the Trustee without the possession of any such Securities, or the production thereof at trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment (except for any amounts payable to the Trustee pursuant to Section 7.06) shall be for the ratable benefit of the Holders in respect of which the action was taken. In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement 36 45 of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. Section 6.03. Application of Moneys Collected by Trustee. Any moneys collected by the Trustee, pursuant to Section 6.02 on account of a default relating to a particular series of Securities, shall be applied in the order following, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the several Securities of such series and coupons appertaining thereto, if any, and the notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses of collection, and reasonable compensation to the Trustee, its agents, attorneys and counsel, and of all sums due the Trustee pursuant to Section 7.06 hereof; SECOND: In case the principal of the Securities of such series shall not have become due, to the payment of interest on the Securities of such series, in the order of the maturity of the installments of such interest, with interest (to the extent that such interest may be lawfully paid under applicable law and has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Securities of such series (or, in the case of Original Issue Discount Securities, at the yield to Stated Maturity), such payments to be made ratably to the persons entitled thereto without discrimination or preference; THIRD: In case the principal of the Securities of such series shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Securities of such series for principal (and premium, if any) and interest, with interest on the overdue principal (and premium, if any) and (to the extent that such interest may be lawfully paid under applicable law and has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Securities of such series (or, in the case of Original Issue Discount Securities, at the yield to Stated Maturity); and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal (and premium, if any) and interest, without preference or priority of principal (and premium, if any) over interest, or of interest over principal (and premium, if any), or of any installment of interest over any other installment of interest, or of any Securities of such series over any other Securities of such series, ratably to the aggregate of such principal (and premium, if any) and accrued and unpaid interest; and FOURTH: The remainder, if any, shall be paid to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. 37 46 Section 6.04. Limitation on Suits by Holders. No Holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceedings at law or in equity upon or under or with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of an Event of Default with respect to Securities of that series and unless the Holders of not less than twenty-five percent in aggregate principal amount at Stated Maturity of the then outstanding Securities of such series shall have made written request upon the Trustee to institute such action or proceedings in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the cost, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request an offer of indemnity shall have failed to institute any such action or proceedings and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.06; it being understood and intended, and being expressly covenanted by the taker and Holder of any Security of any series with every other such taker and Holder and the Trustee, that no one or more Holders of such Securities shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the Holders of any other such Securities or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of such Securities. For the protection and enforcement of the provisions of this Section 6.04, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity. Notwithstanding the foregoing paragraph or any other provision in this Indenture, however, any right of any Holder to receive payment of the principal of (and premium, if any) and interest on any Security on or after the respective due dates expressed in such Security (including any date fixed for redemption pursuant hereto, including any Sinking Fund payment date) or to institute suit for the enforcement of any such payment on or after such respective dates shall not be impaired or affected without the consent of such Holder. Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of Default. All powers and remedies given by this Article Six to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or power accruing upon any default occurring and continuing as aforesaid, shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article Six or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders. 38 47 Section 6.06. Rights of Holders of Majority in Principal Amount of Securities of Any Series to Direct Trustee and to Waive Default. The Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of any series at the time outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to Securities of such series; provided, however, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that subject to the provisions of Section 7.01 hereof, the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel shall determine that the action so directed may not lawfully be taken, or if the Trustee shall by a responsible officer or officers determine that the action so directed would involve it in personal liability or would be unjustly prejudicial to Holders of Securities of such series not taking part in such direction; and provided further, that nothing in this Indenture contained shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction by such Holders. Prior to the declaration of the maturity of the Securities of any series as provided in Section 6.01, the Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of such series at the time outstanding may on behalf of the Holders of all of the Securities of such series waive any past default hereunder and its consequences, except a default in the payment of the principal of (and premium, if any) or interest on any of the Securities of such series. In case of any such waiver, the Company, the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 6.07. Trustee to Give Notice of Default Known to It, But May Withhold Such Notice in Certain Circumstances. The Trustee shall, within 90 days after the occurrence of a default, give to the Holders of all then outstanding Securities, in the manner and to the extent provided in subsection (c) of Section 5.04, notice of all defaults known to the Trustee with respect to such Securities, unless such defaults shall have been cured or waived before the giving of such notice (the term "default" or defaults" for the purposes of this Section 6.07 being hereby defined to be any event or events, as the case may be, specified in clauses (a), (b), (c), (d) and (e) of Section 6.01, not including periods of grace, if any, provided for therein and irrespective of the giving of the written notice specified in clauses (c) and (e) of Section 6.01); provided that, except in the case of default in the payment of the principal of (or premium, if any, on) or interest on any of the Securities of any series or in the making of any Sinking Fund payment, 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 determines that the withholding of such notice is in the interest of the Holders thereof. Section 6.08. Requirement of an Undertaking to Pay Costs in Certain Suits Under the Indenture or Against the Trustee. All parties to this Indenture agree, and each Holder by his acceptance of any Security shall be deemed to have agreed, that any court may in its discretion 39 48 require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.08 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 ten percent in principal amount at Stated Maturity 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 premium, if any) or interest on any Security, on or after the respective due dates expressed in such Security (including any date fixed for redemption, including any Sinking Fund payment date). Section 6.09. Waiver of Stay or Extension Laws. The Company covenants and agrees (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SEVEN CONCERNING THE TRUSTEE Section 7.01. Certain Duties and Responsibilities. The Trustee, prior to the occurrence of an Event of Default with respect to a particular series of Securities and after the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to a particular series of Securities has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture relating to such series, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that: 40 49 (a) prior to the occurrence of an Event of Default with respect to a particular series of Securities and after the curing or waiving of all Events of Default which may have occurred with respect to such series: (1) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for an 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; (c) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith relating to Securities of any series in accordance with the direction of the Holders of not less than a majority in principal amount at Stated Maturity of the Securities of such series at the time outstanding 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, with respect to the Securities of such series under this Indenture; and (d) whether or not therein 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. None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any personal financial liability in the performance of any 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 security or indemnity against such risk or liability is not reasonably assured to it. 41 50 Section 7.02. Certain Rights of Trustee. Except as otherwise provided in Section 7.01: (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, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Company Direction (unless other evidence in respect thereof is herein specifically prescribed), and any resolution of the Board of Directors of the Company shall be evidenced to the Trustee by a Certified Board Resolution; (c) 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 accordance with such advice or opinion of counsel; (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (e) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default which may have occurred, 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, approval or other paper or document, unless requested in writing to do so by the Holders of a majority in aggregate principal amount at Stated Maturity of Securities of any series then outstanding; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is not, in the opinion of the Trustee, reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding; the reasonable expense of every such investigation shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and 42 51 (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. Section 7.03. Trustee Not Liable for Recitals in Indenture or in Securities. The recitals contained herein and in the Securities, except the Trustee's certificate of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities of any series. The Trustee represents that it is duly authorized to execute and deliver this Indenture and perform its obligations hereunder. The Trustee shall not be accountable for the use or application by the Company of any of the Securities of any series or of the proceeds thereof. Section 7.04. Trustee, Paying Agent or Security Registrar May Own Securities. The Trustee or any paying agent or Security Registrar with respect to any series of Securities, in its individual or any other capacity, may become the owner or pledgee of Securities of such series with the same rights it would have if it were not Trustee, paying agent or Security Registrar with respect to such Securities. Section 7.05. Moneys Received by Trustee to Be Held in Trust. Subject to the provisions of Article Twelve hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. Section 7.06. Compensation and Reimbursement. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such reasonable compensation for all services rendered by it hereunder as is mutually agreed upon by the Company and the Trustee (which shall not be limited by any provisions of law in regard to the compensation of a trustee of an express trust), and, except as otherwise expressly provided, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents, attorneys and counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. If any property other than cash shall at any time be subject to a lien in favor of the Holders, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of competent jurisdiction or by the supplemental instrument subjecting such property to such lien, shall be entitled to make advances for the purpose of preserving such property or of discharging tax liens or other prior liens or encumbrances thereon. The Company also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense (including the 43 52 reasonable 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) incurred without negligence or bad faith on the part of the Trustee, arising out of or in connection with the acceptance or administration of this trust. The obligations of the Company under this Section 7.06 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of the Indenture. Such additional indebtedness shall be secured by a lien, prior to that of the Securities of any series with respect to which the indebtedness arose, upon all property and funds held or collected by the Trustee, as such, relating to such series except funds held in Trust for the payment of principal of (and premium, if any) or interest on Securities of such series. Section 7.07 Right of Trustee to Rely on an Officers' Certificate Where No Other Evidence Specifically Prescribed. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such Certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. Section 7.08. Disqualification of Trustee; Conflicting Interests. If the Trustee has or shall acquire any conflicting interest, as defined in the Trust Indenture Act, then, within 90 days after ascertaining that it has such conflicting interest, and if the default (as defined in the Trust Indenture Act) to which such conflicting interest relates has not been cured or waived or otherwise eliminated before the end of such 90-day period, the Trustee shall either eliminate such conflicting interest or resign in the manner and with the effect specified in the Trust Indenture Act and this Indenture. Section 7.09. Requirements for Eligibility of Trustee. The Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or of any State or of the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000 subject to supervision or examination by Federal, State or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 7.09, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.09, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. 44 53 Section 7.10. Resignation and Removal of Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign as Trustee with respect to any series of Securities by giving written notice of resignation to the Company and by giving notice thereof to the Holders of the Securities of such series in the manner and to the extent provided in subsection (c) of Section 5.04. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee with respect to the Securities of such series shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide Holder of a Security or Securities of the affected series for at least six months may, subject to the provisions of Section 6.08, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee with respect to the Securities of such series. Such court may thereupon, after such notice, if any, as it may deem proper and advisable, appoint a successor trustee with respect to the Securities of such series. (b) In case at any time any of the following shall occur: (1) the Trustee shall fail to comply with the provisions of subsection (a) of Section 7.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security or Securities of the affected series for at least six months, or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to all Securities of any affected series and appoint a successor trustee thereof by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or subject to the provisions of Section 6.08, any Holder who has been a bona fide Holder of a Security or Securities of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee thereof. Such court may thereupon, after such notice, if any, as it may deem proper and advisable, remove the Trustee and appoint a successor trustee with respect to the Securities of such series. 45 54 (c) The Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of any series at the time outstanding may at any time remove the Trustee with respect to the Securities of such series and appoint a successor trustee therefor by the delivery to the Trustee so removed, to the successor trustee and to the Company of the evidence provided for in Section 8.01 of the action in that regard taken by such Holders. (d) Any resignation or removal of the Trustee and any appointment of a successor trustee for the Securities of any series pursuant to any of the provisions of this Section 7.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11. Section 7.11. Acceptance by Successor to Trustee. (a) No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 7.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09. (b) In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to its predecessor Trustee as provided in Section 7.10 an instrument accepting such appointment, and thereupon the resignation or removal of the predecessor 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 predecessor Trustee with respect to all such Securities; but, on the request of the Company or the successor trustee, such predecessor Trustee, with like effect as if originally named as Trustee herein, shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers and trusts of the predecessor Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such predecessor Trustee hereunder subject, nevertheless, to its lien, if any, provided for in Section 7.06. (c) In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the predecessor Trustee and each successor trustee with respect to the Securities of the affected series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) if the predecessor Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of that or those series as to which the predecessor Trustee is not resigning shall continue to be vested in the predecessor Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in 46 55 such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such trustee; and upon the execution and delivery of such supplemental indenture, the resignation or removal of the predecessor Trustee shall become effective to the extent provided therein and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such predecessor Trustee shall duly assign, transfer and deliver to such successor trustee all property and money held by such predecessor Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates. (d) Upon acceptance of appointment by a successor trustee with respect to any series of Securities as provided in this Section 7.11, the Company shall give notice of the succession of such trustee and the address of its Corporate Trust Office to all Holders of Securities of any such series in the manner and to the extent provided in subsection (c) of Section 5.04. If the Company fails to provide such notice within 10 days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be provided at the expense of the Company. Section 7.12. Successor to Trustee by Merger, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09 without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of the particular series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and in case at that time any of the Securities of such series shall not have been authenticated, any successor Trustee with respect to the Securities of such series may authenticate such Securities either in the name of any predecessor hereunder with the consent of such predecessor if the predecessor still exists, which consent shall not unreasonably be withheld, or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in such Securities or in this Indenture provided that the certificate of authentication of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities of the particular series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. 47 56 Section 7.13. Preferential Collection of Claims Against Company. (a) Subject to the provisions of subsection (b) of this Section 7.13, if the Trustee in its individual capacity shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company or of any other obligor on any Securities within three months prior to a default, as defined in subsection (c) of this Section 7.13, 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 7.13): (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three months' period and valid as against the 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 months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the 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 Title 11 of the United States Code or applicable state law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three months' period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving, that at the time such property was so 48 57 received, the Trustee had no reasonable cause to believe that a default as defined in subsection (c) of this Section 7.13 would occur within three months; or (D) to receive payment of any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such three months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any such paragraphs is created in renewal of, or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the Holders and the holders of other indenture securities in such manner that the Trustee, the Holders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to Title 11 of the United States Code or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee, the Holders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to Title 11 of the United States Code or applicable state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to Title 11 of the United States Code or applicable state law, whether such distribution is made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee, 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 the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, 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 49 58 unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee who has resigned or been removed after the beginning of such three months' period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such three months' period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such three months' period; and (ii) such receipt of property or reduction of claim occurred within three months after such resignation or removal. (b) There shall be excluded from the operation of subsection (a) of this Section 7.13 a creditor relationship arising from: (1) the ownership or acquisition of securities issued under any indenture or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advance and of the circumstances surrounding the making thereof is given to the Holders at the time and in the manner provided in Section 5.04; (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 7.13; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the United States Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or 50 59 (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 7.13. (c) As used in this Section 7.13: (1) The term "default" shall mean any failure to make payment in full of the principal or interest upon any Security of any series or upon the other indenture securities when and as such principal or interest becomes due and payable. (2) The term "other indenture securities" shall mean securities upon which the Company is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of subsection (a) of this Section 7.13, and (C) under which a default exists at the time of the apportionment of the funds and property held in said special account. (3) The term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand. (4) The term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. (5) The term "Company" shall mean any obligor upon any Security. Section 7.14 Appointment of Additional and Separate Trustees. Whenever the Trustee shall deem it necessary or prudent in order to conform to any law of any jurisdiction, or the Trustee shall be advised by counsel, satisfactory to it, that it is necessary or prudent in the interest of the Holders of Securities of any series or in the event that the Trustee shall have been requested to do so by the Holders of a majority in principal amount at Stated Maturity of the Securities of any series at the time outstanding, the Trustee and the Company shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons appointed by the Company, either to act as additional trustee or trustees hereunder, jointly with the Trustee, or 51 60 to act as separate trustee or trustees hereunder, in any such case with such powers with respect to the affected series of Securities as may be provided in such indenture supplemental hereto, and to vest in such bank, trust company or person as such additional trustee or separate trustee, as the case may be, any property, title, right, power, duty or obligation of the Trustee with respect to the affected series of Securities deemed necessary or advisable by the Trustee, subject to the provisions of this Section 7.14 below set forth. In the event the Company shall not have joined in the execution of such indenture supplemental hereto within ten days after the receipt of a written request from the Trustee so to do, or in case an Event of Default with respect to the particular series of Securities shall occur and be continuing, the Trustee may act under the foregoing provisions of this Section 7.14 without the concurrence of the Company; and the Company hereby appoints the Trustee its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 7.14 in either of such contingencies. The Trustee may execute, deliver and perform any deed, conveyance, assignment or other instrument in writing as may be required by any additional trustee or separate trustee for more fully and certainly vesting in and confirming to it any property, title, right or powers with respect to the affected series of Securities conveyed or conferred to or upon such additional trustee or separate trustee, and the Company shall, upon the Trustee's request, join therein and execute, acknowledge and deliver the same; and the Company hereby makes, constitutes and appoints the Trustee its agent and attorney-in-fact for it and in its name, place and stead to execute, acknowledge and deliver any such deed, conveyance, assignment or other instrument with respect to the affected series of Securities in the event that the Company shall not itself execute and deliver the same within ten days after receipt by it of such request so to do. Any supplemental indenture executed pursuant to the provisions of this Section 7.14 shall conform to the provisions of the Trust Indenture Act of 1939 as in effect as of the date of such supplemental indenture. Every additional trustee and separate trustee hereunder shall, to the extent permitted by law, be appointed and act, and the Trustee shall act with respect to a particular series of Securities, subject to the following provisions and conditions: (1) the Securities of such series shall be authenticated by the Trustee and all powers, duties, obligations and rights conferred upon the Trustee in respect of the receipt, custody, investment and payment of moneys shall be exercised solely by the Trustee; (2) all other rights, powers, duties and obligations with respect to the Securities of such series conferred or imposed upon the Trustee and such additional trustee or separate trustee or any of them shall be conferred or imposed upon and exercised or performed by the Trustee and such additional trustee or trustees and separate trustee or trustees jointly, except to the extent that, under any law of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations with respect to the Securities of such series shall be exercised and performed by such additional trustee or trustees or separate trustee or trustees; 52 61 (3) no power hereby given to, or with respect to which it is hereby provided may be exercised by, any such additional trustee or separate trustee with respect to a particular series of Securities shall be exercised hereunder by such additional trustee or separate trustee except with the consent of the Trustee; and (4) No trustee with respect to a particular series of Securities hereunder shall be personally liable by reason of any act or omission of any other trustee with respect to such series of Securities hereunder. If at any time the Trustee shall deem it no longer necessary or prudent in order to conform to any such law or shall be advised by counsel that it is no longer so necessary or prudent in the interest of the Holders of Securities of any series or in the event that the Trustee shall have been requested to do so in writing by the Holders of a majority in principal amount at Stated Maturity of the Securities of such series at the time outstanding, the Trustee and the Company shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any additional trustee or separate trustee with respect to such series. In the event that the Company shall not have joined in the execution of such indenture supplemental hereto, instruments and agreements, the Trustee may act on behalf of the Company to the same extent provided above. Any additional trustee or separate trustee with respect to any series of Securities may at any time by an instrument in writing constitute the Trustee, its agents or attorney-in-fact with full power and authority, to the extent which may be authorized by law, to do all acts and things and exercise all discretions which it is authorized or permitted to do or exercise with respect to such series, for and in its behalf and in its name. In case any such additional trustee or separate trustee shall die, become incapable of acting, resign or be removed, all the assets, property, rights, powers, trusts, duties and obligations of such additional trustee or separate trustee with respect to such series, as the case may be, so far as permitted by law, shall vest in and be exercised by the Trustee, without the appointment of a new successor to such additional trustee or separate trustee unless and until a successor with respect to such series is appointed in the manner hereinbefore provided. Any request, approval or consent in writing by the Trustee to any additional trustee or separate trustee of any series of Securities shall be sufficient warrant to such additional trustee or separate trustee, as the case may be, to take such action with respect to the particular series of Securities as may be so requested, approved or consented to. Each additional trustee or separate trustee appointed pursuant to this Section 7.14 shall be subject to, and shall have the benefit of, Articles Six, Seven (other than Section 7.09) and Eight hereof and the following Sections of this Indenture shall be specifically applicable to each additional trustee and separate trustee: 5.04(a) (except to the extent that reference therein is made to its eligibility under Section 7.09), (b), (c) and (d), 6.02, 6.07, 7.01, 7.06 and 7.13; provided, however, that no resignation of an additional or separate trustee pursuant to Section 53 62 7.10 hereof shall be conditioned in any sense whatever upon the appointment of a successor to such trustee. ARTICLE EIGHT CONCERNING THE HOLDERS Section 8.01. Evidence of Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount at Stated Maturity of the Securities of any series may take any action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Holders in person or by agent or proxy appointed in writing, or (b) by the record of such Holders voting in favor thereof at any meeting of such Holders duly called and held in accordance with the provisions of Article Nine, or (c) by a combination of such instrument or instruments and any such record of such a meeting of such Holders. Section 8.02. Proof of Execution of Instruments and of Holding of Securities. Subject to the provisions of Sections 7.01, 7.02 and 9.05, proof of the execution of any instrument by a Holder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as shall be satisfactory to the Trustee. The ownership of a registered Security shall be proved by the Security Register relating to the series or by a certificate of the Security Registrar. The ownership of an unregistered Security or any coupon attached to such Security at its issuance shall be proved by the production of such Security or coupon or, with respect to unregistered Securities only, by a certificate executed by any trust company, bank, broker or other depositary, wherever situated, if such certificate shall be acceptable to the Trustee, showing that at the date therein mentioned such person had on deposit with such depositary, or exhibited to it, the Securities therein described; or such facts may be proved by the certificate or affidavit of the person holding such Security, if such certificate or affidavit is acceptable to the Trustee. The Trustee and the Company may assume that such ownership of any unregistered Security continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Security is produced, (2) such Security is produced by some other person or (3) such Security is no longer outstanding. The amount of unregistered Securities held by any person may also be proved in any other manner which the Trustee deems sufficient. The Trustee may require such additional proof of any matter referred to in this Section 8.02 as it shall deem necessary. 54 63 The record of any meeting of Holders shall be proved in the manner provided in Section 9.06. Section 8.03. Who May Be Deemed Owner of Securities. Prior to due presentment for registration of transfer of a registered Security of any series, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the person in whose name such Security shall be registered or, in the case of unregistered Securities, the bearer thereof or the owner thereof determined, pursuant to Section 8.02, as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone) for the purpose of receiving payment of or on account of the principal of (and premium, if any) and interest on such Security and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary; and all such payments so made to any such Holder for the time being, or upon his order, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Security. Section 8.04. Securities Owned by Company or Controlled or Controlling Companies Disregarded for Certain Purposes. In determining whether the Holders of the requisite aggregate principal amount at Stated Maturity of Securities of any series have concurred in any direction, consent or waiver under this Indenture, Securities of such series which are owned by the Company or any other obligor on the Securities of such series or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Securities of such series shall be disregarded and deemed not to be outstanding for the purposes of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series which the Trustee knows are so owned shall be so disregarded. Securities of such series so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Securities and that the pledgee is not the Company or any other obligor on the Securities of such series or a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection for the Trustee. Section 8.05. Instruments Executed by Holders Bind Future Holders. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage in aggregate principal amount at Stated Maturity of the Securities of any series specified in this indenture in connection with such action, any Holder of a Security of such series which is shown by the evidence to be included in the Securities of the particular series the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid, any such 55 64 action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security, and of any Security issued upon registration of transfer thereof or in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon such Security or such other Security. Any action taken by the Holders of the percentage in aggregate principal amount at Stated Maturity of the Securities of any series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the Holders of all such Securities. Section 8.06 Record Date for Determination of Holders Entitled to Vote. The Company may, in the circumstances permitted by the Trust Indenture Act, set a Record Date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action or, in the case of any such vote, prior to such vote, the Record Date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 4.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly appointed proxies) shall be entitled to give or take, or vote on, the relevant action. ARTICLE NINE HOLDERS' MEETINGS AND CONSENTS Section 9.01. Purposes for Which Meeting May Be Called. A meeting of Holders of Securities of any series may be called at any time and from time to time pursuant to the provisions of this Article Nine for any of the following purposes: (1) to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Holders of Securities of such series pursuant to any of the provisions of Article Six; (2) to remove the Trustee and appoint a successor trustee with respect to Securities of such series pursuant to the provisions of Article Seven; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or (4) to take any other action to be taken by or on behalf of the Holders of any specified aggregate principal amount at Stated Maturity of Securities of such series under any other provision of this Indenture or under applicable law. 56 65 Section 9.02. Manner of Calling Meetings. The Trustee may at any time call a meeting of Holders of Securities of any series to take any action specified in Section 9.01, to be held at such time and at such place in the Borough of Manhattan, The City and State of New York, or at such other location as the Trustee shall determine. With respect to registered Securities of any series, notice of every such meeting, setting forth the time and the place of such meeting, and in general terms the action proposed to be taken at such meeting, shall be mailed to such Holders at their addresses as they shall appear on the Security Register with respect to such Securities. With respect to unregistered Securities of any series, notice of every such meeting shall be published in an authorized newspaper on two separate days. Such notice shall be provided not less than 20 nor more than 120 days prior to the date fixed for the meeting. Section 9.03. Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a Certified Board Resolution, or the Holders of at least ten percent in aggregate principal amount at Stated Maturity of Securities of any series then outstanding shall have requested the Trustee to call a meeting of Holders of Securities of such series to take any action authorized in Section 9.01 by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have provided the notice of such meeting within 20 days after receipt of such request, then the Company or the Holders of such Securities in the amount above specified may determine the time and the place in the Borough of Manhattan, The City and State of New York, for such meeting and may call such meeting by providing notice thereof as provided in Section 9.02. Section 9.04. Who May Attend and Vote at Meetings. To be entitled to vote at any meeting of Holders of a particular series of Securities, a person shall (a) be a Holder of one or more Securities of such series or (b) be a person appointed by an instrument in writing as proxy by a Holder of one or more Securities of such series. The only persons who shall be entitled to be present or to speak at any meeting of Holders of a particular series of Securities shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 9.05. Regulations May Be Made by Trustee. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of a particular series, in regard to proof of the holding of Securities of such series and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem necessary. Except as otherwise permitted or required by any such regulations, the holding of Securities of such series shall be proved in the manner specified in Section 8.02 and the appointment of any proxy shall be proved in the manner specified in Section 8.02. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided 57 66 in Section 9.03, in which case the Company or such Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting may be elected by vote of the Holders of a majority in principal amount at Stated Maturity of Securities of the particular series represented at the meeting and entitled to vote. Subject to the provisions of Section 8.04, at the meeting each Holder of Securities of the particular series or proxy entitled to vote shall have one vote for each $1,000 principal amount at Stated Maturity of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security of such series challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Securities of such series held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other Holders of Securities of the particular series. At any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03, the presence of persons holding or persons representing Securities of the particular series in an aggregate principal amount at Stated Maturity sufficient to take action on the business for the transaction of which such meeting was called shall constitute a quorum, but, if less than a quorum be present, the meeting may be adjourned from time to time by the Holders of a majority in principal amount at Stated Maturity of the Securities of such series represented at the meeting and entitled to vote, and the meeting may be held as so adjourned without further notice. Section 9.06. Manner of Voting at Meetings and Record to Be Kept. The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders or proxies entitled to vote. The chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting, of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 9.02. The record shall be signed and verified by the affidavits of the chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. Section 9.07. Written Consent in Lieu of Meetings. The written authorization or consent of the requisite percentage herein provided of Holders of Securities of any series entitled to vote at any meeting of Holders of Securities of a particular series, evidenced as provided in Article 58 67 Eight and filed with the Trustee, shall be effective in lieu of a meeting of such Holders with respect to any matter provided for in this Article Nine. Section 9.08. No Delay of Rights by Meeting. Nothing in this Article Nine contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders of Securities of any series, or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders of Securities of such series under any of the provisions of this Indenture or of the Securities of such series. ARTICLE TEN SUPPLEMENTAL INDENTURES Section 10.01. Purposes for Which Supplemental Indentures May be Entered into Without Consent of Holders. Without the consent of Holders, the Company, when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: (a) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article Eleven; (b) to appoint one or more additional or separate trustees to act under this Indenture in the manner and to the extent contemplated by Section 7.14; (c) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions for the protection of the Holders of Securities of any or all series as its Board of Directors and the Trustee shall consider to be for the protection of the Holders of Securities of such series, and to make the occurrence, or the occurrence and continuance, of a default of any such additional covenants, restrictions, conditions or provisions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth with respect to Securities to such series; provided, however, that in respect of any such additional covenant, restriction, condition or provision with respect to Securities of such series, such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default or may limit the right of the Holders of a majority in aggregate principal amount at Stated Maturity of the Securities of such series to waive such default; 59 68 (d) to add, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (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 provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; (e) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; to convey, transfer, assign, mortgage or pledge any property to or with the Trustee; or to make such other provisions in regard to matters or questions arising under this Indenture as shall not adversely affect the interests of Holders of Securities of any series; (f) to modify, amend or supplement this Indenture to comply with the provisions of Section 11.01; (g) to provide for the issuance of unregistered Securities, or the exchangeability of registered Securities of any series with unregistered Securities of a series issued hereunder, or vice versa, and to make all appropriate changes for such purpose; (h) to provide for the issuance under this Indenture of Securities of a series having any form or terms contemplated by Sections 2.01 and 2.02; and (i) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.14. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed by the Company and the Trustee without the consent of the Holders of any Securities of any series at the time outstanding, notwithstanding any of the provisions of Section 10.02. 60 69 Section 10.02. Modification of Indenture with Consent of Holders 66-2/3% in Principal Amount of Securities. With the consent (evidenced as provided in Section 8.01) of the Holders of not less than 66-2/3 percent in aggregate principal amount at Stated Maturity of the Securities of each series affected at the time outstanding, the Company, when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto with respect to Securities of the particular series for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture relating to such series of Securities or of modifying in any manner the rights of the Holders of Securities of the particular series; provided, however, that no such supplemental indenture shall (i) extend the Stated Maturity of any Security, reduce the principal amount thereof, reduce the rate or extend the time of payment of any interest thereon, reduce any premium payable upon the redemption thereof, reduce the amount of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of Stated Maturity thereof pursuant to Section 6.01, modify provisions relating to amount or regularity of mandatory Sinking Fund payments or make the principal amount thereof payable in any money other than United States legal tender for the payment of public or private debts, without the consent of the Holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of all Securities of each affected series. 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 resect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any series not so affected. Upon the request of the Company, accompanied by a Certified Board Resolution authorizing the execution of any such supplemental indenture relating to Securities of a particular series, and upon the filing with the Trustee of evidence of the consent of Holders of Securities of the particular series as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the Holders of Securities of a particular series to approve under this Section 10.02 the particular form of any proposed supplemental indenture with respect to such series of Securities, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 10.02, the Company shall mail a notice thereof by first-class mail to the Holders of registered Securities of each series affected thereby 61 70 at their addresses as they shall appear on the Security Register for such Securities, or, in the case of unregistered Securities, shall give notice in the manner and to the extent provided in subsection (c) of Section 5.04, setting forth in general terms the substance of such supplemental indenture. Any failure of the Company to provide such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. Section 10.03. Effect of Supplemental Indentures. Upon the execution and delivery of any supplemental indenture with respect to any series of Securities pursuant to the provisions of this Article Ten, this Indenture shall be and be deemed to be modified and amended with respect to the affected series of Securities in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders of Securities of the series affected shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. The Trustee, subject to the provisions of Sections 7.01 and 7.02, may regard an Opinion of Counsel as conclusive evidence that any such supplemental indenture with respect to any series of Securities complies with the provisions of this Article Ten. Section 10.04. Securities May Bear Notation of Changes by Supplemental Indentures. Securities authenticated and delivered after the execution, pursuant to the provisions of this Article Ten, of any supplemental indenture with respect to any series of Securities may bear a notation in the form acceptable to the Trustee as to any matter provided for in such supplemental indenture. New Securities of the affected series so modified as to conform, in the opinion of the Trustee and the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture with respect to such series of Securities may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of the particular series then outstanding. ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE, CONVEYANCE OR LEASE Section 11.01. Company May Consolidate, etc., on Certain Terms. Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other corporation or corporations (whether or not affiliated with the Company), or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance or lease of all or substantially all the property of the Company to any other corporation (whether or not affiliated with the Company) authorized to acquire and operate the same; provided, however, and the Company hereby covenants and agrees, that upon any such consolidation, merger, sale, conveyance or lease, other than a merger in which the Company is the continuing corporation, 62 71 the due and punctual payment of the principal of and interest on all the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company, shall be expressly assumed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by the corporation (if other than the Company) formed by such consolidation, or into which the Company shall have been merged, or by the corporation which shall have acquired or leased such property. Section 11.02. Successor Corporation to be Substituted. In case of any such consolidation, merger, sale, conveyance or lease referred to in Section 11.01 and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and interest on all of the Securities and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as a party. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of Sundstrand Corporation 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, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for the purpose. 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 the event of any such sale or conveyance, but not any such lease, the Company or any successor corporation which shall theretofore previously have become such in the manner described in this Article Eleven shall be discharged from all obligations and covenants under this Indenture and the Securities and may be dissolved and liquidated. In case of any such consolidation, merger, sale, conveyance or lease referred to in Section 11.01, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate. Section 11.03. Opinion of Counsel and Officers' Certificate to Be Given Trustee. The Trustee, subject to Section 7.01 and 7.02, shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel and an Officers' Certificate stating that any such consolidation, merger, sale, conveyance or lease and any such assumption complies with the provisions of this Article Eleven. 63 72 ARTICLE TWELVE DISCHARGE OF INDENTURE AND DEFEASANCE Section 12.01. Termination of Company's Obligations. (a) If the Securities of any series so provide, the Company shall be deemed to have paid and discharged the entire indebtedness on all the Securities of a series, and except as otherwise provided in subsection (d) of this Section 12.01, the provisions of this Indenture as it relates to such Securities shall no longer be in effect, and the Trustee, at the expense of the Company, shall, upon Company Direction, execute proper instruments acknowledging the same if the conditions set forth in paragraphs (1) or (2) or (3) below are satisfied: (1)(A) all Securities of such series 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 2.07 and (ii) Securities for whose payment money (defined for purposes of this Article Twelve as such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts) has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 12.03) have been delivered to the Trustee for cancellation; (B) the Company has paid or caused to be paid all other sums payable under this Indenture in respect of the Securities of such series; and (C) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction of the entire indebtedness on all Securities of any such series and the discharge of this Indenture as it relates to such Securities have been complied with; or (2)(A) all Securities of such series not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company; (B) the condition described in Section 12.01(b)(1) has been satisfied; (C) the conditions described in paragraphs 1(B) and 1(C) of this Section 12.01(a) have been satisfied; and (D) the Company has received an Opinion of Counsel to the effect that the satisfaction and discharge contemplated by this Section 12.01(a)(2) will not violate the 64 73 then applicable rules of, or any related undertaking of the Company to any nationally-recognized securities exchange on which Securities of that series are listed; or (3)(A) the conditions referred to or described in paragraphs 2(B), 2(C) and 2(D) of this Section 12.01(a) have been satisfied; and (B) no Event of Default or event which with notice or lapse of time would become an Event of Default shall have occurred and be continuing on the date of the deposit referred to in Section 12.01(b)(1) on the 91st day after the date of such deposit; provided, however, that should that condition fail to be satisfied on or before such 91st day, the Trustee shall promptly, upon satisfactory receipt of evidence of such failure, return such deposit to the Company. (b) If the Securities of any series so provide, except as otherwise provided in subsection (d) of this Section 12.01, the Company may, at its option, cease to be under any and all obligations with respect to the Securities of any series or cease to be under any obligation to comply with any term, provision or condition set forth in Sections 4.05 and 4.06, and Section 6.01(c) with respect to Sections 4.05 and 4.06 shall not be deemed to be an Event of Default under the Indenture and the Debt Securities of such series, at any time after the applicable conditions set forth below have been satisfied: (1) the Company shall have deposited or caused to be deposited irrevocably with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series (i) money in an amount, or (ii) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination of (i) and (ii), sufficient, after payment based on then applicable law, of all Federal, state and local taxes in respect thereof, payable by the Trustee, in the opinion (with respect to (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge each instalment of principal (including mandatory Sinking Fund payments) of, and premium, if any, with respect to and interest on, the Outstanding Securities of such series on the dates such instalments of interest or principal are due; (2) if the Securities of such series are then listed on any national securities exchange, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Company's exercise of its option under this paragraph would not cause such Securities to be delisted; (3) the interest in the Holders in such deposit shall have been duly perfected under applicable provisions of the Uniform Commercial Code; 65 74 (4) no Event of Default or event (including such deposit) which with notice or lapse of time would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit; (5) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that Holders of the Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 12.01(b) and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised; and (6) the Company has delivered to the Trustee an Opinion of Counsel and Officer's Certificate, each stating that all of the conditions in this Section 12.01(b) have been complied with. (c) For purposes of this Article Twelve, "U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest to any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt. (d) The Company's obligations in Sections 2.05, 2.07, 4.02, 4.03, 4.04, 5.01, 5.02(a), 7.06, 7.10, 7.11 and 14.01 with respect to the Securities of such series, shall survive until all of the Securities of such series are no longer outstanding. Thereafter the Company's obligations in Sections 7.06 and 14.01 shall survive. (e) After a deposit described in subsection (a) or (b) of this Section 12.01, such moneys or payments of principal of and any interest on such U.S. Government Obligations, as the case may be, shall be payable to the Holders of the Securities of such series, as principal of and any interest on such Securities, in the manner and on the dates specified in the Securities of such series. The Trustee then shall, upon request, acknowledge in writing the discharge of the Company's obligations under the Securities of such series and this Indenture with respect to the Securities of such series, except for those surviving obligations specified above. Prior to making any deposit pursuant to this Article Twelve, the Company shall mail a notice by first- 66 75 class mail to each Holder of Registered Securities of such series and, if the Securities of such series were initially issued as unregistered Securities, shall cause to be published at least once in an authorized newspaper a notice, in each case, that states that the Company intends to take such action. (f) Notwithstanding any of the foregoing, the Trustee's rights, duties, obligations and immunities under this Indenture with respect to Securities of any series shall survive until all of the Securities of such series are no longer outstanding. Section 12.02. Application of Trust Deposit. The Trustee shall hold in trust any money or U.S. Government Obligations deposited with it pursuant to Section 12.01. The Trustee shall apply the deposited money or payments of principal of and any interest on U.S. Government Obligations through the paying agent and in accordance with this Indenture to the payment of principal and interest, if any, on the Securities of the series, or to the payment of any mandatory Sinking Fund payments, for which the money or U.S. Government Obligations have been deposited. Section 12.03. Repayment to Company. The Trustee and the paying agent shall promptly pay to the Company upon written request any excess money or U.S. Government Obligations held by them at any time. Subject to applicable law, any money or U.S. Government Obligations deposited with the Trustee or any paying agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or any interest on any Security, or for the payment of any mandatory Sinking Fund payments, and remaining unclaimed for two years after such principal, premium or interest, or such mandatory Sinking Fund payments, have become due and payable shall be paid to the Company on written request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such paying agent with respect to such trust money or U.S. Government Obligations, and all liability of the Company as trustee thereof, shall thereupon cease. ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES Section 13.01. Incorporators, Stockholders, Officers, Directors and Employees of Company Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly 67 76 understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, directors or employees, as such, of the Company or of any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute of, and any and all such rights and claims against every such incorporator, stockholder, officer, director or employee, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution and delivery of this Indenture and the issue of Securities hereunder. ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS Section 14.01. Successors and Assigns of Company Bound by Indenture. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Company shall bind its successors and assigns, whether so expressed or not. Section 14.02. Acts of Board, Committee or Officer of Successor Corporation Valid. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at that time be the successor of the Company. Section 14.03. Required Notices or Demands. Except as provided in Section 6.01(c) and (d), any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by any Holders of Securities of any series to or on the Company may be given or served by being deposited first-class postage prepaid in a post office letter box in the United States addressed (until another address is filed by the Company with the Trustee) as follows or delivered by hand or courier to: Sundstrand Corporation, 4949 Harrison Avenue, P.O. Box 7003, Rockford, Illinois 61125-7003, to the attention of the Secretary. Any notice, direction, request or demand by the Company or by any Holder to or upon the Trustee may be given or made, for all purposes, by being deposited first-class postage prepaid in a post office letter box in the United States addressed to the Corporate Trust Office. Any notice required or permitted to be mailed to a Holder of Securities of any series by the Company or the Trustee pursuant to the provisions of this Indenture shall be deemed to be properly mailed by being deposited first-class postage prepaid in a post office letter box in the United States addressed to such Holder at the address of such Holder as shown on the Security Register for the particular series of Securities. Any notice required or permitted to be given to a Holder of 68 77 unregistered Securities of any series shall be deemed to be properly given if such notice is published in an authorized newspaper on two separate days. Notices, directions, requests and demands shall be deemed delivered on the third day after being properly mailed, on the day delivered if delivered by hand or by courier and on the day after the second publication if given by publication in an authorized newspaper on two separate days. Section 14.04. Indenture and Securities to be Construed in Accordance with the Laws of the State of New York. This Indenture and each Security 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 such State. The descriptive headings of the Articles and Sections of this Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 14.05. Officers' Certificate and Opinion of Counsel to be Furnished upon Application or Demand by the Company. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of any such document is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion, as the case may be, need be furnished. Except as otherwise provided in this Indenture, each certificate or opinion provided for in this Indenture (other than certificates provided pursuant to Section 5.03(d)) and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (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 such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Section 14.06. Payments Due on Holidays. In any case where the date of maturity of interest on or principal of any Security or the date fixed for redemption of any Security shall not be a business day, then payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. 69 78 Section 14.07. Provisions Required by Trust Indenture Act of 1939 to Control. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of Sections 310 through 317 of the Trust Indenture Act, by the operation of Section 318(c) thereof, such imposed duties shall control, except as, and to the extent, expressly excluded from this Indenture, as permitted by the Trust Indenture Act. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, such modification or exclusion shall be controlling. Section 14.08. Indenture May be Executed in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 14.09. 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. The party of the second part hereby accepts the trusts in this Indenture declared and provided upon the terms and conditions hereinabove set forth. 70 79 IN WITNESS WHEREOF, SUNDSTRAND CORPORATION, the party of the first part, and M&I FIRST NATIONAL BANK, the party of the second part, have caused this Indenture to be duly executed, and their respective corporate seals to be affixed and attested, all as of the day and year first above written. SUNDSTRAND CORPORATION [CORPORATE SEAL] By ________________________________ Executive Vice President and Chief Financial Officer Attest: __________________________________ Assistant Secretary M&I FIRST NATIONAL BANK, as Trustee [CORPORATE SEAL] By _____________________________ R.T. Stephenson Executive Vice President Attest: _____________________________ Assistant Secretary 71 80 STATE OF ILLINOIS ) ) SS: COUNTY OF WINNEBAGO ) I, _______________, do hereby certify that on the ____ day of February, 1996, ____________ and _________________ personally appeared before me and being first duly sworn by me severally acknowledged that they signed the foregoing document in the respective capacities therein set forth and declared that the statements therein contained are true. IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year before written. _____________________________ Notary Public My Commission Expires: STATE OF WISCONSIN ) ) SS: COUNTY OF WASHINGTON ) On this ____ day of February, 1996, before me personally came R.T. Stephenson to me known, who, being by me duly sworn, did depose and say that he resides in West Bend, WI; that he is an Executive Vice President of M&I FIRST NATIONAL BANK, one of the parties described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to the instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said Corporation, and that he signed his name thereto by like authority. IN WITNESS WHEREOF, I have hereunto set my hand the day and the year in this Certificate first above written. _____________________________ Notary Public 72 81 SCHEDULE A(1) [FORM OF FACE OF SECURITY] SUNDSTRAND CORPORATION No........... $.......... [If the Security is an Original Issue Discount Security, insert any legend required for Federal income tax purposes.] [Designation of Securities of each series as specified in the instrument establishing such series] SUNDSTRAND CORPORATION, a corporation incorporated under the laws of the State of Delaware (hereinafter called the "Company"), for value received, hereby promises to pay [if the Security is unregistered, insert-bearer] [if the Security is registered, insert , or registered assigns] the principal sum of DOLLARS on at the office or agency of the Company in the Borough of Manhattan, The City and State of New York and such other location or locations as may be provided for pursuant to the Indenture referred to on the reverse hereof, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts [if the Security is registered and bears interest prior to its Stated Maturity, insert and to pay interest on said principal sum at the rate of % per annum, at said offices or agencies, in like coin or currency, from the or , as the case may be, next preceding the date of this [Security] to which interest has been paid or duly provided for on the [Securities], or, if the date of this [Security] is a or to which interest has been paid or duly provided for on the [Securities], from or, if the date of this [Security] is after any or , and prior to the next succeeding or , from such or ; provided, however, that if an to the extent the Company shall default in payment of the interest due on such or then from the next preceding or to which interest has been paid or duly provided for on the [Securities], or if no interest has been paid or duly provided for on the [Securities], from . Interest will be payable on and semi-annually on each and thereafter, until payment of said principal sum has been made or duly provided for. The interest so payable on any or will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this [Security] is registered at the close of business on the Record Date ( of , as the case may be) next preceding such or and may, at the option of the Company, be paid by check mailed to the person entitled thereto at his address last appearing on the Security Register.] The provisions of this [Security] are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. 73 82 This [Security] shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually by the Trustee under the Indenture referred to on the reverse hereof. In Witness Whereof, SUNDSTRAND CORPORATION has caused this [Security] to be signed by its duly authorized officers, manually or in facsimile, and a facsimile of its corporate seal to be imprinted hereon. Dated:____________________ SUNDSTRAND CORPORATION (Corporate Seal) By__________________________ By__________________________ 74 83 SCHEDULE A(2) [FORM OF REVERSE OF SECURITY] SUNDSTRAND CORPORATION [Designation of Securities of each series as specified in the instrument establishing such series] This Security is one of a duly authorized issue of "[insert full designation of series]" of the Company, designated as its "[Securities]", limited to the aggregate principal amount [if the Security is an Original Issue Discount Security, insert - at Stated Maturity] of Dollars ($), all issued under and pursuant to an indenture, dated as of February 15, 1996 (herein referred to as the "Indenture"), duly executed and delivered by the Company and Bankers Trust Company (hereinafter called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the [Securities]. [If the Security is not an Original Issue Discount Security, insert - In case an Event of Default, as defined in the Indenture, relating to the [Securities] shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture provides that in certain events such declaration as it affects the [Securities] and its consequences, may be waived by the Holders of a majority in aggregate principal amount of the [Securities] then outstanding. Any such waiver by the Holder of this [Security] (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this [Security] and of any [Security] issued [if the Security is registered, insert - upon the registration of transfer hereof or] in exchange or substitution herefor, irrespective of whether or not any notation of such waiver is made upon this [Security] or such other [Securities].] [If the Security is an Original Issue Discount Security, insert - In case an Event of Default, as defined in the Indenture, relating to the [Securities] shall have occurred and be continuing, an amount of principal of the [Securities] may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to [insert formula for determining the amount, which amount shall be determined by the Company and certified to the Trustee in an Officer's Certificate]. Upon payment (1) of the amount of principal so declared due and payable and (2) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of, and interest, if any, on the [Securities] shall terminate.] 75 84 [Include the following paragraph if series is subject to a Sinking Fund] The [Securities] are entitled to the benefit of a Sinking Fund as provided for pursuant to the Indenture and are subject to redemption through operation of the Sinking Fund on at [100%] of their principal amount (herein called the "Sinking Fund redemption price") together with accrued interest to the date fixed for redemption. Except as hereinafter provided, on or prior to each date, the Company will deposit with the Trustee or a paying agent (or segregate and hold in trust) an amount sufficient to redeem $ principal amount of [Securities] on such date. At its option, the Company may pay into the Sinking Fund, on or prior to each such date, an additional sum up to % of the amount required to be deposited on such date for the Sinking Fund (before taking into account any applicable credits as hereinafter mentioned). The Trustee will apply any such amounts deposited by the Company to redemption of [Securities] as provided in the Indenture. In lieu of making cash payments into the Sinking Fund the Company may, to the extent and upon the terms provided in the Indenture, deliver to the Trustee for cancellation, certain [Securities] theretofore acquired by the Company and receive credit therefor, at the Sinking Fund redemption price, or receive credit, at such price, for [Securities] theretofore called for redemption otherwise than through the Sinking Fund and which shall have ceased to be outstanding. [Include the following four paragraphs if the series is subject to redemption before Stated Maturity] The [Securities] may be redeemed, at the option of the Company, as a whole or from time to time in part (selected in such manner as the Trustee may deem appropriate and fair) at any time on or after , upon the notice referred to below, at the following redemption prices (expressed in percentages of the principal amount) together with interest accrued to the date fixed for redemption (except that any interest installments becoming due on the date fixed for redemption will be payable to the holders of such [Securities], or of one or more previous [Securities] evidencing all or a portion of the same debt as that evidenced by such particular [Securities], of record at the close of business on the relevant Record Date referred to on the face hereof or in the Indenture). If redeemed during the 12-month period beginning Year Percentage Year Percentage [Dates, years and percentages to be specified in instrument establishing such series] Notice of redemption shall be given to the Holders of [Securities] to be redeemed, as a whole or in part, whether through operation of the Sinking Fund or otherwise, [if the Security is unregistered, insert - by twice publishing a notice in an authorized newspaper] [if the Security 76 85 is registered, insert - by mailing a notice of such redemption to their last addresses as they shall appear upon the Security Register] not less than 20 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. If this [Security] (or a portion hereof) is duly called for redemption and funds for payment duly provided, this [Security] (or such portion) shall cease to bear interest from and after the date fixed for redemption. The Company shall not be required (a) to issue, register the transfer of or exchange any Securities of any series for a period of 15 days next preceding any selection of Securities of such series to be redeemed or (b) to register the transfer of or exchange any Securities of such series selected, called or being called for redemption. In the event of redemption of this [Security] in part only, a new [Security] or [Securities] in authorized denominations and in principal amount equal to the unredeemed portion hereof shall be issued upon the cancellation hereof. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than 66 2/3% in aggregate principal amount at Stated Maturity of the [Securities] at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures which, if they pertain specifically to the [Securities], may add any provisions to or change in any manner or eliminate any of the provisions of the Indenture relating to the [Securities] or of any supplemental indenture relating to the [Securities] or modifying in any manner the rights of the Holders of the [Securities]; provided, however, that no such supplemental indenture shall (i) extend the Stated Maturity of any [Security], reduce the principal amount thereof, reduce the rate or extend the time of payment of any interest thereon, reduce any premium payable upon the redemption thereof, [if the Security is an Original Issue Discount Security, insert - reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Stated Maturity thereof,] [if the Security has mandatory Sinking Fund provisions - modify provisions relating to amount or regularity of mandatory Sinking Fund payments,] or make the principal amount thereof payable in any money other than United States legal tender for the payment of public or private debts without the consent of the Holder of each [Security] so affected, or (ii) reduce the aforesaid percentage of [Securities], the consent of the Holders of which is required for any such supplemental indenture relating to the [Securities], without the consent of the Holders of all [Securities] then outstanding. It is also provided in the Indenture that, prior to the declaration of maturity of the [Securities] upon the occurrence of an Event of Default relating to the [Securities] as defined in the Indenture, the Holders of a majority in aggregate principal amount at Stated Maturity of the [Securities] at the time outstanding may on behalf of the Holders of all of the [Securities] waive any past default under the Indenture relating to the [Securities] and its consequences, except a default in the payment of the principal of (or premium, if any) or interest on any of the [Securities]. Any such consent or waiver by the Holder of this [Security] (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this [Security] and of any [Security] issued [if the Security is registered, insert - upon the registration of transfer hereof or] in exchange or substitution 77 86 herefor, irrespective of whether or not any notation of such consent or waiver is made upon this [Security] or such other [Securities]. No reference herein to the Indenture and no reference to any 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 premium, if any) and interest, if any, on this [Security] at the place, at the respective times, at the rate and in the currency herein prescribed. [If the series so provides, insert] The Company may terminate all of its obligations under the [Securities] and, with certain limited exceptions described in the Indenture, under the Indenture, by irrevocably depositing in trust with the Trustee money, or U.S. Government Obligations (as defined in the Indenture), or any combination of the two, sufficient to pay principal of and interest on the [Securities] to maturity or redemption as the case may be. The [Securities] are issuable as [if applicable - registered] [if applicable - bearer] [Securities] [if applicable - without] [if applicable - with] coupons in denominations of [$1,000] and any integral multiple of [$1,000]. At the office or agency to be maintained by the Company in the Borough of Manhattan, The City and State of New York, or at such other location or locations as may be provided for in the Indenture, and in the manner and subject to the limitations provided in the Indenture, [Securities] may be exchanged by the Holder hereof without charge except for any tax or other governmental charge imposed in relation thereto, for a like aggregate principal amount at Stated Maturity of [Securities] of other authorized denominations. [Include the following two paragraphs if series is registered] This [Security] is transferable and the registration of the transfer hereof may be effected by the registered Holder hereof or by his attorney duly authorized in writing upon due presentment for registration of transfer at the office or agency of the Company, in the Borough of Manhattan, The City and State of New York, or at such other location or locations as may be provided for in the Indenture, but only in the manner and subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in relation thereto. Upon any such registration of transfer, a new [Security] or [Securities], of authorized denominations, for a like aggregate principal amount at Stated Maturity will be issued to the transferee in exchange therefor. Prior to due presentment for registration of transfer of this [Security], the Company, the Trustee, any paying agent and the Security Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this [Security] shall be overdue and notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of receiving payment as herein provided and all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary. 78 87 [Include the following paragraph if the Security is unregistered] The Company, the Trustee, any paying agent and the Security Registrar may deem and treat the bearer hereof and the bearer of any coupon appertaining hereto as the absolute owner hereof and thereof (whether or not this [Security] or such coupon shall be overdue and notwithstanding any notation of ownership or other writing hereon or thereon made by anyone) for the purpose of receiving payments as herein and therein provided and for all other purposes. No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this [Security], or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor corporation whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. [Defeasance, if applicable] All terms used in this [Security] which are defined in the Indenture shall have the meanings assigned to them therein. [Form of coupon, if any, to be provided for in instrument establishing series] 79 88 SCHEDULE B [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the [Securities] described in the within-mentioned Indenture. M&I FIRST NATIONAL BANK, As Trustee By_________________________________ Authorized Signature 80 EX-5.1 4 OPINION OF RICHARD M. SCHILLING 1 Exhibit 5.1 [SUNDSTRAND CORPORATION LETTERHEAD] February 6, 1996 Sundstrand Corporation 4949 Harrison Avenue Rockford, Illinois 61125 RE: Sundstrand Corporation Registration Statement on Form S-3 Gentlemen: As the Vice President and General Counsel of Sundstrand Corporation, a Delaware corporation (the "Company"), I have reviewed the corporate proceedings (the "Corporate Proceedings") taken and to be taken to authorize the execution and delivery by the Company of an indenture (the "Indenture") to be dated as of the date of execution thereof with M&I First National Bank as Trustee, providing for the issuance of debt securities (the "Debt Securities") of the Company. I have examined and am familiar with the Certificate of Incorporation of the Company and its By-Laws, both as amended and/or restated. I have also examined the proposed form of the Indenture, and such other documents, records and certificates of the Company as I consider necessary for the purpose of this opinion. Based on the foregoing I am of the opinion that: 1. The Company is a corporation duly organized under the laws of Delaware, is validly existing, and has the power and authority to execute and deliver the Indenture and, subsequently, to sell the Debt Securities; 2 Sundstrand Corporation Registration Statement on Form S-3 February 6, 1996 Page Two 2. Upon completion of the Corporate Proceedings, the execution and delivery of the Indenture and the issuance of the Debt Securities will have been validly authorized on behalf of the Company, and when the Indenture shall have been duly executed and delivered, the Indenture will constitute a valid, binding and enforceable obligation of the Company in accordance with its terms, except as enforcement of provisions thereof may be limited by bankruptcy or other applicable laws affecting the enforcement of creditors' rights; 3. The Debt Securities, when executed, manually or in facsimile, by the proper officers of the Company and under its corporate seal, or a facsimile thereof, and authenticated by the Trustee under the Indenture, and issued and sold and paid for in accordance with the Corporate Proceedings, will constitute legally issued, valid, binding and enforceable obligations of the Company in accordance with their terms, except as enforcement of provisions thereof may be limited by bankruptcy or other applicable laws affecting the enforcement of creditors' rights, and will be entitled to the benefits of the Indenture. I hereby consent to the use of my name under the caption "Legal Opinions" in the Prospectus constituting a part of the Registration Statement of the Company under the Securities Act of 1933 relating to the Debt Securities and to the filing of this opinion as an exhibit to such Registration Statement. Sincerely, /s/ Richard M. Schilling Richard M. Schilling EX-12.1 5 COMPUTATION OF RATIO OF EARNINGS 1 EXHIBIT 12.1 SUNDSTRAND CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges
Nine Months Ended September 30, Year Ended December 31, ---------------------- ------------------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 --------- ---------- -------- --------- --------- --------- -------- Earnings Available for Fixed Charges: Income from continuing operations before income taxes and cumulative effect of accounting change $77 $95 $149 $133 $110 $146 $160 Equity in undistributed earnings of less- than-fifty-percent-owned companies - - - - (1) - (1) Fixed charges, excluding capitalized interest 29 25 35 46 66 77 97 ------ ------ ------ ------ ------ ------ ------ $106 $120 $184 $179 $175 $223 $256 ====== ====== ====== ====== ====== ====== ====== Fixed Charges: Interest and expense on indebtedness, excluding capitalized interest $25 $21 $30 $40 $59 $70 $91 Capitalized interest - - - - - 1 1 One-third of rental expense, net of subleasing, for operating leases 4 4 5 6 7 7 6 ------ ------ ------ ------ ------ ------ ------ $29 $25 $35 $46 $66 $78 $98 ====== ====== ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges 3.7 4.8 5.3 3.9 2.7 2.9 2.6
EX-23.1 6 CONSENT OF ERNST & YOUNG LLP 1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Sundstrand Corporation for the registration of $150,000,000 of debt securities and to the incorporation by reference therein of our report dated January 26, 1995 (except for the Subsequent Event note, as to which the date is February 21, 1995), with respect to the consolidated financial statements of Sundstrand Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1994, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Chicago, Illinois February 5, 1996 EX-24.1 7 POWERS OF ATTORNEY 1 Exhibit 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, SUNDSTRAND CORPORATION, a Delaware corporation, does hereby nominate, constitute and appoint PAUL DONOVAN and RICHARD M. SCHILLING, and either or both of them as its true and lawful attorneys-in-fact, in its name and on its behalf to file with the Securities and Exchange Commission a Registration Statement on Form S-3 and any amendments, supplements and post-effective amendments thereto, in connection with the registration under the Securities Act of 1933, as amended, of the Corporation's debt securities, consisting of debentures, notes and/or other unsecured evidences of indebtedness, up to an aggregate of $150,000,000 principal amount of indebtedness having a maturity of more than one year from the date of issuance. That each of the undersigned directors and officers of said Corporation does hereby nominate, constitute and appoint PAUL DONOVAN and RICHARD M. SCHILLING, and either or both of them as his true and lawful attorneys-in-fact, in his name and in the capacity indicated below, to execute the aforesaid Form S-3. And the undersigned do hereby authorize and direct the said attorneys-in-fact, and either or both of them, to execute and deliver such other documents to the Securities and Exchange Commission and to take all such other action as they or either of them may consider necessary or advisable to the end that said Form S-3 shall comply with the Securities Act of 1933 and the applicable rules, rulings and regulations of the Securities and Exchange Commission. IN WITNESS WHEREOF, each of the undersigned has subscribed these presents this 5th day of February, 1996. SUNDSTRAND CORPORATION By: /s/ Don R. O'Hare ------------------------ Don R. O'Hare Chairman of the Board (CORPORATE SEAL) ATTEST: /s/ William R. Coole - ---------------------- William R. Coole Assistant Secretary 2 SIGNATURE TITLE ---------------------- ------------------------ /s/ Robert H. Jenkins President and Chief ---------------------- Executive Officer and Robert H. Jenkins Director /s/ Paul Donovan Executive Vice President ---------------------- and Chief Financial Paul Donovan Officer /s/ DeWayne J. Fellows Vice President and ---------------------- Controller DeWayne J. Fellows /s/ Don R. O'Hare Chairman of the Board ---------------------- Don R. O'Hare /s/ J.P. Bolduc Director ---------------------- J.P. Bolduc /s/ Gerald Grinstein Director ---------------------- Gerald Grinstein /s/ Charles Marshall Director ---------------------- Charles Marshall 3 SIGNATURE TITLE ---------------------- ------------------------ Director ---------------------- Klaus H. Murmann /s/ Donald E. Nordlund Director ---------------------- Donald E. Nordlund /s/ Thomas G. Pownall Director ---------------------- Thomas G. Pownall /s/ John A. Puelicher Director ---------------------- John A. Puelicher /s/ Ward Smith Director ---------------------- Ward Smith /s/ Robert J. Smuland Director ---------------------- Robert J. Smuland /s/ Berger G. Wallin Director ---------------------- Berger G. Wallin EX-25.1 8 STATEMENT OF ELIGIBILITY ON FORM T-1 1 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20545 ___________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF TRUSTEE PURSUANT TO SECTION 305(B)(2) _____ ___________________________ M&I FIRST NATIONAL BANK (Exact name of trustee as specified in its charter) WISCONSIN 39-0698093 (Jurisdiction of incorporation (I.R.S. Employer of organization if not a U.S. Identification Number) national bank) 321 NORTH MAIN STREET WEST BEND, WISCONSIN 53095 (Address of principal executive offices) (Zip Code) ___________________________ R.T. STEPHENSON 321 NORTH MAIN STREET WEST BEND, WISCONSIN 53095 (414) 335-3030 (Name, address and telephone number of agent for service) ___________________________ SUNDSTRAND CORPORATION (Exact Name of obligor as specified in its charter) DELAWARE 36-1840610 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 4949 HARRISON AVENUE ROCKFORD, ILLINOIS 61125-7003 (Address of principal executive offices) (Zip Code) DEBT SECURITIES 2 (Title of indenture securities) Item 1. General information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. Federal Deposit Insurance Corporation, Washington, D.C. The Board of Governors of the Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. The corporate trustee is authorized to exercise corporate trust powers. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Item 3. Voting Securities of the Trustee. Not applicable as the obligor is not presently in default. Item 4. Trusteeships Under Other Indentures. Not applicable as the obligor is not presently in default. Item 5. Interlocking Directorates and Similar Relationships with the Obligor or Underwriters. Not applicable as the obligor is not presently in default. Item 6. Voting securities of the Trustee Owned by the Obligor or its Officials. Not applicable as the obligor is not presently in default. Item 7. Voting Securities of the Trustee Owned by Underwriters or their Officials. Not applicable as the obligor is not presently in default. Item 8. Securities of the Obligor Owned or Held by the Trustee. Not applicable as the obligor is not presently in default. Item 9. Securities of Underwriters Owned or Held by the Trustee. Not applicable as the obligor is not presently in default. Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain Affiliates or Security Holders of the Obligor. Not applicable as the obligor is not presently in default. Item 11. Ownership or Holdings by the Trustee of any Securities of a Person Owning 50 Percent or More of the 3 Voting Securities of the Obligor. Not applicable as the obligor is not presently in default. Item 12. Indebtedness of the Obligor to the Trustee. Not applicable as the obligor is not presently in default. Item 13. Defaults by the Obligor. Not applicable as the obligor is not presently in default. Item 14. Affiliations with the Underwriters. Not applicable as the obligor is not presently in default. Item 15. Foreign Trustee. Not applicable. Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility. 1. Articles of Association of M&I First National Bank. 2. Comptroller of the Currency authorization to commence business (incorporated by reference to Exhibit 1 to Statement of Eligibility of Trustee Exhibit to Registration Statement on Form S-3 of Ziegler Collateralized Securities, Inc. West Bend, Wisconsin, Registration Number 33-42723). 3. Federal Reserve Board grant of Fiduciary powers (incorporated by reference to Exhibit 1 to Statement of Eligibility of Trustee Exhibit to Registration Statement on Form S-3 of Ziegler Collateralized Securities, Inc. West Bend, Wisconsin, Registration Number 33-42723). 4. By-Laws of M&I First National Bank. 6. Consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. 7. Latest report of condition of the Trustee published pursuant to law or the requirement of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, M&I First National Bank, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunder duly authorized, all in the City of West Bend and State of Wisconsin, on the 5th day of February, 1996. By: ----------------------------------------- R. T. Stephenson, Executive Vice President 4 ARTICLES OF ASSOCIATION FIRST. The title of this Association shall be M&I First National Bank. SECOND. The Main Office of the Association shall be in West Bend, County of Washington, State of Wisconsin. The general business of the Association shall be conducted at its main office and its branches. THIRD. The Board of Directors of this Association shall consist of not less than five nor more than twenty-five Shareholders. At any meeting of the Shareholders held for the purpose of electing Directors, or changing the number thereof, the number of Directors may be determined by a majority of the votes cast by the Shareholders in person or by proxy. Each director, during the full term of his or her directorship, shall own a minimum of $1,000 aggregate par value of stock of this Association or a minimum market value or equity interest of $1,000 of stock in the bank holding company controlling this Association. A majority of the Board of Directors shall be necessary to constitute a quorum for the transaction of business at any Directors' meeting. The Board of Directors, by the vote of a majority of the full board, may, between annual meetings of Shareholders, increase the membership of the board by not more than two members and by like vote appoint qualified persons to fill the vacancies created thereby. FOURTH. The regular annual meeting of the Shareholders of this Association shall be held at its main banking house, or other convenient place duly authorized by the Board of Directors on such day of each year as is specified therefor in the bylaws. FIFTH. The authorized amount of capital stock of this Association shall be 262,500 shares of common stock of the par value of twenty dollars ($20.00) each; but said capital stock may be increased or decreased from time to time, in accordance with the provisions of the laws of the United States. If the capital stock is increased by the sale of additional shares thereof, each Shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of said capital stock owned by him at the time the increase is authorized by the Shareholders, unless another time subsequent to the date of the Shareholders' meeting is specified in a resolution by the Shareholders at the time the increase is authorized. The Board of Directors shall have the power to prescribe a reasonable period of time within which the preemptive rights to subscribe to the new shares of capital stock must be exercised. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not Subordinated, without the approval of the Shareholders. SIXTH. The Board of Directors shall appoint one of its members President of this Association, who shall be Chairperson of the Board, unless the Board appoints another director to be the Chairperson. The Board of Directors shall have the power to appoint one or more Vice Presidents; and to appoint a Cashier and such other officers and employees as may be required to transact the business of this Association. The Board of Directors shall have the power to define the duties of the officers and employees of the Association; to fix the salaries to be paid to them; to dismiss them; to require bonds from them and to fix 5 the penalty thereof; to regulate the manner in which any increase of the capital of the Association shall be made; to manage and administer the business and affairs of the Association; to make all Bylaws that it may be lawful for them to make; and generally to do and perform all acts that it may be legal for a Board of Directors to do and perform. SEVENTH. The Board of Directors shall have the power to change the location of the main office to any other place within the limits of West Bend, without the approval of the Shareholders but subject to the approval of the Comptroller of the Currency; and shall have the power to establish or change the location of any branch or branches of the Association to any other location, without the approval of the Shareholders but subject to the approval of the Comptroller of the Currency. EIGHTH. The corporate existence of this Association shall continue until terminated in accordance with the laws of the United States. NINTH. The Board of Directors of this Association, or any Shareholder(s) owning, in the aggregate, not less than 10 percent of the stock of this Association, may call a special meeting of Shareholders at any time. Unless otherwise provided by the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the Shareholders shall be given by first-class mail, postage prepaid, mailed at least 10 days prior to the date of such meeting to each Shareholder of record at his address as shown upon the books of this Association. TENTH. Section 1. Right of Directors and Officers to Indemnification. Every person shall be indemnified to the fullest extent permitted by law, as the same may exist or may hereafter be amended (but, in the case of any such amendment, only to the extent such amendment permits the Bank to provide broader indemnification rights than the law permitted the Bank to provide prior to such amendment), for all reasonable expenses (including fees, costs, charges, disbursements, attorneys fees and any other expenses) and against all liability (including the obligation to pay a judgement, settlement, penalty, assessment, forfeiture or fine, including an excise tax with respect to an employee benefit plan) asserted against, incurred by or imposed on him or her in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative ("Proceeding") to which he or she is made or threatened to be made a party by reason of his or her being or having been a Director, Officer, employee or agent of the Bank (or by reason of, while serving as a Director, Officer, employee or agent of the Bank, having served at the Bank's request as a Director, Officer, partner, trustee, member of any governing or decision-making committee, employee or agent of another corporation or foreign corporation, partnership, joint venture, trust or other enterprise, including service to an employee benefit plan); provided, however, in situations other than a successful defense of a Proceeding, the Director, Officer, employee or agent shall not be indemnified where he or she breached or failed to perform a duty to the Bank or such other corporation, partnership, joint venture, trust, or other enterprise and the breach or failure to perform constitutes (a) a willful failure to deal fairly with the Bank or such other corporation, partnership, joint venture, trust, or other enterprise or its Shareholders in connection with the matter in which the Director, Officer, employee or agent has a material conflict of interest, (b) a violation of criminal law, unless the Director, Officer, employee or agent had reasonable cause to believe his or her conduct was lawful, or no reasonable cause to believe his or her conduct was unlawful, (c) a transaction from which the Director, Officer, employee or agent derived an improper personal benefit, or (d) willful misconduct; and further provided, notwithstanding anything to the contrary stated in this Article, no Director, Officer, employee or agent shall be indemnified hereunder against expenses, penalties or other payments incurred in an administrative proceeding or action instituted by the Bank's regulatory agency, which proceeding or action results in a final order assessing civil money penalties or requiring affirmative 6 action by an individual or individuals in the form of payments to the Bank. Such rights to indemnification shall include the right to be paid by the Bank reasonable expenses as incurred in defending such Proceeding; provided, however, that payment of such expenses as incurred shall be made only upon such person delivering to the Bank (a) a written affirmation of his or her good faith belief that he or she is entitled to indemnification hereunder, and (b) a written undertaking, executed personally or on his or her behalf, to repay the allowance to the extent it is ultimately determined that such person is not entitled to indemnification under this Article. The Bank may require that the undertaking be secured and may require payment of reasonable interest on the allowance to the extent that it is ultimately determined that such person is not entitled to indemnification. A Director, Officer, employee or agent seeking indemnification under this Article shall select one of the means for determining his or her right to indemnification set forth in Section 180.0855 of Wisconsin Statutes, or any successor thereto. SECTION 2. Right of Director or Officer to Bring Suit. If a claim under this Article is not paid in full by the Bank within 30 days after a written claim has been received by the Bank, the claimant may at any time thereafter bring suit against the Bank to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the reasonable expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any Proceeding in advance of its final disposition where the required undertaking has been tendered to the Bank) that the claimant has not met the standards of conduct under this Article which make it permissible for the Bank to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Bank. SECTION 3. Contract Rights; Amendment or Repeal. All rights under this Article shall be deemed a contract between the Bank and the Director, Officer, employee or agent pursuant to which the Bank and the Director, Officer, employee or agent intend to be legally bound. Any repeal, amendment or modification of this Article shall be prospective only as to conduct of a Director, Officer, employee or agent occurring thereafter, and shall not affect any rights or obligations then existing. SECTION 4. Scope of Article. The rights granted by this Article shall not be deemed exclusive of any other rights to which a Director, Officer, employee or agent may be entitled under any statute, agreement, vote of Shareholders or disinterested Directors or otherwise. The indemnification and advancement of expenses provided by or granted pursuant to this Article shall continue as to a person who has ceased to be a Director, Officer, employee or agent in respect to matters arising prior to such time, and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person. SECTION 5. Insurance. The Bank may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a Director, Officer, employee or agent of the Bank or is or was serving at the request of the Bank as a Director, Officer, partner, trustee, member of any governing or decision-making committee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service to an employee benefit plan, against any liability asserted against that person or incurred by that person in any such capacity, or arising out of that person's status as such, whether or not the Bank would have the power to indemnify such person against such expense, liability or loss under this Article; provided, however, that any such policy of insurance purchased by the Bank shall exclude coverage for a formal order assessing civil money penalties against a Director, Officer or employee of the Bank. 7 SECTION 6. Interpretation of Provisions. In order for the Bank to obtain and retain qualified Directors, Officers, employees and agents, the foregoing provisions shall be liberally administered in order to afford maximum indemnification of Directors, Officers, employees and agents and, accordingly, the indemnification above provided for shall be granted in all cases unless to do so would clearly contravene applicable law, controlling precedent or public policy. ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the Shareholders by the affirmative vote of the holders of a majority of the stock of this Association unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. 8 AMENDED AND RESTATED BYLAWS OF THE M&I FIRST NATIONAL BANK WEST BEND, WISCONSIN ORGANIZED UNDER THE NATIONAL BANKING LAWS OF THE UNITED STATES _____________________ ARTICLE I SHAREHOLDERS SECTION 1. Annual Meeting. The annual meeting of the Shareholders of the Association for the purpose of electing Directors, and for the transaction of such other business as may properly come before the meeting, shall be held on the fourth Tuesday of January of each year, or if that date falls on a legal holiday in Wisconsin, on the next following banking day, at such time as shall be fixed by the Secretary of the Association or the Board of Directors. SECTION 2. Special Meetings. Special meetings of the Shareholders may be called by the Chairman of the Board or President, and special meetings shall be called by either the Chairman of the Board or the President on the written request of a majority of Directors or Shareholders owning ten percent of the outstanding stock. SECTION 3. Place of Meetings. All meetings of the Shareholders shall be held at the main office of the Association, unless some other place shall be designated and so specified in the notice of the meeting. SECTION 4. Notice of Meetings. Except as otherwise provided by law, the Association shall notify Shareholders of the date, time and place of each annual and special meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting by first class mail, postage prepaid, addressed to each Shareholder at the address of such Shareholder appearing on the books of the Association. Notice of a special meeting shall include a description of each purpose for which the meeting is called. Notice of the meeting shall be given only to those Shareholders entitled to vote at the meeting, unless otherwise required by law. SECTION 5. Quorum. A majority of the outstanding shares of stock represented in person or by proxy shall constitute a quorum at any meeting of the Shareholders, except at a meeting to act upon amendments to the Articles of Association or Bylaws, for which a quorum shall constitute shares of stock represented in person or by proxy consisting of at least two-thirds of the outstanding shares. In the absence of a quorum a meeting may be adjourned from time to time and the meeting may be held as adjourned without further notice. Unless otherwise provided by law, or these Bylaws, a majority of the votes cast shall decide every matter submitted to the Shareholders at any meeting. 1 9 SECTION 6. Proxies. Shareholders may vote at any meeting of the Shareholders by proxies duly authorized in writing, except that no officer or employee of the Association may be designated to act as proxy. Proxies shall be valid only for one meeting, to be specified therein, unless otherwise provided in the proxy, and any adjournments of such meeting. Proxies shall be dated and shall be filed with the records of the meeting. SECTION 7. Shares in Name of Another Corporation. Shares outstanding in the name of another corporation may be voted by the president of such corporation, or any other officer or proxy appointed by such president in the absence of express notice of the designation of some other person by the board of directors or bylaws of such other corporation. SECTION 8. Waiver of Notice. A Shareholder may waive any notice or defects in the notice required by these Bylaws, the Articles of Association or any provision of law, before or after the date and time stated in the notice, provided that such waiver is in writing and signed by the Shareholder entitled to the notice, and contains the same information that would have been required in the notice under any applicable provisions under any statute, except that the time and place of meeting need not by stated. Such waiver must be delivered to the Association for inclusion in the corporate records. A Shareholder's attendance at a meeting in person or by proxy, waives objection to (i) lack of notice or defective notice of the meeting, unless the Shareholder at the beginning of the meeting or promptly upon arrival objects to the holding of the meeting or transacting business at the meeting, and (ii) consideration of a particular matter at the meeting that is not within the purpose described in the meeting notice, unless the Shareholder objects to considering the matter when it is presented. SECTION 9. Unanimous Consent Without Meeting. Any action required or permitted by the Articles of Association or Bylaws or any provision of law to be taken at a meeting of the Shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof and delivered to the Association for inclusion in the Association's records. 2 10 ARTICLE II DIRECTORS SECTION 1. Management. The business and affairs of the Association shall be managed by a Board of not more than fifteen (15) Directors nor less than five (5) Directors, at the discretion of the Shareholders. The number of directors shall by designated annually within these limits by the Shareholders at the annual meeting. Those persons elected as Directors must be qualified to act as Directors in accordance with 12 U.S.C. Section 72. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by said Board. SECTION 2. Election and Tenure. The Directors shall be elected by the Shareholders at the regular annual meeting of shareholders, and a majority of the stock represented shall be necessary for election. Each Director shall hold office for one (1) year and until his or her successor has been elected and qualified, or until his or her death, or until he or she shall resign or until he or she has been removed in the manner hereinafter provided. A Director may be removed from office by affirmative vote of a majority of the outstanding shares entitled to vote for the election of such Director, taken at a special meeting of Shareholders called for that purpose. A Director may resign at any time by filing his written resignation with the President of the Association. SECTION 3. Director Emeritus. No person shall be eligible to be elected a Director at any meeting of Shareholders held on or after the date he or she attains age seventy (70); provided that this provision shall not apply to Directors who have already attained the aforesaid age prior to the date of adoption of these Bylaws. The Board of Directors, at its discretion, may designate such a person who has served as a Director of the Association as a Director Emeritus. Any Director who has attained age sixty-five (65) upon declining to stand for reelection shall likewise be eligible to be designated a Director Emeritus by the Board. A Director Emeritus shall be entitled to receive all notices of meetings and communications to Directors, attend all meetings of the Board of Directors and to participate in discussions of the Board. However, a Director Emeritus shall not vote or be counted in determining a quorum at any meeting of Directors. SECTION 4. Regular Meetings. The regular meetings of the Board of Directors shall be held once each month at such day and hour as the Board may fix. Nor formal notice of such meetings need be given to any Director. SECTION 5. Special Meetings. Special meetings of the Board of Directors may, and at the written request of any three Directors shall, be called at any time by the Chairman of the Board or the President, or in the absence of the Chairman of the Board and the President, by any Vice President who is then a member of the board of Directors. Notice of any special meeting shall be given at least forty-eight (48) hours previous thereto, except in the case of an emergency as provided under the Wisconsin Business Corporation Law, by written or oral notice, by telephone, telegraph, teletype, facsimile or by mail or private carrier. Notice to Directors of any meeting shall be deemed to be effective as provided in Section 180.0141 of Wisconsin Statutes, or any successor thereto. SECTION 6. Quorum. A majority of the whole number of directors shall constitute a 3 11 quorum at any meeting. In the absence of a quorum, a lesser number may adjourn any meeting from time to time and the meeting may be held as adjourned, without further notice, if a quorum is obtained. SECTION 7. Notice, Waiver, Participation. Whenever any notice is required to be given to any director of the Association under the provisions of these Bylaws or under the provisions of the Articles of Association or under the provisions of any law, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the Director entitled to such notice, shall be deemed equivalent to the giving of such notice. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting and objects thereat to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Any or all of the Directors may participate in a regular or special meeting of the Board of Directors, or such meeting may be conducted through the use of, any means of communication by which either (a) all participating Directors may simultaneously hear each other during the meeting, or (b) all communication during the meeting is immediately transmitted to each participating Director, and each participating Director is able to immediately send messages to all other participating Directors; provided that, all participating Directors must be informed that a meeting is taking place at which official business may be transacted. SECTION 8. Vacancies. When any vacancy occurs among the Directors, a majority of the remaining members of the Board shall appoint a Director to fill such vacancy at any regular meeting of the Board, or at a special meeting called for that purpose. SECTION 9. Unanimous Consent Without Meeting. Any action required or permitted by the Articles of Association or Bylaws or any provision of law to be taken by the Board of Directors at a meeting or by resolution may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Directors then in office. SECTION 10. Presumption of Assent. A director of the Association who is then present at a meeting of the Board of Directors or a committee thereof of which he is a member at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless (i) the Director objects at the beginning of the meeting or promptly upon his or her arrival to holding the meeting or transacting business at the meeting, or (ii) the Director's abstention or dissent to the action taken shall be entered in the minutes of the meeting, or (iii) the Director shall file his or her written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Association immediately after the adjournment of the meeting, or (iv) the Director dissents or abstains from an action taken, minutes of the meeting are prepared that fail to show the Director's dissent or abstention from the action taken and the Director delivers to the Association by registered mail a written notice of that failure promptly after receiving the minutes. A Director who votes in favor of action taken may not dissent or abstain from that action. SECTION 11. Compensation. The compensation of Directors shall be determined by the Board of Directors. 4 12 ARTICLE III COMMITTEES OF THE BOARD The Board of directors must formally ratify written policies authorized by committees of the Board of Directors before such policies become effective. Each committee must have one or more *member(s), who serve at the pleasure of the Board of Directors. Provisions of the Articles of Association and Bylaws governing place of meetings, notice of meeting, quorum and voting requirements of the Board of Directors, apply to committees and their members as well. The creation of a committee and appointment of members to it must be approved by the Board of Directors. SECTION 1. Loan Committee. There shall be a Loan Committee composed of three (3) or more Directors, appointed by the board annually or more often. The Loan Committee shall have power to discount and purchase bills, notes and other evidences of debt, to buy and sell bills of exchange, to examine and approve loans and discounts, to exercise authority regarding loans and discounts, and to exercise, when the Board of Directors is not session, all other powers of the Board of Directors that may lawfully be delegated. The Loan Committee shall keep minutes of its meetings, and such minutes shall be submitted at the regular meeting of the Board of Directors at which a quorum is present, and any action taken by the Board of Directors with respect thereto shall be entered in the minutes of the Board of Directors. SECTION 2. Investment Committee. There shall be an Investment Committee composed of three (3) or more Directors, appointed by the Board of Directors annually or more often. The Investment Committee shall have the power to ensure adherence to the investment policy, to recommend amendments thereto, to purchase and sell securities, to exercise authority regarding investments and to exercise, when the Board of Directors is not in session, all other powers of the Board of Directors regarding investment securities that may be lawfully delegated. The Investment Committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the Board of Directors at which a quorum is present, and any action taken by the Board of Directors with respect thereto shall be entered in the minutes of the Board of Directors. SECTION 3. Examining Committee. There shall be an Examining Committee composed of not less than three (3) Directors, exclusive of any active officers, appointed by the Board annually or more often. The duty of that Committee shall be to make, or cause to be made, by either the internal audit staff of Marshall & Ilsley Corporation or a qualified firm of Certified Public Accountants approved by the Board of Directors, suitable examinations of the affairs of the Association at least annually. The results of examinations conducted by the internal audit staff of Marshall & Ilsley Corporation or a firm of Certified Public Accountants, together with any recommendations for revisions in accounting or operating procedures and controls which are deemed advisable, shall be reported periodically in writing to the Examining Committee. At least annually, the Examining Committee shall report in writing to the Board of Directors the result of examinations conducted since the previous report to the Board of Directors. Such report shall state whether the Association is in a sound condition, and whether adequate internal accounting controls and procedures are being maintained and shall recommend to the Board of Directors such changes in the manner of conducting the affairs of the Association as shall be deemed advisable. 5 13 SECTION 4. Other Committees. The Board of Directors may appoint, from time to time, from its own members, compensation, special litigation and other committees of one or more persons for such purposes and with such powers as the Board of directors may determine. However, a committee may not: (1) Authorize distributions of assets or dividends. (2) Approve action required to be approved by Shareholders. (3) Fill vacancies on the Board of Directors or any of its committees. (4) Amend Articles of Association. (5) Adopt, amend or repeal Bylaws. (6) Authorize or approve issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares. 6 14 ARTICLE IV OFFICERS SECTION 1. Number and Election. The Officers of the Association shall be a Chairman of the Board of Directors, if the Board of Directors elects to fill such office, and a President, one or more Vice Presidents, a Secretary, and such other Officers and Assistant Officers as may be required or desirable for the prompt and orderly transaction of the business of the Association. One or more of the vice Presidents may be designated as Executive Vice President, Senior Vice President, or First Vice President, or have such other designation as may be determined by the board of Directors. Such Officers shall be elected by the Directors at the regular meeting of the board of Directors after the adjournment of each regular annual meeting of the Shareholders or at any regular meeting of the Board of Directors or at any special meeting of the Board of Directors called for said purpose. A Vice President may serve as Secretary, in which event there shall be at least one other Vice President. The Board of Directors shall fix the compensation for each Officer. SECTION 2. Officers to be Members of the Board of Directors. The Chairman of the Board of Directors and the President shall be members of the Board of Directors. SECTION 3. Chairman of the Board. The duties of the Chairman of the Board of Directors, if one be elected, shall be to preside at all meetings, regular and special, of the Shareholders of the Association and of its Board of Directors, and such other, further, and additional duties as may be conferred upon said Chairman by the Board of Directors. The Board of Directors may from time to time, by resolution, reapportion the duties and responsibilities for the general overall management of the Association between the Chairman of the Board and the President. SECTION 4. President. The President shall preside at all meetings of the Shareholders and at all meetings of the Board of Directors, unless a Chairman of the Board of Directors shall have been elected in which case the Chairman shall preside. The President shall perform all the usual duties and have such powers as are incident to the office and shall have such other powers and duties as may from time to time be prescribed by the Bylaws or by resolution of the Board of Directors. SECTION 5. Vice Presidents. In the absence of the President or in the event of the death, inability or refusal to act, or in the event for any reason which shall be impracticable for him to act personally, the Vice President (or if there be more than one then according to the designations made or in the order designated by the Board of Directors, or in the absence of any designation, in the order of their election) shall perform the duties of the President, and when so acting, shall have all of the powers of and be subject to all of the restrictions upon the President. Any Vice President shall perform such other duties and have such powers as are incident to the office of Vice President, or incident to the office of Executive Vice President, Senior Vice President, First Vice President, or other such designated office if any such designations have been made by the Board of Directors, or as may be prescribed from time to time by the Board of Directors or the President. SECTION 6. Secretary. The Board of Directors shall appoint a secretary, cashier or other designated officer who shall be secretary of the Board of Directors and of the Association and shall 7 15 keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these Bylaws; shall be the custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall have and may exercise any and all of the powers and duties pertaining by law, regulation or practice, to the office of cashier, as defined by the Comptroller of the Currency or imposed by these Bylaws; and shall also perform such other duties as may be assigned from time to time by the Board of Directors. SECTION 7. Other Officers and Assistant Officers. There shall be such number of other officers and assistant officers as the Board of Directors may from time to time authorize and elect. They shall perform such duties and have such authority as shall from time to time be delegated or assigned to them by the President or the Board of Directors. Other officers and assistant officers below the level of Assistant Vice President shall bear functional titles descriptive of their area of responsibility, but shall be deemed to be Assistant Cashiers for purposes prescribed by statute, supervisory regulations, and appropriate resolutions of the Board of Directors. SECTION 8. Term of Office. Each Officer shall hold office for the term of one year, and until his or her successor shall have been duly elected, or until his or her death, or until he or she shall resign, or shall have been removed by the Board of Directors. SECTION 9. Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Association will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment shall not of itself create contract rights. SECTION 10. Vacancies. A Vacancy in any office because of death, resignation, removal, disqualification or otherwise, shall be filled by the Board of Directors for the unexpired portion of the term or left vacant. 8 16 ARTICLE V FIDUCIARY ACTIVITIES SECTION 1. Trust Officer. There shall be a trust officer of this Association whose duties shall be to manage, supervise, and direct all fiduciary activities. Such person shall do or cause to be done all things necessary or proper in carrying on the fiduciary business of the Association according to provisions of law and applicable regulations; and shall act pursuant to opinion of counsel where such opinion is deemed necessary. Opinions of counsel shall be retained on file in connection with all important matters pertaining to fiduciary activities. The trust officer shall be responsible for all assets and documents held by the Association in connection with fiduciary matters. The Board of Directors may appoint other trust officers as it may deem necessary, with such duties as may be assigned. SECTION 2. Trust Investment Committee. There shall be a Trust Investment Committee of this Association composed of three (3) or more members, who shall be capable and experienced officers or Directors of the Association. All investments of funds held in a fiduciary capacity shall be made, retained or disposed of only with the approval of the Trust Investment Committee, and the Committee shall keep minutes of all its meetings, showing the disposition of all matters considered and passed upon by it. The committee shall, promptly after the acceptance of an account for which the Association has investment responsibilities, review the assets thereof, to determine the advisability of retaining or disposing of such assets. The committee shall conduct a similar review at least once during each calendar year thereafter and within fifteen months of the last such review. A report of all such reviews, together with the action taken as a result thereof, shall be noted in the minutes of the committee. SECTION 3. Trust Audit Committee. The Board of Directors shall appoint a committee of Directors, exclusive of any active officer of the Association, which shall, at least once during each calendar year and within fifteen (15) months of the last such audit make suitable audits of the Association's fiduciary activities or cause suitable audits to be made by auditors responsible only to the Board of Directors, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles. SECTION 4. Fiduciary Files. There shall be maintained by the Association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. SECTION 5. Trust Investments. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and local law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under local law. 9 17 ARTICLE VI S E A L The Board of Directors is empowered and instructed to adopt and procure for the Association an official seal. An impression of the seal shall be placed in the space immediately following this section. The Secretary of the Association Shall have custody of the seal. SEAL 10 18 ARTICLE VII AMENDMENTS These Bylaws may be added to, amended, altered or repealed at any regular meeting or special meeting called for that purpose of the Board of Directors, by a vote of a majority of the total number of the directors. The Shareholders may amend or repeal the Bylaws even though the Bylaws may also be amended or repealed by the Board of Directors. 11 19 ARTICLE VIII EMERGENCY OPERATIONS SECTION 1. General. In the event of an emergency declared by the President of the United States, the Governor of this State or an official in authority of this City or the persons performing their functions, and/or the area in which the Association is situated is declared to be a disaster area and/or, by reason of the occurrence of a disaster whereby the operations of the Association cannot be immediately continued at its banking quarters or by its duly elected Officers and other personnel, then the Officers and employees of the Association will continue to conduct the affairs of the Association under such guidance from the Directors as may be available except as to matters which by statute require specific approval of the Board of Directors and subject to conformance with any law, including 12 U.S.C. Section 95, and governmental directives during the emergency, and the following sections of these Bylaws shall be in full force and effect and shall prevail over other sections of these Bylaws to the contrary. SECTION 2. Meetings and Quorums. A valid Special Shareholders' Meeting may be held on call by the President, the Acting President, any Director of this Association or by an officer of Marshall & Ilsley Corporation on three (3) hours notice of the time and place of such meeting to each Shareholder by telegraph or telephone to the last known address of such Shareholder or in person and any Corporation action may be taken at such meeting at which the majority of the issued and outstanding shares of the Association, represented in person or by proxy, shall be present. In the event of failure of communications a valid Special Shareholders' meeting may be held without call or notice by a Shareholder or Shareholders owning a majority of the issued and outstanding shares of the Association represented in person or by proxy at a time and place to be determined by agreement of such Shareholders. A valid Special Directors' Meeting may be held on call by the President, the Acting President, or any Director of this Association or by an officer of Marshall & Ilsley Corporation on three (3) hours notice of the time and place of such meeting to each Director by telegraph or telephone to the last known address of such Director or in person and three (3) or more duly elected and qualified Directors and/or "temporary" Directors shall constitute a quorum for such meeting. In the event of failure of communications a valid Special Directors' Meeting may be held without call or notice by three (3) or more duly elected and qualified Directors and/or "temporary" Directors at a time and place to be determined by agreement among them. SECTION 3. Executive Committee. In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Association by its Directors and Officers as contemplated by these Bylaws, any two or more available members of the Executive committee, if any, shall constitute a quorum of that committee for the full conduct and management of the affairs and business of the Association. If there is no Executive Committee or if a minimum of two members of the Executive Committee are not available, any three or more Directors shall constitute an executive committee for the full conduct and management of the affairs and business of the Association during the period of the emergency. Normal functions of the Board of Directors and Officers of the Association as provided in the Bylaws shall be resumed when the emergency 12 20 period has ceased. SECTION 4. Disability of Officers. The Board of Directors shall have the power, in the absence or disability of any Officer, or upon refusal of any officer to act, to delegate and prescribe such Officer's powers and duties to any other Officer, or to any Director, for the time being. This Section may be implemented by an advance resolution adopted by the Board of Directors designating order of succession among the Officers to be effective automatically in the period of emergency when one or more Officers may be unable to perform normal executive duties. SECTION 5. Offices. The offices of the Association at which its business shall be conducted shall be the main office or any other legally authorized location which may be leased or acquired by the Association to carry on its business. During an emergency resulting in any authorized place of business of the Association being unable to function, the business ordinarily conducted at such location shall be relocated elsewhere in suitable quarters, in lieu of the locations heretofore mentioned, as may be designated by the Board of Directors or by the Executive Committee, by virtue of the authority as may be granted or by approval of the Comptroller of the Currency, for the purpose of facilitating continuance of the business of banking during the period of the emergency. Any temporarily relocated place of business of the Association shall be returned to its legally authorized location as soon as practicable and such temporary place of business shall then be discontinued. 13 21 ARTICLE VIII CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. Certificates for Shares. Certificates representing shares of the Association shall be in such form, consistent with law, as shall be determined by the Board of Directors. Such certificates shall be signed by the President or a Vice President, and the Secretary. The name and address of the person to whom the shares represented thereby are issued with the number of shares and date of issue, shall be entered on the stock transfer books of the Association. All certificates surrendered to the Association for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled except as provided in Section 3 of this Article IX. SECTION 2. Transfer of Shares. Prior to due presentment of a certificate for shares for registration of transfer, the Association may treat the registered owner of such shares as the person exclusively entitled to vote, to receive notifications and otherwise to exercise all the rights and power of an owner. Where a certificate for shares is presented to the Association with a request to register for transfer, the Association shall not be liable to the owner or any other person suffering loss as a result of such registration of transfer if (a) there were on or with the certificate the necessary endorsements, and (b) the Association had no duty to inquire into adverse claims or has discharged any such duty. The Association may require reasonable assurance that said endorsements are genuine and effective and compliance with such other regulations as may be prescribed under the authority of the Board of Directors. SECTION 3. Lost, Destroyed or Stolen Certificates. Where the owner claims that a certificate for shares has been lost, destroyed or wrongfully taken, a new certificate shall be issued in place thereof if the owner (a) so requests before the Association has notice that such shares have been acquired by a bona fide purchaser, and (b) satisfies such reasonable requirements as the Board of Directors may prescribe which may include furnishing an indemnification agreement or an indemnity bond. SECTION 4. Stock Regulations. The Board of Directors shall have the power and authority to make all such further rules and regulations not inconsistent with the law or regulations and rulings of the comptroller of the Currency as it may deem expedient concerning the issue, transfer, and registration of certificates representing shares of the Association. 14 22 I, Roger T. Stephenson, Certify that: (1) I am the duly constituted Secretary of M&I First National Bank, West Bend, and of its Board of Directors, and as such officer, am the official custodian of its records; and (2) the foregoing Bylaws, as amended, are the Bylaws of the Association, and all of them are now lawfully in force and effect. I have hereunto affixed my official signature and the Seal of the Association, in the City of West Bend, on this 5th day of February, 1996. S E A L ________________________________ Roger T. Stephenson, Secretary 15 23 Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, M&I First National Bank hereby consents, in connection with the qualification of the Indenture of Sundstrand Corporation governing debt securities, that reports of examination of M&I First National Bank by Federal and State authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefore. M&I FIRST NATIONAL BANK By:__________________________________________ R. T. Stephenson, Executive Vice President Dated: February 5, 1996 24 COMPTROLLER OF THE CURRENCY ADMINISTRATOR OF NATIONAL BANKS REPORT OF CONDITION Consolidating domestic subsidiaries of the M&I FIRST NATIONAL BANK OF WEST BEND in the state of Wisconsin, at the close of business on December 31, 1995 published in response to call made by Comptroller of the Currency, under Title 12, United States Code, Section 161. Charter Number 11060, Comptroller of the Currency, 9 District. Statement of Resources and Liabilities Dollar Amounts in Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin 13,823 Interest-Bearing balances 0 Securities (from Schedule RC-B): Held to maturity securities 11,955 Available for sale securities 56,764 14,674 Federal funds sold 500 Securities purchased under agreements to resell Loans and lease financing receivables: Loans and Leases, net of unearned income 162,170 . . . . . . . LESS: Allowance for loan and lease losses 2,444 . . . . . . . LESS: Allocated transfer risk reserve 0 . . . . . . . Loans and leases, net of unearned income, allowance, and reserve 159,726 Assets held in trading accounts 0 Premises and fixed assets (including capitalized leases) 3,633 Other real estate owned 0 Investments in unconsolidated subsidiaries and associated companies 0 Customers' liability to this bank on acceptances outstanding 20 Intangible assets 159 Other assets 2,834 Total assets 264,088
(FDIC 8040/54B 3/90) Continued 25 COMPTROLLER OF THE CURRENCY ADMINISTRATOR OF NATIONAL BANKS M&I FIRST NATIONAL BANK REPORT OF CONDITION (Continued) Dollar Amounts in Thousands LIABILITIES Deposits: In domestic offices 234,717 Noninterest-bearing 57,078 . . . . . . . Interest-bearing 177,639 . . . . . . . Federal funds purchased 0 Securities sold under agreements to repurchase 5,400 Demand notes issued to the U.S. Treasury 0 Trading Liabilities 0 Other borrowed money: With original maturity of one year or less 0 With original maturity of more than one year 0 Mortgage indebtedness and obligations under capitalized leases 0 Bank's liability on acceptances executed and outstanding 20 Subordinated notes and debentures 0 Other liabilities 2,722 Total liabilities 242,859 Limited-Life preferred stock and related surplus 0 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock 5,250 Surplus 5,194 Undivided profits and capital reserves 9,958 Net unrealized holding gains (losses) on available for sale securities 827 Total equity capital 21,229 Total liabilities, limited-life preferred stock, and equity capital 264,088
I, OSCAR W. STEELE SR. VICE PRESIDENT & CASHIER of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. _______________________________________________ Signature _______________________________________________ Date (FDIC 8040/54B) (PAGE 2) PRINTER COPY -----END PRIVACY-ENHANCED MESSAGE-----