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EXHIBIT (4c)
EXECUTION COPY
ISSUING AND PAYING AGENCY AGREEMENT
THIS AGREEMENT, dated as of February 1, 1990 by and between BRUSH
WELLMAN INC., an Ohio corporation, (the "Company") and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation (the "Issuing and Paying
Agent"), in connection with the issuance and payment of the Notes referred to in
this Agreement.
W I T N E S S E T H :
SECTION 1
Appointment of Paying Agent
The Company hereby designates the Issuing and Paying Agent as
depository for the safekeeping of its Notes deposited with the Issuing and
Paying Agent by the Company, and to act as agent of the Company in respect to
the preparation, delivery and payment of such Notes. Attached hereto as Exhibit
A is a copy of the corporate resolutions of the Company authorizing this
Agreement.
SECTION 2
Issuance of Notes
The Company proposes to issue and sell, from time to time, Medium-Term
Notes (the "Notes") having maturities of 9 months to 30 years from their dates
of issue as selected by
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the purchaser and agreed to by the Company up to an aggregate principal amount
outstanding of $75,000,000. The Company has appointed Shearson Lehman Hutton
Inc. and McDonald & Company Securities, Inc. its agents for offering such Notes
(the "Agents").
SECTION 3
Description of Notes
Each Note will be signed manually by any two officers of the Company
who shall be any two of the chief financial officer, any assistant treasurer and
any other officer of the Company designated in writing by the chief financial
officer of the Company to the Issuing and Paying Agent (an "Authorized
Representative"). The Notes shall be substantially in the forms set forth in
Exhibit B hereto and shall have a maturity of not less than 9 months from date
of issue and not more than 30 years from date of issue, and shall be issued in
denominations of $500,000.00 and larger denominations in integral multiples of
$1,000.
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SECTION 4
Completion, Authentication and Delivery of Notes
a. The procedures for completion, authorization, delivery and settlement of
the Notes will be as set forth herein and in the Administrative Procedures
attached as Exhibit C hereto.
b. From time to time, the Issuing and Paying Agent shall receive instructions
by telecopy (or other acceptable written means) from an Authorized
Representative regarding the completion and delivery of some, or all of
the Notes. Such instructions shall include:
(i) the name of the person in whose name a Note is to be registered (such
person shall be sometimes hereinafter referred to as the "Registered
Owner");
(ii) the address of the Registered Owner;
(iii) the address of the Registered Owner for interest payments, if
different from (ii) above;
(iv) the taxpayer identification number of the Registered Owner;
(v) the principal amount of such Note;
(vi) the interest rate to be borne by such Note;
(vii) the date of maturity of such Note;
(viii) the issue date ("Settlement Date") of such Note;
and
(ix) delivery instructions.
At such time the Company shall also deliver to the Issuing and Paying Agent
Notes complying with such instructions executed by any two Authorized
Representatives.
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c. Upon receipt of such instructions, the Issuing and
Paying Agent shall:
(i) cause each Note to be manually authenticated by any
one of the officers of the Issuing and Paying Agent
duly authorized for such purpose; and
(ii) deliver each Note to the presenting Agent or its designee, which
delivery shall be against a signed, time stamped receipt on the
Settlement Date as herein provided or as otherwise provided in such
instructions.
d. Instructions regarding the Note and the completed Note must be received by
the Issuing and Paying Agent not later than 3:00 p.m., New York City time,
on the business day next preceding the date on which delivery for the Note
is to occur.
SECTION 5
Delivery of the Notes
The Issuing and Paying Agent shall deliver Notes to the Agent or its
designees only against a signed, time stamped receipt. A Note shall be deemed to
have been delivered if the Issuing and Paying Agent delivers such Note to the
presenting Agent and receives such Agent's signed, timed stamped receipt for the
delivery. Once the Issuing and Paying Agent has delivered a Note to an Agent
against receipt, the Company shall bear the risk that such Agent fails to remit
payment therefor or return same to the Issuing and Paying Agent.
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SECTION 6
Calculation and Payment of Interest
Interest payments on each Note will be made on the date specified in
each Note and at maturity or redemption to the Registered Owner thereof.
The procedures to be followed by each party hereto are set forth
below:
a. The Issuing and Paying Agent shall arithmetically determine the amount
of interest due on each outstanding Note on each Interest Payment Date
as set forth herein and shall notify the Company at least five days
prior to any Interest Payment Date of the amount of interest payable
on each of said Notes and the total amount of interest payable.
b. The Company shall remit funds to the Issuing and Paying Agent in an
amount sufficient to pay all interest due on the Notes in the manner
hereinafter set forth in Section 8 hereof.
c. Interest payments on each Note shall be made on each February 1 and
August 1 and at maturity (each an "Interest Payment Date"), commencing
with the Interest Payment Date next following the date of such Note;
provided, however, that if any Note is dated between the Record Date
(as hereinafter defined) next preceding an Interest Payment Date and
such Interest Payment Date, the first payment of interest on such Note
will be the next succeeding Interest Payment Date. Whenever any
payment to be made under a Note is stated to be due on a date on which
banks are not open for business in New York, New York, such payment
shall be made on the next succeeding day on which banks are open for
business in New York, New York. Interest on each Note will accrue from
its original issue date as it appears on such Note or from the most
recent Interest Payment Date to which interest has been paid. Interest
(including payments for partial periods) will be calculated on the
basis of a 360- day year of twelve 30-day months. All interest
payments on any Note (other than interest due at maturity or upon
redemption on a date other than an Interest Payment Date) will be
payable by check of the Issuing and Paying Agent mailed on the
Interest Payment Date to the person in whose name the Note is
registered at the close of business on January
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15 or July 15 as applicable, next preceding such February 1 or August
1 (the "Record Date") at such holder's address as shown in the
register referred to in Section 9, or at such other place in the
United States as such holder shall designate to the Issuing and Paying
Agent from time to time in writing; provided, however, that upon the
written request of a registered holder of Notes of any series in an
aggregate principal amount exceeding $1,000,000 received by the
Issuing and Paying Agent prior to the Record Date for the applicable
Interest Payment Date, payment of interest shall be made by wire
transfer in immediately available funds into an account specified by
such registered holder. Interest payable at maturity or early
redemption, however, will be payable to the person to whom principal
shall be payable. If the Issuing and Paying Agent mails or sends by
wire transfer the interest payable on any Note to any address or
account other than the one required hereunder, the Issuing and Paying
Agent shall indemnify the Company from any loss, liability or expense
arising therefrom.
d. The Issuing and Paying Agent shall, at the expense of the Company, be
responsible for withholding taxes, if any, on interest only to the
extent that the Issuing and Paying Agent has been instructed by the
Company or any governmental agency that any taxes should be withheld.
The Issuing and Paying Agent shall, at the expense of the Company,
solicit from Registered Owners information or other reports or returns
necessary or required by law or regulation in connection with any
federal or state requirements to report information or withhold for
taxes.
SECTION 7
Payment of Principal
Subject to receipt of funds as provided in Section 8 hereof and upon
presentation of an appropriate Note, payment of principal and interest due at
maturity or upon redemption for each Note will be made upon surrender of such
Note at the office of the Issuing and Paying Agent located at 30 West Broadway,
New York, New York 10015 (or at such other location as the Company shall have
previously notified the
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registered holder of such Note) in immediately available funds. The Issuing and
Paying Agent will mark the Note "CANCELLED" and remit it directly to the
Company. Interest will cease to accrue upon a Note after the date on which it is
stated to mature or on which it has been called for redemption (so long as funds
sufficient for the payment thereof have been deposited with the Issuing and
Paying Agent).
The Issuing and Paying Agent shall provide the Company by the 15th
of each month with a list of the principal and interest to be paid on Notes
maturing or being redeemed in the next succeeding month. At the request of the
Company, the Issuing and Paying Agent shall render to the Company semi-annual
and annual statements (or more frequently at the reasonable request of the
Company) of receipt and disbursement of the funds received by the Issuing and
Paying Agent.
SECTION 8
Deposit of Funds
The Company shall, on or prior to each Interest Payment Date, pay to
the Issuing and Paying Agent an amount in immediately available funds sufficient
to pay all interest due on outstanding Notes on such Interest Payment Date and
shall, on or prior to each maturity or redemption date of any Note, pay to the
Issuing and Paying Agent an amount in immediately available funds sufficient to
pay the principal
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of any such Note and interest accruing thereon to the maturity date or
redemption date.
Defeasance
At the Company's option, the Company shall be deemed to have been
discharged from its obligations with respect to the Notes upon satisfaction of
the applicable conditions set forth below:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Issuing and Paying Agent as trust funds in trust,
specifically pledged as security for, and dedicated solely to the benefit of the
holders of the Notes (i) money in an amount, or (ii) U.S. Government Obligations
(as defined below) which through the payment of interest and principal in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Issuing and Paying Agent, to pay and
discharge each installment of principal of and premium, if any, and interest on,
the outstanding Notes on such dates that such installments of interest or
principal and premium are due;
(2) such deposit will not result in a breach or violation of or
constitute a default under this Agreement or any other agreement or instrument
to which the Company is a party or by which it is bound;
(3) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with respect
to the Notes shall have occurred and be continuing on the date of such deposit
and no Event of Default under Section 18 (1) (e) or Section 18 (1) (f) shall
have occurred and be continuing on the 91st day after such date; and
(4) the Company shall have delivered to the Issuing and Paying Agent
an opinion of counsel to the effect that the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or similar IRS
pronouncement or that there has been a change in law in either case with the
result that the holders of the Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance or
discharge.
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"U.S. Government Obligations" means (i) direct obligations of the
United States for which its full faith and credit are pledged for the full and
timely payment thereof, (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States, the full and
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States, or (iii) certificates or receipts representing
direct ownership interests in obligations or specified portions (such as
principal or interest) of obligations described in (i) or (ii), which
obligations are held by a custodian in safekeeping on behalf of such
certificates or receipts.
SECTION 9
Registration; Transfer
a. The Issuing and Paying Agent shall maintain a register in which it shall
register the names, addresses and taxpayer identification numbers of the
holders of the Notes and shall register the transfer of Notes. Such
register shall be open to the Company for inspection and copying upon
request.
b. A Note may be transferred only by surrender of the Note for registration
of transfer at the office of the Issuing and Paying Agent referred to
below (or at such other location as the Company shall have previously
notified the registered holder of the Note), duly endorsed or accompanied
by a written instrument of
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transfer in form satisfactory to the Issuing and Payment Agent duly
executed by the registered holder, and thereafter a new Note in the same
principal amount will be issued to the designated transferee. No service
charge shall be made for any such registration of transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. No transfer of any Note shall
be made if such transfer would not comply with the restrictions on
transfer contained in such Note.
c. Each Note shall bear an original issue date which, with respect to any
Note (or portion hereof), shall remain the same for all Notes subsequently
issued upon transfer, exchange or substitution of such original Note
regardless of the date of issuance of any such subsequently issued Note.
d. Each Note is exchangeable for a like aggregate principal amount of Notes
of a different authorized denominations, each with a minimum denomination
of $500,000 and larger denominations in integral multiples of $1000, as
requested by the Holder surrendering the same at the Issuing and Payment
Agent's offices.
SECTION 10
Persons Deemed Owners
Prior to due presentment of a Note for registration of transfer, the
Company, and any agent of the Company may treat the person in whose name such
Note is registered as the
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owner of such Note for the purpose of receiving payments of principal and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and neither the Company, nor the Issuing and Payment
Agent (nor any agent of the Company) shall be affected by notice to the
contrary.
SECTION 11
Mutilated, Lost, Stolen or Destroyed Notes
In case any Note shall become mutilated or destroyed, lost or stolen,
the Company shall execute and upon its request the Issuing and Payment Agent
shall authenticate and deliver, a new Note of like tenor and principal amount
having a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note or in lieu of and substitution for the Note destroyed,
lost or stolen. In every case the applicant for a substituted Note shall furnish
to the Company and to the Issuing and Payment Agent such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
to the Issuing and Payment Agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof. The
Issuing and Payment Agent may authenticate any such substituted Note and deliver
the same upon the written request or authorization of an officer of the Company.
Upon the issuance of any substituted Note, the Company may require the holder
thereof to pay a sum
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sufficient to cover any expense connected therewith. In case any Note which has
matured or has been redeemed or is about to mature or to be redeemed shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Note, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Note if the applicant for
such payment shall furnish the Issuing and Paying Agent with such mutilated
Note) if the applicant for such payment shall furnish the Company and the
Issuing and Payment Agent with such security or indemnity as may be required by
them to save each of them harmless, and, in the case of destruction, loss or
theft, evidence to the satisfaction of the Company of the destruction, loss or
theft of such Note and of the ownership thereof. All applications under this
Section shall be processed by the Issuing and Paying Agent.
SECTION 12
Return of Unclaimed Funds
Any money deposited with the Issuing and Paying Agent and remaining
unclaimed for two years after the date upon which the last payment of principal
or interest on any Note to which such deposit relates shall have become due and
payable, shall be repaid to the Company by the Issuing and Paying Agent on
demand, and the holder of any Note to which such deposit is related who is
entitled to receive payment shall thereafter look only to the Company for the
payment
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thereof and all liability of the Issuing and Paying Agent with respect to such
money shall thereupon cease.
The Issuing and Paying Agent shall not invest any money deposited by
the Company with the Issuing and Paying Agent.
SECTION 13
Resignation or Removal of Paying Agent
The Issuing and Paying Agent may at any time resign from its duties
hereunder by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than sixty days after the
giving of such notice to the Company. The Issuing and Paying Agent may be
removed at any time by the filing with it of an instrument in writing signed on
behalf of the Company and specifying such removal and the date when it is
intended to become effective. Upon such resignation or removal, the Issuing and
Paying Agent shall transfer to the successor Issuing and Paying Agent all moneys
held by it hereunder and unissued Notes. If such successor agent has not been
appointed by that time, the Issuing and Paying Agent shall hold such money and
any unissued Notes until such successor Issuing and Paying Agent is appointed
but that shall be the sole surviving responsibility of the Issuing and Paying
Agent under this Agreement. Any termination or resignation hereunder shall not
affect the Issuing and Paying Agent's rights to the payment of fees
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earned or charges incurred through the effective date of such resignation or
termination, as the case may be.
Until the principal of, and interest on, the Notes shall have been
paid in full to the Registered Owners thereof, the Company shall take the
necessary action so that there shall at all times be an Issuing and Paying Agent
having offices in New York City. In case the Issuing and Paying Agent shall
resign or be removed, the Company shall appoint a successor Issuing and Paying
Agent, effective as of the date of such resignation or removal, which successor
Issuing and Paying Agent shall be a bank or trust company organized and doing
business under the laws of any state or the United States of America, authorized
under applicable laws to exercise corporate trust powers, and having a combined
capital and surplus of at least $50,000,000 as of its most recent fiscal year
end.
SECTION 14
Reliance on Instructions; Opinion of Counsel
Telephone instructions given by an Authorized Representative to the
Issuing and Paying Agent will be electronically voice-recorded by the Issuing
and Paying Agent and the Company hereby consents to such recording. Should any
discrepancy develop with respect to such telephone instructions, the
instructions as repeated by the Issuing and Paying Agent will be deemed the
controlling and proper instructions. The Issuing and Paying Agent shall incur no
liability to the Company in acting hereunder upon telephonic
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or other instructions contemplated hereby which the recipient thereof believed
in good faith to have been given by an Authorized Representative. Should the
Issuing and Paying Agent at any time request or receive an opinion of its
counsel (which includes in-house counsel) concerning its duties hereunder, it
shall be free to rely in good faith upon the advice contained in such opinion
and shall be relieved of any liability under this Agreement in so relying.
SECTION 15
Cancellation of Unissued Notes
Promptly upon the written request of the Company, the Issuing and
Paying Agent shall cancel and return to the Company all unissued Notes in its
possession.
SECTION 16
Representation and Warranties of the Company
Each instruction given to the Issuing and Paying Agent in accordance
with Section 4 hereof with respect to any Note shall constitute a representation
and warranty to the Issuing and Paying Agent by the Company that the issuance
and delivery of such Note have been duly and validly authorized by the Company
and that once completed, authenticated, delivered and paid for pursuant hereto,
the Notes will constitute the valid and legally binding obligations of the
Company. The Company further warrants that it is free to enter into this
Agreement and to perform the terms hereof.
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SECTION 17
Maintenance of Corporate Existence
The Company covenants, for benefit of the Registered Owners from time
to time of the Notes, that it will maintain its corporate existence, will not
dissolve or otherwise dispose of all or substantially all of its assets and will
not consolidate with or merge into another corporation or permit one or more
corporations to consolidate with or merge into it, except that the Company may
(i) sell or otherwise transfer all or substantially all of its assets to, or
consolidate with or merge into, another corporation, or (ii) permit one or more
corporations or any other organizations to consolidate with or merge into it, or
(iii) acquire all or substantially all of the assets of one or more corporations
or any other organization; provided, that (a) the surviving, resulting or
transferee corporation, as the case may be, is incorporated under the laws of
the United States of America or any state thereof and assumes in writing all of
the obligations of and restrictions on the Company hereunder and under the
Notes, and (b) after giving effect to such sale, transfer, consolidation or
merger, no Event of Default (as defined in Section 18) or event which, with the
giving of notice, the passage of time or both would constitute an Event of
Default, shall have occurred and be continuing.
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Limitation Upon Mortgages and Liens
The Company will not at any time directly or indirectly create or
assume and will not cause or permit any Subsidiary directly or indirectly to
create or assume, otherwise than in favor of the Company or any Subsidiary, any
mortgage, pledge or other lien or encumbrance upon any receivable or other asset
or any interest it may have therein or of or upon any stock of any Subsidiary,
whether now owned or hereafter acquired, without making effective provision (and
the Company covenants that in such case it will make or cause to be made
effective provision) whereby the Notes and any other indebtedness of the Company
then entitled thereto shall be secured by such mortgage, pledge, lien or
encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so as any such other obligations and indebtedness
shall be so secured,; provided, however, that the foregoing covenant shall not
be applicable to the following:
(a) (i) any mortgage, pledge, inventory consignment or other lien or
encumbrance on any receivable or other asset hereafter acquired or constructed
by the Company or a Subsidiary, or any property on which any asset so
constructed is located, and created prior to, contemporaneously with or within
180 days after, such acquisition or construction or the commencement of
commercial operation of such asset to secure or provide for the payment of any
part of the purchase price of such receivable or other asset or construction
cost
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of such asset, or (ii) the acquisition by the Company or a Subsidiary of any
receivable or other asset subject to any mortgage, pledge, or other lien or
encumbrance upon such receivable or other asset, (iii) any mortgage, pledge or
other lien or encumbrance on any receivable or asset owned by any corporation or
other entity which existed on or prior to the date such corporation or entity
was acquired by the Company, or (iv) any conditional sales agreement or other
title retention or security agreement with respect to any receivable or other
asset hereafter acquired or any asset hereafter constructed; provided that the
lien of any such mortgage, pledge or other lien does not spread to any
receivable or other asset owned prior to such acquisition or construction or to
any receivable or other asset thereafter acquired or constructed other than
additions or substitutions to such acquired or constructed receivable or other
asset and other than property on which any asset so constructed is located, and
provided, further, that if a firm commitment from a bank, insurance company or
other lender or investor (not including the Company, a Subsidiary or an
affiliate of the Company) for the financing of the acquisition or construction
of any asset is made prior to, contemporaneously with or within the 180 day
period hereinabove referred to, the applicable mortgage, pledge, lien or
encumbrance shall be deemed to be permitted by this subsection (a) whether or
not created or assumed within such period;
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(b) any mortgage pledge or other lien or encumbrance created for the
sole purpose of extending, renewing or refunding any mortgage, pledge, lien or
encumbrance permitted by subsection (a) of this Section; provided, however, that
the principal amount of indebtedness secured thereby shall not exceed the
principal amount of indebtedness so secured at the time of such extension,
renewal or refunding and that such extension, renewal or refunding mortgage,
pledge, lien or encumbrance shall be limited to all or any part of the same
receivable or other asset that secured the mortgage, pledge or other lien or
encumbrance extended, renewed or refunded;
(c) liens for taxes or other assessments or governmental charges or
levies not then due and delinquent or the validity of which is being contested
in good faith and, in the latter case, against which an adequate reserve has
been established; pledges or deposits to secure public or statutory obligations
or to secure performance in connection with bids or contracts; materialmen's,
mechanics', carrier's, workmen's, repairmen's or other like liens, or deposits
to obtain the release of such liens; deposits to secure surety, stay, appeal or
custom bonds; liens created by or resulting from any litigation or legal
proceeding which is currently being contested in good faith by appropriate
proceedings; licenses or leases or patents, trademarks or trade names; leases
and liens, rights of reverter and other possessory rights of the lessor
thereunder; zoning
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restrictions, easements, right-of-way or other restrictions on the use of real
property or minor irregularities in the title thereto; and any other liens and
encumbrances similar to those described in this subsection, the existence of
which does not, in the opinion of the Company, materially impair the use by the
Company or a Subsidiary of the affected receivable or other asset in the
operation of the business of the Company or a Subsidiary, or the value of such
receivable or other asset for the purposes of such business;
(d) any mortgage, pledge or other lien or encumbrance on any
receivable or other asset leased to or purchased by the Company or a Subsidiary
securing, directly or indirectly, obligations issued by a State, a territory or
a possession of the United States, or any political subdivision of any of the
foregoing, or the District of Columbia, to finance the cost of acquisition or
cost of construction of such receivable or other asset, provided that the
interest paid on such obligations is entitled to be excluded from gross income
of the recipient pursuant to Section 103(a)(1) of the Internal Revenue Code of
1986, as amended, and as in effect of the date hereof (or any successor to such
provision as in effect at the time of the issuance of such obligations);
(e) any mortgage, pledge or other lien or encumbrance not otherwise
permitted under this Section, provided, however, the aggregate amount of
indebtedness secured by all such mortgages, pledges, liens or
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encumbrances, together with the aggregate sale price of receivables and other
assets involved in sale and leaseback transactions not otherwise permitted
except under subsection (a) of Limitations Upon Sale and Leaseback Transactions
does not exceed $25,000,000;
(f) any consignment arrangement, mortgage, pledge or other lien or
encumbrance upon or relating only to Precious Metals used or usable by the
Company or any Subsidiary in its business (as used herein, the term "Precious
Metals" shall include gold, silver, platinum and palladium, but shall not
include beryllium); and
(g) any pledge or other lien or encumbrance upon any receivable of
any Subsidiary, the domicile of which is not located in the United States, which
was created in connection with a factoring or similar arrangement.
Limitations Upon Sale and Leaseback Transactions.
The Company will not, and will not permit any Subsidiary to, sell or
transfer (except to the Company or one or more Subsidiaries, or both) any
receivable or other asset owned by it with the intention of taking back a lease
of such receivable or other asset other than a lease for a temporary period (not
exceeding 36 months) with the intent that the use by the Company or such
Subsidiary of such receivable or other asset will be discontinued on or before
the expiration of such period unless either:
(a) the sum of the aggregate sale price of receivables and other
assets involved in sale and leaseback
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transactions not otherwise permitted under this Section plus the aggregate
amount of indebtedness secured by all mortgages, pledges, liens and encumbrances
not otherwise permitted except under subsection (e) of Limitation upon Mortgages
and Liens does not exceed $25,000,000; or
(b) the Company within 120 days after the sale or transfer shall have
been made by the Company or by any such Subsidiary applies an amount equal to
the greater of (i) the net proceeds of the sale of the receivable or other asset
sold and leased back pursuant to such arrangement or (ii) the fair market value
of the receivable or other asset sold and leased back at the time of entering
into such arrangement (which may be conclusively determined by the directors of
the Company) to the retirement of the Notes or other indebtedness maturing more
than one year, or extendible at the option of the obligor to a date more than
one year after the date of determination thereof ("Funded Debt"') of the Company
ranking on a parity with the Notes; provided, however, that the amount required
to be applied to the retirement of outstanding Notes or other Funded Debt of the
Company pursuant to this clause (b) shall be reduced by (1) the principal amount
of any Notes delivered within 120 days after such sale to the Issuing and Paying
Agent for retirement and cancellation, and (2) the principal amount of any other
Funded Debt of the Company ranking on a parity with the Notes voluntarily
retired by the Company within 120 days after such sale, whether or not any such
retirement of Funded Debt shall
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be specified as being made pursuant to this clause (b). Notwithstanding the
foregoing, no retirement referred to in this clause (b) may be effected by
payment at maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision;
(c) the net proceeds of the sale of the property leased pursuant to
such arrangement are applied to the purchase of properties, facilities or
equipment to be used for general operating purposes; or
(d) such transaction was effected in conjunction with the issuance of
bonds or notes the interest on which is excluded from gross income pursuant to
Section 103(a)(1) of the Internal Revenue Code of 1986, as amended, and as in
effect on the date hereof (or any successor to such provision as in effect at
the time of the issuance of such obligations).
For purposes of the foregoing, "Subsidiary" means a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
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SECTION 18
1. Events of Default. The occurrence of any of the following events
shall constitute an Event of Default with respect to the Notes:
a. a default in the timely payment of any principal due on any Note,
either at maturity, upon any redemption, by declaration or otherwise;
b. a default for thirty days in the payment of any interest due on
any Note;
c. the Company shall default in the due and punctual performance of
any other covenant contained herein or in the Notes and such default
continues for thirty days after written notice requiring the same to be
remedied shall have been given to the Company by the Holder of any Note;
provided that if such default is correctable but cannot be corrected within
such thirty day period, it shall not constitute an Event of Default if (i)
corrective action is instituted by the Company within such period and is
diligently pursued until the default is corrected and (ii) such default is
corrected within 180 days;
d. (i) the Company shall fail to pay any portion of principal of or
interest on any indebtedness for borrowed money of the Company having a
principal amount in excess of $5,000,000 (other than the Notes) when due
and payable (after giving effect to any applicable grace period) and such
failure shall continue for a period of
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five days after written notice thereof to the Company by the holder of any Note,
or (ii) any other event shall occur (other than by reason of prepayment of such
indebtedness at the option of the Company) or condition shall exist and the
effect of such other event or condition is to cause indebtedness for borrowed
money having a principal amount of $5,000,000 of the Company to become due prior
to its stated maturity and such indebtedness for borrowed money is not
discharged or such acceleration is not otherwise cured, waived, rescinded or
annulled for a period of thirty days after written notice thereof to the Company
by the holder of any Note;
e. the Company shall:
(A) admit in writing its inability to pay its debts generally
as they become due, or
(B) file a petition to be adjudicated a voluntary bankrupt in
bankruptcy or a petition to otherwise take advantage of any State or
Federal bankruptcy or insolvency law, or
(C) make an assignment for the benefit of its creditors or seek
a composition with its creditors, or
(D) consent to the appointment of a receiver of itself, or its
fees or charges, or of all or any substantial part of its property;
f. the Company shall, upon an involuntary petition under any section or
chapter of the Federal bankruptcy laws filed against it, be adjudicated a
bankrupt or a court of competent jurisdiction shall
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enter an order or decree (which order or decree shall continue unstayed and
in effect for a period of 60 consecutive days) appointing a trustee or
receiver (interim or permanent) or appointing the Company a
debtor-in-possession, with or without its consent, or approving a petition
filed against it seeking its reorganization or arrangement under the
Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state thereof; or
g. a final judgment for the payment of money in excess of $5,000,000
shall be rendered against the Company and at any time after forty-five days
from the entry thereof, (A) such judgment shall not have been discharged,
or (B) the Company shall not have taken and be diligently prosecuting an
appeal therefrom or from the order, decree or process upon which or
pursuant to which such judgment shall have been granted or entered, and
shall not have caused, within forty-five days, the execution of or levy
under such judgment, order, decree or process or the enforcement thereof to
have been stayed pending determination of such appeal.
2. Acceleration of Maturity; Rescission of Declaration of
Acceleration. If an Event of Default with respect to the Notes occurs and is
continuing, then in every such case, the Holder of any Note then outstanding, by
notice in writing to the Company, may declare the principal of such Note and the
interest accrued thereon to be due and payable
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immediately. Upon any such declaration and notice, such principal amount shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to a
Note has been made and before judgment or decree for payment of the money due
has been obtained, the Holder of such Note may, by written notice to the Company
and the Issuing and Paying Agent, rescind such declaration, and its consequences
shall be rescinded and annulled with respect to such Note if:
a. the Company has paid or deposited with the Issuing and Paying
Agent a sum sufficient to pay:
(i) all overdue interest on all Notes with respect to which an
Event of Default has been declared; and
(ii) the principal of any Notes with respect to which an Event of
Default has been declared which have become due otherwise than by such
declaration of acceleration and the interest accrued thereon;
b. all Events of Default with respect to the Notes with respect to
which an Event of Default has been declared, other than the nonpayment of
the principal of such Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Clause (3) of this Section.
The Issuing and Paying Agent shall, at the request
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of the Company, notify the Registered Owners of the Notes of
such rescission.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
3. Waiver of Past Defaults. A Registered Owner of any Note may
waive any past default hereunder and its consequences with respect to such Note.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Agreement and such Note. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 19
Fees
For its services under this Agreement, the Company shall pay the
Issuing and Paying Agent compensation as shall be mutually agreed upon.
SECTION 20
Notices
Notices and other communications hereunder shall (except to the extent
otherwise expressly provided) be in writing and shall be addressed as follows,
or to such other address as the party receiving such notice shall have
previously specified:
If to the Company:
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BRUSH WELLMAN INC.
1200 Hanna Building
Cleveland, Ohio 44115
Attn: Chief Financial Officer
Telephone: (216) 443-1000
Facsimile: (216) 443-1161
If to the Issuing and Paying Agent:
Morgan Guaranty Trust Company of New York
30 West Broadway
New York, NY 10015
Attn: Corporate Trust Department
Telephone: (212) 587-6028
Facsimile: (212) 693-0534
SECTION 21
Information Furnished by the Issuing and Paying Agent
Upon the reasonable request of the Company, given in writing at any
time and from time to time, the Issuing and Paying Agent shall promptly provide
the Company with information with respect to Notes issued hereunder to the
extent such information is reasonably available.
SECTION 22
Liability
Neither the Issuing and Paying Agent nor its officers or employees
shall be liable to the Company for any act or omission hereunder except in the
case of the Issuing and Paying Agent's gross negligence or willful misconduct or
as described in the last sentence of Section 6 hereof. The duties and
obligations of the Issuing and Paying Agent, its officers and employees shall be
determined by the express provisions of this Agreement, and they shall not be
liable
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except for the performance of such duties and obligations as are specifically
set forth herein and no implied covenants shall be read into this Agreement
against them. Neither the Issuing and Paying Agent nor its officers shall be
required to ascertain whether any issuance or sale of Notes (or any amendment or
termination of this Agreement) is in compliance with any other agreement (other
than this Agreement) to which the Company is a party (whether or not the Issuing
and Paying Agent is also a party to such other agreement).
SECTION 23
Indemnification
The Company agrees to indemnify and hold harmless the Issuing and
Paying Agent, its directors, officers and employees and agents from and against
any and all liabilities, (including liability for penalties), losses, claims,
damages, actions, suits, judgments, demands, costs and expenses (including legal
fees and expenses) relating to or arising out of or in connection with its or
their performance under this Agreement, except to the extent that they are
caused by the gross negligence or willful misconduct of the Issuing and Paying
Agent. The foregoing indemnity includes, but is not limited to, any action taken
or omitted in good faith within the scope of this Agreement upon telephone,
telecopier or other electronically transmitted instructions, if authorized
herein, received from or believed by the Agent in good faith to have been given
by, an Authorized Representative. This indemnity shall survive the
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resignation or removal of the Agent and the satisfaction or termination of this
Agreement.
SECTION 24
Benefit of Agreement
This Agreement is solely for the benefit of the parties hereto and
their successors and assigns and no other person shall acquire or have any
rights under or by virtue hereof.
SECTION 25
Governing Law
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to its principles of
conflict of laws.
SECTION 26
Severability Clause
In case any provision in this Agreement or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 27
Effect of Headings
The Section headings herein are for convenience of reference only and
shall not affect the construction hereof.
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SECTION 28
Amendments Without Consent of the Holders of the Notes
(a) The Company and the Issuing and Paying Agent may from time to time
and at any time enter into an amendment hereof for one or more of the following
purposes:
(1) to make such provision in regard to matters or questions arising
under this Agreement as may be necessary or desirable, and not inconsistent
with this Agreement or prejudicial to the interests of the holders of the
Notes for the purpose of supplying any omission, curing any ambiguity, or
curing, correcting or supplementing any defective or inconsistent
provision;
(2) to change or eliminate any of the provisions of this Agreement,
provided that any such change or elimination shall become effective only
when there is no Note outstanding created prior to the execution of such
amendment which is entitled to the benefit of such provision;
(3) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Notes;
(4) to grant to or confer upon the Issuing and Paying Agent for the
benefit of the holders of the Notes any additional rights, remedies, powers
or authority;
(5) to permit the Issuing and Paying Agent to comply with any duties
imposed upon it by law; and
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(6) to make any other change that is not prejudicial to the Issuing
and Paying Agent or the holders of the Notes, in the judgment of the
Issuing and Paying Agent.
(b) The Issuing and Paying Agent is hereby authorized to join with the
Company in the execution of any such amendments to this Agreement, to make any
further appropriate agreements and stipulations which may be therein contained,
but the Issuing and Paying Agent shall not be obligated to enter into any such
amendment which affects the Issuing and Paying Agent's own rights, duties or
immunities under this Agreement or otherwise.
(c) Any amendment to this Agreement authorized by this Section may be
executed by the Company and the Issuing and Paying Agent without the consent of
the holders of any of the Notes at the time outstanding, notwithstanding any of
the provisions of Section 29.
(d) The Issuing and Paying Agent shall be fully protected in relying
upon any opinion of counsel delivered to and approved by it as conclusive
evidence that (i) any amendment to this Agreement complies with the provisions
of this Agreement and (ii) the Issuing and Paying Agent is authorized to execute
such amendment.
Section 29
Amendments With the Consent of the Holders of the Notes
(a) With the consent of the holders of 66 2/3% in aggregate principal
amount of the Notes at the time
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outstanding, the Company and the Issuing and Paying Agent may from time to time
and at any time enter into an amendment to this Agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
holders of the Notes; provided, however, that no such amendment shall:
(1) change the maturity date of any Note, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
thereof or any premium thereon, or change the coin or currency in which the
principal of any Note or any premium or interest thereon is payable, or
change the date on which any Note may be redeemed or adversely affect the
rights of the holders of the Notes to institute suit for the enforcement of
any payment of principal of or any premium or interest on any Note, in each
case without the consent of the holder of each Note so affected; or
(2) modify this section or reduce the aforesaid percentage of Notes,
the holders of which are required to consent to any such amendment to this
Agreement, without the consent of the holders of all of the Notes then
outstanding.
(b) Upon the request of the Company authorizing the execution of any
such amendment to this Agreement, and upon providing of evidence satisfactory to
the Issuing and Paying Agent of the requisite consent of Noteholders, the
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35
Issuing and Paying Agent shall join with the Company in the execution of such
amendment unless such amendment affects the Issuing and Paying Agent's own
rights, duties or immunities under this Agreement or otherwise, in which case
the Issuing and Paying Agent may in its discretion, but shall not be obligated
to, enter into such amendment to this Agreement.
(c) It shall not be necessary for the consent of the holders of Notes
under this section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
(d) The Issuing and Paying Agent shall be fully protected in relying
upon any opinion of counsel delivered to and approved by it as conclusive
evidence that (i) any amendment to this Agreement complies with the provisions
of this Agreement and (ii) the Issuing and Paying Agent is authorized to execute
such amendment.
SECTION 30
Notice of Redemption and Payment of Notes on Redemption
(1) Notice of redemption to each holder of Notes to be redeemed as a
whole or in part shall be given by the Company no less than 30 nor more than 60
days prior to the date fixed for redemption at the address of the Registered
Owner on the register maintained by the Issuing and Paying Agent. Any notice
which is given in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder of the Note receives the
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36
notice. In any case, failure duly to give such notice, or any defect in such
notice, to the holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.
(2) Each such notice shall specify the date fixed for redemption, the
places of redemption and the redemption price at which such Notes are to be
redeemed, and shall state that payment of the redemption price of such Notes or
portion thereof to be redeemed will be made on surrender of such Notes at such
places of redemption, that interest accrued to the date fixed for redemption
will be paid as specified in such notice, and that from and after such date
interest thereon will cease to accrue. If less than all the Notes are to be
redeemed, the notice shall specify the Notes or portions thereof to be redeemed.
In case any Note is to be redeemed in part only, the notice which relates to
such Note shall state the portion of the principal amount thereof to be
redeemed, and shall state that, upon surrender of such Note, a new Note or Notes
having the same terms in aggregate principal amount equal to the unredeemed
portion thereof will be issued.
(3) If at the time of the mailing of any notice of redemption the
Company shall not have irrevocably directed the Issuing and Paying Agent to
apply funds deposited with the Issuing and Paying Agent or held by it and
available to be used for the redemption of Notes to redeem all the Notes
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37
called for redemption, such notice shall state that it is subject to the receipt
of the redemption moneys by the Issuing and Paying Agent before the date fixed
for redemption and that such notice shall be of no effect unless such moneys are
so received before such date.
(4) If notice of redemption shall have been given as provided in
Section (1) above and the Company has deposited with the Issuing and Paying
Agent prior to the redemption date an amount sufficient to pay the redemption
price together with interest accrued to the date fixed for redemption, such
Notes or portions of Notes called for redemption shall become due and payable on
the date and at the places stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption of such
Notes and interest on the Notes or portions thereof so called for redemption
shall cease to accrue and such Notes or portions thereof shall thereafter be
deemed not to be entitled to any benefit under this Agreement except to receive
payment of the redemption price together with interest accrued thereon to the
date fixed for redemption. On presentation and surrender of such Notes at such a
place of payment in such notice specified, such Notes or the specified portions
thereof shall be paid and redeemed at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption.
(5) If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, or if the
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Company shall not have deposited with the Issuing and Paying Agent prior to the
redemption date an amount sufficient to pay the redemption price of all Notes
called for redemption, together with the interest accrued to the redemption
date, the notice of redemption shall be ineffective and the principal on such
Note shall continue to bear interest as if the notice of redemption had not been
given.
(6) Upon surrender of any Note redeemed in part only, the Company
shall execute, and the Issuing and Paying Agent shall authenticate, deliver and
register, a new Note or Notes of authorized denominations in aggregate principal
amount equal to, and having the same terms, original issue date and the
unredeemed portion of the Note so surrendered.
SECTION 31
Notice to Rating Agencies
So long as any Notes are rated by Moody's Investors Service, Inc. or
Standard & Poor's Corporation, the Company agrees to give to such rating agency
or agencies, as the case may be, prompt written notice of the appointment of any
successor Issuing and Paying Agent and any material amendment
to this Agreement.
SECTION 32
Counterparts
This Agreement may be executed in several counterparts, each of
which shall be an original and all of
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which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their officers duly authorized thereunto, as of
the day and year first above written.
BRUSH WELLMAN INC.
By:/s/ Clark G. Waite
---------------------------------
Title: Senior Vice President
and Chief Financial Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:/s/
---------------------------------
Title: Assistant Vice President
40
Exhibit A
Resolutions
41
Exhibit B
Form of Notes
42
Exhibit C
Administrative Procedures
43
RESOLVED, that the Corporation be and hereby is authorized to issue and sell
unsecured Medium-Term Notes (the "Notes") in the aggregate principal amount of
up to $75,000,000 pursuant to the terms of the proposed Private Placement
Agreement between the Corporation, Shearson Lehman Hutton Inc. and McDonald &
Company Securities, Inc. (the "Private Placement Agreement"); and
RESOLVED, that the actions of the officers of the Corporation in selecting
Shearson Lehman Hutton Inc. and McDonald & Company Securities, Inc. as agents
("Agents") to solicit or receive offers to purchase the Notes be, and they
hereby are, ratified, confirmed and approved as the acts and deeds of the
Corporation; and
RESOLVED, that the Corporation be and hereby is authorized to enter into the
Private Placement Agreement and that the form of the Private Placement Agreement
presented to the Board at this meeting identified as STB Draft 10/20/89 (and
hereby ordered filed with the records of this meeting) be, and it hereby is,
authorized, approved and adopted, and that the Chairman, President and Chief
Executive Officer or any Vice President (including any Senior vice President) of
the Corporation be, and each of them hereby is, authorized, in the name and on
behalf of the Corporation, to execute and deliver the Private Placement
Agreement with such additions, deletions and modifications therein as any of
them may approve, such execution and delivery conclusively to evidence the due
authorization, execution and delivery thereof by the Corporation; and
RESOLVED, that the officers of the Corporation be, and each of them hereby is,
authorized in the name and on behalf of the Corporation, to do any and all
things required to be done by the Corporation under the terms and provisions of
the Private Placement Agreement; and
RESOLVED, that the form of Note attached as Exhibit B to the Issuing and Paying
Agency Agreement (as hereinafter defined) be, and it hereby is, authorized,
approved and adopted and that the Chief Financial Officer, any Assistant
Treasurer and any officer of the Company designated in writing by the Chief
Financial Officer, be, and each of them hereby is, authorized, in the name and
on behalf of the Corporation, from time to time to offer, sell, execute and
deliver the Notes at such times, in such amounts, with such maturities, interest
rates, redemption provisions and other terms, and to such persons, as they deem
appropriate or desirable, such execution and delivery conclusively to evidence
the due
44
authorization, execution and delivery thereof by the Corporation; and
RESOLVED, that the actions of the officers of the Corporation in arranging for
the creation, issuance and sale of the Notes, including the preparation,
execution and delivery of documents in connection therewith, be, and they hereby
are, ratified, confirmed and approved as the acts and deeds of the Corporation;
and
RESOLVED, that the officers of the Corporation be authorized to select an
issuing and paying agent (the "Issuing and Paying Agent") to act as depository
for the safekeeping of the Notes and as agent to the Corporation in connection
with the preparation, delivery and payment of the Notes; and
RESOLVED, that the Corporation be and hereby is authorized to enter into an
Issuing and Paying Agency Agreement between the Corporation and the Issuing and
Paying Agent (the "Issuing and Paying Agency Agreement") and that the form of
the Issuing and Paying Agency Agreement presented to the Board at this meeting
identified as STB Draft 10/20/89 (and hereby ordered filed with the records of
this meeting) be, and it hereby is, authorized, approved and adopted, and that
the Chairman, President and Chief Executive Officer or any Vice President
(including any Senior Vice President) of the Corporation be, and each of them
hereby is, authorized, in the name and on behalf of the Corporation, to execute
and deliver the Issuing and Paying Agency Agreement with such additions,
deletions and modifications therein as any of them may approve, such execution
and delivery conclusively to evidence the due authorization, execution and
delivery thereof by the Corporations and
RESOLVED, that the officers of the Corporation be, and each of them hereby is,
authorized, for and on behalf of the Corporation, to do any and all things
required to be done by the Corporation under the terms and provisions of the
Issuing and Paying Agency Agreement; and
RESOLVED, that the Corporation be and hereby is authorized to prepare a Private
Placement Memorandum (the "Private Placement Memorandum") to be distributed by
the Agents in connection with the solicitation of offers to purchase the Notes
and that the draft of the Private Placement Memorandum presented to the Board at
this meeting identified as STB Draft 10/20/89 (and hereby ordered filed with the
records of this meeting) be, and it hereby is, authorized, approved and adopted,
and the
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Chairman, President and Chief Executive Officer and any Vice President
(including any Senior Vice President) of the Corporation be, and each of them
hereby is, authorized, in the name and on behalf of the Corporation, to deliver
the Private Placement Memorandum to the Agents for distribution by them to
potential purchasers of Notes with such additions, deletions and modifications
therein as any of them may approve, such delivery conclusively to evidence the
due authorization and approval thereof by the Corporation, and from time to time
to amend the Private Placement Memorandum as they determine to be necessary and
appropriate and to deliver the Private Placement Memorandum, as amended, to the
Agents for distribution by them to potential purchasers of Notes, such delivery
conclusively to evidence the due authorization and approval thereof by the
Corporation; and
RESOLVED, that the Agents be, and each of them hereby is, authorized to (until
their authority is revoked by an officer of the Company) use and distribute the
Private Placement Memorandum, as the same may be amended or supplemented from
time to time, to potential purchasers of Notes in connection with the
solicitation of offers to purchase the Notes; and
RESOLVED, that the officers of the Corporation be, and each of them hereby is,
authorized, in the name and on behalf of the Corporation, to do all acts that
they deem necessary or appropriate, including, without limitation, the
execution, acknowledgment, verification, delivery, filing and publishing of
consents to, and appointments of statutory agents for, service of process,
applications, reports, resolutions, and other documents in order to comply with
the applicable blue sky or securities laws of all states of the United States of
America and other jurisdictions in order to permit the offer and sale of the
Notes, to register or qualify, or to have registered and qualified, the Notes
and any of them for sale in such jurisdictions, and to maintain such
registrations or qualifications in effect for as long as such officers deem to
be in the best interests of the Corporation; and
RESOLVED, that if in any jurisdiction in which any application or statement
regarding the sale of the Notes is filed, a prescribed form of resolution or
resolutions is required, such resolution shall be deemed to have been, and
hereby is, adopted; and the Secretary and any Assistant Secretary of the
Corporation be, and each of them hereby is, authorized to certify the adoption
of all such resolutions as though such resolutions were now
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46
adopted, all such resolutions to be inserted in the minute book of the
Corporation and to be appropriately marked by one of such officers; and
RESOLVED, that the Chairman, President and Chief Executive Officer and any Vice
President (including any Senior Vice President) of the Corporation be, and each
of them hereby is, authorized to execute, deliver and file any and all such
other notices or documents, and to do or cause to be done any and all such other
acts and things, as they or any of them may deem necessary or appropriate in
order to enable the Corporation to carry out the purposes and intent of the
foregoing resolutions; and
RESOLVED, that notwithstanding anything herein to the contrary the authority of
the officers of the Corporation to execute any of the Notes shall be conditioned
upon the obtaining by the Company of an investment grade rating of the Notes
from Standard & Poor's Corporation or Moody's Investors Service, Inc.
satisfactory to each of the Chairman and President of the Corporation and the
Chief Financial Officer of the Corporation.
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RESOLVED, that each of the resolutions adopted by this Board of Directors on
October 24, 1989 concerning the proposed issuance and sale of unsecured
Medium-Term Notes is hereby amended so that each reference therein to the
"Chairman, President and Chief Executive Officer" or to the "Chairman and
President" be deleted and that in the place of such references the phrase
"President and Chief Executive Officer" be inserted, all other provision of such
resolutions remaining unchanged.
48
FORM OF NOTE
Registered Principal Amount
Note Number: $_______________
BRUSH WELLMAN INC.
Medium-Term Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION
UNDER THAT ACT UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. BY ITS
PURCHASE OF THIS NOTE, THE PURCHASER AGREES THAT IT IS ACQUIRING THIS NOTE
FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, THE
PUBLIC DISTRIBUTION THEREOF, AND THAT ANY RESALE OF THIS NOTE MAY BE MADE
ONLY (A) TO A PLACEMENT AGENT OR THE COMPANY, (B) THROUGH A PLACEMENT AGENT
TO AN INSTITUTIONAL INVESTOR APPROVED AS AN ACCREDITED INVESTOR BY SUCH
PLACEMENT AGENT, (C) DIRECTLY TO AN INSTITUTIONAL INVESTOR APPROVED AS AN
ACCREDITED INVESTOR BY A PLACEMENT AGENT OR THE COMPANY OR (D) THROUGH A
DEALER TO AN INSTITUTIONAL INVESTOR APPROVED AS AN ACCREDITED INVESTOR BY
THE COMPANY IN A TRANSACTION APPROVED BY THE COMPANY; PROVIDED, HOWEVER,
THAT SUCH RESTRICTIONS ARE SUBJECT TO ANY REQUIREMENT OF LAW THAT THE
DISPOSITION OF THE PROPERTY OF ANY PURCHASER SHALL AT ALL TIMES BE AND
REMAIN WITHIN ITS CONTROL.
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2
Original
Issue Price Issue Date Interest Rate Maturity Date
% %
Initial Redemption Date:
IF APPLICABLE AS INDICATED ABOVE, THE REDEMPTION PRICE INITIALLY SHALL BE
___% OF THE PRINCIPAL AMOUNT OF THIS NOTE AND SHALL DECLINE AT EACH ANNIVERSARY
OF THE INITIAL REDEMPTION DATE BY ___% OF SUCH PRINCIPAL AMOUNT UNTIL THE
REDEMPTION PRICE IS 100% OF SUCH PRINCIPAL AMOUNT.
On the Maturity Date specified above (the "Maturity Date") (except to
the extent redeemed or repaid prior to the Maturity Date), for value received,
Brush Wellman Inc., an Ohio corporation (the "Company"), promises to pay to
______________, or registered assigns, the principal amount of ______________
DOLLARS, and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) at the rate per annum set forth above on the unpaid principal
amount hereof, from the Original Issue Date specified above (the "Original
Issue Date") until the Principal Amount specified on the face hereof (the
"Principal Amount") has been paid in full, in consecutive semi-annual payments
on February 1 and August 1 in each year ("Interest Payment Dates") and on the
Maturity Date, commencing with the first Interest Payment Date next succeeding
the date hereof; provided, however, that if an Interest Payment Date is not a
Business Day (as hereinafter defined), such Interest Payment Date shall be the
following day that is a Business Day and provided further that if the Original
Issue Date of this Note is after the Record Date (as hereinafter defined)
pertaining to the first Interest Payment Date, interest accruing on this Note
for the period beginning on the Original Issue Date and ending on, but
excluding the first Interest Payment Date will be paid on the Interest Payment
Date following the next succeeding Record Date to the registered owner of this
Note on such next succeeding Record Date. Interest payable on any Interest
Payment Date other than on the Maturity Date or upon redemption shall be
payable to the person in whose name this Note is registered at the close of
business on the fifteenth day (whether or not a Business Day (as hereinafter
defined)) of the calendar month next preceding the calendar month in which an
Interest Payment Date falls (each a "Record Date"). Interest payable on the
Maturity Date or upon redemption shall be payable to the person to whom the
principal of this Note shall be payable. This Note shall not bear interest
after the Maturity Date.
Payments of principal and interest shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts. Payments of interest other
than interest
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3
payable on the Maturity Date or upon redemption will be made by check mailed on
the applicable Interest Payment Date to the person entitled thereto as provided
above at such person's address shown in the register maintained by the Company
at the offices of Morgan Guaranty Trust Company of New York, a New York banking
corporation at 30 West Broadway, New York, New York 10015 or its successor as
issuing and paying agent (the "Issuing and Paying Agent"), or, at the option of
the registered holder hereof, at such other place in the United States of
America as the registered holder hereof shall designate to the Issuing and
Paying Agent in writing. Notices regarding changes of address shall be effective
upon recordation in such register. Holders of Notes the aggregate principal
amount of which exceeds $1,000,000 shall be entitled to receive payments of
interest, other than interest payable on the Maturity Date or on redemption, in
immediately available funds via wire transfer provided arrangements for such
payment have been made with the Issuing and Paying Agent on or prior to the
Record Date for the applicable Interest Payment Date. For purposes of this Note,
"Business Day" shall mean any day that is not a Saturday or Sunday and that in
New York, New York is not a day on which banking institutions are generally
authorized or obligated by law to close. If the Maturity Date specified above is
not a Business Day, the Maturity Date will be deemed to be the next succeeding
Business Day.
Reference is hereby made to the provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth on the face hereof.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Any action by the holder of this Note shall bind all future holders of
this Note, and of any Note issued in
51
4
exchange or substitution herefor or in place hereof, in respect of anything done
or permitted by the Company.
BRUSH WELLMAN INC.
By:
-----------------------------
Title:
By:
-----------------------------
Title:
This Note is not valid for any purpose unless the certificate of authentication
hereon shall have been manually signed by Morgan Guaranty Trust Company of New
York, as Issuing and Paying Agent.
Date:
Certificate of Authentication
Morgan Guaranty Trust Company of New York
as Issuing and Paying Agent
By:
--------------------------
Authorized Officer
52
5
[REVERSE SIDE OF NOTE]
The principal amount hereof and interest hereon due at maturity or
upon redemption will be paid upon maturity or redemption in immediately
available funds against presentation and surrender of this Note at the office of
the Issuing and Paying Agent set forth on the face hereof, or at such other
office or agency of the Company in New York City as the Company shall designate
by written notice to the registered holder of this Note. Prior to due
presentment of this Note for registration or transfer, the Company may treat the
person in whose name this Note is registered as the owner of such Note for the
purpose of receiving payments of principal and interest on this Note and for all
other purposes whatsoever. The Company shall not be obligated to register any
transfer made without compliance with the restrictions on transfer set forth on
the face hereof.
This Note is one of the Medium-Term Notes issued by the Company (the
"Notes") and is authenticated pursuant to an Issuing and Paying Agency Agreement
dated as of February 1, 1990 (the "Issuing and Paying Agency Agreement") between
the Company and the Issuing and Paying Agent. Copies of the Issuing and Paying
Agency Agreement are on file at the offices of the Issuing and Paying Agent.
The interest payable hereon on each Interest Payment Date will include
accrued interest from and including the Original Issue Date or from and
including the last date to which interest has been paid, as the case may be, to,
but excluding such Interest Payment Date.
Unless specified on the face hereof, this Note is not redeemable or
subject to prepayment. If specified on the face hereof, this Note may be
redeemed in whole or in part at the option of the Company on any Business Day on
or after the Initial Redemption Date specified on the face hereof, at the
Redemption Price specified on the face hereof, together with interest accrued to
the date of redemption. The Company shall give notice to the holder hereof of
any redemption of this Note not less than 30 nor more than 60 days prior to the
date fixed for such redemption by the Company. Such notice shall be mailed to
the holder of this Note at its address last appearing in the register maintained
by the Company with the Issuing and Paying Agent.
The maturity of this Note may be accelerated in accordance with the
provisions of the Issuing and Paying Agency Agreement upon the occurrence of any
Event of Default (as defined in the Issuing and Paying Agency Agreement).
Modification and amendment of the Issuing and Paying Agency Agreement may be
effected by the Company and the Issuing and Paying Agent with the consent of the
holders of 66 2/3% in
53
6
principal amount of the outstanding Notes affected thereby, provided that no
such modification or amendment may, without the consent of the holder of each
outstanding Note affected thereby, (a) change the stated maturity of any
installment of principal of, or interest on, any Note or any premium payable on
the redemption thereof, or change the redemption price; (b) reduce the principal
amount of, or the interest or premium payable on, any Note or reduce the amount
of principal that could be declared due and payable prior to the stated
maturity; (c) change the place or currency of any payment of principal of, or
any premium or interest on, any Note; (d) impair the right of a holder to
institute suit for the enforcement of any payment on or with respect to any
Note; (e) reduce the percentage in principal amount of outstanding Notes, the
consent of the holders of which is required to modify or amend the Issuing and
Paying Agency Agreement or to waive compliance with certain provisions of the
Issuing and Paying Agency Agreement; or (f) modify the foregoing requirements.
Modification and amendment of the Issuing and Paying Agency Agreement may be
effected by the Company and the Issuing and Paying Agent without the consent of
the holders to make other modifications, generally of a ministerial or
immaterial nature.
The Issuing and Paying Agency Agreement sets forth certain covenants
relating to the maintenance of the Company's corporate existence and certain
other covenants, the provisions of which are by this reference deemed
incorporated herein as if set forth in full at this place.
The Company covenants that until the principal of, and interest on,
this Note shall have been paid in full to the registered owner hereof, there
shall at all times be an Issuing and Paying Agent having offices in The City of
New York. In case the Issuing and Paying Agent shall resign or be removed, the
Company shall appoint a successor Issuing and Paying Agent, effective as of the
date of such resignation or removal, which successor Issuing and Paying Agent
shall be a bank or trust company organized and doing business under the laws of
any state or the United States of America, authorized under applicable laws to
exercise corporate trust powers, and having a combined capital and surplus of at
least $50,000,000 as of its most recent fiscal year end.
At the Company's option, the Company shall be deemed to have been
discharged from its obligations with respect to this Note upon the satisfaction
of the applicable conditions set forth below:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Issuing and Paying Agent as trust funds in trust,
specifically pledged as security for, and dedicated solely to the benefit of the
holders of the Notes (i) money in an amount, or (ii) U.S. Government
54
7
Obligations (as defined below) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination of (i) and (ii), sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Issuing and Paying Agent, to pay and
discharge each installment of principal of and premium, if any, and interest on,
the outstanding Notes on such dates such installments of interest or principal
and premium are due;
(2) such deposit will not result in a breach or violation of or
constitute a default under the Issuing and Paying Agency Agreement or any other
agreement or instrument to which the Company is a party or by which it is bound;
(3) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with respect
to the Notes shall have occurred and be continuing on the date of such deposit
and no Event of Default under Section 18 (1) (e) or Section 18 (1) (f) of the
Issuing and Paying Agency Agreement shall have occurred and be continuing on the
91st day after such date; and
(4) the Company shall have delivered to the Issuing and Paying Agent
an opinion of counsel to the effect that the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or similar IRS
pronouncement or that there has been a change in law in either case with the
effect that the holders of the Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance or
discharge.
"U.S. Government Obligations" means (i) direct obligations of the
United States for which its full faith and credit are pledged for the full and
timely payment thereof, (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States, the full and
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States, or (iii) certificates or receipts representing
direct ownership interests in obligations or specified portions (such as
principal or interest) of obligations described in (i) or (ii), which
obligations are held by a custodian in safekeeping on behalf of such
certificates or receipts.
Any money or U.S. Government Obligations deposited with the Issuing
and Paying Agent and remaining unclaimed for two years after the date upon which
the last payment of principal or interest on this Note shall have become due and
55
8
payable, shall be repaid to the Company by the Issuing and Paying Agent on
demand and the holder of this Note entitled to receive payment shall thereafter
look only to the Company for the payment thereof and all liability of the
Issuing and Paying Agent with respect to such money or U.S. Government
Obligations shall thereupon cease.
In the event that a Repurchase Event shall occur, each holder of Notes
outstanding at the time of the occurrence of the applicable event described in
(A) of the definition of Repurchase Event shall have the right to require the
Company to purchase such holder's Notes on the date (the "Date of Repurchase")
that is 45 days after the occurrence of such Repurchase Event at a price equal
to the Repurchase Price. The "Repurchase Price" means the aggregate principal
amount of the Notes to be so purchased, together with accrued interest to the
Date of Repurchase. A holder of Notes shall have the right to require the
purchase of all or only a portion of such holder's Notes, provided that a holder
shall have the right to require the purchase of less than all of such holder's
Notes only if the Notes designated for purchase by such holder are in aggregate
principal amounts of $1,000 (or any whole multiple thereof) and the aggregate
principal amount of Notes to be held by such holder after the purchase by the
Company is not less than $500,000.
Within ten days after the occurrence of a Repurchase Event, the
Company shall mail a notice of the occurrence of such Repurchase Event to all
holders of Notes and the Issuing and Paying Agent. The notice shall state that a
Repurchase Event has occurred, shall specify the date and nature thereof and
shall set forth the Repurchase Price and the date before which a holder must
notify the Company of such holder's intention to exercise the repurchase right,
and the procedure which such holder must follow to exercise such right. To
exercise the repurchase right the holder of Notes must deliver on or before the
30th day after the date of the Repurchase Event written notice to the Company
(or an agent designated by the Company for such purpose) of the holder's
exercise of such right and the principal amount of Notes as to which the holder
is exercising such right, together with the Notes with respect to which the
right is being exercised, duly endorsed for transfer. Once a holder has
exercised his repurchase right in the manner provided above, such exercise is
irrevocable.
For purposes of this Note, the following terms shall have the
following meanings:
The term "Applicable Percentage" shall mean, (1) in the case of each
distribution referred to in clause (A)(4) of the definition of Repurchase Event,
the percentage determined as of the Calculation Date of each such distribution
by dividing the aggregate fair market value (as determined in
56
9
good faith by the directors of the Company, whose determination shall be
conclusive and binding upon all holders of Notes) of such distribution, by the
Current Market Price of all of the common shares of the Company outstanding on
the day immediately prior to such Calculation Date and (2) in the case of each
purchase or acquisition referred to in clause (A)(4) of the definition of
Repurchase Event, the percentage determined as of the Calculation Date of each
such purchase or acquisition by dividing all amounts expended by the Company,
any Subsidiary or any ESOP (the amount expended, if other than in cash, to be
determined in good faith by the directors of the Company, whose determination
shall be conclusive and binding upon all holders of Notes) for the purchase or
acquisition of any common shares of the Company, by the Current Market Price of
all of the common shares of the Company outstanding on the day immediately prior
to such Calculation Date.
The term "Continuing Director" shall mean, with respect to any Note, a
director of the Company who either (a) was director of the Company on the date
of issuance of such Note or (b) became a director of the Company subsequent to
the issuance of such Note and whose election or nomination for election by the
shareholders of the Company was duly approved by the Continuing Directors who
were at that time directors of the Company, either by a specific vote or by
approval of the proxy statement issued by the Company on behalf of the directors
of the Company, in which such individual was named as a nominee for director of
the Company.
The term "Current Market Price" shall mean the average of the daily
closing prices (or, if none, the average of the last daily bid and asked prices)
of the common shares of the Company as quoted by the primary securities exchange
on which such shares are traded, or, if none, the primary inter-dealer quotation
system which reports quotations for such shares, for the trading days during the
period of 90 consecutive calendar days ending on the day immediately prior to
the Calculation Date.
The term "ESOP" means an Employee Stock Ownership Plan of the Company,
as such term is defined in Section 4975(e)(7) of the Internal Revenue Code of
1986, as amended.
The term "Investment Grade Rating" means a rating of BBB- or higher by
S&P or a rating of Baa3 or higher by Moody's or, upon any change in the rating
categories of S&P or Moody's, the equivalent of such respective ratings by S&P
or Moody's.
The term "Moody's" means Moody's Investors Services, Inc. and its
successors and assigns.
57
10
The term "Repurchase Event" shall mean
(A) the occurrence of any one or more of the following events:
(1) the Company shall consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its
assets to any person (other than to a Subsidiary of the Company);
(2) any person (other than the Company, a Subsidiary or an employee
benefit plan of the Company) shall purchase or otherwise acquire, directly
or indirectly, beneficial ownership of securities of the Company and, as a
result of such purchase or acquisition, such person (together with its
associates and affiliates) shall directly or indirectly beneficially own
in the aggregate (a) thirty percent (30%) or more of the common shares of
the Company or (b) securities representing thirty percent (30%) or more of
the combined voting power of the Company's voting securities then entitled
to vote in elections of the directors of the Company, in each case
outstanding on the date immediately prior to the date of such purchase or
acquisition (or, if there be more than one, the last such purchase or
acquisition);
(3) the Company purchases or otherwise acquires common shares of the
Company, if, after giving effect to such purchase or acquisition, during
the 365 day period immediately preceding such purchase or acquisition, the
Company has acquired thirty percent (30%) or more of the common shares of
the Company outstanding on the date of the first such purchase or
acquisition during such period;
(4) on any day (a "Calculation Date") (a) the Company shall make any
distribution or distributions of cash, securities or other property (other
than regular periodic cash dividends at a rate which is substantially
consistent with past practice and other than any distribution of common
shares or rights to acquire common shares to holders of common shares)
whether by means of dividend, reclassification, recapitalization or
otherwise, or (b) the Company, a Subsidiary or an ESOP shall purchase or
otherwise acquire, directly or indirectly, beneficial ownership of common
shares of the Company, such that the sum of the Applicable Percentages of
all such distributions, purchases and acquisitions contemplated by clauses
58
11
(a) and (b) which have occurred on the Calculation Date and during the
365-day period immediately preceding the Calculation Date shall equal or
exceed thirty percent (30%); or
(5) Continuing Directors cease to constitute at least a majority of
the directors of the Company;
if, but only if;
(B) during the period commencing with the first public announcement
of the occurrence of such event or the intention to cause such event to occur
and ending 90 days after the later of (a) such public announcement and (b) the
occurrence of such event (which period shall, in either case, be extended for so
long as the rating of the Notes is under publicly announced consideration for
possible downgrading by Moody's or S&P), the rating assigned to the Notes is
reduced by either Moody's or S&P from an Investment Grade Rating to a rating
that is not an Investment Grade Rating.
In the event that the Company becomes a Subsidiary of any other
corporation, these provisions shall continue to be applied to the Company and
shall also be applied to such other corporation, in the same manner, to the same
extent and with the same effect as would be the case had they been applied to
the Company.
The term "S&P" shall mean Standard & Poor's Corporation and its
successors and assigns.
A corporation shall be a "Subsidiary" of another corporation if more
than 50% of the outstanding stock of such corporation then entitled to vote in
elections for its directors is owned, directly or indirectly, by such other
corporation or by one or more Subsidiaries of such other corporation, or by such
other corporation and by one or more Subsidiaries of such other corporation.
59
BRUSH WELLMAN INC.
as Issuer
$75,000,000
Medium-Term Notes
ADMINISTRATIVE PROCEDURES
The administrative procedures and the specific terms of the offering of
Medium-Term Notes (the "Notes") on a continuing basis by Brush Wellman Inc. (the
"Company") pursuant to the Private Placement Agreement dated February 9, 1990
(the "Agreement") among the Company and Shearson Lehman Hutton Inc. and McDonald
& Company Securities, Inc., as agents (each an "Agent" and collectively, the
"Agents") are explained below. The Notes will be authenticated by Morgan
Guaranty Trust Company of New York, as authenticating agent (the "Paying
Agent"). The Paying Agent, as issuing and paying agent will make payments of
semiannual interest on the Notes and payments of principal, premium, if any, and
interest, if any, due at maturity or upon redemption of the Notes, and will act
as transfer agent and registrar.
Maturities: Maturities will be from 9 months
to 30 years from the date of
issue, as agreed upon in each case
by the purchaser and the Company.
Price to Public: Each Note will be sold at 100% of
the principal amount, unless
otherwise agreed between the
purchaser and the Company.
Denominations: The Notes will be issued in
denominations of $500,000 or any
amount in excess thereof which is
an integral multiple of $1,000.
B-1
60
Registration: Notes will be issued only in fully
registered form.
Acceptance and Unless otherwise agreed by the Company and the
Rejection of Agents, the Company will have the sole right
Offers: to accept offers to purchase Notes and may reject any
offer in whole or in part. Unless otherwise
instructed by the Company, the Agents will promptly
advise the Company by telephone of all offers to
purchase Notes received by it, other than those
rejected by it. The Company may reject any offer in
whole or in part. Each Agent may reject any offer
received by it in whole or in part in its discretion
reasonably exercised.
Settlement: The receipt of immediately
available funds by the Company in
payment for a Note shall, with
respect to such Note, constitute
"Settlement." All offers accepted
by the Company will be settled not
later than the fifth business day
next succeeding the date of
acceptance unless the Company and
any purchaser agree to settlement
on an earlier or later date.
Procedures for The Company and the Agents will confer from time to
Pricing: time on the interest rates to be paid on the Notes.
If the Company should notify the Agents that it has
determined to change such interest rates, the Agents
will suspend their solicitation of offers until such
time as the Company has advised the Agents of new
interest rates. Upon receipt by the Agents of
notification of the new interest rates, the Agents
may resume their solicitation efforts.
Such notifications will be given by the Company by
telephone, confirmed in writing, to the Agents at:
Shearson Lehman Hutton Inc. American Express Tower
World Financial Center
B-2
61
New York, New York 10285
Attention: Medium Term Note
Department, 9th Floor
Telephone: (212) 640-8400
Telecopy: (212) 528-7035; and
McDonald & Company Securities,
Inc.,
2100 Society National Building
Cleveland, Ohio 44114
Attention: Corporate Finance
Department
Telephone: (216) 443-2791
Telecopy: (216) 443-2688.
Settlement Settlement procedures with regard
Procedures: to each Note sold by the Agents,
as agents, shall be as follows:
The Agent that has solicited the offer to
purchase the Note will advise the Treasurer of
the Company by facsimile (or other acceptable
written means) of the following settlement
information:
1. Exact name of registered
owner.
2. Exact address of
registered owner for
interest payments and
notices.
3. Taxpayer identification
number of registered
owner.
4. Principal amount of the
Note.
5. Interest rate.
6. Sale date.
7. Settlement date.
8. Maturity date.
9. The Agent's commission to
be paid in the form of a
discount upon settlement.
10. Proceeds to Company.
B-3
62
11. Redemption provisions and
other economic provisions
of the Notes, if any.
A. The Company will advise the Paying Agent of the foregoing
information by facsimile (or other acceptable written
means) for each such offer received by it, and will
deliver to the Paying Agent completed and executed Notes,
in time for the Paying Agent to authenticate and deliver
the required Notes. If the Company rejects an offer, the
Company will promptly notify the applicable Agent.
B. Upon receipt of the manually signed Notes, the Paying
Agent will distribute a preprinted 4- ply Note packet
containing the following documents (or a 1-ply Note and 3
appropriately designated photocopies thereof) in forms
approved by the Company, the Agents and the Paying Agent:
1. Note with form of customer confirmation attached.
2. Stub 1 -- For Paying Agent.
3. Stub 2 -- For applicable Agent.
4. Stub 3 -- For Company.
In the event the Agent refuses to accept and pay for such
Note because the Note was incorrectly prepared, the Agent
shall not be required to credit the Company's account as
provided below.
C. Upon instructions from the Company, the Paying Agent will
deliver the Note (with the confirmation) and Stubs 1 and 2
B-4
63
to the Agent or to its representative designated in
writing by the respective Agent (each a "Representative")
at an office of the Agent or the Representative located in
the borough of Manhattan and south of Chambers Street, and
such Agent or its Representative will acknowledge receipt
of the Note by stamping the delivery receipt (Stub 1) with
the date and time received and returning it to the Paying
Agent. Such delivery will be made upon confirmation to the
Paying Agent from the Company of receipt by the Company of
funds available for immediate use, in an amount equal to
the principal amount of the Note, less the applicable
commission or discount determined as provided in Exhibit A
of the Agreement. In the event that the instructions given
by any Agent for payment to the account of the Company are
revoked pursuant to the provisions of these proceedings,
the Company will as promptly as possible credit the
account of such Agent designated by such Agent for such
purpose in an amount of immediately available funds equal
to the amount of such payment and will debit the account
of the Company in like amount of funds.
D. An Agent or its representative will deliver the Note
(with confirmation) to the customer against payment in
immediately available funds. In all cases, receipt by the
customer of the Private Placement Memorandum,
appropriately amended or supplemented, must accompany or
precede any written offer to purchase the Note, delivery
of the Note and confirmation and payment by the purchaser
for the Note.
B-5
64
If an Agent is instructed by the purchaser to deliver
the Note and confirmation to
different locations, the Note and the confirmation
will each be accompanied or preceded by the Private
Placement Memorandum, appropriately amended or
supplemented.
E. An Agent or its Representative will obtain the
acknowledgement of receipt of the Note by the customer
through completion of Stub 2.
F. The Paying Agent will send by first class mail Stub 3
to the Company. Periodically, the Paying Agent will
also send to the Company a statement setting forth the
principal amount of the Notes outstanding as of that
date after giving effect to such transaction.
Settlement Procedures For offers accepted by the Company (or as provided
Timetable: above, an Agent on behalf of the Company), Settlement
Procedures "A" through "F" set forth above shall be
completed on or before the respective times (New York
City time) set forth below.
Settlement A 3:00 P.M. on the business day immediately
Procedure preceding the day of settlement
B-C 2:15 P.M. on day of settlement
D-E 3:00 P.M. on day of settlement
F 5:00 P.M. on day of settlement
B-6
65
Date of Issuance: Each Note shall bear an original
issue date, which, with respect to
any Note (or any portion thereof),
shall remain the same for all
Notes subsequently issued upon
transfer, exchange or substitution
of such original Note regardless
of the date of issuance of any
such subsequently issued Note.
Interest: Each Note will bear interest from
the original issue date of a Note,
or from the most recent interest
payment date to which interest has
been paid, at an annual rate
stated on the face thereof. Each
payment of interest shall include
interest accrued through the
previous day. Interest payments
will be made semiannually on
February 1 and August 1 (each an
"Interest Payment Date") of each
year and at maturity or upon
redemption, subject to certain
exceptions. Interest, other than
interest due at maturity or upon
redemption, will be payable to the
person in whose name the Note is
registered at the close of
business on the fifteenth day of
the calendar month next preceding
the Interest Payment Date falls
(each a "Record Date"). However,
the first payment of interest on
any Note originally issued between
a Record Date and an Interest
Payment Date will be made on the
Interest Payment Date following
the next succeeding Record Date.
Interest at maturity or upon
redemption will be payable to such
person to whom the payment of
principal is payable. The date of
original issue of each Note will
be the date of its authentication.
The date of authentication of each
Note will be the settlement date.
Interest (including payments for
partial periods) will be
calculated on the basis of a 360-
day year of twelve 30-day months.
B-7
66
Payments of Principal The Paying Agent will pay the principal amount of
and Interest: each Note at maturity or upon redemption upon
presentment of the Note. Such payment, together with
payment of interest due at maturity or upon
redemption for such Note, will be made in funds
available for immediate use by the Noteholder. Notes
presented to the Paying Agent will be marked as
cancelled. All interest payments (other than interest
due at maturity or upon redemption) will be made by
check mailed to the person entitled thereto as
provided above; provided that a holder of $1,000,000
or more in aggregate principal amount of Notes shall
be entitled to receive payments of interest by wire
transfer of immediately available funds upon written
request to the Paying Agent received not later than
the Record Date prior to the Interest Payment Date.
The Paying Agent will be responsible for withholding
taxes on interest paid if it is required by
applicable law to so withhold.
Failure to Settle: If a purchaser shall fail to accept delivery of and
make payment for any Note, the Agent will notify the
Paying Agent and the Company by telephone confirmed
in writing, and return the Note to the Paying Agent.
Upon the Paying Agent's receipt of the Note from such
Agent, the Company will promptly return to such Agent
an amount of immediately available funds equal to any
amount previously transferred to the Company in
respect of the Note pursuant to advances made by such
Agent. Such return will be made on the settlement
date if possible, and in any event not later than the
business day following the settlement date. An Agent
shall use its best efforts
B-8
67
to deliver such Note to the Paying Agent forthwith.
The Company agrees to reimburse such Agent on an
equitable basis for its loss of the use of funds
during the period when such funds were credited to
the account of the Company. An Agent will not be
entitled to any commission with respect to any Note
that the purchaser does not accept or pay for.
Immediately upon receipt of the Note in respect of
which the failure occurred, the Paying Agent will
make appropriate entries in its records and mark the
Note as cancelled and destroy the Note.
Suspension of The Company may instruct each Agent to suspend
Solicitation: solicitation of offers to purchase Notes at any
time. Upon receipt of at least one business day"s
prior notice from the Company, the Agents will
forthwith suspend solicitation until such time as
the Company has advised it that solicitation of
such offers may be resumed.
In the event that at the time the Company suspends
solicitation of offers there shall be any offers
outstanding for settlement, the Company will promptly
advise each Agent and the Paying Agent whether such
offers may be accepted and settled and whether copies
of the Private Placement Memorandum as in effect at
the time of the suspension may be delivered in
connection with the settlement of such offers. The
Company will have the sole responsibility for such
decision and for any arrangements which be made in
the event that the Company determines that such
offers may not be accepted and settled or that copies
of such Private Placement Memorandum may not be so
delivered.
B-9
68
Authenticity of The Company will cause the Paying Agent to furnish
Signatures: the Agents from time to time with the specimen
signatures of each of the Paying Agent's officers,
employees or agents who have been authorized by the
Paying Agent to authenticate Notes, but the Agents
will have no obligation or liability to the Company
or the Paying Agent in respect of the authenticity of
the signature of any officer, employee or agent of
the Company or the Paying Agent on any Note.
Payment of Selling The Company agrees to pay each Agent a commission in
Commissions and the form of a discount equal to a percentage (set
Expenses: forth as Exhibit A to the Private Placement
Agreement) of the principal of each Note sold
by the Company as a result of a solicitation made by
such Agent and, to the extent described in the
Private Placement Agreement the Agent's expenses in
connection therewith.
B-10