<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 1996
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TITANIUM METALS CORPORATION
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(Exact name of registrant as specified in charter)
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Delaware 0-28538 13-5630895
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(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
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1999 Broadway, Suite 4300, Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 296-5600
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
4.1 Certificate of Trust of TIMET Capital Trust I dated November
13, 1996
4.2 Amended and Restated Declaration of Trust of TIMET Capital
Trust I, dated as of November 20, 1996 among Titanium
Metals Corporation, as trust sponsor, The Chase
Manhattan Bank, as Property Trustee, Chase Manhattan
Bank Delaware, as Delaware Trustee and Joseph S.
Compofelice, Robert E. Musgraves and Mark A. Wallace,
as Regular Trustees
4.3 Indenture for the 6 5/8% Convertible Junior Subordinated
Debentures due 2026, dated as of November 20, 1996
between Titanium Metals Corporation and The Chase
Manhattan Bank, as Trustee
4.4 Form of 6 5/8% Convertible Preferred Securities, Beneficial
Unsecured Convertible Securities (BUCS) (included in
Exhibit 4.2 above)
4.5 Form of 6 5/8% Trust Common Securities (included in Exhibit
4.2 above)
4.6 Form of 6 5/8% Convertible Junior Subordinated Debentures due
2026 (included in Exhibit 4.3 above)
4.7 Convertible Preferred Securities Guarantee Agreement, dated as
of November 20, 1996, between Titanium Metals
Corporation, as Guarantor, and The Chase Manhattan
Bank, as Guarantee Trustee
99.1 Purchase Agreement, dated November 20, 1996, among Titanium
Metals Corporation, TIMET Capital Trust I, Salomon
Brothers Inc, Merrill Lynch, Pierce, Fenner & Smith
and Morgan Stanley & Co., Incorporated
99.2 Registration Agreement, dated November 20, 1996, among
Titanium Metals Corporation, TIMET Capital Trust I
and Salomon Brothers Inc, as representative of the
initial purchasers
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On November 20, 1996, TIMET Capital Trust I, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
sold an aggregate of 3,500,000 6 5/8% Convertible Preferred Securities,
Beneficial Unsecured Convertible Securities (BUCS) (the "Convertible Preferred
Securities"), representing preferred undivided beneficial interests in the
assets of the Trust, to Salomon Brothers Inc, Merrill Lynch, Pierce, Fenner &
Smith, Incorporation, and Morgan Stanley & Co., Incorporated (collectively, the
"Initial Purchasers"). On December 4, 1996, the Trust sold an additional
525,000 Convertible Preferred Securities to the Initial Purchasers pursuant to
an overallotment option granted to Initial Purchasers. The sales to the
Initial Purchasers were made pursuant to a Purchase Agreement dated as of
November 20, 1996 among the Trust, the Registrant, as sponsor of the Trust and
guarantor, and the Initial Purchasers (the "Purchase Agreement").
<PAGE> 3
The Convertible Preferred Securities were sold to the Initial
Purchasers for resale at the initial offering price of $50.00 per Convertible
Preferred Security (i) to qualified institutional buyers in reliance on Rule
144A under the Securities Act of 1933, as amended (the "Securities Act"), (ii)
to certain institutional "accredited investors" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that agree in writing to
comply with certain transfer restrictions and other conditions, (iii) outside
the United States to certain persons in reliance on Regulation S under the
Securities Act, and (iv) to (a) executive officers and directors of the Company
who are "accredited investors" as defined in Rule 501(a)(4) under the
Securities Act and (b) certain individuals having relationships with the
Company (or an executive officer or director thereof) who either (x) are
"accredited investors" as defined in Rule 501(a)(5) or (6) under the Securities
Act or (y) have such knowledge and experience in financial and business matters
that such individuals are capable of evaluating the merits and risks of any
prospective investment in the Convertible Preferred Securities.
On November 20, 1996, the Registrant acquired from the Trust
all the common securities (the "Trust Common Securities" and, together with the
Convertible Preferred Securities, the "Trust Securities") representing
undivided beneficial interests in the assets of the Trust. The Trust exists
for the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in an equivalent amount of 6 5/8% Convertible Junior Subordinated
Debentures due 2026 (the "Debentures") of the Registrant. Upon an event of
default under the Amended and Restated Declaration of Trust, as dated as of
November 20, 1996, among the Registrant, The Chase Manhattan Bank, as property
trustee, and Chase Manhattan Bank (Delaware), as Delaware trustee (the
"Declaration"), the holders of Convertible Preferred Securities will have a
preference over the holders of the Trust Common Securities with respect to
distributions and payments upon redemption, liquidation and otherwise.
The consideration to the Trust for the Convertible Preferred
Securities sold to the Initial Purchasers was an aggregate of $201,250,000.
The consideration to the Trust for the Trust Common Securities sold to the
Registrant was an aggregate of $6,224,220. The Registrant issued a total of
$207,474,220 in Debentures to the Trust. Estimated proceeds to the Registrant,
net of estimated expenses of approximately $2,300,000 related to the
transactions and net of compensation of $6,540,625 paid by the Registrant to
the Initial Purchasers, is approximately $192,400,000.
The Convertible Preferred Securities are convertible, at the
option of the holder thereof, at any time after 90 days following the first
date of original issuance thereof and prior to redemption, into shares of
common stock, par value $.01 per share (the "Common Stock"), of the Registrant,
at a conversion rate of 1.339 shares of Common Stock for each Convertible
Preferred Security (equivalent to approximately $37.34 per share of Common
Stock), subject to adjustment in certain circumstances.
Pursuant to a Registration Agreement dated November 20, 1996
among the Registrant, the Trust and Salomon Brothers Inc, as representative of
the Initial Purchasers (the "Registration Statement"), the Registrant has
agreed to file a shelf registration statement under the Securities Act relating
to resales of the Convertible Preferred Securities and the Common
<PAGE> 4
Stock issuable upon conversion thereof. If such registration statement is not
filed or has not become effective within certain time periods set forth in the
Registration Statement, the interest rate on the Debentures will be temporarily
increased, and additional dividends will be payable on the Convertible
Preferred Securities.
Holders of Convertible Preferred Securities are entitled to
receive cumulative cash distributions at an annual rate of 6 5/8% of the
liquidation amount of $50 per Convertible Preferred Security, accruing from the
first date of original issuance and payable quarterly in arrears on March 1,
June 1, September 1 and December 1 of each year, commencing March 1, 1997,
subject to the right of the Registrant, under certain circumstances, to extend
the time for payment of distributions. The payment of distributions out of
moneys held by the Trust and payments on liquidation of the Trust or the
redemption of Convertible Preferred Securities are guaranteed by the Registrant
to the extent set forth in a Convertible Preferred Securities Guarantee
Agreement dated as of November 20, 1996 between the Registrant and The Chase
Manhattan Bank, as guarantee trustee. The Guarantee covers payments of
distributions and other payments on the Convertible Preferred Securities only
if the Trust holds assets that are available for distribution to holders of
Convertible Preferred Securities, and then only to the extent of such assets.
The Guarantee, when taken together with the Registrant's obligations under the
Debentures and the Indenture dated as of November 20, 1996 between the
Registrant and The Chase Manhattan Bank, as trustee (the "Indenture") and its
obligations under the Declaration, including its obligations to pay costs,
expenses, debts and liabilities of the Trust (other than with respect to the
Trust Securities), provide a full and unconditional guarantee of amounts due on
the Convertible Preferred Securities. The obligations of the Registrant under
the Guarantee are subordinate and junior in right of payment to all other
liabilities of the Registrant and pari passu with the most senior preferred
stock, if any, issued from time to time by the Registrant. The obligations of
the Registrant under the Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined in the
Indenture) of the Registrant, and rank pari passu with the Registrant's other
general unsecured creditors. The obligations of the Registrant under the
Debentures and Guarantee are also effectively subordinated to all existing and
future indebtedness and other liabilities, including trade payables, of the
Registrant's subsidiaries. The Debentures purchased by the Trust may be
subsequently distributed pro rata to holders of the Convertible Preferred
Securities and Trust Common Securities in connection with the dissolution of
the Trust upon the occurrence of certain events.
The foregoing summaries of the Convertible Preferred
Securities, the Trust Common Securities, the Debentures, the Declaration, the
Indenture, the Guarantee, the Purchase Agreement, and the Registration
Agreement are qualified in their entirety by reference to Exhibits 4.1 through
4.7, inclusive, and 99.1 and 99.2 attached hereto.
The Registrant believes that the sale of the Convertible
Preferred Securities to the Initial Purchasers for resale outside the United
States was exempt from the registration requirements of the Securities Act
pursuant to Regulation S thereunder.
* * * * *
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
TITANIUM METALS CORPORATION
(Registrant)
December 5, 1996 /s/ Robert E. Musgraves
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Robert E. Musgraves,
Vice President -- Administration, General
Counsel and Secretary
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EXHIBIT INDEX
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Exhibit
No. Exhibit Description Page
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4.1 Certificate of Trust of TIMET Capital Trust I dated November
13, 1996
4.2 Amended and Restated Declaration of Trust of TIMET Capital
Trust I, dated as of November 20, 1996 among Titanium
Metals Corporation, as trust sponsor, The Chase
Manhattan Bank, as Property Trustee, Chase Manhattan
Bank Delaware, as Delaware Trustee and Joseph S.
Compofelice, Robert E. Musgraves and Mark A. Wallace,
as Regular Trustees
4.3 Indenture for the 6 5/8% Convertible Junior Subordinated
Debentures due 2026, dated as of November 20, 1996
between Titanium Metals Corporation and The Chase
Manhattan Bank, as Trustee
4.4 Form of 6 5/8% Convertible Preferred Securities, Beneficial
Unsecured Convertible Securities (BUCS) (included in
Exhibit 4.2 above)
4.5 Form of 6 5/8% Trust Common Securities (included in Exhibit
4.2 above)
4.6 Form of 6 5/8% Convertible Junior Subordinated Debentures due
2026 (included in Exhibit 4.3 above)
4.7 Convertible Preferred Securities Guarantee Agreement, dated as
of November 20, 1996, between Titanium Metals
Corporation, as Guarantor, and The Chase Manhattan
Bank, as Guarantee Trustee
99.1 Purchase Agreement, dated November 20, 1996, among Titanium
Metals Corporation, TIMET Capital Trust I, Salomon
Brothers Inc, Merrill Lynch, Pierce, Fenner & Smith
and Morgan Stanley & Co., Incorporated
99.2 Registration Agreement, dated November 20, 1996, among
Titanium Metals Corporation, TIMET Capital Trust I
and Salomon Brothers Inc, as representative of the
initial purchasers
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<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF TRUST
OF
TIMET CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of TIMET Capital Trust I (the
"Trust"), dated as of November 13, 1996, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is TIMET Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington,
Delaware 19801, Attention: Corporate Trustee Administration.
3. Effective Date. This Certificate of Trust shall be
effective upon its filing in the office of the Secretary of State of the State
of Delaware.
4. Counterparts. This Certificate of Trust may be executed
in one or more counterparts.
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2
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first
above written.
CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee,
by
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Name:
Title:
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Name: Joseph S. Compofelice,
as Trustee
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Name: Robert E. Musgraves,Esq.
as Trustee
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Name: Mark A. Wallace,
as Trustee
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EXHIBIT 4.2
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TIMET CAPITAL TRUST I
Dated as of November 20, 1996
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TABLE OF CONTENTS
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ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application . . . . . . . . . . . . . 10
SECTION 2.02. Lists of Holders of Securities . . . . . . . . . . . . . . 10
SECTION 2.03. Reports by the Property Trustee . . . . . . . . . . . . . 11
SECTION 2.04. Periodic Reports to Property Trustee . . . . . . . . . . . 11
SECTION 2.05. Evidence of Compliance with Conditions Precedent . . . . . 12
SECTION 2.06. Events of Default; Waiver . . . . . . . . . . . . . . . . 12
SECTION 2.07. Event of Default; Notice . . . . . . . . . . . . . . . . . 14
ARTICLE III
Organization
SECTION 3.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.02. Office . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.03. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.04. Prohibition of Actions by the Trust and the Trustees . . . 15
SECTION 3.05. General Authority of the Trustees . . . . . . . . . . . . 17
SECTION 3.06. Title to Property of the Trust . . . . . . . . . . . . . . 17
SECTION 3.07. Not Responsible for Recitals or Issuance of Securities . . 17
SECTION 3.08. Duration of Trust . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.09. Mergers . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.10. Dissolution of Trust . . . . . . . . . . . . . . . . . . . 19
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Contents, p. 2
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ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Trust Common Securities . . . . . . . 20
SECTION 4.02. Responsibilities of the Sponsor . . . . . . . . . . . . . . 21
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.02. Delaware Trustee; Eligibility . . . . . . . . . . . . . . . 22
SECTION 5.03. Property Trustee; Eligibility . . . . . . . . . . . . . . . 22
SECTION 5.04. Qualifications of Regular Trustees and Delaware Trustee
Generally . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.05. Initial Trustees . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.06. Appointment, Removal and Resignation of Trustees . . . . . . 24
SECTION 5.07. Vacancies Among Trustees . . . . . . . . . . . . . . . . . . 26
SECTION 5.08. Merger, Conversion, Consolidation or Succession to
Business of a Trustee . . . . . . . . . . . . . . . . . . 27
SECTION 5.09. Authority, Powers and Duties of the Regular Trustees . . . . 27
SECTION 5.10. Delegation of Powers and Duties of the Regular Trustees . . 31
SECTION 5.11. Powers and Duties of the Property Trustee . . . . . . . . . 32
SECTION 5.12 Certain Duties and Responsibilities of the Property
Trustee . . . . . . . .. . . .. . . . . . . . . . . . . . 34
SECTION 5.13. Certain Rights of Property Trustee . . . . . . . . . . . . . 36
SECTION 5.14. Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.15. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI
Distributions
SECTION 6.01. Distributions . . . . . . . . . . . . . . . . . . . . . . . 39
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Contents, p. 3
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ARTICLE VII
The Securities
SECTION 7.01. Title and Terms . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.02. General Provisions Regarding the Securities . . . . . . . . 40
SECTION 7.03. General Form of Certificates . . . . . . . . . . . . . . . . 41
SECTION 7.04. Form of Convertible Preferred Securities Certificates;
Global Certificates . . . . . . . . . . . . . . . . . . . 41
SECTION 7.05. Execution and Dating of Certificates . . . . . . . . . . . . 43
SECTION 7.06. Authentication of Certificates . . . . . . . . . . . . . . . 43
SECTION 7.07. Definitive Convertible Preferred Security Certificates . . . 44
SECTION 7.08. Temporary Certificates . . . . . . . . . . . . . . . . . . . 44
SECTION 7.09. Registrar, Paying Agent and Conversion Agent . . . . . . . . 44
SECTION 7.10. Paying Agent To Hold Money in Trust . . . . . . . . . . . . 45
SECTION 7.11. Outstanding Convertible Preferred Securities . . . . . . . . 45
SECTION 7.12. Convertible Preferred Securities in Treasury . . . . . . . . 46
SECTION 7.13. Notices to Depositary . . . . . . . . . . . . . . . . . . . 46
SECTION 7.14. Appointment of Successor Depositary . . . . . . . . . . . . 46
SECTION 7.15. Deemed Security Holders . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
Transfers, Exchanges and Cancelations
of Securities
SECTION 8.01. General . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.02. Transfer Procedures and Restrictions . . . . . . . . . . . . 48
SECTION 8.03. Mutilated, Destroyed, Lost or Stolen Certificates;
Replacement Securities . . . . . . . . . . . . . . . . . . 58
SECTION 8.04. Cancelation of Convertible Preferred Security Certificates . 58
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Contents, p. 4
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ARTICLE IX
Limitation of Liability of
Holders of Securities, Trustees and Others
SECTION 9.01. Liability . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.02. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.03. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.04. Indemnification . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.05. Outside Businesses . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X
Accounting
SECTION 10.01. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.02. Certain Accounting Matters . . . . . . . . . . . . . . . . . 66
SECTION 10.03. Banking . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.04. Withholding . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XI
Amendments and Meetings
SECTION 11.01. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.02. Meetings of the Holders of Securities; Action by Written
Consent . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XII
Representations of Property Trustee and
Delaware Trustee
SECTION 12.01. Representations and Warranties of Property Trustee . . . . . 71
SECTION 12.02. Representations and Warranties of Delaware Trustee . . . . . 72
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ARTICLE XIII
Miscellaneous
SECTION 13.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13.02. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.03. Intention of the Parties . . . . . . . . . . . . . . . . . . 75
SECTION 13.04. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.05. Successors and Assigns . . . . . . . . . . . . . . . . . . . 75
SECTION 13.06. Invalidity of Any Provision . . . . . . . . . . . . . . . . 76
SECTION 13.07. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 76
Annex and Exhibits
ANNEX I Terms of the 6-5/8% Convertible Preferred
Securities, Beneficial Unsecured Convertible
Securities (BUCS) and the 6-5/8% Trust Common
Securities
Exhibit A-1 Form of Convertible Preferred Security
Exhibit A-2 Form of Trust Common Security
Exhibit B Form of Convertible Debenture
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<PAGE> 7
EXECUTION COPY
AMENDED AND RESTATED DECLARATION OF TRUST
(this "Declaration") of TIMET CAPITAL TRUST I dated
and effective as of November 20, 1996, by the
undersigned trustees (together with all other Persons
from time to time duly appointed and serving as
trustees in accordance with the provisions of this
Declaration, the "Trustees"), Titanium Metals
Corporation, a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the holders, from time to
time, of undivided beneficial interests in the Trust
issued pursuant to this Declaration.
WHEREAS the Trustees and the Sponsor established TIMET Capital
Trust I (the "Trust"), a trust under the Trust Act (as defined herein),
pursuant to a Declaration of Trust dated as of November 13, 1996 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on November 14, 1996, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Convertible
Debentures (as defined herein) of the Company (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued; and
WHEREAS all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 8
2
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions. Unless the context otherwise
requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.01;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) a reference to the masculine includes the feminine and
vice versa.
"Additional Interest" means, if at any time while the Property
Trustee is the Holder of any Convertible Debentures, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any state thereof, or any other taxing authority, then, in any such
case, the additional interest on the Debentures held by the Property Trustee in
such amounts as shall be required so that the net amounts received and retained
by the Trust and the Property Trustee after paying any such taxes, duties,
assessments or other governmental charges will be not less than the amounts the
Trust and the Property Trustee would have received had no
<PAGE> 9
3
such taxes, duties, assessments or other governmental charges been imposed.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereto.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, the ownership and transfers of which shall be maintained and made
through book entries by the Depositary as described in Section 8.02.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or in Chicago, Illinois are authorized or
required by law to close.
"Certificate" means a global or definitive certificate in
fully registered form representing a Trust Common Security or a Convertible
Preferred Security.
"Closing Date" means November 26, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation thereto.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it, then the body performing such duties
at such time.
"Common Stock" means the common stock, $.01 par value, of the
Company.
"Company" means Titanium Metals Corporation, a Delaware
corporation.
"Company Indemnified Person" means (i) any Regular Trustee;
(ii) any Affiliate of any Regular Trustee;
<PAGE> 10
4
(iii) any officer, director, shareholder, member, partner, employee,
representative or agent of any Regular Trustee; or (iv) any officer, employee
or agent of the Trust or its Affiliates.
"Compound Interest" means interest, compounded quarterly, upon
accrued and unpaid interest (including Additional Interest) on the Convertible
Debentures during an Extension Period at the rate specified in the Convertible
Debentures to the extent permitted by applicable law.
"Conversion Agent" has the meaning set forth in Section 7.09
hereof.
"Convertible Debentures" means the 6-5/8% Convertible Junior
Subordinated Debentures due 2026 to be issued by the Company under the
Indenture and to be held by the Property Trustee, a specimen certificate for
such Convertible Debentures being Exhibit B hereto.
"Convertible Preferred Securities" has the meaning specified
in Section 7.01 hereof.
"Convertible Preferred Security Certificate" means a
Certificate representing a Convertible Preferred Security substantially in the
form of Exhibit A-1.
"Convertible Preferred Security Beneficial Owner" means, with
respect to a Book-Entry Interest, a Person who is the beneficial owner of such
Book-Entry Interest, as reflected on the books of the Depositary, or on the
books of a Person maintaining an account with such Depositary (directly as a
participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Corporate Trust Office" means the principal office of the
Property Trustee in New York, New York, at which at any particular time its
corporate trust business shall be administered and which at the date of this
Indenture is 450 West 33rd Street, New York, New York 10001.
"Covered Person" means (a) any officer, director, stockholder,
partner, member, representative, employee or agent of (i) the Trust, (ii) the
Trust's Affiliates or (iii) the Sponsor; and (b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.02
hereof.
<PAGE> 11
5
"Depositary" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Convertible Preferred Securities and in whose name or in the
name of a nominee or nominees of that organization shall be registered a Global
Certificate or Certificates and which shall undertake to effect book-entry
transfers and pledges of the Convertible Preferred Securities, which shall
initially be The Depository Trust Company, until a successor shall be appointed
pursuant to Section 7.14, and thereafter means such successor Depositary.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Convertible Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation thereto.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 9.04(b) hereof.
"Fiscal Year" has the meaning set forth in Section 10.01
hereof.
"Guarantee" means the Convertible Preferred Securities
Guarantee Agreement dated as of November 20, 1996 of the Sponsor in respect of
the Convertible Preferred Securities.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of November 20, 1996,
between the Company and the Indenture Trustee, as it may be amended from time
to time.
<PAGE> 12
6
"Indenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Investment Company" means an "investment company" as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation thereto.
"Legal Action" has the meaning set forth in Section
5.09(d)(vii) hereof.
"List of Holders" has the meaning set forth in Section 2.02
hereof.
"Majority in aggregate liquidation amount" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Trust Common Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all
outstanding Securities or all outstanding Securities of the relevant class, as
the context may require.
"Ministerial Action" has the meaning set forth in Annex I
hereto.
"Offering Memorandum" means the final Offering Memorandum,
dated November 20, 1996, relating to the Convertible Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
<PAGE> 13
7
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.09.
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in
Section 5.11(c) hereof.
"Purchase Agreement" means the Purchase Agreement dated
November 20, 1996, between the Sponsor, the Trust and the initial purchasers
named therein, relating to the Convertible Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.09.
<PAGE> 14
8
"Registration Agreement" means the Registration Agreement
dated as of November 20, 1996, among the Sponsor, the Trust and the initial
purchasers named in the Purchase Agreement, relating to the shelf registration
of the Convertible Preferred Securities, the Guarantee, the Convertible
Debentures and the Common Stock issuable upon conversion thereof.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any vice president, any assistant vice president, the treasurer, any
assistant treasurer, the secretary, any assistant secretary or any other
officer in the Corporate Trust Office of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Definitive Certificate" has the meaning set forth
in Section 7.07 hereof.
"Restricted Global Certificate" has the meaning set forth in
Section 7.04(a) hereof.
"Restricted Securities Legend" has the meaning set forth in
Section 8.02(j) hereof.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Convertible Preferred Securities and
the Trust Common Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor legislation thereto.
<PAGE> 15
9
"Shelf Registration Statement" means the registration
statement to be filed by the Sponsor with the Commission pursuant to the
Registration Agreement.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Titanium Metals Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation or
amalgamation, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning specified in Section
3.09(b) hereof.
"Successor Securities" has the meaning specified in Section
3.09(b) hereof.
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in aggregate liquidation amount" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Trust Common Securities, voting
separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all
outstanding Securities or all outstanding Securities of the relevant class, as
the context may require.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Act" means the Delaware Business Trust Act (Chapter 38
of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq.), as it
may be amended from time to time, or any successor legislation thereto.
<PAGE> 16
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"Trust Common Securities" has the meaning specified in Section
7.01 hereof.
"Trust Common Security Certificate" means a definitive
Certificate in fully registered form representing a Trust Common Security
substantially in the form of Exhibit A-2.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation thereto.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Unanimous Consent" has the meaning set forth in Section
2.06(a)(ii) hereof.
"Unrestricted Definitive Certificate" has the meaning
specified in Section 8.02(c) hereof.
"Unrestricted Global Certificates" has the meaning specified
in Section 8.02(b) hereof.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration, which are incorporated by reference in
and made part of this Declaration and shall, to the extent applicable, be
governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is an
"indenture trustee" for the purposes of the Trust Indenture Act.
<PAGE> 17
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(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.02. List of Holders of Securities. (a) The
Sponsor shall provide the Property Trustee with a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders of the Convertible Preferred Securities ("List of Holders"). The List
of Holders as of February 15 and August 15 of each year shall be provided five
Business Days after such dates, and the List of Holders shall also be provided
at any other time within 30 days of receipt by the Sponsor of a written request
for a List of Holders, such List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. Notwithstanding
the foregoing, the Sponsor shall not be obligated to provide such List of
Holders at any time (x) the List of Holders does not differ from the most
recent List of Holders given to the Property Trustee by the Sponsor or (y) all
of the Convertible Preferred Securities are represented by one or more Global
Securities (as defined in the Indenture). The Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. (a) Within
60 days after May 15 of each year, commencing in 1997, the Property Trustee
shall transmit by mail to Holders such reports concerning the Property Trustee
and its actions under this Declaration as may be required pursuant to the Trust
Indenture Act in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or quotation system upon which the Convertible Preferred
Securities are listed, with the Commission and with the Company. The Trust
<PAGE> 18
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will notify the Property Trustee if and when the Convertible Preferred
Securities are listed on any national securities exchange or quotation system.
SECTION 2.04. Periodic Reports to Property Trustee. Each of
the Sponsor and the Trust shall file with the Commission, and deliver to the
Property Trustee and the Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall
be filed with the Property Trustee within 15 days after the same is so required
to be filed with the Commission.
Delivery of such reports, information and documents to the
Property Trustee is for informational purposes only and the Property Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Trust's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to conclusively rely on Officers' Certificates).
Each of the Sponsor and the Trust shall also provide to the
Property Trustee on a timely basis such information as the Property Trustee
reasonably requires to enable the Property Trustee to prepare and file any form
required to be submitted by the Company with the Internal Revenue Service and
the Holders of the Securities relating to original issue discount, if any,
including, without limitation, Form 1099-OID or any successor form.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. (a) The Holders of
a Majority in aggregate liquidation
<PAGE> 19
13
amount of Convertible Preferred Securities may, by vote, on behalf of the
Holders of all of the Convertible Preferred Securities, waive any past Event of
Default in respect of the Convertible Preferred Securities and its
consequences; provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the unanimous consent or vote of the holders of
the Convertible Debentures (a "Unanimous Consent") to be waived under
the Indenture, the Event of Default under the Declaration may only be
waived by the vote of each Holder of Convertible Preferred Securities
outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Convertible Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or an Event of Default with respect to the
Convertible Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of an Event of
Default with respect to the Convertible Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Trust Common Securities of
any such Event of Default with respect to the Trust Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the
Holders of the Trust Common Securities.
(b) The Holders of a Majority in aggregate liquidation amount
of the Trust Common Securities may, by vote, on behalf of the Holders of all of
the Trust Common Securities, waive any past Event of Default with respect to
the Trust Common Securities and its consequences; provided that, if the
underlying Event of Default under the Indenture:
<PAGE> 20
14
(i) is not waivable under the Indenture, except where the
Holders of the Trust Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.06(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires a Unanimous Consent to be waived, except where
the Holders of the Trust Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.06(b), the Event of Default under the Declaration may only
be waived by the unanimous vote of the Holders of the Trust Common
Securities; and
provided further that each Holder of Trust Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with respect to
the Trust Common Securities and its consequences until all Events of Default
with respect to the Convertible Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Convertible Preferred Securities
and only the Holders of the Convertible Preferred Securities will have the
right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.06(b) shall be in lieu
of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by
the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.06(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Trust Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Trust Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Convertible
Preferred Securities constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.06(c) shall
be in lieu of Section 316(a)(1)(B) of
<PAGE> 21
15
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.07. Event of Default; Notice. (a) The Property
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first-class postage prepaid, to the Holders of the
Securities, notices of all defaults with respect to the Securities actually
known to a Responsible Officer of the Property Trustee, unless such defaults
have been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 2.07 being hereby defined to be an Event of Default as
defined in the Indenture, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein);
provided that, except for a default in the payment of principal of, premium, if
any, or interest on any of the Convertible Debentures or in the payment of any
sinking fund installment established for the Convertible Debentures, the
Property Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee, or a trust committee of
directors or Responsible Officers of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust is named "TIMET Capital Trust
I", as such name may be modified from time to time by the Regular Trustees or,
if there are more than two,
<PAGE> 22
16
a majority of the Regular Trustees, following 10 Business Days' written notice
to the Holders of Securities. The activities of the Trust may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.02. Office. The address of the principal office of
the Trust is in care of Titanium Metals Corporation, 1999 Broadway, Suite 4300,
Denver, Colorado 80202, Attention of Robert E. Musgraves, Regular Trustee. On
10 Business Days' written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.03. Purpose. The exclusive purposes and functions
of the Trust are (a) to issue and sell Securities and use the proceeds from
such sale to acquire the Convertible Debentures and (b) except as otherwise
limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust
not to be classified for United States Federal income tax purposes as a grantor
trust.
SECTION 3.04. Prohibition of Actions by the Trust and the
Trustees. The Trust shall not, and the Trustees shall not, engage in any
activity other than as required or authorized by this Declaration. In
particular, the Trust shall not and the Trustees shall not cause the Trust to:
(a) invest any proceeds received by the Trust as a result of
holding the Convertible Debentures, but shall distribute all such
proceeds (except for Additional Interest, if any, which the Trust
shall apply to the payment of the taxes, duties, assessments and
governmental charges which gave rise to such Additional Interest) to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
<PAGE> 23
17
(d) make any loans or incur any indebtedness other than loans
represented by the Convertible Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(g) other than as provided in this Declaration or Annex I
hereto, (i) direct the time, method and place of exercising any trust
or power conferred upon the Indenture Trustee with respect to the
Convertible Debentures, (ii) waive any past default that is waivable
under the Indenture, (iii) exercise any right to rescind or annul any
declaration that the principal of all the Convertible Debentures shall
be due and payable, or (iv) consent to any amendment, modification or
termination of the Indenture or the Convertible Debentures where such
consent shall be required unless the Trust shall have received an
opinion of counsel to the effect that such amendment or modification
will not cause more than an insubstantial risk that (A) the Trust will
be deemed an Investment Company required to be registered under the
Investment Company Act, or (B) for United States Federal income tax
purposes the Trust will not be classified as a grantor trust.
SECTION 3.05. General Authority of the Trustees. In dealing
with the Trustees acting on behalf of the Trust, no person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Declaration.
SECTION 3.06. Title to Property of the Trust. Except as
provided in Section 5.11 with respect to the Convertible Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have undivided beneficial interests in the assets of the Trust.
<PAGE> 24
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SECTION 3.07. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.08. Duration of Trust. The Trust, unless
terminated pursuant to the provisions of Section 3.10 hereof, shall exist until
December 1, 2033.
SECTION 3.09. Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to, any Person, except
as described in Sections 3.09(b) and 3.09(c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees, and without
the consent of the Holders of the Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any state of the United States
or the District of Columbia; provided that:
(i) the Convertible Preferred Securities or any substitute
securities having substantially the same terms as the Convertible
Preferred Securities (the "Successor Securities") are listed, or any
Successor Securities will be listed upon notification of issuance, on
any national securities exchange or quotation system on which the
Convertible Preferred Securities are then listed or quoted;
(ii) such merger, consolidation, amalgamation or replacement
does not cause the Convertible Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(iii) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Convertible Preferred Securities (including any
<PAGE> 25
19
Successor Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
(iv) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received the opinion of independent
counsel to the Trust reasonably acceptable to the Property Trustee and
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement will not adversely affect the rights, preferences
and privileges of the Holders of the Convertible Preferred
Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of
the Holders' interest in the new entity), including the
limited liability of such Holders;
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will be treated as a grantor trust for United States
Federal income tax purposes; and
(v) if the Trust is not the survivor,
(A) such successor entity (the "Successor Entity")
either:
(1) expressly assumes all of the obligations
of the Trust under the Securities; or
(2) substitutes Successor Securities for the
Convertible Preferred Securities so long as the
Successor Securities rank the same as the Convertible
Preferred Securities with respect to Distributions,
assets and payments upon liquidation, redemption and
otherwise;
(B) the Company expressly acknowledges a trustee of
the Successor Entity that possesses the
<PAGE> 26
20
same powers and duties as the Property Trustee as the Holder
of the Convertible Debentures;
(C) such Successor Entity has a purpose substantially
identical to that of the Trust; and
(D) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities to the same
extent provided by the Guarantee.
(c) Notwithstanding Section 3.09(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the Trust
Common Securities, consolidate, amalgamate, merge with or into, or be replaced
by any other entity or permit any other Person to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation, merger
or replacement would cause the Trust or Successor Entity to be classified as
other than a grantor trust for United States Federal income tax purposes.
SECTION 3.10. Dissolution of Trust. (a) The Trust shall
dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the consent of a Majority in
aggregate liquidation amount of the Convertible Preferred Securities,
voting together as a single class, to dissolve the Trust, or the
revocation of the Certificate of Incorporation of the Sponsor and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Convertible Debentures shall have been
called for redemption and the amounts necessary for redemption
thereof, including any Additional Interest and Compound Interest,
shall have been paid to the Property Trustee and the Property Trustee
shall have redeemed the Securities in accordance with the terms of the
Securities;
<PAGE> 27
21
(v) upon the occurrence and continuation of a Tax Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Convertible Debentures
shall have been distributed to the Holders of Securities in exchange
for all of the Securities;
(vi) upon the expiration of the term of the Trust on December
1, 2033; or
(vii) before the issuance of any Securities, with the consent
of all the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 3.10(a), the Regular Trustees shall pay (or make
provision for the payment of) all claims against the Trust and shall execute
and file a certificate of cancelation with the Secretary of State of the State
of Delaware and the Trust shall terminate.
(c) The provisions of Article IX shall survive the
termination of the Trust.
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Trust Common Securities.
On the Closing Date and on any other date Convertible Preferred Securities are
sold pursuant to the overallotment option granted in the Purchase Agreement,
the Sponsor will purchase all of the Trust Common Securities issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Convertible Preferred Securities are sold.
SECTION 4.02. Responsibilities of the Sponsor. In connection
with the issue and sale of the Convertible Preferred Securities, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to determine the states and foreign jurisdictions in which
to take appropriate action to qualify or register for sale all or part
of the
<PAGE> 28
22
Convertible Preferred Securities and to do any and all such acts,
other than actions that must be taken by the Trust, and advise the
Trust of actions it must take, and prepare for execution and filing
and execute any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such states and foreign jurisdictions;
(b) to prepare for filing by the Trust and execute an
application to the National Association of Securities Dealers, Inc.'s
Private Offerings, Resales and Trading through Automatic Linkages
("PORTAL") Market to designate the Convertible Preferred Securities as
PORTAL-eligible securities;
(c) to negotiate the terms of and execute the Purchase
Agreement and other agreements, documents and instruments providing
for the sale of the Convertible Preferred Securities;
(d) to prepare for filing with the Commission and execute the
Shelf Registration Statement, including any amendments thereto; and
(e) to prepare for filing by the Trust with the Commission and
execute a registration statement on Form 8-A relating to the
registration of the Convertible Preferred Securities under Section
12(b) of the Exchange Act, including any amendments thereto.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees. The initial number of
Trustees shall be five, and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
aggregate liquidation amount of the Trust Common Securities voting as a class
at a meeting of the Holders of the Trust Common Securities; provided,
<PAGE> 29
23
however, that the number of Trustees shall in no event be less than two; and
provided further that (i) there shall be at least one Regular Trustee who is an
employee or officer of, or is affiliated with the Sponsor, (ii) one Trustee
shall be the Delaware Trustee if required by the Trust Act as provided in
Section 5.02 and (iii) one Trustee shall be the Property Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee as provided
in Section 5.02(b).
SECTION 5.02. Delaware Trustee; Eligibility. If required by
the Trust Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is resident of the State of Delaware;
or
(b) if not a natural person, an entity that has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law; provided that if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee may also be the
Delaware Trustee and Section 5.14 shall have no application to such Delaware
Trustee.
SECTION 5.03. Property Trustee; Eligibility. (a) There
shall at all times be one Trustee which shall act as Property Trustee and
shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any state or territory thereof
or of the District of Columbia, or a Person permitted by the
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 5.03(a)(ii), the
combined capital and surplus of such corporation shall
<PAGE> 30
24
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a- 5 and to the extent the
Investment Company Act or Trust Indenture Act requires a trustee
having certain qualifications to hold title to the "eligible assets"
of the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.06(d).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Trust Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.04. Qualifications of Regular Trustees and Delaware
Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.05. Initial Trustees. (a) The initial Regular
Trustees are:
Joseph S. Compofelice
Robert E. Musgraves
Mark A. Wallace
In care of Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
<PAGE> 31
25
The initial Delaware Trustee is:
Chase Manhattan Bank Delaware
1201 North Market Street, 6th Floor
Wilmington, DE 19801
Attention of Corporate Trust Department
The initial Property Trustee is:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention of Vice President, Global Trust Services
SECTION 5.06. Appointment, Removal and Resignation of
Trustees. (a) So long as no default or Event of Default has occurred and is
continuing, and subject to Sections 5.06(b) and 5.06(c), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in aggregate liquidation amount of the Trust
Common Securities voting as a class.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.06(a) until a successor possessing the
qualifications to act as a Property Trustee under Section 5.03 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee and delivered to the
Trust, the Sponsor and the removed Property Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.06(a) until a successor possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the removed Delaware Trustee.
<PAGE> 32
26
(d) A Trustee appointed to office shall hold office until
his, hers or its successor shall have been appointed or until his, her or its
death, removal, resignation, dissolution or liquidation. Any Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and
the Trust, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(e) The Holders of the Trust Common Securities shall use
their best efforts to promptly appoint a Successor Property Trustee or
Successor Delaware Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with
Section 5.06(d).
(f) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery pursuant to this Section 5.06 of an
instrument of resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and
<PAGE> 33
27
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(h) No appointment of any Successor Property Trustee shall be
effective until all amounts not subject to a good faith dispute which are known
to be owed to the Property Trustee and which are then due have been paid;
provided that upon such payment, within five Business Days of a request by the
Sponsor, the Property Trustee shall certify that all such amounts have been
paid, and that a Successor Property Trustee may be appointed.
SECTION 5.07. Vacancies Among Trustees. If a Trustee ceases
to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 5.01, or if the number of Trustees is increased pursuant to
Section 5.01, a vacancy shall occur. A resolution certifying the existence of
such vacancy by the Regular Trustees or, if there are more than two, a majority
of the Regular Trustees, shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 5.06.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with this Section 5.07, the
Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.08. Merger, Conversion, Consolidation or Succession
to Business of a Trustee. Any corporation into which the Property Trustee or
the Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Property Trustee or the Delaware
Trustee, as the case may be, shall be a party, or any corporation succeeding to
all
<PAGE> 34
28
or substantially all the corporate trust business of the Property Trustee or
the Delaware Trustee, as the case may be, shall be the Successor Property
Trustee or the Successor Delaware Trustee, as the case may be, hereunder;
provided such corporation shall be otherwise qualified and eligible under this
Article V, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
SECTION 5.09. Authority, Powers and Duties of the Regular
Trustees. (a) Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust.
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to this Section 5.09; provided that the Shelf Registration Statement,
including any amendments thereto, shall be signed by a majority of the Regular
Trustees.
(d) The Regular Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(i) to issue and sell the Convertible Preferred Securities and
the Trust Common Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series of
Convertible Preferred Securities and no more than one series of Trust
Common Securities; and provided further that there shall be no
interests in the Trust other
<PAGE> 35
29
than the Securities, and the issuance of Securities shall be limited
to simultaneous issuance of both Convertible Preferred Securities and
Trust Common Securities on the Closing Date and any other date
Convertible Preferred Securities are sold pursuant to the
overallotment option granted in the Purchase Agreement;
(ii) in connection with the issue and sale of the Convertible
Preferred Securities, at the direction of the Sponsor, to:
(A) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Convertible Preferred Securities in any state or foreign
jurisdiction in which the Sponsor has determined to qualify or
register such Convertible Preferred Securities for sale;
(B) execute and file an application, prepared by the
Sponsor, to the PORTAL Market to designate the Convertible
Preferred Securities PORTAL-eligible securities;
(C) execute and deliver letters, documents, or
instruments to the Depositary relating to the Convertible
Preferred Securities;
(D) execute and perform the Purchase Agreement and
other agreements, documents and instruments providing for the
sale of the Convertible Preferred Securities;
(E) execute the Shelf Registration Statement prepared
by the Sponsor, including any amendments thereto relating to,
among other securities, the Convertible Preferred Securities;
and
(F) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Convertible Preferred Securities under Section 12(b) of
the Exchange Act.
<PAGE> 36
30
(iii) to acquire the Convertible Debentures with the proceeds
of the sale of the Convertible Preferred Securities and the Trust
Common Securities; provided, however, that the Regular Trustees shall
cause legal title to the Convertible Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of
the Convertible Preferred Securities and the Holders of Trust Common
Securities;
(iv) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any Ministerial Action
in relation to a Special Event;
(v) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of
the Trust Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Convertible
Preferred Securities and Holders of Trust Common Securities as to such
actions and applicable record dates;
(vi) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the
Securities;
(vii) to bring or defend, pay, collect, compromise, arbitrate
or resort to a legal action, or otherwise adjust claims or demands of
or against the Trust (a "Legal Action"), unless pursuant to Section
5.11(e), the Property Trustee has the exclusive power to bring such
Legal Action;
(viii) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, advisors, and
consultants and pay reasonable compensation for such services;
(ix) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(x) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the
<PAGE> 37
31
Property Trustee, which certificate may be executed by any Regular
Trustee;
(xi) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(xii) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(xiii) to give prompt written notice to the Holders of the
Securities of any notice received from the Company of its election to
defer payments of interest on the Convertible Debentures by extending
the interest payment period under the Indenture;
(xiv) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing;
(xv) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Convertible Preferred
Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(xvi) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 5.09,
including, but not limited to:
(A) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(B) causing the Trust to be classified for United
States Federal income tax purposes as a grantor trust; and
(C) cooperating with the Company to ensure that the
Convertible Debentures will be treated as
<PAGE> 38
32
indebtedness of the Company for United States Federal income
tax purposes; provided that such action does not adversely
affect the interests of Holders; and
(xvii) to take all action necessary to cause all applicable
tax returns and tax information reports that are required to be filed
with respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
(e) The Regular Trustees must exercise the powers set forth
in this Section 5.09 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.03, and the Regular Trustees shall
not take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
(f) Subject to this Section 5.09, the Regular Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 5.11.
(g) Any expenses incurred by the Regular Trustees pursuant to
this Section 5.09 shall be reimbursed by the Sponsor.
SECTION 5.10. Delegation of Powers and Duties of the Regular
Trustees. The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein. The Regular
Trustees may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 their power for the purpose of
executing any documents contemplated in Section 5.09, including the
Registration Statement or any amendment thereto or other document filed with
the Commission, or making any other governmental filing.
SECTION 5.11. Powers and Duties of the Property Trustee. (a)
The legal title to the Convertible Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the
<PAGE> 39
33
Property Trustee to the Convertible Debentures shall vest automatically in each
Person who may hereafter be appointed as Property Trustee in accordance with
Section 5.06. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Convertible Debentures have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Convertible Debentures to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds
made in respect of the Convertible Debentures held by the Property
Trustee, deposit such funds into the Property Trustee Account and make
payments to the Holders of the Convertible Preferred Securities and
Holders of the Trust Common Securities from the Property Trustee
Account in accordance with Section 6.01. Funds in the Property
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account shall be an
account that is maintained in The City of New York with a banking
institution having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal,
state, territorial or District of Columbia authority;
(ii) engage in such ministerial and administrative activities
as so directed and as shall be necessary or appropriate to effect the
redemption of the Convertible Preferred Securities and the Trust
Common Securities to the extent the Convertible Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial and administrative activities as so
directed as shall be necessary or appropriate to effect the
distribution of the Convertible Debentures to Holders of Securities
upon the occurrence of certain Special Events arising
<PAGE> 40
34
from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Convertible
Debentures under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, but
subject to the rights of the Holders pursuant to the terms of such Securities,
enforce its rights as holder of the Convertible Debentures, including the right
to take any Legal Action which arises out of or in connection with such an
Event of Default.
(f) Subject to this Section 5.11, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 5.09.
(g) The Property Trustee must exercise the powers set forth
in this Section 5.11 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.03, and the Property Trustee shall
not take any action that is inconsistent with the purposes and functions of the
Trust set out in Section 3.03.
SECTION 5.12. Certain Duties and Responsibilities of the
Property Trustee. (a) The Property Trustee, before the occurrence of any
Event of Default and after all Events of Default that may have occurred have
been cured or waived, shall undertake to perform only such duties and
obligations as are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06) of which a Responsible Officer of the Property
Trustee has actual knowledge, the Property Trustee shall exercise such rights
and powers vested in it by this Declaration, and use the same degree of care
and skill in its exercise, as a prudent individual would exercise or use
<PAGE> 41
35
under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own wilful misconduct, except that prior
to the occurrence of an Event of Default and after the curing or waiving of all
such Events of Default that may have occurred, in the absence of bad faith on
the part of the Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property Trustee
and conforming to the requirements of this Declaration; but in the case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Declaration.
(c) The Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts.
(d) The Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a Majority in aggregate liquidation amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration.
(e) The Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee be
liable for any default or misconduct of the Regular Trustees or the Sponsor.
(f) No provision of this Declaration shall require the
Property Trustee to expend or risk its own funds otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability
<PAGE> 42
36
is not reasonably assured to it under the terms of this Declaration or
indemnity reasonably satisfactory to the Property Trustee against such risk or
liability is not reasonably assured to it.
(g) The Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Convertible Debentures
and the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to
the Property Trustee under this Declaration and the Trust Indenture Act.
(h) The Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing with
the Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 5.11(c)(i) and except to
the extent otherwise required by law.
(i) The Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Convertible Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith.
SECTION 5.13. Certain Rights of Property Trustee. (a)
Subject to the provisions of Section 5.12:
(i) the Property Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) if requested by the Property Trustee, any direction or
act of the Sponsor or the Regular Trustees contemplated by this
Declaration shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it
<PAGE> 43
37
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
satisfactory to the Property Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Property Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Property Trustee; provided that nothing contained in this Section
5.13(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
<PAGE> 44
38
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, attorneys, custodians or nominees and the Property
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (A) may request instructions from the
Holders of the Securities, which instructions may only be given by the
Holders of the same proportion in aggregate liquidation amount of the
Securities as would be entitled to direct the Property Trustee under
the terms of the Securities in respect of such remedy, right or
action, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall
be protected in acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
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any obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 5.14. Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.02, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Regular Trustees or the
Property Trustee described in this Declaration. Except as set forth in Section
5.02, the Delaware Trustee shall be a Trustee for the sole and limited purpose
of fulfilling the requirements of Section 3807 of the Trust Act.
SECTION 5.15. Meetings. If there is more than one Regular
Trustee, meetings of the Regular Trustees shall be held from time to time upon
the call of any Regular Trustee. Regular meetings of the Regular Trustees may
be held at a time and place fixed by resolution of the Regular Trustees.
Notice of any in-person meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
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notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter;
provided that a Quorum is present, or without a meeting by the written consent
of a majority of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. If and to the extent that the
Company makes a payment of principal of, premium, if any, or interest
(including Compound Interest but excluding Additional Interest, if any, which
the Trust shall apply to the payment of the taxes, duties, assessments and
governmental charges which gave rise to such Additional Interest) on the
Convertible Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders of Convertible Preferred
Securities and Trust Common Securities in accordance with the preferences set
forth in the respective terms of such Securities, as described in Annex I
hereto.
ARTICLE VII
The Securities
SECTION 7.01. Title and Terms. The Regular Trustees shall on
behalf of the Trust issue one class of convertible preferred securities,
representing undivided beneficial interests in the assets of the Trust (the
"Convertible Preferred Securities"), and one class of common securities,
representing undivided beneficial interests in the assets of the Trust (the
"Trust Common Securities"), each having such terms (the "Terms") as are set
forth in
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Annex I. The Trust shall issue no securities or other interests in the assets
of the Trust other than the Convertible Preferred Securities and the Trust
Common Securities. The aggregate number of Convertible Preferred Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex I hereto.
The Terms of the Securities set forth in Annex I and the forms
of Certificates set forth in Exhibits A- 1 and A-2 are part of the terms of
this Declaration and to the extent applicable, the Property Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree
to such Terms and to be bound thereby.
SECTION 7.02. General Provisions Regarding the Securities.
(a) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(b) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be validly issued, fully paid and
nonassessable.
(c) Every Person, by virtue of having become a Holder or a
Convertible Preferred Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Declaration.
SECTION 7.03. General Form of Certificates. The Convertible
Preferred Security Certificates and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Trust
Common Security Certificates and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-2, each of which
is hereby incorporated in and expressly made a part of this Declaration.
The Certificates may have letters, numbers, notations or other
marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage; provided that any such notation, legend or endorsement is in
a form acceptable to the Trust. The Trust at the direction of the Sponsor
shall furnish any such legend not contained in Exhibit A-1 to the Property
Trustee in writing.
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The definitive Certificates shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
national securities exchange or quotation system on which the Convertible
Preferred Securities may be listed or quoted, all as determined by the Regular
Trustees, as evidenced by their execution thereof. The Trust shall issue no
Securities in bearer form.
SECTION 7.04. Form of Convertible Preferred Securities
Certificates; Global Certificates. (a) Convertible Preferred Securities
offered and sold, on original issuance, to "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act) ("QIBs") in reliance on Rule
144A shall be issued in the form of a global Convertible Preferred Security
Certificate in fully registered form without distribution coupons and with the
appropriate legends set forth in Exhibit A-1 hereto (a "Restricted Global
Certificate"), which shall be deposited on behalf of the purchasers of the
Convertible Preferred Securities represented thereby with the Property Trustee,
at its New York office, as custodian for the Depositary, and registered in the
name of the Depositary or a nominee of the Depositary, duly executed by the
Trust and authenticated by the Property Trustee as hereinafter provided. The
number of Convertible Preferred Securities represented by the Restricted Global
Certificate may from time to time be increased or decreased by adjustments made
on the records of the Property Trustee and the Depositary or its nominee as
hereinafter provided.
(b) Unless required by the Depositary, any national
securities exchange or quotation system on which the Convertible Preferred
Securities may be listed or quoted or any rule, regulation or law, Convertible
Preferred Securities issued in the form of global Convertible Preferred
Security Certificates need not be printed, lithographed or engraved on steel
engraved borders, but shall be in such form as is acceptable to the Depositary.
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43
(c) Each global Convertible Preferred Security Certificate
authenticated and delivered hereunder shall bear a legend in substantially the
following form, in capital letters and bold-face type:
THIS SECURITY IS A GLOBAL CONVERTIBLE PREFERRED SECURITY
CERTIFICATE WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CONVERTIBLE PREFERRED SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION.
(d) If the Depositary is The Depository Trust Company, each
global Convertible Preferred Security Certificate authenticated and delivered
hereunder shall also bear a legend in substantially the following form, in
capital letters and bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
SIGNATORY OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE TRUST OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
SECTION 7.05. Execution and Dating of Certificates. The
Certificates shall be signed on behalf of the Trust by a Regular Trustee. In
case any Regular Trustee who shall have signed any of the Certificates shall
cease to be such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered as
though the person who signed such Certificates had not ceased to be such
Regular Trustee; and any Certificates may be signed on behalf of the Trust by
such persons who, at the actual date of execution of such Certificate, shall be
the Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Regular
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Trustee. Each Convertible Preferred Security shall be dated the date of its
authentication.
One Regular Trustee shall sign the Convertible Preferred
Security Certificates for the Trust by manual or facsimile signature. Unless
otherwise determined by the Trust, such signature shall, in the case of Trust
Common Security Certificates, be a manual signature.
SECTION 7.06. Authentication of Certificates. Each global
Convertible Preferred Security Certificate shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of The
Depositary Trust Company, and delivered to such Depositary or a nominee thereof
or custodian therefor, and each such global Convertible Preferred Security
Certificate shall constitute a single Convertible Preferred Security for all
purposes of this Declaration.
A Certificate shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Certificate has been
authenticated under this Declaration. Upon a written order of the Trust signed
by one Regular Trustee, the Property Trustee shall authenticate the
Certificates for original issue.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Security
Certificates. An authenticating agent may authenticate Convertible Preferred
Security Certificates whenever the Property Trustee may do so. Each reference
in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.07. Definitive Convertible Preferred Security
Certificates. Convertible Preferred Securities offered and sold, on original
issuance, in reliance on Regulation S under the Securities Act or to
"accredited investors" (as defined in Rule 501(a)(1), (2), (3), (4) or (7)
under the Securities Act) other than QIBs shall be issued in the form of
individual definitive Convertible Preferred Security Certificates in fully
registered form without distribution coupons and with the appropriate legends
set forth in Exhibit A-1 hereto (each, a "Restricted
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Definitive Certificate"); provided that upon transfer of such Convertible
Preferred Securities to a QIB, such Convertible Preferred Securities will,
unless the Restricted Global Certificate has previously been exchanged, be
exchanged for an interest in the Restricted Global Certificate pursuant to the
provisions of Section 8.02(e).
SECTION 7.08. Temporary Certificates. Until definitive
Certificates are ready for delivery, the Trust may prepare and the Property
Trustee shall authenticate temporary Certificates. Temporary Certificates
shall be substantially in the form of definitive Certificates but may have
variations that the Trust considers appropriate for temporary Certificates.
Without unreasonable delay, the Trust shall prepare and the Property Trustee
shall authenticate definitive Certificates in exchange for temporary
Certificates.
SECTION 7.09. Registrar, Paying Agent and Conversion Agent.
The Trust shall (a) maintain in the Borough of Manhattan in The City of New
York, an office or agency where Convertible Preferred Securities may be
presented for registration of transfer or exchange (the "Registrar"), (b) an
office or agency where Convertible Preferred Securities may be presented for
payment (the "Paying Agent") and (c) an office or agency where Convertible
Preferred Securities may be presented for conversion (the "Conversion Agent").
The Registrar shall keep a register of the Convertible Preferred Securities and
of their transfer and exchange. The Trust may appoint the Registrar, the
Paying Agent and Conversion Agent and may appoint one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent and the term "Conversion Agent" includes
any additional conversion agent. The Trust may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice to any Holder.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Regular Trustees. The Trust shall notify the Property
Trustee of the name and address of any Agent not a party to this Declaration.
The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust may act, and shall initially act, as paying agent,
registrar and co-registrar for the Trust Common Securities.
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The Trust initially appoints First Chicago Trust Company of
New York as Registrar, Paying Agent and Conversion Agent. First Chicago Trust
Company of New York shall be entitled to the protections of Sections 5.12 and
5.13 and Article IX in its capacity as Registrar, Paying Agent and Conversion
Agent.
SECTION 7.10. Paying Agent To Hold Money in Trust. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
principal or distribution on the Securities, and will notify the Property
Trustee if there are insufficient funds. While any such insufficiency
continues, the Property Trustee may require a Paying Agent to pay all money
held by it to the Property Trustee. The Trust at any time may require a Paying
Agent to pay all money held by it to the Property Trustee and to account for
any money disbursed by it. Upon payment over to the Property Trustee, the
Paying Agent (if other than the Trust or an Affiliate of the Trust) shall have
no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.
SECTION 7.11. Outstanding Convertible Preferred Securities.
The Convertible Preferred Securities "outstanding" at any time are all the
Convertible Preferred Securities authenticated by the Property Trustee except
for those canceled by it, those delivered to it for cancelation, and those
described in this Section 7.11 as not outstanding.
If a Convertible Preferred Security is replaced or paid
pursuant to Section 8.03, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Convertible Preferred Security is held by a bona fide purchaser.
If Convertible Preferred Securities are considered paid in
accordance with the terms of this Declaration, they cease to be outstanding and
interest on them ceases to accrue.
A Convertible Preferred Security does not cease to be
outstanding because one of the Trust, the Sponsor or an
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Affiliate of the Sponsor holds such Convertible Preferred Security.
SECTION 7.12. Convertible Preferred Securities in Treasury.
In determining whether the Holders of the required amount of Securities have
concurred in any direction, waiver or consent, Convertible Preferred Securities
owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may
be, shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected
in relying on any such direction, waiver or consent, only Convertible Preferred
Securities which a Responsible Officer of the Property Trustee actually knows
are so owned shall be so disregarded.
SECTION 7.13. Notices to Depositary. Whenever a notice or
other communication to the Convertible Preferred Security Holders is required
under this Declaration, the Regular Trustees shall, in the case of any Global
Convertible Preferred Security, give all such notices and communications
specified herein to be given to the Convertible Preferred Security Holders to
the Depositary, and shall have no notice obligations to the Convertible
Preferred Security Beneficial Owners.
SECTION 7.14. Appointment of Successor Depositary. If the
Depositary elects to discontinue its services as securities depositary with
respect to the Convertible Preferred Securities, the Regular Trustees may, in
their sole discretion, appoint a successor Depositary with respect to such
Convertible Preferred Securities.
SECTION 7.15. Deemed Security Holders. The Trustees and any
Agent may treat the Person in whose name any Certificate shall be registered on
the books and records of the Trust as the sole holder of such Certificate and
of the Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
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ARTICLE VIII
Transfers, Exchanges and Cancelations of Securities
SECTION 8.01. General. (a) Where Convertible Preferred
Security Certificates are presented to the Registrar or a co-registrar with a
request to register a transfer or to exchange them for an equal number of
Convertible Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers and
exchanges, the Trust shall issue and the Property Trustee shall authenticate
Convertible Preferred Security Certificates at the Registrar's request.
(b) Securities may only be transfered, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and
in the Terms set forth in Annex I. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(c) Subject to this Article VIII, the Sponsor and any Related
Party may only transfer Trust Common Securities to the Sponsor or a Related
Party; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
Federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(d) The Regular Trustees shall provide for the registration
of Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other governmental charges that may be
imposed in relation to such transfers. Upon surrender for registration of
transfer of any Certificates, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
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transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
(e) The Trust shall not be required (i) to issue, register
the transfer of or exchange Convertible Preferred Security Certificates during
a period beginning at the opening of business 15 days before the day of any
selection of Convertible Preferred Securities for redemption and ending at the
close of business (New York City time) on the day of selection, or (ii) to
register the transfer or exchange of any Convertible Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Convertible Preferred Security being redeemed in part.
SECTION 8.02. Transfer Procedures and Restrictions. (a)
General.
(i) The transfer and exchange of global Convertible Preferred
Security Certificates or beneficial interests therein shall be
effected through the Depositary, in accordance with this Declaration
and the procedures of the Depositary therefor.
(ii) Unless and until definitive Convertible Preferred
Security Certificates have been issued to the Convertible Preferred
Security Beneficial Owners pursuant to Section 8.02(i):
(A) the Trust and the Trustees shall be entitled to
deal with the Depositary for all purposes of this Declaration
(including the payment of Distributions on the Global
Certificates and receiving approvals, votes or consents
hereunder) as the Holder of the Convertible Preferred
Securities represented thereby and shall have no obligation to
the
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Convertible Preferred Security Beneficial Owners; and
(B) the rights of the Convertible Preferred Security
Beneficial Owners shall be exercised only through the
Depositary and shall be limited to those established by law
and agreements between such Convertible Preferred Security
Beneficial Owners and the Depositary and the direct and
indirect participants in the Depositary. The Depositary will
make book-entry transfers among the participants in the
Depositary.
(iii) Except in connection with an effective registration
statement under the Securities Act, including the Shelf Registration
Statement contemplated by and in accordance with the terms of the
Registration Agreement, if Convertible Preferred Securities are issued
upon the transfer, exchange or replacement of Convertible Preferred
Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend, the Convertible Preferred Securities so issued
shall bear the Restricted Securities Legend, or the Restricted
Securities Legend shall not be removed, as the case may be, unless
there is delivered to the Trust and the Property Trustee such
satisfactory evidence, which may include an opinion of counsel, as may
be reasonably required by the Trust, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A, Rule 144 or
Regulation S under the Securities Act or that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act.
Upon provision of such satisfactory evidence, the Property Trustee, at
the written direction of the Trust, shall authenticate and deliver
Convertible Preferred Securities that do not bear the Restricted
Securities Legend.
(b) Transfers Under Effective Shelf Registration Statement.
After the initial effectiveness of a Shelf Registration Statement for
Convertible Preferred Securities, all requirements pertaining to legends on
such Convertible Preferred Securities will cease to apply, and beneficial
interests in a global Convertible Preferred Security without legends will be
available to transferees of such Convertible Preferred Securities upon exchange
of the transfering
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Holder's Restricted Definitive Certificate or directions to transfer such
Holder's beneficial interest in the Restricted Global Certificate, as the case
may be. After the initial effectiveness of the Shelf Registration Statement,
the Trust shall issue and the Property Trustee shall authenticate a global
Convertible Preferred Security in fully registered form without the Restricted
Securities Legend (the "Unrestricted Global Certificate") to deposit with the
Depositary to evidence transfers under the Shelf Registration Statement of (i)
beneficial interests in the Restricted Global Certificates, (ii) Restricted
Definitive Certificates and (iii) Unrestricted Definitive Certificates.
(c) Restricted Definitive Certificate to Unrestricted
Definitive Certificate; Termination of Restricted Period. Following the
termination of the "restricted period" (as defined in Rule 903(c)(3) under the
Securities Act) with respect to the issuance of the Convertible Preferred
Securities in reliance on Regulation S, of which notice shall be provided to
the Property Trustee, such Convertible Preferred Securities may be exchanged
for Convertible Preferred Securities in definitive, fully registered form
without distribution coupons, but without the Restricted Securities Legend
("Unrestricted Definitive Certificates"), that are free from any restriction on
transfer (other than such as are solely attributable to any Holder's status).
Unrestricted Definitive Certificates will bear a CUSIP number different from
that of the other Convertible Preferred Securities and transfers or exchanges
from an Unrestricted Definitive Certificate to the global Convertible Preferred
Security Certificate must be effected pursuant to Section 8.02(b).
(d) Transfer and Exchange of Definitive Certificates. When
definitive Convertible Preferred Security Certificates are presented to the
Registrar or co-registrar (x) to register the transfer of such definitive
Convertible Preferred Security Certificates or (y) to exchange such definitive
Convertible Preferred Security Certificates for definitive Convertible
Preferred Security Certificates in different denominations, the Registrar or
co-registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the definitive Convertible Preferred Security Certificates surrendered for
transfer or exchange:
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(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) shall be accompanied by the following additional
information and documents:
(A) if such definitive Convertible Preferred Security
Certificates are being delivered to the Registrar by a Holder
for registration in the name of such Holder, without transfer,
a certification from such Holder to that effect (in the form
set forth on the reverse of the definitive Convertible
Preferred Security Certificate); or
(B) if such definitive Convertible Preferred
Security Certificates are being transfered pursuant to an
exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act (1) a certification to
that effect (in the form set forth on the reverse of the
definitive Convertible Preferred Security Certificate) and (2)
if the Trust or Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
QIB transferees of definitive Convertible Preferred Security
Certificates that are transfered in accordance with Rule 144A under the
Securities Act must take delivery of their interests in the Convertible
Preferred Securities in the form of a beneficial interest in the global
Convertible Preferred Security Certificate in accordance with Section 8.02(e).
(e) Restrictions on Transfer of a Definitive Convertible
Preferred Security Certificate for a Beneficial Interest in a Global
Convertible Preferred Security Certificate. A definitive Convertible Preferred
Security Certificate may not be exchanged for a beneficial interest in a global
Convertible Preferred Security Certificate except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a definitive
Convertible Preferred Security Certificate, duly endorsed or accompanied by
appropriate instruments of transfer, together with:
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(i) certification, in the form set forth on the reverse of the
definitive Convertible Preferred Security Certificate, that such
definitive Convertible Preferred Security Certificate is being
transfered to a QIB in accordance with Rule 144A under the Securities
Act; and
(ii) written instructions directing the Registrar to make, or
to direct the Depositary to make, an adjustment on its books and
records with respect to such global Convertible Preferred Security
Certificate to reflect an increase in the number of the Convertible
Preferred Securities represented by such global Convertible Preferred
Security Certificate,
then the Registrar shall cancel such definitive Convertible Preferred Security
Certificate and cause, or direct the Depositary to cause, the aggregate number
of Convertible Preferred Securities represented by the global Convertible
Preferred Security Certificate to be increased accordingly. If no global
Convertible Preferred Security Certificate is then outstanding, the Trust shall
issue and the Property Trustee shall authenticate, upon written order of any
Regular Trustee, an appropriate number of Convertible Preferred Securities in
global form.
(f) Transfer and Exchange of Global Convertible Preferred
Security Certificates. The transfer and exchange of beneficial interests in a
global Convertible Preferred Security Certificate shall be effected through the
Depositary, in accordance with this Declaration (including applicable
restrictions on transfer set forth in Section 8.02(a)(iii), if any) and the
procedures of the Depositary therefor.
(g) Transfer of a Beneficial Interest in a Global Convertible
Preferred Security Certificate for a Definitive Convertible Preferred Security
Certificate.
(i) Any person having a beneficial interest in a global
Convertible Preferred Security Certificate that is being transfered or
exchanged pursuant to an effective registration statement under the
Securities Act or pursuant to clause (A) or (B) below may upon
request, and if accompanied by the information specified below,
exchange such beneficial interest for a definitive Convertible
Preferred Security Certificate representing the same number of
Convertible Preferred
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Securities. Upon receipt by the Registrar from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a
global Convertible Preferred Security Certificate of written
instructions or such other form of instructions as is customary for
the Depositary and the following additional information and documents
(all of which may submitted by facsimile):
(A) if such beneficial interest is being registered
in the name of the Holder designated by the Depositary as
being the owner of such beneficial interest, a certification
from such Holder to that effect (in the form set forth on the
reverse of the Convertible Preferred Security Certificate); or
(B) if such beneficial interest is being transfered
pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act (1) a
certification to that effect from the transferee or transferor
(in the form set forth on the reverse of the Convertible
Preferred Security Certificate) and (2) if the Property
Trustee or Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the
restrictions set forth in the legend set forth in Section
8.02(j),
then the Registrar will cause, in accordance with the standing
instructions and procedures existing between the Registrar and the
Depositary, the aggregate principal amount of the global Convertible
Preferred Security Certificate to be reduced on its books and records
and, following such reduction, the Trust will execute and the Property
Trustee will authenticate and deliver to the transferee a definitive
Convertible Preferred Security Certificate.
(ii) Definitive Convertible Preferred Security Certificates
issued in exchange for a beneficial interest in a global Convertible
Preferred Security Certificate pursuant to this Section 8.02(g) shall
be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The
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Registrar shall deliver such Convertible Preferred Securities to the
persons in whose names such Convertible Preferred Securities are so
registered in accordance with the written instructions of the
Depositary.
Beneficial interests in the Restricted Global Certificate may
not be exchanged for a Restricted Definitive Certificate except as provided in
Sections 8.02(g)(i)(B) and 8.02(i).
(h) Restrictions on Transfer and Exchange of Convertible
Preferred Securities Represented by a Global Convertible Preferred Security
Certificate. Notwithstanding any other provisions of this Declaration (other
than the provisions set forth in Section 8.02(i)), a Convertible Preferred
Security represented by a global Convertible Preferred Security Certificate may
not be transfered as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(i) Authentication of Definitive Convertible Preferred
Security Certificates. If at any time:
(i) the Depositary notifies the Trust that the Depositary is
unwilling or unable to continue as Depositary for the global
Convertible Preferred Security Certificates and a successor Depositary
for the global Convertible Preferred Security Certificates is not
appointed by the Trust at the direction of the Sponsor within 90 days
after delivery of such notice or at any time the Depositary has ceased
to be a "clearing agency" registered under the Exchange Act;
(ii) the Trust, in its sole discretion, notifies the Property
Trustee in writing that it elects to cause the issuance of Definitive
Preferred Securities under this Declaration; or
(iii) an Event of Default has occurred and is continuing;
then a Regular Trustee will execute on behalf of the Trust, and the Property
Trustee, upon receipt of a written order of the Trust signed by a Regular
Trustee requesting the authentication and delivery of Definitive Preferred
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Securities to the Persons designated by the Trust, will authenticate,
definitive Convertible Preferred Security Certificates, in an aggregate
principal amount equal to the principal amount of Convertible Preferred
Securities represented by the global Convertible Preferred Security
Certificates.
Upon surrender of the global Convertible Preferred Security
Certificates by the Depositary, accompanied by registration instructions, the
Regular Trustees shall cause definitive Convertible Preferred Security
Certificates to be delivered to Convertible Preferred Security Beneficial
Owners in accordance with the instructions of the Depositary. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected
in relying on, said instructions of the Depositary.
(j) Legend.
(i) Except as permitted by the following paragraph (ii), each
Convertible Preferred Security Certificate (and all Convertible
Preferred Securities issued in exchange therefor or substitution
thereof) shall bear a legend (the "Restricted Securities Legend") in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERED (X)
PRIOR TO THE THIRD ANNIVERSARY OF THE ISSUANCE HEREOF (OR THE ISSUANCE
OF ANY PREDECESSOR SECURITY HERETO) OR (Y) IF LATER, BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN
(1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS
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SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN
TRANSFERORS SO SPECIFIED IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO
THE EXPIRATION OF THE "ONE-YEAR RESTRICTED PERIOD" (WITHIN THE MEANING
OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE
FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN
THE INDENTURE MAY NOT TRANSFER THIS SECURITY PURSUANT TO THIS CLAUSE
(4) PRIOR TO THE EXPIRATION OF THE "ONE-YEAR RESTRICTED PERIOD"
(WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE
SECURITIES ACT), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES; AND
AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE
144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT
IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
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(ii) Upon any sale or transfer of a Convertible Preferred
Security (including any Convertible Preferred Security represented by
a global Convertible Preferred Security Certificate) after such
Convertible Preferred Security is no longer "restricted" within the
meaning of Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act:
(A) in the case of any Convertible Preferred Security
that is a definitive Convertible Preferred Security
Certificate, the Registrar shall permit the Holder thereof to
exchange such Convertible Preferred Security Certificate for a
definitive Convertible Preferred Security Certificate that
does not bear the Restricted Securities Legend and rescind any
restriction on the transfer of such Convertible Preferred
Security; and
(B) in the case of any beneficial interest in a
global Convertible Preferred Security Certificate, the
Registrar shall permit the Holder thereof to exchange such
beneficial interest for a beneficial interest in another
global Convertible Preferred Security Certificate that does
not bear the Restricted Securities Legend.
(k) Cancellation or Adjustment of Global Convertible
Preferred Security Certificates. At such time as all beneficial interests in a
global Convertible Preferred Security Certificate have either been exchanged
for definitive Convertible Preferred Security Certificates to the extent
permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such global Convertible
Preferred Security Certificate shall be returned to the Depositary for
cancelation or retained and canceled by the Property Trustee. At any time
prior to such cancelation, if any beneficial interest in a global Convertible
Preferred Security Certificate is exchanged for definitive Convertible
Preferred Security Certificates, Convertible Preferred Securities represented
by such global Convertible Preferred Security Certificate shall be reduced and
an adjustment shall be made on the books and records of the Registrar with
respect to such global Convertible Preferred Security Certificate by the
Registrar to reflect such reduction.
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SECTION 8.03. Mutilated, Destroyed, Lost or Stolen
Certificates; Replacement Securities. If the holder of a Security claims that
the Certificate representing such Security has been lost, destroyed or
wrongfully taken or if such Certificate is mutilated and is surrendered to the
Trust or in the case of the Convertible Preferred Securities to the Property
Trustee, the Trust shall issue and the Property Trustee shall authenticate a
replacement Certificate if the Property Trustee's and the Trust's requirements,
as the case may be, are met. If required by the Property Trustee or the Trust,
an indemnity bond must be sufficient in the judgment of both to protect the
Trustees, the Property Trustee, the Sponsor or any authenticating agent from
any loss which any of them may suffer if a Certificate is replaced. The
Company may charge for its expenses in replacing a Certificate.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Sponsor in its discretion
may, instead of issuing a new Certificate, pay such Security.
Every replacement Certificate is an additional obligation of
the Trust.
SECTION 8.04. Cancelation of Convertible Preferred Security
Certificates. The Trust at any time may deliver Convertible Preferred Security
Certificates to the Property Trustee for cancelation. The Registrar, Paying
Agent and Conversion Agent shall forward to the Property Trustee any
Convertible Preferred Securities surrendered to them for registration of
transfer, redemption, conversion, exchange or payment. The Property Trustee
shall promptly cancel all Convertible Preferred Securities surrendered for
registration of transfer, redemption, conversion, exchange, payment,
replacement or cancelation and shall dispose of canceled Convertible Preferred
Securities as the Trust directs in writing. The Trust may not issue new
Convertible Preferred Securities to replace Convertible Preferred Securities
that it has paid or that have been delivered to the Property Trustee for
cancelation or that any holder has converted.
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ARTICLE IX
Limitation of Liability of
Holders of Securities, Trustees and Others
SECTION 9.01. Liability. (a) Except as expressly set forth
in this Declaration, the Guarantee and the terms of the Securities, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities, which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Trust Common Securities shall be liable
for all of the debts and obligations of the Trust (other than with respect to
the Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Trust Act, the Holders
of the Convertible Preferred Securities shall be entitled to the same
limitation of personal liability as is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
SECTION 9.02. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Trust or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust by the Regular Trustees and in a manner such Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence (or, in the case of the
Property Trustee, negligence) or wilful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or
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statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or on
behalf of the Trust by the Regular Trustees, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 9.03. Fiduciary Duty. (a) To the extent that, at
law or in equity, an Indemnified Person has duties (including fiduciary duties)
and liabilities relating thereto to the Trust or to any other Covered Person,
an Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities;
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person
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shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 9.04. Indemnification. (a) (i) The Company shall
indemnify, to the full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Trust) by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
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(ii) The Company shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust and except that no such indemnification shall
be made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless
and only to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.04(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 9.04(a) (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth
in paragraphs (i) and (). Such determination shall be made (A) by the Regular
Trustees by a majority vote of a quorum consisting of such Regular Trustees who
were not parties to such action, suit or proceeding, (B) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written
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opinion, or (C) by the Holders of the Trust Common Securities of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.04(a) shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Company as authorized in this Section 9.04(a). Notwithstanding the foregoing,
no advance shall be made by the Company if a determination is reasonably and
promptly made (A) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (B) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (C) the Holders of the
Trust Common Securities of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Holders of the Trust Common Securities at the
time such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not opposed
to the best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had reasonable
cause to believe his conduct was unlawful. In no event shall any advance be
made in instances where the Regular Trustees, independent legal counsel or the
Holders of the Trust Common Securities reasonably determine that such person
deliberately breached his duty to the Trust or the Holders of the Common or
Convertible Preferred Securities.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 9.04(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Company or
Holders of the Convertible Preferred Securities of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
9.04(a) shall be deemed to be provided by a contract between the Company and
each
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Company Indemnified Person who serves in such capacity at any time while this
Section 9.04(a) is in effect. Any repeal or modification of this Section
9.04(a) shall not affect any rights or obligations then existing.
(vii) The Company or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under the
provisions of this Section 9.04(a).
(viii) For purposes of this Section 9.04(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was serving
at the request of such constituent entity as a director, trustee, officer,
employee or agent of another entity, shall stand in the same position under the
provisions of this Section 9.04(a) with respect to the resulting or surviving
entity as he would have with respect to such constituent entity if its separate
existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 9.04(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability
or expense including taxes (other than taxes based on the income of such
Fiduciary Indemnified Person) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
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administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 9.04(b) shall survive the satisfaction
and discharge of this Declaration.
SECTION 9.05. Outside Businesses. Any Covered Person, the
Sponsor, the Regular Trustees, the Delaware Trustee and the Property Trustee
may engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. None of the Covered Persons, the Sponsor, the Regular
Trustees, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Regular
Trustees, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Sponsor or its Affiliates.
ARTICLE X
Accounting
SECTION 10.01. Fiscal Year. The fiscal year ("Fiscal Year")
of the Trust shall be the calendar year, or such other year as is required by
the Code.
SECTION 10.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the
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Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States Federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year by a firm of independent certified public accountants
selected by the Regular Trustees.
(b) If required by the Trust Indenture Act, the Regular
Trustees shall cause to be prepared and delivered to each of the Holders of
Securities, within 90 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the
Trust as of the end of such Fiscal Year, and the related statements of income
or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States
Federal income tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States Federal
income tax return, on a Form 1041 or such other form required by the Code, and
any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 10.03. Banking. The Trust may maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Convertible Debentures
held by the Property Trustee shall be made directly to the Property Trustee
Account and no other funds of the Trust shall be deposited in the Property
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
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SECTION 10.04. Withholding. The Trust and the Regular
Trustees shall comply with all withholding requirements under United States
Federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Regular Trustee shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not
withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XI
Amendments and Meetings
SECTION 11.01. Amendments. (a) Except as otherwise provided
in this Declaration or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed
by each of the Regular Trustees, the Property Trustee, the Delaware Trustee and
the Sponsor; provided that the consent of each of such parties to a proposed
amendment shall not be unreasonably withheld.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
<PAGE> 75
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(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received an
opinion of counsel (who may be counsel to the Sponsor or the Trust)
that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States Federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company that is required to be registered under the Investment
Company Act.
(c) So long as any Securities remain outstanding, any
amendment that would adversely affect the rights, privileges or preferences of
any Holder of Securities may be effected only with such additional requirements
as may be set forth in the terms of such Securities.
(d) Section 9.01(c) and this Section 11.01 shall not be
amended without the consent of all of the Holders of the Securities.
(e) Article IV and the rights of the Holders of the Trust
Common Securities under Article V to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in aggregate liquidation amount of the Trust Common
Securities.
(f) Notwithstanding Section 11.01(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
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70
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) qualify this Declaration under the Trust Indenture Act; and
(v) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority, which amendment does
not have a material adverse effect on the rights, preferences or
privileges of the Holders.
SECTION 11.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees or, if there are more than
two, a majority of the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms
of the Securities or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of 10% in aggregate liquidation amount of such class of Securities.
Such direction shall be given by delivering to the Regular Trustees one or more
calls in a writing stating that the signing Holders of Securities wish to call
a meeting and indicating the general or specific purpose for which the meeting
is to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by the Certificates so
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
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71
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least seven
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any
national securities exchange or quotation system on which the
Convertible Preferred Securities are listed or quoted, such vote,
consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders
of Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking
of action without a meeting shall be given to the Holders of
Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by
the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of three years from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
<PAGE> 78
72
(iv) unless the Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Convertible Preferred Securities are then listed
or trading provide otherwise, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XII
Representations of Property Trustee and Delaware Trustee
SECTION 12.01. Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of New York, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms
of, this Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee; and the
Declaration has been duly executed and delivered by the Property
Trustee, and constitutes a legal, valid and binding obligation of the
Property Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of
the court (regardless of whether the
<PAGE> 79
73
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the
Declaration by the Property Trustee does not conflict with or
constitute a breach of the certificate of incorporation or by-laws of
the Property Trustee.
(d) At the Closing Date, the Property Trustee has not
knowingly created any liens or encumbrances on such Convertible
Debentures.
(e) To the knowledge of the Property Trustee, no consent,
approval or authorization of, or registration with or notice to, any
New York State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the
Declaration.
SECTION 12.02. Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration and at
the time of Closing, and each Successor Delaware Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Delaware
Trustee's acceptance of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; and the
Declaration has been duly executed and delivered by the Delaware
Trustee, and constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of
the court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
<PAGE> 80
74
(c) The execution, delivery and performance of the
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the certificate of incorporation or by-laws of
the Delaware Trustee.
(d) To the knowledge of the Delaware Trustee, no consent,
approval or authorization of, or registration with or notice to, any
state or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIII
Miscellaneous
SECTION 13.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, sent by facsimile or mailed by first-class mail, as
follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Securities):
In care of Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
Telephone: (303) 296-5600
Facsimile: (303) 296-5650
Attention of Robert E. Musgraves, Regular Trustee
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75
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may
give notice of to the Holders of the Securities):
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Telephone: (212) 946-8157
Facsimile: (212) 946-3358
Attention of Vice President, Global Trust Services
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may
give notice of to the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 North Market Street, 6th Floor
Wilmington, DE 19801
Telephone: (302) 428-3375
Facsimile: (302) 984-4889
Attention of Corporate Trust Department
(d) if given to the Holders of the Trust Common Securities, at
the mailing address of the Sponsor set forth below (or such other
address as the Holders of the Trust Common Securities may give notice
to the Trust):
Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
Telephone: (303) 296-5600
Facsimile: (303) 296-5650
Attention of Robert E. Musgraves, Vice President,
General Counsel and Secretary
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first-class
mail, postage prepaid
<PAGE> 82
76
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
SECTION 13.02. Governing Law. THIS DECLARATION AND THE
RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
SECTION 13.03. Intention of the Parties. It is the intention
of the parties hereto that the Trust be classified for United States Federal
income tax purposes as a grantor trust. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
SECTION 13.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect
the interpretation of this Declaration or any provision hereof.
SECTION 13.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
SECTION 13.06. Invalidity of any Provision. If any provision
of this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 13.07. Counterparts. This Declaration may contain
more than one counterpart of the signature page and this Declaration may be
executed by the affixing of the signature of each of the Trustees to one of
such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same
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77
force and effect as though all of the signers had signed a single signature
page.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the date first above written.
---------------------------------------
Joseph S. Compofelice, as Trustee
---------------------------------------
Robert E. Musgraves, as Trustee
---------------------------------------
Mark A. Wallace, as Trustee
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee,
By
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Property Trustee,
By
-------------------------------------
Name:
Title:
TITANIUM METALS CORPORATION,
as Sponsor,
By
-------------------------------------
Name:
Title:
<PAGE> 84
ANNEX I
TERMS OF THE
CONVERTIBLE PREFERRED SECURITIES AND THE
TRUST COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust, dated as of November 20, 1996 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Convertible Preferred
Securities and the Trust Common Securities are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration):
1. Designation and Number. (a) Convertible Preferred
Securities. 3,500,000 Convertible Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of One
Hundred Seventy-Five Million Dollars ($175,000,000), plus up to an additional
525,000 Convertible Preferred Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of Twenty-Six
Million Two Hundred Fifty Thousand Dollars ($26,250,000) solely to cover
overallotments, as provided for in the Purchase Agreement (the "Option
Convertible Preferred Securities"), and a liquidation amount with respect to
the assets of the Trust of $50.00 per Convertible Preferred Security, are
hereby designated for the purposes of identification only as "6-5/8%
Convertible Preferred Securities, Beneficial Unsecured Convertible Securities
(BUCS) (Liquidation Amount $50.00 per Convertible Preferred Security)" (the
"Convertible Preferred Securities"). The Convertible Preferred Security
Certificates evidencing the Convertible Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any national securities
exchange or quotation system on which the Convertible Preferred Securities are
listed or quoted.
(b) Trust Common Securities. 108,248 Trust Common Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of Five Million Four Hundred Twelve Thousand Four Hundred Dollars
($5,412,400) plus up to an additional 16,238 Trust Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of Eight Hundred
<PAGE> 85
2
Eleven Thousand Nine Hundred Dollars ($811,900) to meet the capital
requirements of the Trust in the event of an issuance of Option Convertible
Preferred Securities, and a liquidation amount with respect to the assets of
the Trust of $50.00 per Trust Common Security, are hereby designated for the
purposes of identification only as "6-5/8% Common Securities (Liquidation
Amount $50.00 per Common Security)" (the "Trust Common Securities"). The Trust
Common Security Certificates evidencing the Trust Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions. (a) Distributions payable on each
Security will be fixed at a rate per annum of 6.625% (subject to adjustment in
the event the Shelf Registration Statement is not filed or is not declared
effective within, or is not continuously effective for, the time periods
specified in the Registration Agreement) (the "Coupon Rate") of the stated
liquidation amount of $50.00 per Security, such rate being the rate of interest
payable on the Convertible Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes any such interest
(including any Compound Interest but excluding Additional Interest) payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Convertible Debentures held by the Property
Trustee and to the extent the Trust has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed.
(b) Except as otherwise described below, Distributions on the
Securities will be cumulative, will accumulate from the first date of original
issuance and will be payable quarterly in arrears, on the following dates,
which dates correspond to the interest payment dates on the Convertible
Debentures: March 1, June 1, September 1 and December 1 of each year,
commencing on March 1, 1997, when, as and if available for payment by the
Property Trustee.
<PAGE> 86
3
The Company has the right at any time during the term of the Convertible
Debentures to defer interest payments (excluding, for such purposes, payments
with respect to Additional Interest, if any) from time to time by extending the
interest payment period for successive periods not exceeding 20 consecutive
quarters (each, an "Extension Period") for each such period; provided that no
Extension Period may extend beyond the maturity date of the Convertible
Debentures. As a consequence of such extension, quarterly Distributions on the
Securities will be deferred (although such Distributions will continue to
accumulate with interest since interest will continue to accrue on the
Convertible Debentures and will be compounded quarterly). In the event that
the Company exercises this right, then, during such period the Company has
agreed, among other things, (i) not to declare or pay dividends on, or make a
distribution with respect to, or redeem or purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (A)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security requiring the Company to purchase shares of Common Stock, (B) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (C) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged), (ii) not to make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company that rank pari passu with or
junior to the Convertible Debentures and (iii) not to make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
Prior to the termination of any such Extension Period, the Company may further
extend such Extension Period; provided that such Extension Period, together
with all such previous and further extensions thereof, may not exceed 20
consecutive quarters and may not extend beyond the maturity date of the
Convertible Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above restrictions.
<PAGE> 87
4
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates shall be the February 15, May
15, August 15 and November 15 prior to the next succeeding payment dates,
except as otherwise described in this Annex I. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment in
respect of the Convertible Preferred Securities represented by the Global
Certificates will be made to The Depository Trust Company (the "Depositary"),
which will credit the relevant accounts at the Depositary on the applicable
distribution dates or, in the case of certificated securities, such payments
shall be made by check mailed to the address of the Holder entitled thereto as
such address shall appear on the Register. The relevant record dates for the
Trust Common Securities shall be the same record dates as for the Convertible
Preferred Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date as a result of the Company
having failed to make a payment under the Convertible Debentures will cease to
be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
distribution or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock of the Company
pursuant to the terms of the Securities as set forth in this Annex I to the
Declaration, accumulated Distributions will not be paid on Convertible
Preferred Securities that are converted, nor will any payment, allowance or
adjustment be made for accumulated and unpaid Distributions, whether or not in
arrears, on converted Convertible Preferred Securities except that if any
Convertible Preferred Security is converted (i) on or after a record date for
payment of Distributions thereon,
<PAGE> 88
5
the Distributions payable on the related payment date with respect to such
Convertible Preferred Security shall be distributed to the Holder on such
record date, despite such conversion, and (ii) during an Extension Period and
after the Property Trustee mails a notice of redemption of the Convertible
Preferred Securities that are converted, accumulated and unpaid Distributions
through the date of conversion on such Convertible Preferred Securities called
for redemption shall be distributed to the Holder who converts such Convertible
Preferred Securities, which Distribution shall be made on the redemption date.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed pro rata (as defined in paragraph 9) among the Holders of
the Securities.
3. Liquidation Distribution upon Dissolution. In the event
of any voluntary or involuntary dissolution, winding up or termination of the
Trust (each a "Liquidation") the then Holders of the Securities on the date of
the Liquidation will be entitled to receive out of the assets of the Trust
available for distribution to Holders of Securities after satisfaction of
liabilities to creditors, Distributions in an amount equal to the aggregate of
the stated liquidation amount of $50.00 per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such Liquidation,
Convertible Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Securities, with an interest rate equal to
the Coupon Rate of, and bearing accrued and unpaid interest in an amount equal
to the accumulated and unpaid Distributions on, such Securities, shall be
distributed on a pro rata basis to the Holders of the Securities.
If, upon any such Liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a pro rata basis in
accordance with paragraph 9 below.
4. Redemption and Distribution. (a) Upon the repayment of
the Convertible Debentures, in whole or in part, whether at maturity or upon
redemption (either at the option of the Company or pursuant to a Tax Event),
the
<PAGE> 89
6
proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Convertible Debentures so repaid or redeemed at a
redemption price equal to the redemption price of such repaid or redeemed
Convertible Debentures, together with accrued and unpaid interest (including
Compound Interest but excluding Additional Interest) thereon through the date
fixed for redemption, payable in cash (the "Redemption Price").
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Trust Common Securities and the Convertible Preferred Securities
will be redeemed pro rata and the Convertible Preferred Securities to be
redeemed will be as described in paragraph 4(e)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as defined below and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, unless the Convertible Debentures are
redeemed in the limited circumstances in relation to a Tax Event described in
the following paragraph of this paragraph 4(c), dissolve the Trust and, after
satisfaction of creditors of the Trust, if any, cause Convertible Debentures
held by the Property Trustee (w) having an aggregate principal amount equal to
the aggregate liquidation amount of, (x) an interest rate identical to the
Coupon Rate of, (y) accrued and unpaid interest equal to the accumulated and
unpaid Distributions on, and (z) the same record dates for payment as, the
Securities to be distributed to the Holders of the Securities in liquidation of
such Holders' interest in the Trust on a pro rata basis, within 90 days
following the occurrence of such Special Event (the "90-Day Period"); provided,
however, that in the case of a Tax Event, such dissolution and distribution
shall be conditioned on the Regular Trustees' receipt of an opinion of a
nationally recognized independent tax counsel experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Convertible Preferred Securities will not recognize any income, gain or loss
for United States Federal income tax purposes as a result of such dissolution
and distribution of Convertible Debentures and, provided further, that if at
the time there is available to the Trust the opportunity to eliminate, within
the 90-Day Period, the Special Event by taking some ministerial action, such as
filing a form or making an
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7
election, or pursuing some other similar reasonable measure that in the sole
judgment of the Company has, or will cause, no adverse effect on the Trust, the
Company or the Holders of the Securities and will involve no material cost (a
"Ministerial Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution.
If in the event of a Tax Event, (i) after receipt of a
Dissolution Tax Opinion (as defined below) by the Trust, the Regular Trustees
have received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Company would be precluded from deducting the interest on the Convertible
Debentures for United States Federal income tax purposes (determined without
regard to the use made by the Company of the proceeds from the sale of the
Convertible Debentures) even if the Convertible Debentures were distributed to
the Holders of Securities in liquidation of such Holders' interest in the Trust
as described in this paragraph 4(c), or (ii) after receipt of a Dissolution Tax
Opinion, the Regular Trustees shall have been informed by such tax counsel that
a No Recognition Opinion cannot be delivered to the Trust, the Company shall
have the right, upon not less than 15 nor more than 60 days' notice, to redeem
the Convertible Debentures in whole (but not in part) for cash within the
90-Day Period, and promptly following such redemption, the Securities shall be
redeemed on a pro rata basis at $50.00 per Security plus accumulated and unpaid
Distributions; provided, however, that if at the time there is available to the
Company or the Trust the opportunity to eliminate, within such 90-Day Period,
the Tax Event by taking some Ministerial Action, the Trust or the Company will
pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that,
as a result of (A) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (B)
any amendment to, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
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8
publication of any judicial decision or regulatory determination), (C) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (D) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated or issued or which
interpretation or pronouncement is issued or adopted or which action is taken,
in each case after November 20, 1996 (collectively, a "Change in Tax Law"),
there is more than an insubstantial risk that (1) the Trust is, or will be
within 90 days of the date thereof, subject to United States Federal income tax
with respect to income accrued or received on the Convertible Debentures, (2)
the Trust is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of other taxes, duties or other governmental charges,
or (3) interest payable by the Company to the Trust on the Convertible
Debentures is not, or within 90 days of the date thereof will not be,
deductible by the Company for United States Federal income tax purposes
(determined without regard to the use made by the Company of the proceeds of
the Convertible Debentures). Notwithstanding anything in the previous sentence
to the contrary, a Tax Event shall not include any Change in Tax Law that
requires the Company for United States Federal income tax purposes to defer
taking a deduction for any original issue discount ("OID") that accrues with
respect to the Convertible Debentures until the interest payment related to
such OID is paid by the Company in money; provided that such Change in Tax Law
does not create more than an insubstantial risk that the Company will be
prevented from taking a deduction for OID accruing with respect to the
Convertible Debentures at a date that is no later than the date the interest
payment related to such OID is actually paid by the Company in money.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") to the effect that, as a result of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in Investment Company Law"), there is more than an insubstantial risk
that the Trust is or will be considered an Investment Company that is required
to be registered
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9
under the Investment Company Act, which Change in Investment Company Law
becomes effective on or after November 20, 1996.
On the date fixed for any distribution of Convertible
Debentures, upon dissolution of the Trust: (I) the Securities will no longer be
deemed to be outstanding and (II) certificates representing Securities will be
deemed to represent beneficial interests in Convertible Debentures having an
aggregate principal amount equal to the aggregate liquidation amount, and
bearing accrued and unpaid interest equal to the accumulated and unpaid
Distributions, on such Securities until such certificates are presented to the
Company or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on
all Securities for all quarterly Distribution periods terminating on or before
the date fixed for redemption.
(e) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of
Convertible Debentures in exchange for, the Securities (a "Redemption
or Distribution Notice") will be given by the Trust by mail to each
Holder of Securities to be redeemed or exchanged not fewer than 15 nor
more than 60 days before the date fixed for redemption or exchange
thereof, which, in the case of a redemption, will be the date fixed
for redemption of the Convertible Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this paragraph 4(e)(i), a
Redemption or Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid,
to Holders of Securities. Each Redemption or Distribution Notice
shall be addressed to the Holders of Securities at the address of each
such Holder appearing in the books and records of the Trust. No
defect in the Redemption or Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the
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10
Securities to be redeemed shall be redeemed pro rata from each Holder
of Convertible Preferred Securities, it being understood that, in
respect of Convertible Preferred Securities registered in the name
of and held of record by the Depositary or its nominee or nominees (or
any successor Depositary or its nominee or nominees), the distribution
of the proceeds of such redemption will be made to each Depositary
Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption or Distribution Notice (which notice is irrevocable), then,
provided that the Company has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity
of the Convertible Debentures, (A) with respect to Convertible
Preferred Securities held in book-entry form, by 12:00 noon, New York
City time, on the redemption date, the Trust will deposit irrevocably
with the Depositary or its nominee or nominees (or successor
Depositary or its nominee or nominees) funds sufficient to pay the
applicable Redemption Price with respect to such Convertible Preferred
Securities and will give the Depositary irrevocable instructions and
authority to pay the applicable Redemption Price to the Holders of
such Convertible Preferred Securities represented by the Global
Certificates, and (B) with respect to Convertible Preferred Securities
issued in definitive form and Trust Common Securities, the Trust will
irrevocably deposit with the Paying Agent funds sufficient to pay the
amount payable on redemption to the Holders of such Securities upon
surrender of their certificates. If a Redemption or Distribution
Notice shall have been given and funds deposited as required, then on
the date of such deposit, all rights of Holders of such Securities so
called for redemption will cease, except the right of the Holders of
such Securities to receive the Redemption Price, but without interest
thereon. Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities
that have been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in
respect of any such delay)
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11
except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date
fixed for redemption. If payment of the Redemption Price in respect
of any Securities is improperly withheld or refused and not paid
either by the Trust or by the Company as guarantor pursuant to the
Guarantee, Distributions on such Securities will continue to
accumulate at the then applicable rate, from the original redemption
date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of
calculating the amount payable upon redemption (other than for
purposes of calculating any premium).
(iv) In the event of any redemption in part, the Trust shall
not be required (A) to issue, register the transfer of or exchange of
any Convertible Preferred Security during a period beginning at the
opening of business (New York City time) 15 days before any selection
for redemption of Convertible Preferred Securities and ending at the
close of business (New York City time) on the earliest date on which
the relevant notice of redemption is deemed to have been given to all
holders of Convertible Preferred Securities to be so redeemed or (B)
to register the transfer of or exchange of any Convertible Preferred
Securities so selected for redemption, in whole or in part, except for
the unredeemed portion of any Convertible Preferred Securities being
redeemed in part.
(v) Redemption or Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in the case of
Convertible Preferred Securities held in book-entry form, the
Depositary and, in the case of Securities held in definitive form, the
Holders of such certificates and (B) in respect of the Trust Common
Securities, the Holders thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws), the
Company or any of its subsidiaries may at any time and from time to
time purchase outstanding Convertible Preferred Securities by tender,
in the open market or by private agreement.
<PAGE> 95
12
5. Conversion Rights. The Holders of Convertible Preferred
Securities shall have the right at any time after 90 days following the first
date of original issuance of the Convertible Preferred Securities and prior to
the close of business (New York City time) on the fifth Business Day
immediately preceding the date of repayment of such Convertible Preferred
Securities, whether at maturity or upon redemption (either at the option of the
Company or pursuant to a Tax Event), at their option, to cause the Conversion
Agent to convert Securities, on behalf of the converting Holders, into shares
of Common Stock of the Company in the manner described herein on and subject to
the following terms and conditions:
(a) The Convertible Preferred Securities will be convertible
at the office of the Conversion Agent into fully paid and
nonassessable shares of Common Stock of the Company pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities
for a portion of the Convertible Debentures theretofore held by the
Trust on the basis of one Security per $50.00 aggregate principal
amount of Convertible Debentures, and immediately to convert such
amount of Convertible Debentures into fully paid and nonassessable
shares of Common Stock of the Company at an initial conversion rate of
1.339 shares of Common Stock of the Company per $50.00 principal
amount of Convertible Debentures (which is equivalent to a conversion
price of approximately $37.34 per share of Common Stock of the
Company), subject to certain adjustments set forth in Section 13.03 of
the Indenture and in the terms of the Convertible Debentures (as so
adjusted, the "Conversion Price").
(b) In order to convert Securities into Common Stock of the
Company, the Holder shall submit to the Conversion Agent at the office
referred to above an irrevocable request to convert Securities on
behalf of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates. The
Conversion Request shall (i) set forth the number of Securities to be
converted and the name or names, if other than the Holder, in which
the shares of Common Stock of the Company should be issued and (ii)
direct the Conversion Agent (A) to exchange such Securities for a
portion of the Convertible Debentures held by the Trust (at the rate
of exchange specified in the preceding paragraph) and (B) to
<PAGE> 96
13
immediately convert such Convertible Debentures on behalf of such
Holder, into Common Stock of the Company (at the conversion rate
specified in the preceding paragraph). The Conversion Agent shall
notify the Trust of the Holder's election to exchange Securities for a
portion of the Convertible Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Convertible Debentures for
exchange in accordance with this paragraph 5. The Conversion Agent
shall thereupon notify the Company of the Holder's election to convert
such Convertible Debentures into shares of Common Stock of the
Company. Accrued Distributions will not be paid on Convertible
Preferred Securities that are converted, nor will any payment,
allowance or adjustment be made for accumulated and unpaid
Distributions, whether or not in arrears, on converted Convertible
Preferred Securities except that if any Convertible Preferred Security
is converted (1) on or after a record date for payment of
Distributions thereon, the Distributions payable on the related
payment date with respect to such Convertible Preferred Security shall
be distributed to the Holder on such record date, despite such
conversion, and (2) during an Extension Period and after the Property
Trustee mails a Redemption Distribution Notice with respect to the
Convertible Preferred Securities that are converted, accrued and
unpaid Distributions through the date of conversion on such
Convertible Preferred Securities called for redemption shall be
distributed to the Holder who converts such Convertible Preferred
Securities, which Distribution shall be made on the redemption date
fixed for redemption. Except as provided above, neither the Trust nor
the Company will make, or be required to make, any payment, allowance
or adjustment upon any conversion on account of any accumulated and
unpaid Distributions on the Securities (including any Compound
Interest) surrendered for conversion, or on account of any accumulated
and unpaid dividends on the shares of Common Stock of the Company
issued upon such conversion. The Company shall make no payment or
allowance for distributions on the shares of Common Stock of the
Company issued upon such conversion, except to the extent that such
shares of Common Stock of the Company are held of record on the record
date for any such distributions and except as provided in Section
13.09 of the Indenture. Securities shall be deemed to have been
converted immediately
<PAGE> 97
14
prior to the close of business (New York City time) on the day on
which a Notice of Conversion relating to such Securities is received
by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive the
Common Stock of the Company issuable upon conversion of the
Convertible Debentures shall be treated for all purposes as the record
holder or holders of such Common Stock of the Company at such time.
As promptly as practicable on or after the Conversion Date, the
Company shall issue and deliver at the office of the Conversion Agent
a certificate or certificates for the number of full shares of Common
Stock of the Company issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the
Person or Persons entitled to receive the same, unless otherwise
directed by the Holder in the notice of conversion and the Conversion
Agent shall distribute such certificate or certificates to such Person
or Persons.
(c) Each Holder of a Security by his acceptance thereof
appoints First Chicago Trust Company of New York (the "Conversion
Agent") for the purpose of effecting the conversion of Securities in
accordance with this paragraph 5. In effecting the conversion and
transactions described in this paragraph 5, the Conversion Agent shall
be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Securities from time to time for
Convertible Debentures held by the Trust in connection with the
conversion of such Securities in accordance with this paragraph 5 and
(ii) to convert all or a portion of the Convertible Debentures into
Common Stock of the Company and thereupon to deliver such shares of
Common Stock of the Company in accordance with the provisions of this
paragraph 5 and to deliver to the Trust a new Convertible Debenture or
Convertible Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock of the Company will
be issued as a result of conversion, but in lieu thereof, such
fractional interest will be in cash (based on the last reported sale
price of the Common Stock of the Company on the Conversion Date) by
the Company to the Trust, which in turn will make such
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15
payment to the Holder or Holders of Securities so converted.
(e) The Company shall at all times reserve and keep available
out of its authorized and unissued Common Stock of the Company, solely
for issuance upon the conversion of the Convertible Debentures, free
from any preemptive or other similar rights, such number of shares of
Common Stock of the Company as shall from time to time be issuable
upon the conversion of all the Convertible Debentures then
outstanding. Notwithstanding the foregoing, the Company shall be
entitled to deliver upon conversion of Convertible Debentures, shares
of Common Stock of the Company reacquired and held in the treasury of
the Company (in lieu of the issuance of authorized and unissued shares
of Common Stock of the Company), so long as any such treasury shares
are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock of the Company issued upon
conversion of the Convertible Debentures shall be duly authorized,
validly issued, fully paid and nonassessable. The Trust shall deliver
the shares of Common Stock of the Company received upon conversion of
the Convertible Debentures to the converting Holder free and clear of
all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Company and the Trust
shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations
as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the Common Stock
of the Company (and all requirements to list the Common Stock of the
Company issuable upon conversion of Convertible Debentures that are at
the time applicable), in order to enable the Company to lawfully issue
Common Stock of the Company to the Trust upon conversion of the
Convertible Debentures and the Trust to lawfully deliver the Common
Stock of the Company to each Holder upon conversion of the Securities.
(f) The Company will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock
of the Company on conversion of Convertible Debentures and the
delivery of the shares of Common Stock of the Company by the Trust
upon conversion of the Securities. The Company shall not,
<PAGE> 99
16
however, be required to pay any tax that may be payable in respect of
any transfer involved in the issue and delivery of shares of Common
Stock of the Company in a name other than that in which the Securities
so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the
Trust the amount of any such tax or has established to the
satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding paragraph 5(f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of
the Securities or as set forth in this Annex I to the Declaration or
the Declaration itself or otherwise require the Property Trustee or
the Trust to pay any amounts on account of such withholdings.
6. Voting Rights of Holders of Convertible Preferred
Securities. (a) Except as provided under paragraph 6(b) and paragraph 8, in
the Trust Act and the Trust Indenture Act and as otherwise required by law and
the Declaration, the Holders of the Convertible Preferred Securities will have
no voting rights. No vote or consent of the Holders of the Convertible
Preferred Securities will be required for the Trust to redeem and cancel
Convertible Preferred Securities or to distribute the Convertible Debentures in
accordance with the Declaration and the terms of the Securities.
(b) Subject to the requirements set forth in this paragraph
6(b), the Holders of a Majority in aggregate liquidation amount of the
Convertible Preferred Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available
to the Property Trustee and direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee, as holder of the Convertible Debentures, (i) to exercise
the remedies available to it under the Indenture as a holder of the Convertible
Debentures, (ii) to waive any past default and its consequences that are
waivable under the Indenture, (iii) to exercise any right to rescind or annul a
declaration that the principal of all the Convertible Debentures shall be due
and payable or (iv) to consent to any amendment, modification or termination of
the Indenture or the Convertible Debentures where such consent shall be
required; provided that where a consent or action
<PAGE> 100
17
under the Indenture would require the Unanimous Consent of the Holders of
Convertible Debentures affected thereby, the Property Trustee may only give
such consent or take such action at the written direction of each Holders of
the Convertible Preferred Securities outstanding. The Property Trustee shall
be under no obligation to revoke any action previously authorized or approved
by a vote of the Holders of the Convertible Preferred Securities. Other than
with respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Indenture Trustee as set forth above,
the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of the Convertible Preferred
Securities under this paragraph 6(b) unless the Property Trustee has obtained
an opinion of independent tax counsel to the effect that for the purposes of
United States Federal income tax the Trust will not be classified as other than
a grantor trust on account of such action and each Holder will be treated as
owning an undivided beneficial interest in the Convertible Debentures.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of, premium, if any, or interest on the Convertible Debentures on the
date such principal, premium or interest is otherwise payable (or in the case
of redemption on the date fixed for redemption), then a Holder of Convertible
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder (a "Direct Action") of the principal of or interest on
Convertible Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Convertible Preferred Securities of such
Holder on or after the respective due date specified in the Convertible
Debentures. Except as provided in the preceding sentence, the Holders of
Convertible Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the Convertible Debentures. In
connection with such Direct Action, the Company will be subrogated to the
rights of such Holder of Convertible Preferred Securities under the Declaration
to the extent of any payment made by the Company to such Holder of Convertible
Preferred Securities in such Direct Action.
(c) Any required approval or direction of Holders of
Convertible Preferred Securities may be given at a separate meeting of Holders
of Convertible Preferred Securities convened for such purpose, at a meeting of
all of the Holders of Securities in the Trust or pursuant to
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written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Convertible Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Convertible Preferred Securities.
Each such notice will include a statement setting forth the following
information (i) the date of such meeting or the date by which such action is to
be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
(d) Notwithstanding that Holders of Convertible Preferred
Securities are entitled to vote or consent under any of the circumstances
described above, any of the Convertible Preferred Securities that are owned by
the Company or any Affiliate of the Company shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if such
Convertible Preferred Securities were not outstanding.
7. Voting Rights of Holders of Trust Common Securities. (a)
Except as provided under paragraphs 7(b) and (c) and paragraph 8, in the Trust
Act and the Trust Indenture Act and as otherwise required by law and the
Declaration, the Holders of the Trust Common Securities will have no voting
rights. No vote or consent of the Holders of the Trust Common Securities will
be required for the Trust to redeem and cancel Trust Common Securities or to
distribute the Convertible Debentures in accordance with the Declaration and
the terms of the Securities.
(b) The Holders of the Trust Common Securities are entitled,
in accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.06 of the Declaration and only after
each and every Event of Default with respect to the Convertible Preferred
Securities has been cured, waived, or otherwise eliminated and subject to the
requirements of the last sentence of this paragraph 7(c), the Holders of a
Majority in aggregate liquidation amount of the Trust Common Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee and direct the
exercise of any trust or power conferred upon
<PAGE> 102
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the Property Trustee under the Declaration, including the right to direct the
Property Trustee, as holder of the Convertible Debentures, (i) to exercise the
remedies available to it under the Indenture as a holder of the Convertible
Debentures, (ii) to waive any past default and its consequences that are
waivable under the Indenture, (iii) to exercise any right to rescind or annul a
declaration that the principal of all the Convertible Debentures shall be due
and payable or (iv) to consent to any amendment, modification or termination of
the Indenture or the Convertible Debentures where such consent shall be
required; provided that, where a consent or action under the Indenture would
require the Unanimous Consent of the Holders of Convertible Debentures affected
thereby, the Property Trustee may only give such consent or take such action at
the written direction of each Holder of the Trust Common Securities
outstanding. Pursuant to this paragraph 7(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Convertible Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the Property
Trustee or the Indenture Trustee as set forth above, the Property Trustee shall
be under no obligation to take any action in accordance with the directions of
the Holders of the Trust Common Securities under this paragraph 7(c) unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that for the purposes of United States Federal income tax the Trust will
not be classified as other than a grantor trust on account of such action and
each Holder will be treated as owning an undivided beneficial interest in the
Convertible Debentures.
(d) Any approval or direction of Holders of Trust Common
Securities may be given at a separate meeting of Holders of Trust Common
Securities convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of Trust Common Securities
are entitled to vote, or of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each Holder of record of Trust
Common Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken, (ii)
a description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter
<PAGE> 103
20
upon which written consent is sought and (iii) instructions for the delivery of
proxies or consents.
8. Amendments to Declaration and Indenture. (a) In addition
to any requirements under Section 11.01 of the Declaration, if any proposed
amendment to the Declaration provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, or (ii) the dissolution, winding up or
termination of the Trust, other than as described in Section 3.10 of the
Declaration, then the Holders of Securities as a class will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the Holders of a Majority in aggregate liquidation amount of the Securities
affected thereby, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Convertible Preferred Securities or only the Trust Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of a Majority in aggregate liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Convertible Debentures is required under the Indenture with
respect to any amendment, modification or termination on the Indenture or the
Convertible Debentures, the Property Trustee shall request the written
direction of the Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in aggregate liquidation
amount of the Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the Unanimous Consent of
the Holders of Convertible Debentures, the Property Trustee may only give such
consent at the written direction of each Holder of the Securities; and,
provided further, that the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
paragraph 8(b) unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of United States
Federal income tax the Trust
<PAGE> 104
21
will not be classified as other than a grantor trust on account of such action.
9. Pro Rata. A reference in these terms of the Securities to
any payment, distribution or treatment as being "pro rata" shall mean pro rata
to each Holder of Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Convertible Preferred Securities pro rata
according to the aggregate liquidation amount of Convertible Preferred
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Convertible Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Convertible Preferred
Securities, to each Holder of Trust Common Securities pro rata according to the
aggregate liquidation amount of Trust Common Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Trust Common
Securities outstanding.
10. Ranking. The Convertible Preferred Securities rank pari
passu and payment thereon shall be made pro rata with the Trust Common
Securities except that, if an Event of Default has occurred and is continuing
under the Indenture in respect of the Convertible Debentures held by the
Property Trustee, the rights of Holders of the Trust Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Convertible Preferred Securities.
11. Acceptance of Guarantee and Indenture. Each Holder of
Convertible Preferred Securities, by the acceptance thereof, agrees to the
provisions of the Guarantee, including the subordination provisions therein,
and to the provisions of the Indenture.
12. No Preemptive Rights. The Holders of the Securities
shall have no preemptive rights to subscribe for any additional securities.
13. Miscellaneous. These terms constitute a part of the
Declaration.
<PAGE> 105
22
The Company will provide a copy of the Declaration (together
with this Annex I), the Guarantee, and the Indenture to a Holder without charge
on written request to the Company at its principal place of business.
<PAGE> 106
EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY
[FACE OF SECURITY]
[Include if Convertible Preferred Security is in global form:
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CONVERTIBLE PREFERRED SECURITY REGISTERED, AND NO TRANSFER OF THIS CONVERTIBLE
PREFERRED SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION.]
[Include if Convertible Preferred Security is in global form
and The Depository Trust Company is the Depositary: UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED SIGNATORY OF THE DEPOSITORY TRUST COMPANY ("DTC") TO
THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include if Convertible Preferred Security is restricted:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERED (X) PRIOR TO THE THIRD ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) IF LATER, BY
ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO
THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE
<PAGE> 107
2
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS BEING EFFECTED BY
CERTAIN TRANSFERORS SO SPECIFIED IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO
THE EXPIRATION OF THE "ONE-YEAR RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO
THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE
(PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS
SECURITY PURSUANT TO THIS CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "ONE-YEAR
RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER
THE SECURITIES ACT), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT,
OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES; AND AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
"QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A OR (2) AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.]
[Include if Convertible Preferred Security was initially
issued in reliance on Regulation S under the Securities Act: SUBSEQUENT
TRANSFERS OF THIS SECURITY (OR
<PAGE> 108
3
ANY OTHER SECURITY REFERRED TO ABOVE) AND REGISTRATION OF SUCH TRANSFERS ARE
SUBJECT TO THE PRIOR SATISFACTION OF THE CERTIFICATION REQUIREMENTS AS THE
REGISTRAR OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
[Include if Convertible Preferred Security is a restricted,
definitive Security: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
TIMET CAPITAL TRUST I
6-5/8% Convertible Preferred Securities
Beneficial Unsecured Convertible Securities (BUCS)
(Liquidation Amount $50.00 per Convertible Preferred Security)
of
TIMET Capital Trust I
Cert. No.:_______ CUSIP No.
No. of Convertible
Preferred Securities:______
TIMET CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
____________________________ (the "Holder") is the registered owner of
convertible preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the "6-5/8% Convertible
Preferred Securities, Beneficial Unsecured Convertible Securities (BUCS)
(Liquidation Amount $50.00 per Convertible Preferred Security)" (the
"Convertible Preferred Securities"). The Convertible Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Convertible Preferred
Securities represented hereby are issued and shall in all respects be subject
to the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of November 20,
<PAGE> 109
4
1996, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Convertible Preferred Securities
as set forth in Annex I thereto. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled
to the benefits of the Guarantee to the extent provided therein. The Company
will provide a copy of the Declaration, the Guarantee and the Indenture to a
Holder without charge upon written request to the Trust at its principal place
of business.
Reference is hereby made to select provisions of the
Convertible Preferred Securities set forth on the reverse hereof, which select
provisions shall for all purposes have the same effect as if set forth at this
place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
Federal income tax purposes, the Convertible Debentures as indebtedness and the
Convertible Preferred Securities as evidence of indirect beneficial ownership
in the Convertible Debentures.
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Convertible Preferred Securities shall
not be entitled to any benefit under the Declaration or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Trust has caused this instrument to be
duly executed.
Dated:
TIMET CAPITAL TRUST I,
By
-------------------------------------
Name:
Title:
<PAGE> 110
5
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred
to in the within-mentioned Declaration.
Dated:
THE CHASE MANHATTAN BANK, as
Property Trustee,
By
--------------------------------------
Name:
Title:
<PAGE> 111
6
[REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred Security
will be fixed at a rate per annum of 6.625% (subject to adjustment in the event
the Shelf Registration Statement is not filed or is not declared effective
within, or is not continuously effective for, the time periods specified in the
Registration Agreement) (the "Coupon Rate") of the stated liquidation amount of
$50.00 per Convertible Preferred Security, such rate being the rate of interest
payable on the Convertible Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes any such interest
(including any Compound Interest but excluding Additional Interest) payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Convertible Debentures held by the Property
Trustee and to the extent the Trust has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed.
Except as otherwise described below, Distributions on the
Convertible Preferred Securities will be cumulative, will accumulate from the
first date of original issuance and will be payable quarterly in arrears, on
the following dates, which dates correspond to the interest payment dates on
the Convertible Debentures: March 1, June 1, September 1 and December 1 of
each year, commencing on March 1, 1997, when, as and if available for payment
by the Property Trustee. The Company has the right at any time during the term
of the Convertible Debentures to defer interest payments (excluding, for such
purposes, payments with respect to Additional Interest, if any) from time to
time by extending the interest payment period for successive periods not
exceeding 20 consecutive quarters (each, an "Extension Period") for each such
period; provided that no Extension Period may extend beyond the maturity date
of the Convertible Debentures. As a consequence of such extension, quarterly
Distributions on the Convertible Preferred Securities will be deferred
(although such Distributions will continue to accumulate with interest since
interest
<PAGE> 112
7
will continue to accrue on the Convertible Debentures and will be compounded
quarterly). In the event that the Company exercises this right, then, during
such period the Company has agreed, among other things, (a) not to declare or
pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (i) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security requiring the Company to purchase shares
of Common Stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged), (b) not to make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by the Company that
rank pari passu with or junior to the Convertible Debentures and (c) not to
make any guarantee payments with respect to the foregoing (other than pursuant
to the Guarantee). Prior to the termination of any such Extension Period, the
Company may further extend such Extension Period; provided that such Extension
Period, together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters and may not extend beyond the maturity date of
the Convertible Debentures. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above restrictions.
Distributions on the Convertible Preferred Securities will be
payable to the Holders thereof as they appear on the books and records of the
Trust on the relevant record dates. The relevant record dates shall be the
February 15, May 15, August 15 and November 15 prior to the next such
succeeding payment date, except as otherwise described in the Declaration.
The Convertible Preferred Securities shall be redeemable as
provided in the Declaration.
<PAGE> 113
8
The Convertible Preferred Securities shall be convertible into
shares of common stock, $.01 par value ("Common Stock") of Titanium Metals
Corporation, a Delaware corporation, through (1) the exchange of Convertible
Preferred Securities for a portion of the Convertible Debentures and (2) the
immediate conversion of such Convertible Debentures into Common Stock of
Titanium Metals Corporation, in the manner and according to the terms set forth
in the Declaration.
<PAGE> 114
9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Convertible Preferred Security Certificate to:
_____________________________________
(Insert assignee's social security or
tax identification number)
________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints agent to transfer this Convertible
Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
--------------------------
- -------------------------------
(Sign exactly as your name appears on the
other side of this Convertible Preferred Security)
Certificate)
Signature Guarantee:*
--------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE> 115
10
CONVERSION REQUEST
To: The Chase Manhattan Bank, as Property Trustee of TIMET Capital Trust I
The undersigned owner of these Convertible Preferred
Securities hereby irrevocably exercises the option to convert these Convertible
Preferred Securities, or the portion below designated, into the common stock,
$.01 par value (the "Common Stock") of Titanium Metals Corporation in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of November 20, 1996, by Joseph S. Compofelice, Robert
E. Musgraves and Mark A. Wallace, as Regular Trustees, Chase Manhattan Bank
Delaware, as Delaware Trustee, The Chase Manhattan Bank, as Property Trustee,
Titanium Metals Corporation, as Sponsor, and by the Holders, from time to time,
of individual beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Convertible Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) (a) to exchange
such Convertible Preferred Securities for a portion of the Convertible
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Convertible Preferred
Securities set forth as Annex I to the Declaration) and (b) to immediately
convert such Convertible Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Convertible
Preferred Securities set forth as Annex I to the Declaration).
The undersigned also hereby directs the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Date:
-----------------
Number of Convertible Preferred Securities to be converted:
----------------
<PAGE> 116
11
If a name or names other than the undersigned, please indicate
in the spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or persons.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------
(Sign exactly as your name appears on the
other side of this Convertible Preferred
Security Certificate) (for conversion only)
Please print or typewrite name
and address, including zip code,
and social security or other
identifying number.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Signature Guarantee:*
-------------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE> 117
12
CERTIFICATE TO BE DELIVERED UPON
EXCHANGE OR REGISTRATION OF
RESTRICTED CONVERTIBLE PREFERRED SECURITIES
This certificate relates to __________ Convertible Preferred
Securities held in (check applicable space) ___ book-entry or ___ definitive
form by the undersigned.
(A) The undersigned (check one box below):
(1) [ ] has requested the Property Trustee by written order
deliver in exchange for its beneficial interest in
the Restricted Global Convertible Preferred Security
held by the Depositary a Convertible Preferred
Security or Securities in definitive, fully
registered form in such number equal to its
beneficial interest in such Restricted Global
Convertible Preferred Security (or the number
thereof indicated above); or
(2) [ ] has requested the Property Trustee by written order
exchange its Convertible Preferred Security in
definitive, fully registered form for an interest in
the Restricted Global Preferred Security held by the
Depositary in such number equal to the number of
Convertible Preferred Securities in definitive, fully
registered form so held; or
(3) [ ] has requested the Property Trustee by written order
exchange or register the transfer of a Convertible
Preferred Security or Securities.
(B) The undersigned confirms that such Securities are being (check one
box below):
(1) [ ] acquired for the undersigned's own account, without
transfer (in satisfaction of Section 8.02(d)(ii)(A)
of the Indenture); or
(2) [ ] pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
<PAGE> 118
13
(4) [ ] pursuant to Rule 144 under the Securities Act of 1933.
Unless one of the boxes in (B) above is checked, the Property
Trustee will refuse to register any of the Convertible Preferred Securities
evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (1), (3) or (4) is checked, the
Property Trustee may require, prior to registering any such transfer of the
Convertible Preferred Securities such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
TO BE COMPLETED BY PURCHASER IF (B)(2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
these Convertible Preferred Securities for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act of 1933, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Trust as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
----------------------------
Signature
Signature Guarantee:*
----------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE> 119
EXHIBIT A-2
FORM OF TRUST COMMON SECURITY
[FACE OF SECURITY]
THIS TRUST COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN
EFFECTIVE REGISTRATION STATEMENT. OTHER THAN AS PROVIDED IN THE DECLARATION
(AS DEFINED HEREIN), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERED EXCEPT TO A RELATED PARTY (AS DEFINED IN THE DECLARATION)
OF TITANIUM METALS CORPORATION.
TIMET CAPITAL TRUST I
6-5/8% Common Securities
(Liquidation Amount $50.00 per Trust Common Security)
of
TIMET Capital Trust I
Cert. No.______
No. of Trust Common
Securities________
TIMET CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
________________________ (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the "6-5/8% Common Securities (Liquidation
Amount $50.00 per Common Security)" (the "Trust Common Securities"). The Trust
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Trust Common Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of November 20, 1996, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of the
Trust Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
<PAGE> 120
2
them in the Declaration. The Company will provide a copy of the Declaration
and the Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Reference is hereby made to select provisions of the Trust
Common Securities set forth on the reverse hereof, which select provisions
shall for all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Company is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
Federal income tax purposes the Convertible Debentures as indebtedness and the
Trust Common Securities as evidence of indirect beneficial ownership in the
Convertible Debentures.
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Trust Common Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Trust has caused this instrument to be
duly executed.
Dated:
TIMET CAPITAL TRUST I,
By
---------------------------
Name:
Title:
[Seal]
Attest:
- -------------------------
<PAGE> 121
3
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Common Securities referred to in the
within-mentioned Declaration.
Dated:
THE CHASE MANHATTAN BANK, as
Property Trustee,
By
---------------------------------
Name:
Title:
<PAGE> 122
4
[REVERSE OF SECURITY]
Distributions payable on each Trust Common Security will be
fixed at a rate per annum of 6.625% (subject to adjustment in the event the
Shelf Registration Statement is not filed or is not declared effective within,
or is not continuously effective for, the time periods specified in the
Registration Agreement) (the "Coupon Rate") of the stated liquidation amount of
$50.00 per Trust Common Security, such rate being the rate of interest payable
on the Convertible Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes any such interest
(including any Compound Interest but excluding Additional Interest) payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Convertible Debentures held by the Property
Trustee and to the extent the Trust has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed.
Except as otherwise described below, Distributions on the
Trust Common Security Securities will be cumulative, will accrue from the date
of initial issuance and will be payable quarterly in arrears, on the following
dates, which dates correspond to the interest payment dates on the Convertible
Debentures: March 1, June 1, September 1 and December 1 of each year,
commencing on March 1, 1997, when, as and if available for payment by the
Property Trustee. The Company has the right at any time during the term of the
Convertible Debentures to defer interest payments from time to time by
extending the interest payment period for successive periods not exceeding 20
consecutive quarters (each, an "Extension Period") for each such period;
provided that no Extension Period may extend beyond the maturity date of the
Convertible Debentures. As a consequence of such extension, quarterly
Distributions on the Trust Common Security Securities will be deferred
(although such Distributions will continue to accumulate with interest since
interest will continue to accrue on the Convertible Debentures and will be
compounded quarterly). In the event
<PAGE> 123
5
that the Company exercises this right, then, during such period the Company has
agreed, among other things, (a) not to declare or pay dividends on, or make a
distribution with respect to, or redeem or purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security requiring the Company to purchase shares of Common Stock, (ii) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged), (b) not to make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company that rank pari passu with or
junior to the Convertible Debentures and (c) not to make any guarantee payments
with respect to the foregoing. Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters and may not extend beyond the
maturity date of the Convertible Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above restrictions.
<PAGE> 124
6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Trust Common Security Certificate to:
-------------------------------------
(Insert assignee's social security or
or tax identification number)
-----------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints agent to transfer this Trust Common
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date:
------------------------------------
- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Trust Common Security
Certificate)
Signature Guarantee:*
-------------------
* (Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE> 1
EXHIBIT 4.3
================================================================================
TITANIUM METALS CORPORATION, as Issuer
and
THE CHASE MANHATTAN BANK, as Trustee
------------------
INDENTURE
Dated as of November 20, 1996
$180,412,400*
6-5/8% Convertible Junior Subordinated Debentures due 2026
------------------
- ------------
* Subject to increase to up to $207,474,300 in the event the
over-allotment option is exercised.
================================================================================
<PAGE> 2
i
TABLE OF CONTENTS
<TABLE>
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Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Compliance Certificates and Opinions . . . . . . . . . . . . 13
SECTION 1.03. Form of Documents Delivered to Trustee . . . . . . . . . . . 13
SECTION 1.04. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . 14
SECTION 1.05. Notices, Etc., to Trustee and the Company . . . . . . . . . . 16
SECTION 1.06. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . 16
SECTION 1.07. Conflict with Trust Indenture Act . . . . . . . . . . . . . . 17
SECTION 1.08. Effect of Headings and Table of Contents . . . . . . . . . . 17
SECTION 1.09. Successors and Assigns . . . . . . . . . . . . . . . . . . . 17
SECTION 1.10. Invalidity of any Provision . . . . . . . . . . . . . . . . . 17
SECTION 1.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.02. Initial Issuance To Property
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
The Debentures
SECTION 3.01. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.03. Execution, Authentication, Delivery and Dating . . . . . . . 21
SECTION 3.04. Temporary Debentures . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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SECTION 3.05. Registration, Registration of Transfer and Exchange . . . . . 22
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Debentures . . . . . . 24
SECTION 3.07. Payment of Interest; Interest Rights Preserved . . . . . . . 25
SECTION 3.08. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.09. Cancelation . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.10. Right of Set Off . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.12. Option to Extend Interest Payment Period . . . . . . . . . . 28
SECTION 3.13. Paying Agent, Security Registrar and Conversion Agent . . . . 30
SECTION 3.14. Global Debentures . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . 33
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . 34
ARTICLE V
Remedies
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . 36
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . 38
SECTION 5.05. Trustee May Enforce Claims Without Possession
of Debentures . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.06. Application of Money Collected . . . . . . . . . . . . . . . 39
SECTION 5.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest and Convert . . . . . . . . . . . . . . . . . . 40
SECTION 5.09. Restoration of Rights and Remedies . . . . . . . . . . . . . 40
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . 40
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . 40
</TABLE>
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SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 41
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . 42
SECTION 5.16. Enforcement by Holders of Convertible Preferred
Securities . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities . . . . . . . . . . . . . 43
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.03. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . 43
SECTION 6.04. Not Responsible for Recitals or Issuance of Debentures . . . 45
SECTION 6.05. May Hold Debentures . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . 45
SECTION 6.08. Disqualification; Conflicting Interests . . . . . . . . . . . 46
SECTION 6.09. Corporate Trustee Required; Eligibility . . . . . . . . . . . 46
SECTION 6.10. Resignation and Removal; Appointment of Successor . . . . . . 47
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . 48
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.13. Preferential Collection of Claims Against Company . . . . . . 49
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders . . 49
SECTION 7.02. Preservation of Information; Communications to Holders . . . 50
SECTION 7.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.04. Reports by Company . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
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ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms . . . . 51
SECTION 8.02. Successor Substituted . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders . . . . . 53
SECTION 9.02. Supplemental Indentures with Consent of Holders . . . . . . . 54
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . 55
SECTION 9.04. Effect of Supplemental Indentures . . . . . . . . . . . . . . 55
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . . . 56
SECTION 9.06. Reference in Debentures to Supplemental Indentures . . . . . 56
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest . . . . . . . . . . . . . . 56
SECTION 10.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . 56
SECTION 10.03. Money for Debenture Payments to Be Held in Trust . . . . . . 57
SECTION 10.04. Statement by Officers as to Default . . . . . . . . . . . . . 58
SECTION 10.05. Limitation on Dividends; Covenants as to the Trust . . . . . 58
SECTION 10.06. Payment of Expenses of the Trust . . . . . . . . . . . . . . 59
ARTICLE XI
Redemption of Debentures
SECTION 11.01. Optional Redemption . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.02. Tax Event Optional Redemption . . . . . . . . . . . . . . . . 61
SECTION 11.03. Applicability of Article . . . . . . . . . . . . . . . . . . 62
</TABLE>
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SECTION 11.04. Election to Redeem; Notice to Trustee . . . . . . . . . . . . 62
SECTION 11.05. Selection by Trustee of Debentures to Be Redeemed . . . . . . 62
SECTION 11.06. Notice of Redemption . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.07. Deposit and Payment of Redemption Price . . . . . . . . . . . 63
SECTION 11.08. Debentures Payable on Redemption Date . . . . . . . . . . . . 64
SECTION 11.09. Debentures Redeemed in Part . . . . . . . . . . . . . . . . . 64
SECTION 11.10. No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XII
Subordination of Debentures
SECTION 12.01. Agreement to Subordinate . . . . . . . . . . . . . . . . . . 65
SECTION 12.02. Default on Senior Indebtedness . . . . . . . . . . . . . . . 66
SECTION 12.03. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . 66
SECTION 12.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 12.05. Trustee to Effectuate Subordination . . . . . . . . . . . . . 69
SECTION 12.06. Notice by the Company . . . . . . . . . . . . . . . . . . . . 70
SECTION 12.07. Rights of the Trustee; Holders of Senior Indebtedness . . . . 71
SECTION 12.08. Subordination May Not Be Impaired . . . . . . . . . . . . . . 71
ARTICLE XIII
Conversion of Debentures
SECTION 13.01. Conversion Rights . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.02. Conversion Procedures . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.03. Conversion Price Adjustments . . . . . . . . . . . . . . . . 75
SECTION 13.04. Reclassification, Consolidation, Merger or Sale of Assets . . 81
SECTION 13.05. Notice of Adjustments of Conversion Price . . . . . . . . . . 82
SECTION 13.06. Prior Notice of Certain Events . . . . . . . . . . . . . . . 83
SECTION 13.07. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.08. Dividend or Interest Reinvestment Plans . . . . . . . . . . . 84
SECTION 13.09. Certain Additional Rights . . . . . . . . . . . . . . . . . . 85
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SECTION 13.10. Trustee Not Responsible for Determining Conversion Price or
Adjustments . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 13.11 Restrictions on Transfer of Common Stock Issuable Upon
Conversion . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE XIV
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 14.01. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . 87
</TABLE>
EXHIBIT AND ANNEX
EXHIBIT A Form of Debenture
ANNEX A Amended and Restated Declaration of Trust among the Company,
as trust sponsor, The Chase Manhattan Bank, as property
trustee, Chase Manhattan Bank Delaware, as Delaware trustee,
and Joseph S. Compofelice, Robert E. Musgraves and Mark A.
Wallace, as regular trustees, dated as of November 20, 1996.
- ------------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE> 8
EXECUTION COPY
INDENTURE, dated as of November 20, 1996,
between TITANIUM METALS CORPORATION, a corporation
duly organized and existing under the laws of the
State of Delaware (herein called the "Company"),
having its principal office at 1999 Broadway, Suite
4300, Denver, Colorado 80202, and THE CHASE MANHATTAN
BANK, a New York banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS TIMET Capital Trust I, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as trust sponsor, The Chase Manhattan Bank, as property trustee (the
"Property Trustee"), Chase Manhattan Bank Delaware, as Delaware trustee (the
"Delaware Trustee"), and Joseph S. Compofelice, Robert E. Musgraves and Mark
A. Wallace, as regular trustees (the "Regular Trustees"), dated as of November
20, 1996 (the "Declaration"), pursuant to the Purchase Agreement (the "Purchase
Agreement") dated November 20, 1996, among the Company and the underwriters
named therein, will issue and sell up to 3,500,000 (or 4,025,000 if the
over-allotment option is exercised in full) of its 6-5/8% Convertible Preferred
Securities, Beneficial Unsecured Convertible Securities (BUCS) (the
"Convertible Preferred Securities") with a liquidation amount of $50.00 per
Convertible Preferred Security, having an aggregate liquidation amount with
respect to the assets of the Trust of $175,000,000 (or $201,250,000 if the
over-allotment option is exercised in full);
WHEREAS the trustees of the Trust, on behalf of the Trust,
will execute and deliver to the Company 6-5/8% Common Securities (the "Trust
Common Securities") of the Trust, registered in the name of the Company, in an
aggregate amount equal to three percent of the capitalization of the Trust,
equivalent to 108,248 Trust Common Securities (or 124,486 Trust Common
Securities if the over-allotment option is exercised in full), with a
liquidation amount of $50.00 per Trust Common Security, having an aggregate
liquidation amount with respect to the assets of the Trust of $5,412,400 (or
$6,224,300 if the over-allotment option is exercised in full) (the "Trust
Common Securities");
<PAGE> 9
2
WHEREAS the Trust will use the proceeds from the sale of the
Convertible Preferred Securities and the Trust Common Securities to purchase
from the Company 6-5/8% Convertible Junior Subordinated Debentures due 2026
(the "Debentures") of the Company in an aggregate principal amount of
$180,412,400 (or $207,474,300 if the over-allotment option is exercised in
full);
WHEREAS the Company is guaranteeing the payment of
distributions on the Convertible Preferred Securities, and payment of the
Redemption Price (as defined herein) and payments on liquidation with respect
to the Convertible Preferred Securities, to the extent provided in the
Convertible Preferred Securities Guarantee Agreement (the "Guarantee") dated
November 20, 1996 between the Company and The Chase Manhattan Bank, as
guarantee trustee, for the benefit of the holders of the Convertible Preferred
Securities from time to time;
WHEREAS the Company has duly authorized the creation of the
Debentures of the tenor and amount herein set forth and to provide therefor the
Company has duly authorized the execution and delivery of this Indenture;
WHEREAS so long as the Trust is a Holder of Debentures, and
any Convertible Preferred Securities are outstanding, the Declaration provides
that the holders of Convertible Preferred Securities may cause the Conversion
Agent to (a) exchange such Convertible Preferred Securities for Debentures held
by the Trust and (b) immediately convert such Debentures into Common Stock of
the Company; and
WHEREAS all things necessary to make the Debentures, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Debentures by the Holders thereof, it is mutually agreed, for the equal and
ratable benefit of all Holders of the Debentures, as follows:
<PAGE> 10
3
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article I have the meanings
assigned to them in this Article I and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.04 hereof.
"Additional Interest" has the meaning specified in Section
3.01 hereof.
"Additional Payments" means Compound Interest and Additional
Interest, if any.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereto.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
<PAGE> 11
4
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means any day on which banking institutions in
The City of New York or in Chicago, Illinois are authorized or required by law
to close.
"Certificated Convertible Preferred Securities" has the
meaning specified in Section 3.14 hereof.
"Closing Price" has the meaning specified in Section 13.07(a)
hereof.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Article XIII, shares issuable on conversion of
Debentures shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor
<PAGE> 12
5
Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Chief Executive Officer, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Compound Interest" has the meaning specified in Section 3.12
hereof.
"Conversion Agent" means the Person appointed to act on behalf
of the holders of Convertible Preferred Securities in effecting the conversion
of Debentures as and in the manner set forth in the Declaration and Section
13.02 hereof.
"Conversion Date" has the meaning specified in Section 13.02
hereof.
"Convertible Preferred Securities" has the meaning specified
in the Recitals to this instrument.
"Corporate Trust Office" means the principal office of the
Trustee in New York, New York, at which at any particular time its corporate
trust business shall be administered and which at the date of this Indenture is
450 West 33rd Street, New York, New York 10001.
"Credit Facility" means that certain Amended and Restated Loan
and Security Agreement, dated as of March 24, 1995, as amended, by and between
the Company and Congress Financial Corporation (Central), including any related
notes, guarantees, collateral documents, security agreements, hypothecs,
mortgages, instruments and agreements executed in connection therewith, in each
case as they or any of them may be amended, modified or restated from time to
time; or any refinancing of such agreement in the bank credit market (including
institutional participants therein).
"Current Market Price" has the meaning specified in Section
13.03(f) hereof.
<PAGE> 13
6
"Debentures" has the meaning specified in the Recitals to this
instrument.
"Declaration" has the meaning specified in the Recitals of
this instrument.
"Defaulted Interest" has the meaning specified in Section 3.07
hereof.
"Delaware Trustee" has the meaning given it in the Recitals of
this instrument.
"Depositary" means, with respect to any Debentures issued in
the form of one or more Global Debenture, a clearing agency registered under
the Exchange Act that is dedicated to act as Depositary for the Debentures.
"Direct Action" means a proceeding directly instituted by a
holder of Convertible Preferred Securities for enforcement of payment to such
holder of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Convertible Preferred
Securities of such holder on or after the respective due date specified in the
Debentures, if an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of, premium, if any, or interest on, the Debentures on the date such
principal, premium or interest is otherwise payable (or in the case of
redemption, on the Redemption Date).
"Dissolution Event" means that, as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved in accordance
with the Declaration and the Debentures held by the Property Trustee are to be
distributed to the holders of Trust Securities issued by the Trust pro rata in
accordance with the Declaration.
"Dissolution Tax Opinion" has the meaning specified in Annex I
to the Declaration.
"Event of Default" has the meaning specified in Section 5.01
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation thereto.
<PAGE> 14
7
"Expiration Time" has the meaning specified in Section
13.03(e) hereof.
"Extension Period" has the meaning specified in Section 3.12
hereof.
"Global Debentures" has the meaning specified in Section 3.14
hereof.
"Guarantee" has the meaning specified in the Recitals to this
instrument.
"Holder" means a Person in whose name a Debenture is
registered in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" has the meaning specified in Section
3.01 hereof.
"Investment Company Event" has the meaning specified in Annex
I to the Declaration.
"Maturity", when used with respect to any Debenture, means the
date on which the principal of such Debenture becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Ministerial Action" has the meaning specified in Section
11.02 hereof.
"90-Day Period" has the meaning specified in Section 11.02
hereof.
"No Recognition Opinion" has the meaning specified in Annex I
to the Declaration.
"Notice of Conversion" means the notice to be given by a
holder of Convertible Preferred Securities to the
<PAGE> 15
8
Conversion Agent directing the Conversion Agent to exchange such Convertible
Preferred Securities for Debentures and to convert such Debentures into Common
Stock on behalf of such holder.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Chief Executive Officer, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.04 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel who
may be the Company's General Counsel.
"Outstanding", when used with respect to Debentures, means, as
of the date of determination, all Debentures theretofore authenticated and
delivered under this Indenture, except (i) Debentures theretofore canceled by
the Trustee or delivered to the Trustee for cancelation; (ii) Debentures for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of such Debentures; provided that
if such Debentures are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and (iii) Debentures that have been paid pursuant to
Section 3.07, converted into Common Stock pursuant to Section 13.01, or in
exchange for or in lieu of which other Debentures have been authenticated and
delivered pursuant to this Indenture, other than any such Debentures in respect
of which there shall have been presented to the Trustee proof satisfactory to
it that such Debentures are held by a bona fide purchaser in whose hands such
Debentures are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of the
Outstanding Debentures have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Debentures owned by the Company
or any other obligor upon the Debentures or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request,
<PAGE> 16
9
demand, authorization, direction, notice, consent or waiver, only Debentures
which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded. Debentures so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Debentures
and that the pledgee is not the Company or any other obligor upon the
Debentures or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, premium, if any, or interest on any Debentures on behalf
of the Company.
"Person" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Predecessor Debenture" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.06 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture.
"Property Trustee" has the meaning specified in the Recitals
of this instrument.
"Purchase Agreement" has the meaning specified in the Recitals
to this instrument.
"Purchased Shares" has the meaning specified in Section
13.03(e) hereof.
"Redemption Date", when used with respect to any Debenture to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debenture to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
<PAGE> 17
10
"Redemption Tax Opinion" has the meaning set forth in Annex I
to the Declaration.
"Reference Date" has the meaning specified in Section 13.03(c)
hereof.
"Registration Agreement" means the Registration Agreement,
dated November 20, 1996, among the Trust, the Company and the Initial
Purchasers named in the Purchase Agreement.
"Regular Record Date" has the meaning specified in Section
3.01 hereof.
"Regular Trustees" has the meaning specified in the Recitals
of this instrument.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Trustee, any
vice president, any assistant vice president, the treasurer, any assistant
treasurer, the secretary, any assistant secretary, any trust officer or any
other officer in the Corporate Trust Office of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restrictive Legend" has the meaning specified in Section 2.02
hereof.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor legislation thereto.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.05 hereof.
"Senior Indebtedness" means, with respect to the Company, (i)
the principal of, premium, if any, and interest in respect of, (A) indebtedness
of the Company for money
<PAGE> 18
11
borrowed and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments issued by the Company, including interest accruing on
or after a bankruptcy or other similar event, whether or not an allowed claim
therein, (ii) all indebtedness, and all obligations to pay fees and other
amounts, under the Credit Facility, (iii) all capital lease obligations of the
Company, (iv) all obligations of the Company issued or assumed as the deferred
purchase price of property, all conditional sale obligations of the Company and
all obligations of the Company under any title retention agreement (but
excluding obligations to trade creditors), (v) all obligations of the Company
for the reimbursement of any letter of credit, banker's acceptance, security
purchase facility or similar credit transaction, (vi) all obligations of the
type referred to in clauses (i) through (v) above of other Persons for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise, and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other Persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the
Company), except in the cases of each of clauses (i) through (vii) above for
(1) any such indebtedness that is by its terms subordinated to or pari passu
with the Debentures and (2) any indebtedness between or among the Company or
its affiliates, including all other debt securities and guarantees in respect
of those debt securities issued to (a) the Trust or a trustee of such Trust or
(b) any other trust, or a trustee of such trust, partnership, or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"Financing Entity") in connection with the issuance by such Financing Entity of
preferred securities or other securities which rank pari passu with, or junior
to, the Convertible Preferred Securities. Such Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits of Article XII
irrespective of any amendment, modification or waiver of any term of such
Senior Indebtedness.
"Shelf Registration Statement" has the meaning specified in
the Registration Agreement.
"Special Event" has the meaning specified in Annex I to the
Declaration.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07 hereof.
<PAGE> 19
12
"Stated Maturity", when used with respect to any Debenture or
any instalment of interest thereon, means the date specified in such Debenture
as the fixed date on which the principal, together with any accrued and unpaid
interest (including Compound Interest), of such Debenture or such instalment of
interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than
50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof, directly
or indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Tax Event" has the meaning specified in Annex I to the
Declaration.
"Trading Day" has the meaning specified in Section 13.07(b)
hereof.
"Trust" has the meaning specified in the Recitals to this
instrument.
"Trust Common Securities" has the meaning specified in the
recitals to this Instrument.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation thereto.
"Trust Securities" means the Convertible Preferred Securities
and the Trust Common Securities.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president thereof, whether or not designated by a
number or a word or words added before or after the title "vice president".
<PAGE> 20
13
"Voting Stock" of any Person means capital stock of such
Person which ordinarily has voting power for the election of directors (or
Persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason
of any contingency.
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act or
reasonably requested by the Trustee in connection with such application or
request. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include (a) a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto; (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and (d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
<PAGE> 21
14
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04. Acts of Holders; Record Dates. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the
<PAGE> 22
15
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee or the Company, as the
case may be, deems sufficient.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Debentures entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or permitted to be given or
taken by Holders. If not set by the Company prior to the first solicitation of
a Holder made by any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 7.01) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled
to give or take, or vote on, the relevant action.
(d) The ownership of Debentures shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Debenture shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular
Debenture may do so with regard to all or any part of the principal amount of
such Debenture or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.
<PAGE> 23
16
SECTION 1.05. Notices, Etc., to Trustee and the Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with, (a) the Trustee by any Holder or by
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with, or sent via facsimile to, the Trustee
at its Corporate Trust Office, Attention: Global Trust Services, or (b) the
Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, or sent via facsimile, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such event,
at such Holder's address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Any notice when mailed to a Holder
in the aforesaid manner shall be conclusively deemed to have been received by
such Holder whether or not actually received by such Holder. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
<PAGE> 24
17
SECTION 1.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or to be excluded, as the case may be.
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 1.10. Invalidity of any Provision. In case any
provision in this Indenture or in the Debentures 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 1.11. Benefits of Indenture. Nothing in this
Indenture or in the Debentures, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of
Senior Indebtedness, the holders of Convertible Preferred Securities (to the
extent provided herein) and the Holders of Debentures, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. THIS INDENTURE AND THE
DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.13. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Debenture or the last
date on which a Holder has the right to convert his Debentures shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Debentures) payment of interest or principal or conversion of the
Debentures need not be made on such date, but may be made on the next
succeeding
<PAGE> 25
18
Business Day (except that, if such Business Day is in the next succeeding
calendar year, such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, shall be the immediately preceding Business Day) with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or on such last day for conversion; provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
SECTION 1.14. Trust Indenture Act; Application. (a) This
Indenture is subject to the provisions of the Trust Indenture Act that are
required to be part of this Indenture, which are incorporated by reference in
and made part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
ARTICLE II
Debenture Forms
SECTION 2.01. Forms Generally. The Debentures and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Debentures may have may have letters, numbers, notations or
other marks of identification or designation and such legends or endorsements
required by law, securities exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). The Company shall furnish
any such legend not contained in Exhibit A to the Trustee in writing. Each
Debenture shall be dated the date of its authentication. The terms and
provisions of the Debentures set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
<PAGE> 26
19
The definitive Debentures shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any national securities exchange or quotation system on which the
Debentures may from time to time be listed, all as determined by the officers
executing such Debentures, as evidenced by their execution thereof.
SECTION 2.02. Initial Issuance to Property Trustee. The
Debentures initially issued to the Property Trustee of the Trust shall be in
the form of one or more individual certificates in definitive, fully registered
form without coupons and shall bear the restrictive legend (the "Restrictive
Legend") contained in Exhibit A unless and until the Company determines
otherwise in accordance with applicable law.
ARTICLE III
The Debentures
SECTION 3.01. Title and Terms. The aggregate principal
amount of Debentures that may be authenticated and delivered under this
Indenture is limited to the sum of (a) $180,412,400 and (b) such aggregate
principal amount (which may not exceed $27,061,900 if the over-allotment option
is exercised) of Debentures, if any, as shall be purchased by the Trust
pursuant to an over-allotment option in accordance with the terms and
provisions of the Purchase Agreement, except for Debentures authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.09 or 13.02.
The Debentures shall be known and designated as the "6-5/8%
Convertible Junior Subordinated Debentures due 2026" of the Company. Their
Stated Maturity shall be December 1, 2026, and they shall bear interest at the
rate of 6.625% per annum (subject to adjustment in the event the Shelf
Registration Statement is not filed or is not declared effective within, or is
not continuously effective for, the time periods specified in the Registration
Agreement as provided in Exhibit A), from November 26, 1996 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, as the case may be, payable quarterly (subject to deferral as set forth
herein), in
<PAGE> 27
20
arrears, on March 1, June 1, September 1 and December 1 (each an "Interest
Payment Date") of each year, commencing March 1, 1997, until the principal
thereof is paid or made available for payment, and they shall be paid to the
Person in whose name the Debenture is registered at the close of business (New
York City time) on the regular record date for such interest instalment, which
shall be the February 15, May 15, August 15 and November 15 next preceding such
Interest Payment Date (the "Regular Record Date"). Interest will compound
quarterly and will accrue at the rate of 6.625% per annum (subject to
adjustment in the event the Shelf Registration Statement is not filed or is not
declared effective within, or is not continuously effective for, the time
periods specified in the Registration Agreement as provided in Exhibit A) on
any interest instalment in arrears for more than one quarter or during an
extension of an interest payment period as set forth in Section 3.12 hereof.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed will be computed on
the basis of the actual number of days elapsed. In the event that any date on
which interest is payable on the Debentures is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
If at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any state thereof, or any
other taxing authority, then, in any such case, the Company will pay as
additional interest ("Additional Interest") on the Debentures held by the
Property Trustee such amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying any
such taxes, duties, assessments or other governmental charges will be not less
than the amounts the Trust and the Property Trustee would
<PAGE> 28
21
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
The principal of, premium, if any, and interest on the
Debentures shall be payable at the office or agency of the Company in the
United States maintained for such purpose and at any other office or agency
maintained by the Company for such purpose in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
The Debentures shall be redeemable as provided in Article XI
hereof.
The Debentures shall be subordinated and junior in right of
payment to Senior Indebtedness as provided in Article XII hereof.
The Debentures shall be convertible as provided in Article
XIII hereof.
SECTION 3.02. Denominations. The Debentures shall be
issuable only in registered form without coupons and only in denominations of
$50.00 in principal amount and integral multiples thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
The Debentures shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
<PAGE> 29
22
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Debentures; and the Trustee in
accordance with such Company Order shall authenticate and make available for
delivery such Debentures as in this Indenture provided and not otherwise.
No Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Debenture a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be conclusive evidence, and the only
evidence, that such Debenture has been duly authenticated and delivered
hereunder.
SECTION 3.04. Temporary Debentures. Pending the preparation
of definitive Debentures, the Company may execute, and upon a Company Order the
Trustee shall authenticate and deliver, temporary Debentures which are
typewritten, printed, lithographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Debentures in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Debentures
may determine, as evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause
definitive Debentures to be prepared without unreasonable delay. After the
preparation of definitive Debentures, the temporary Debentures shall be
exchangeable for definitive Debentures upon surrender of the temporary
Debentures at any office or agency of the Company designated pursuant to
Section 10.02, without charge to the Holder. Upon surrender for cancelation of
any one or more temporary Debentures the Company shall execute and the Trustee
shall authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Debentures of authorized denominations. Until
so exchanged the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures.
SECTION 3.05. Registration, Registration of Transfer and
Exchange. (a) General. The Company shall cause to be kept at the Corporate
Trust Office of the
<PAGE> 30
23
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debentures and of transfers of Debentures. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Debentures
and transfers of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture
at an office or agency of the Company designated pursuant to Section 10.02 for
such purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Debentures of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Debentures may be exchanged for
other Debentures of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Debentures to be exchanged at such
office or agency. Whenever any Debentures are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Debentures which the Holder making the exchange is entitled
to receive.
All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debentures surrendered upon such registration of transfer or
exchange.
Every Debenture presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Debentures, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
<PAGE> 31
24
Debentures, other than exchanges pursuant to Section 3.04, 9.06, 11.09 or 13.02
not involving any transfer.
(b) Transfer Restrictions. No Debenture shall be transfered
except in compliance with the Restrictive Legend unless otherwise determined by
the Company in accordance with applicable law; provided that upon any such
determination, the Company shall provide the Trustee an Officers' Certificate
and Opinion of Counsel evidencing such determination. Upon any distribution of
the Debentures to the holders of the Convertible Preferred Securities in
accordance with the Declaration, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01(f) to provide for transfer
procedures and restrictions with respect to the Debentures substantially
similar to those contained in the Declaration to the extent applicable in the
circumstances existing at the time of such distribution.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Debentures. If any mutilated Debenture is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Debenture of like tenor and principal amount and
bearing a number not contemporaneously Outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of like tenor and principal amount and bearing a
number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen
Debenture has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section
3.06, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other
<PAGE> 32
25
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section 3.06 in
lieu of any destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Debenture shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Debentures duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debenture (or one or more Predecessor Debentures) is registered at
the close of business (New York City time) on the Regular Record Date.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business (New York City time) on a Special Record Date for the payment
of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Debenture and the
date of the proposed payment, and the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the
<PAGE> 33
26
proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in
this clause (a) provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business (New
York City time) on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
national securities exchange or quotation system on which the
Debentures may be listed, and, if so listed, upon such notice as may
be required by such securities exchange or quotation system, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause (B), such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.07, each
Debenture delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, and to accrue (including in each such case
Additional Payments), which were carried by such other Debenture.
In the case of any Debenture which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment
Date (other than any Debenture whose Maturity is prior to such Interest Payment
Date),
<PAGE> 34
27
interest whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Debenture (or one or more Predecessor Debentures)
is registered at the close of business (New York City time) on such Regular
Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Debenture that is converted, interest
whose Stated Maturity is after the date of conversion of such Debenture shall
not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest (including Compound Interest but excluding Additional Interest, if
any) on the Debentures being converted, which shall be deemed to be paid in
full. Subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in this paragraph and the second
paragraph of clause (a) of Section 13.02, the Company's delivery upon
conversion of the fixed number of shares of Common Stock into which the
Debentures are convertible (together with the cash payment, if any, in lieu of
fractional shares and Additional Interest, if any) shall be deemed to satisfy
the Company's obligation to pay the principal amount at Maturity of the portion
of Debentures so converted and any unpaid interest (including Additional
Payments, if any) accrued on such Debentures at the time of such conversion.
If any Debenture called for redemption is converted, any money deposited with
the Trustee or with any Paying Agent or so segregated and held in trust for the
redemption of such Debenture shall (subject to any right of the Holder of such
Debenture or any Predecessor Debenture to receive interest as provided in this
paragraph) be paid to the Company upon a Company Request or, if then held by
the Company, shall be discharged from such trust.
SECTION 3.08. Persons Deemed Owners. Prior to due
presentment of a Debenture for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Debenture is registered as the owner of such Debenture for the
purpose of receiving payment of principal of, premium, if any, and (subject to
Section 3.07) interest (including Additional Payments, if any) on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
is overdue, and neither the Company, the Trustee nor any agent
<PAGE> 35
28
of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 3.09. Cancelation. All Debentures surrendered for
payment, redemption, registration of transfer or exchange or conversion shall,
if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancelation any Debentures previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Debentures so delivered shall be promptly canceled by the
Trustee. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures canceled as provided in this Section 3.09, except as expressly
permitted by this Indenture. All canceled Debentures held by the Trustee shall
be disposed of as directed by a Company Order; provided, however, that the
Trustee shall not be required to destroy the certificates representing such
canceled Debentures.
SECTION 3.10. Right of Set Off. Notwithstanding anything to
the contrary in this Indenture, the Company shall have the right to set off any
payment it is otherwise required to make hereunder to the extent the Company
has theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
SECTION 3.11. CUSIP Numbers. The Company in issuing the
Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 3.12. Option to Extend Interest Payment Period. (a)
The Company shall have the right at any time during the term of the Debentures
to defer interest payments (excluding, for such purposes, payments with respect
to Additional Interest, if any) from time to time by extending the interest
payment period for successive periods (each, an "Extension Period") not
exceeding 20 consecutive quarters for each such period; provided no Extension
Period may
<PAGE> 36
29
extend beyond the Stated Maturity of the Debentures. On each Interest Payment
Date during an Extension Period, the Company shall pay all accrued and unpaid
Additional Interest on the Debentures. At the end of each Extension Period,
the Company shall pay all interest then accrued and unpaid (including accrued
and unpaid Additional Interest) together with interest thereon compounded
quarterly at the rate specified for the Debentures (as provided in Exhibit A
hereto) to the extent permitted by applicable law ("Compound Interest");
provided that during any Extension Period, the Company shall (i) not declare or
pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (A) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security requiring the Company to purchase shares
of Common Stock, (B) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock or (C)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), (ii) not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company that rank pari passu
with or junior to the Debentures and (iii) not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee). Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period; provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive quarters
and may not extend beyond the Stated Maturity of the Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may commence a new Extension Period, subject to the above
requirements. No interest or any other payment with respect to the Debentures
(other than payments with respect to Additional Interest, if any, which the
Company shall not have the right to defer) shall be due and payable during an
Extension Period.
(b) If the Property Trustee is the sole Holder of the
Debentures at the time the Company selects an Extension
<PAGE> 37
30
Period, the Company shall give written notice to the Regular Trustees, the
Property Trustee and the Trustee of its selection of such Extension Period at
least one Business Day prior to the earlier of (i) the date the distributions
on the Convertible Preferred Securities are payable or (ii) if the Convertible
Preferred Securities are listed on a national securities exchange or quotation
system, the date the Trust is required to give notice to such self-regulatory
organization or to holders of the Convertible Preferred Securities of the
record date or the date such distributions are payable, but in any event not
less than 10 Business Days prior to such record date. The Company shall cause
the Regular Trustees to give notice of the Company's selection of such
Extension Period to the holders of the Convertible Preferred Securities.
(c) If the Property Trustee is not the sole Holder of the
Debentures at the time the Company selects an Extension Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extension Period at least 10 Business Days prior to the
earlier of (i) the next succeeding Interest Payment Date or (ii) if the
Convertible Preferred Securities are listed on a national securities exchange
or quotation system, the date the Company is required to give notice to such
self-regulatory organization or to Holders of the Debentures on the record or
payment date of such related interest payment, but in any event not less than
two Business Days prior to such record date.
(d) The quarter in which any notice is given pursuant to
paragraphs (b) and (c) hereof shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under paragraph (a) hereof.
SECTION 3.13. Paying Agent, Security Registrar and Conversion
Agent. The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of
its Affiliates may act in any such capacity. The Trustee is entitled to the
protections of Article VI in its capacity as Paying Agent, Security Registrar
and Conversion Agent.
SECTION 3.14. Global Debentures. (a) In connection with a
Dissolution Event:
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(i) The Debentures in certificated form may be presented to
the Trustee by the Property Trustee in exchange for one or more global
certificates in an aggregate principal amount up to the aggregate
principal amount of all Outstanding Debentures (the "Global
Debentures"), to be registered in the name of the Depositary, or its
nominee or nominees, and delivered by the Trustee to the Depositary
for crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company upon any such
presentation shall execute Global Debentures in such aggregate
principal amount or amounts as instructed by the Regular Trustees and
deliver the same to the Trustee for authentication and delivery in
accordance with this Indenture. Payments on the Debentures issued as
Global Debentures will be made to the Depositary.
(ii) Any Convertible Preferred Security Certificate which
represents Convertible Preferred Securities other than Convertible
Preferred Securities held by the Depositary or its nominee or nominees
(each, a "Certificated Convertible Preferred Security") will be deemed
to represent beneficial interests in Debentures in certificated form
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the
Certificated Convertible Preferred Securities until such Convertible
Preferred Security Certificates are presented to the Security
Registrar for transfer or reissuance at which time or times such
Convertible Preferred Security Certificates will be canceled and
Debentures, registered in the names of the holders of such Convertible
Preferred Security Certificates or the transferees of such holders of
such Convertible Preferred Security Certificates, as the case may be,
with aggregate principal amounts equal to the aggregate liquidation
amounts of the Convertible Preferred Security Certificates canceled,
will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with this Indenture. On
issue of such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee to the
Trustee will be deemed to have been canceled.
<PAGE> 39
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(b) A Global Debenture may be transfered, in whole but not in
part, only to another nominee of the Depositary, or to a successor Depositary
or its nominee.
(c) If the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for the Global Debentures and
no successor depositary shall have been appointed, or the Depositary, at any
time, ceases to be a clearing agency registered under the Exchange Act at which
time the Depositary is required to be so registered to act as such depositary
and no successor depositary shall have been appointed, the Company will execute
and, subject to Section 3.05 of this Indenture, the Trustee, upon written
notice from the Company and receipt of a Company Order, will authenticate and
deliver the Debentures in definitive, fully registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debentures in exchange for such Global
Debentures. In addition, upon an Event of Default or if the Company may at any
time determine that the Debentures shall no longer be represented by Global
Debentures, in such event the Company will execute and, subject to Section 3.05
of this Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery the Debentures in definitive, fully registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debentures in exchange for
such Global Debentures. Upon the exchange of the Global Debentures for such
Debentures in definitive, fully registered form without coupons, in authorized
denominations, the Global Debentures shall be canceled by the Trustee. Such
Debentures in definitive, fully registered form issued in exchange for the
Global Debentures shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee in writing. The
Trustee shall deliver such Debentures to the Depositary for delivery to the
Persons in whose names such Debentures are so registered.
(d) Every Global Debenture authenticated and delivered
hereunder shall bear a legend in substantially the following form, in capital
letters and bold-face type:
THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS
<PAGE> 40
33
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A DEBENTURE
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
(e) If the Depositary is The Depository Trust Company, the
Global Debenture authenticated and delivered hereunder shall also bear a legend
in substantially the following form, in capital letters and bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to any surviving
rights of conversion, registration of transfer or exchange of Debentures herein
expressly provided for), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when (a) either (i) all Debentures theretofore
authenticated and delivered (other than (A) Debentures which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 3.06 and (B) Debentures for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancelation; or (ii)
either (A) all such Debentures not theretofore delivered to the Trustee
<PAGE> 41
34
for cancelation have become due and payable, (B) will become due and payable at
their Stated Maturity within one year or (C) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the expense, of the
Company; and the Company has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Debentures not theretofore delivered
to the Trustee for cancelation, for principal and interest (including
Additional Payments, if any) to the date of such deposit (in the case of
Debentures which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be, along with an accountants' certificate
stating such funds are sufficient; (b) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and (c) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.07
and, if money shall have been deposited with the Trustee pursuant to subclause
(ii) of clause (a) of this Section 4.01, the obligations of the Trustee under
Section 4.02 and the last paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in
accordance with the provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal, premium, if any, and interest for whose
payment such money has been deposited with the Trustee. All moneys deposited
with the Trustee pursuant to Section 4.01 (and held by it or any Paying Agent)
for the payment of Debentures subsequently converted shall be returned to the
Company upon a Company Request.
<PAGE> 42
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default,"
wherever used herein, means any one of the following events that has occurred
and is continuing (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article XII or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) failure for 30 days to pay interest on the Debentures,
including any Additional Payments in respect thereof, when due;
provided that a valid extension of an interest payment period will not
constitute a default in the payment of interest (including Compound
Interest, but excluding Additional Interest, if any) for this purpose;
(b) failure to pay principal of or premium, if any, on the
Debentures when due, whether at maturity, upon redemption, by
declaration of acceleration or otherwise;
(c) failure to observe or perform any other covenant contained
in this Indenture for 90 days after written notice to the Company by
the Trustee or by the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debentures specifying such failure
to observe or perform any such covenant, requiring it to be remedied
and stating that such notice is a notice of an Event of Default
hereunder;
(d) failure by the Company to deliver shares of its Common
Stock within 30 days of an election by a holder of Convertible
Preferred Securities to convert such Convertible Preferred Securities
in accordance with the Declaration and Section 13.02 hereof;
(e) entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company a bankrupt
<PAGE> 43
36
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days;
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company to the entry of a decree or order for relief in
respect of itself in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the filing by
the Company of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or state law, or the consent by
the Company to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or the making by the
Company of an assignment for the benefit of creditors, or the
admission by the Company in writing of its inability to pay its debts
generally as they become due; or
(g) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the
distribution of Debentures to holders of Convertible Preferred
Securities in liquidation of the Trust, (ii) upon the redemption of
all outstanding Convertible Preferred Securities or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
<PAGE> 44
37
A default under any other indebtedness of the Company or of
the Trust shall not constitute an Event of Default under this Indenture.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debentures may declare the principal of all
the Debentures and any other amounts payable hereunder to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal and all accrued
interest shall become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as provided in this Article V, the Holders of a
majority in aggregate principal amount of the Outstanding Debentures, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all overdue interest (including Additional
Payments, if any) on all Debentures, (ii) the principal of any
Debentures which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and (iii) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of Debentures which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if (a) default is made in
the payment of any interest (including Additional Payments, if any) on any
Debenture
<PAGE> 45
38
when such interest becomes due and payable and such default continues for a
period of 30 days, or (b) default is made in the payment of the principal of
any Debenture at the Stated Maturity thereof, the Company will, upon demand of
the Trustee, pay to it, for the benefit of the Holders of such Debentures, the
whole amount then due and payable on such Debentures for principal and interest
(including Additional Payments, if any) and, to the extent that payment thereof
shall be legally enforceable, interest on any overdue principal and on any
overdue interest (including Additional Payments, if any), at the rate borne by
the Debentures, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of
any judicial proceeding relative to the Company (or any other obligor upon the
Debentures), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.07.
<PAGE> 46
39
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Debentures or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession
of Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the possession
of any of the Debentures or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the equal and ratable benefit of the Holders of the Debentures in respect
of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Subject to
Article XII, any money collected by the Trustee pursuant to this Article V
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest (including Additional Payments, if any), upon presentation of the
Debentures and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
first, to the payment of all amounts due the Trustee under
Section 6.07; and
second, to the payment of the amounts then due and unpaid for
principal of and interest (including Additional Payments, if any) on
the Debentures in respect of which or for the benefit of which such
money has been collected, equally and ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Debentures for principal and interest (including Additional Payments,
if any), respectively.
SECTION 5.07. Limitation on Suits. Subject to Section 5.16,
no Holder of any Debenture shall have any right to institute any proceeding,
judicial or otherwise,
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40
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless (a) such Holder has previously given
written notice to the Trustee of a continuing Event of Default; (b) the Holders
of not less than 25% in aggregate principal amount of the Outstanding Debentures
shall have also made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder; (c) such
Holder or Holders have offered to the Trustee indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred in compliance with
such request; (d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding Debentures; it being understood and intended
that no one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the Holders.
SECTION 5.08. Unconditional Right of Holders to Receive
Principal and Interest and Convert. Notwithstanding any other provision in
this Indenture, the Holder of any Debenture shall have the right, which is
absolute and unconditional, to receive payment of the principal of, premium, if
any, and (subject to Section 3.07) interest (including Additional Payments, if
any) on such Debenture on the respective Stated Maturities expressed in such
Debenture (or, in the case of redemption, on the Redemption Date) and to
convert such Debenture in accordance with Article XIII and to institute suit
for the enforcement of any such payment and right to convert, and such rights
shall not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively
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41
to their former positions hereunder and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Debenture to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority
in aggregate principal amount of the Outstanding Debentures shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; provided that (a) such direction shall not be in conflict with any
rule of law or with this Indenture; and (b) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 5.13. Waiver of Past Defaults. Subject to Section
9.02 hereof, the Holders of not less than a majority in aggregate principal
amount of the Outstanding Debentures may on behalf of the Holders of all the
Debentures waive any past default hereunder and its consequences, except a
default (a) in the payment of the principal of, premium, if any, or interest
(including Additional Payments, if any) on any Debenture (unless such
<PAGE> 49
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default has been cured and a sum sufficient to pay all matured instalments of
interest and principal due otherwise than by acceleration has been deposited
with the Trustee); or (b) in respect of a covenant or provision of this
Indenture that under Article IX cannot be modified or amended without the
consent of the Holder of each Outstanding Debenture affected; provided,
however, that if the Debentures are held by the Trust or a trustee of the
Trust, such waiver shall not be effective until the holders of a majority in
liquidation amount of Convertible Preferred Securities shall have consented to
such waiver; provided further that if the consent of the Holder of each
Outstanding Debenture is required, such waiver shall not be effective until
each holder of Convertible Preferred Securities shall have consented to such
waiver.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; provided that
neither this Section 5.14 nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or the Trustee or in any suit
for the enforcement of the right to receive the principal of, premium, if any,
and interest (including Additional Payments, if any) on any Debenture or to
convert any Debenture in accordance with Article XIII.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law
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and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 5.16. Enforcement by Holders of Convertible Preferred
Securities. Notwithstanding any other provision of this Indenture, if an Event
of Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of, premium, if any, or interest
(including Compound Interest, but excluding, for such purposes, Additional
Interest, if any) on the Debentures on the date such principal, premium or
interest is otherwise payable, the Company acknowledges that, in such event, a
holder of Convertible Preferred Securities may institute a Direct Action for
payment on or after the respective due date specified in the Debentures. The
Company may not amend this Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of all the holders of
Convertible Preferred Securities. Notwithstanding any payment made to such
holder of Convertible Preferred Securities by the Company in connection with a
Direct Action, the Company shall remain obligated to pay the principal of,
premium, if any, and interest (including Additional Payments, if any) on the
Debentures held by the Trust or the Property Trustee and the Company shall be
subrogated to the rights of the holder of such Convertible Preferred Securities
with respect to payments on the Convertible Preferred Securities to the extent
of any payments made by the Company to such holder in any Direct Action. The
holders of Convertible Preferred Securities will not be able to exercise
directly any other remedy available to the Holders of the Debentures.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. The
duties and responsibilities of the Trustee shall be as provided by the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or
<PAGE> 51
44
liability is not reasonably assured to it under the terms of this Indenture or
indemnity satisfactory to the Trustee against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 6.01.
SECTION 6.02. Notice of Defaults. The Trustee shall give the
Holders notice of any default hereunder as and to the extent provided by the
Trust Indenture Act. For the purpose of this Section 6.02, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the
provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
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(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to reasonable
examination of the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without
negligence or wilful misconduct, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Debentures. The recitals contained herein and in the Debentures, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the
use or application by the Company of the Debentures or the proceeds thereof.
<PAGE> 53
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SECTION 6.05. May Hold Debentures. The Trustee, any Paying
Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Paying Agent,
Security Registrar, or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees (a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder; (b) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable expenses,
fees, disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or
bad faith; and (c) to indemnify the Trustee and any predecessor Trustee, and
their respective officers, directors, agents or employees for, and to hold each
of them harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(f) or Section
5.01(g), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section 6.07 shall survive the
termination of this Indenture.
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47
SECTION 6.08. Disqualification; Conflicting Interests. If
the Trustee has or shall acquire a conflicting interest within the meaning of
the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
in The City of New York. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 6.09, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.09, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VI.
SECTION 6.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article VI shall become effective until
the acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by the Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Debentures, delivered to the Trustee and the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of
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48
competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(i) the Trustee shall fail to comply with any provision of
this Indenture applicable to it after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Debenture for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company
or by any such Holder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, (x) the Company by Board Resolution may remove the
Trustee, or (y) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. In
addition, so long as no default or Event of Default has occurred and is
continuing, the Trustee may be appointed or removed without cause at any time
by the Company.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Debentures delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall
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49
have been so appointed by the Company or the Holders and accepted appointment
in the manner hereinafter provided, any Holder who has been a bona fide Holder
of a Debenture for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
(g) No appointment of any successor Trustee shall be
effective until all amounts not subject to a good faith dispute which are known
to be owed to the Trustee and which are then due have been paid; provided that
upon such payment, within five Business Days of a request by the Company, the
Trustee shall certify that all such amounts have been paid, and that a
successor Trustee may be appointed.
SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transfering to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VI.
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SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided such corporation shall be otherwise
qualified and eligible under this Article VI. In case any Debentures shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Debentures so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Debentures.
SECTION 6.13. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of a date not more than 15 days prior to the
delivery thereof, and (b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished; excluding from any such list names and
addresses received by the Trustee in its capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list
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furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Debentures, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) Within 60 days after
May 15 of each year, commencing in 1997, the Trustee shall transmit by mail to
Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act in the manner
provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each national securities
exchange or quotation system upon which the Debentures are then listed or
quoted, with the Commission (if required) and with the Company. The Company
will notify the Trustee if and when the Debentures are listed on any national
securities exchange or quotation system.
SECTION 7.04. Reports by Company. The Company shall file
with the Trustee and the Commission, and transmit to Holders, such information,
documents and other reports with respect to the Debentures, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided by the Trust Indenture Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
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Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely on Officers' Certificates).
The Company shall also provide to the Trustee on a timely
basis such information as the Trustee requires to enable the Trustee to prepare
and file any form required to be submitted by the Company with the Internal
Revenue Service and the Holders of the Debentures relating to original issue
discount, if any, including, without limitation, Form 1099-OID or any successor
form.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on Certain
Terms. The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer
or lease, all or substantially all of the properties and assets of the
Company on a consolidated basis shall be a corporation, limited
liability company, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of, premium, if any, and interest
(including Additional Payments, if any) on all the Debentures and the
performance or compliance with every covenant of this Indenture on the
part of the Company to be performed or complied with and shall have
provided for conversion rights in accordance with Article XIII;
<PAGE> 60
53
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article
VIII and that all conditions precedent herein provided for relating to
such transaction have been complied with.
This Section 8.01 shall only apply to a merger or
consolidation in which the Company is not the surviving corporation and to
conveyances, leases and transfers by the Company as transferor or lessor of all
or substantially all of its properties and assets on a consolidated basis.
SECTION 8.02. Successor Substituted. Upon any consolidation
of the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of all or substantially all the properties and
assets of the Company on a consolidated basis in accordance with Section 8.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Debentures.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the
<PAGE> 61
54
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Debentures; or
(b) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(c) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(d) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; provided that such action
pursuant to this clause (d) shall not materially and adversely affect
the interests of the Holders of the Debentures or, so long as any of
the Convertible Preferred Securities shall remain outstanding, the
holders of the Convertible Preferred Securities;
(e) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act; or
(f) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Debentures, and all other matters required
pursuant to Section 3.05(b) or otherwise necessary, desirable or
appropriate in connection with the issuance of Debentures to holders
of Convertible Preferred Securities in the event of a distribution of
Debentures by the Trust if a Special Event occurs and is continuing.
<PAGE> 62
55
SECTION 9.02. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debenture affected thereby, (a)
extend the Stated Maturity of the principal of, or any instalment of interest
(including Additional Payments, if any) on, any Debenture, or reduce the
principal amount thereof, or reduce the rate or extend the time for payment of
interest thereon, or extend the Extension Period, or reduce any premium payable
upon the redemption thereof, or change the coin or currency in which, any
Debenture or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or adversely
affect (as to such Holder) the right to convert any Debenture as provided in
Article XIII (except as permitted by Section 9.01(c)), or modify the provisions
of this Indenture with respect to the subordination of the Debentures in a
manner adverse to the Holders, (b) reduce the percentage in aggregate principal
amount of the Outstanding Debentures, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in
this Indenture, or (c) modify any of the provisions of this Section 9.02 or
Section 5.13, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Debenture affected thereby; provided
that if the Debentures are held by the Trust or a trustee of the Trust, such
supplemental indenture shall not be effective until the holders of a majority
in liquidation amount of Trust Securities shall have consented to such
supplemental indenture; provided further that if the consent of the Holder of
each Outstanding Debenture is required, such supplemental indenture shall not
be effective until each holder of the Trust Securities of the Trust shall have
consented to such supplemental indenture.
<PAGE> 63
56
It shall not be necessary for any Act of Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided that unless such consent shall
have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 90 days after such record date, any such
consent previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
SECTION 9.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article IX, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. No such supplemental indenture shall directly or
indirectly modify the provisions of Article XII in any manner which might
terminate or impair the rights of the Senior Indebtedness pursuant to such
subordination provisions.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this
<PAGE> 64
57
Article IX shall conform to the requirements of the Trust Indenture Act.
SECTION 9.06. Reference in Debentures to Supplemental
Indentures. Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debentures.
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest. The
Company will duly and punctually pay the principal of, premium, if any, and
interest (including Additional Payments, if any) on the Debentures in
accordance with the terms of the Debentures and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain in the United States an office or agency where Debentures may be
presented or surrendered for payment, where Debentures may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debentures and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies (in the United States) where the Debentures may be
presented or surrendered for any or all such purposes and may from time to time
rescind such
<PAGE> 65
58
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the United States for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 10.03. Money for Debenture Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Debentures, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
in writing of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Debentures,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee in writing of its
action or failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.03, that such Paying Agent will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Debentures) in the making of any payment in respect of the Debentures, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by a Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee,
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59
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or
interest on (including Additional Payments, if any) any Debenture and remaining
unclaimed for two years after such principal or interest has become due and
payable shall be paid to the Company on a Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of any such
Debenture shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
SECTION 10.04. Statement by Officers as to Default. The
Company will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not, to the best knowledge of the signers
thereof, the Company is in default in the performance and observance of any of
the material terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.05. Limitation on Dividends; Covenants as to the
Trust. (a) The Company covenants that so long as any Debentures are
Outstanding, if (i) there shall have occurred and be continuing any event that
with the giving of notice or the lapse of time or both, would constitute an
Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Guarantee, or (iii) the Company has
exercised its option to defer interest payments on the Debentures by extending
the interest payment period and such period, or any extension thereof, shall be
continuing, then the Company shall (x) not declare or pay dividends on, or make
a distribution with respect to, or redeem or purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (1)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations
<PAGE> 67
60
pursuant to any contract or security requiring the Company to purchase shares
of Common Stock, (2) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock or (3)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), (y) not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company that rank pari passu
with or junior to the Debentures and (z) not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee).
(b) The Company also covenants and agrees (i) that it may
transfer Trust Common Securities only to a Related Party, and that it shall,
together with its Related Parties, maintain 100% ownership of the Trust Common
Securities; provided, however, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Trust Common
Securities and (ii) that it shall use its reasonable efforts, consistent with
the terms and provisions of the Declaration, to cause the Trust (A) to remain a
statutory business trust, except in connection with the distribution of the
Debentures to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration, and (B) to otherwise
continue to be classified as a grantor trust for United States Federal income
tax purposes.
SECTION 10.06. Payment of Expenses of the Trust. In
connection with the offering, sale and issuance of the Debentures to the
Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:
(a) pay for all costs, fees and expenses (including all fees
and expenses of its counsel) relating to the offering, sale and
issuance of the Debentures, including commissions, discounts and
expenses payable pursuant to the Purchase Agreement and compensation
of the Trustee under this Indenture in accordance with the provisions
of Section 6.07 of this Indenture;
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(b) be responsible for and pay for all debts and obligations
(other than with respect to the Trust Securities) of the Trust, pay
for all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including
commissions, discounts and expenses in connection therewith), the fees
and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing, and disposition of Trust
assets); and
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets), and all
liabilities, costs and expenses with respect to such taxes, of the
Trust.
ARTICLE XI
Redemption of Debentures
SECTION 11.01. Optional Redemption. The Company shall have
the right to redeem the Debentures, in whole or in part, at any time or from
time to time, on or after December 1, 1999, upon not less than 15 nor more than
60 days' notice, at the following redemption prices (expressed as percentages
of the principal amount of Debentures to be redeemed), plus, in each case,
accrued and unpaid interest (including Additional Payments, if any) to, but
excluding the Redemption Date, if redeemed during the 12-month period beginning
December 1:
<TABLE>
<CAPTION>
Percentage of
Principal
Year Amount
- ---- ------
<S> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.6375%
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.9750%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.3125%
</TABLE>
<PAGE> 69
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<TABLE>
<S> <C>
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.6500%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.9875%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.3250%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.6625%
</TABLE>
and at a redemption price equal to 100% of the principal amount of the
Debentures to be redeemed plus accrued and unpaid interest (including
Additional Payments, if any) to the Redemption Date, if redeemed on or after
December 1, 2006. Any redemption pursuant to this Section 11.01 shall be made
pursuant to the provisions of Sections 11.03 through 11.09 hereof.
SECTION 11.02. Tax Event Optional Redemption. If a Tax Event
has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular
Trustees shall have been informed by tax counsel rendering the
Dissolution Tax Opinion that a No Recognition Opinion cannot be
delivered to the Trust;
then, notwithstanding Section 11.01, the Company shall have the right upon not
less than 15 nor more than 60 days' notice to the Holders of the Debentures to
redeem the Debentures in whole (but not in part) for cash at a redemption price
equal to 100% of the principal amount of the Debentures plus accrued and unpaid
interest (including Additional Payments, if any) within 90 days following the
occurrence of such Tax Event (the "90-Day Period"); provided, however, that if,
at the time there is available to the Company or the Trust the opportunity to
eliminate within the 90-Day Period, the Tax Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, has or
will cause no material adverse effect on the Company, the Trust or the holders
of the Trust Securities and will involve no material cost (a "Ministerial
Action"), the Company or the Trust shall pursue such Ministerial Action in lieu
of redemption; and provided further that the Company shall have no right to
redeem the Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration.
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SECTION 11.03. Applicability of Article. Redemption of
Debentures at the election of the Company, as permitted by Sections 11.01 and
11.02, shall be made in accordance with this Article XI.
SECTION 11.04. Election to Redeem; Notice to Trustee. The
election of the Company to redeem Debentures pursuant to Section 11.01 or 11.02
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 45 days and no more than
90 days prior to the Redemption Date fixed by the Company, notify the Trustee
in writing of such Redemption Date and of the principal amount of Debentures to
be redeemed and provide a copy of the notice of redemption given to Holders of
Debentures to be redeemed pursuant to Section 11.05.
SECTION 11.05. Selection by Trustee of Debentures to Be
Redeemed. If less than all the Debentures are to be redeemed (unless such
redemption affects only a single Debenture), the particular Debentures to be
redeemed shall be selected not more than 45 days prior to the Redemption Date
by the Trustee, from the Outstanding Debentures not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to $50.00
or any integral multiple thereof) of the principal amount of the Debentures.
The Trustee shall promptly notify the Company in writing of
the Debentures selected for redemption as aforesaid and, in case of any
Debentures selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Debenture, whether such
Debenture is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Debenture shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Debenture.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Debentures
shall relate, in the case of any Debentures redeemed or to be redeemed only in
part, to the
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64
portion of the principal amount of such Debentures which has been or is to be
redeemed.
SECTION 11.06. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 15
nor more than 60 days prior to the Redemption Date, to each Holder of
Debentures to be redeemed, at such Holder's address appearing in the Security
Register.
All notices of redemption shall identify the Debentures to be
redeemed (including, if relevant, the CUSIP number) and shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture to be redeemed and
that interest thereon will cease to accrue on and after said date, and
(d) the place or places where such Debentures are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Debentures to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 11.07. Deposit and Payment of Redemption Price.
Prior to 10:00 a.m. (New York City time) on the Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 10.03) an amount of money sufficient to pay the Redemption Price of,
plus (except if the Redemption Date shall be an Interest Payment Date) accrued
and unpaid interest (including Additional Payments, if any) on all the
Debentures which are to be redeemed on that date. Such redemption payment
shall be made to the Holders prior to the close of business (New York City
time) on the Redemption Date or such earlier time as the Company determines.
If any Debenture called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held
in trust for the
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65
redemption of such Debenture shall (subject to any right of the Holder of such
Debenture or any Predecessor Debenture to receive interest as provided in the
last paragraph of Section 3.07) be paid to the Company upon a Company Request
or, if then held by the Company, shall be discharged from such trust.
SECTION 11.08. Debentures Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Debentures so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued and unpaid interest
(including Additional Payments, if any)) such Debentures shall cease to bear
interest. Upon surrender of any such Debenture for redemption in accordance
with said notice, such Debenture shall be paid by the Company at the Redemption
Price, together with accrued and unpaid interest (including Additional
Payments, if any) to the Redemption Date; provided, however, that instalments
of interest whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Debentures, or one or more Predecessor
Debentures, registered as such at the close of business (New York City time) on
the relevant Record Dates according to the terms and the provisions of Section
3.07.
If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Debenture.
SECTION 11.09. Debentures Redeemed in Part. In the event of
any redemption in part, the Company shall not be required (i) to issue,
register the transfer of or exchange any Debenture during a period beginning at
the opening of business (New York City time) 15 Business Days before any
selection for redemption of Debentures and ending at the close of business (New
York City time) on the earliest date on which the relevant notice of redemption
is deemed to have been given to all Holders of Debentures to be so redeemed or
(ii) to register the transfer of or exchange any Debentures so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Debentures being redeemed in part.
Any Debenture which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with,
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66
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Debenture without service charge,
a new Debenture or Debentures, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debenture so surrendered.
SECTION 11.10. No Sinking Fund. The Debentures are not
entitled to the benefit of any sinking fund.
ARTICLE XII
Subordination of Debentures
SECTION 12.01. Agreement to Subordinate. The Company
covenants and agrees, and each Holder of Debentures by such Holder's acceptance
thereof likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article XII; and each Holder of a Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions. The payment by the Company of the
principal of, premium, if any, and interest (including Additional Payments, if
any) on all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full in money of all existing and future Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred;
provided, however, that no provision of this Article XII shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 12.02. Default on Senior Indebtedness. In the event
and during the continuation of any default by the Company in the payment of
principal, premium, interest or any other payment due on any Senior
Indebtedness continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness, unless and until such default
shall have been cured or waived or shall have ceased to exist, or in the event
that the maturity of any Senior Indebtedness has been accelerated because of a
default, or if an "Event of Default" (as
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defined therein) has occurred and is continuing under the Credit Facility that
would permit the lenders under such Credit Facility to accelerate the maturity
thereof or demand payment in full, then no payment shall be made by the Company
with respect to the principal of (including redemption payments, if any),
premium, if any, or interest (including Additional Payments, if any) on the
Debentures.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 12.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 12.03. Liquidation; Dissolution; Bankruptcy. Upon
any payment by the Company or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other
proceedings, all principal of, and premium, if any, and interest due or to
become due on, all Senior Indebtedness must be paid in full in money before any
payment is made on account of the principal, premium, if any, or interest
(including Additional Payments, if any) on the Debentures; and upon any such
dissolution, winding up, liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Debentures
or the Trustee would be entitled, except for the provisions of this Article
XII, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Debentures or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro
rata to such holders on the
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basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
in full in money, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or the Holders of the Debentures before all Senior Indebtedness is
paid in full in money, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, and their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article XII, the words, "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XII with respect to the Debentures to the payment of all Senior
Indebtedness which may at the time be outstanding; provided that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders of
such Senior Indebtedness are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the Company with,
or the merger of the
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Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of all or substantially all
its properties and assets on a consolidated basis to another Person upon the
terms and conditions provided for in Article VIII hereof shall not be deemed a
dissolution, winding up, liquidation or reorganization for the purposes of this
Section 12.03 if such other Person shall, as a part of such consolidation,
merger, conveyance, transfer or lease, comply with the conditions stated in
Article VIII hereof. Nothing in Section 12.02 or in this Section 12.03 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
6.07 hereof.
SECTION 12.04. Subrogation. Subject to the payment in full
in money of all Senior Indebtedness, the rights of the Holders of the
Debentures shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of, premium, if any, and interest (including
Additional Payments, if any) on the Debentures shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders
of such Senior Indebtedness of any cash, property or securities to which the
Holders of the Debentures or the Trustee would be entitled except for the
provisions of this Article XII, and no payment pursuant to the provisions of
this Article XII, to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Debentures or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Debentures, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XII or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Debentures the principal of,
premium, if any, and interest (including Additional Payments, if any) on the
Debentures as and when the same shall become due and payable in accordance
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with their terms, or is intended to or shall affect the relative rights of the
Holders of the Debentures and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of
Section 6.03, and the Holders of the Debentures, shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, as the case may be,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII.
SECTION 12.05. Trustee to Effectuate Subordination. Each
Holder of Debentures by such Holder's acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XII and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
SECTION 12.06. Notice by the Company. The Company shall give
prompt written notice to a Responsible Officer of the Trustee of any fact known
to the Company which would prohibit the making of any payment of monies to or
by the Trustee in respect of the Debentures pursuant to the provisions of this
Article XII. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in
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respect of the Debentures pursuant to the provision of this Article XII, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee from the Company or
a holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.03 hereof, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 12.06 at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of, premium, if any, or interest (including Additional Payments, if
any) on any Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were received,
and shall be fully protected and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
The Trustee, subject to the provisions of Section 6.03, shall
be entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
on behalf of such holder) to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the right of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.07. Rights of the Trustee; Holders of Senior
Indebtedness. The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article XII in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of
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Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are set forth in this Article XII, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 6.03, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it shall pay
over or deliver to Holders of Debentures, the Company or any other Person money
or assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article XII or otherwise. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article XII and
no implied covenants or obligations with respect to holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
SECTION 12.08. Subordination May Not Be Impaired. No right
of any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Debentures, without incurring responsibility to the Holders of the Debentures
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Debentures to the
holders of Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter,
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such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same
or any agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Senior
Indebtedness;
(iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 12.09. Amendment to Subordination Provisions. The
Company covenants and agrees, and each Holder of Debentures by such Holder's
acceptance thereof likewise covenants and agrees, for the benefit of the
lenders under the Credit Facility, that none of (i) the definitions of "Senior
Indebtedness" or "Credit Facility", (ii) any other definition contained herein
concerning the subordination of the Debentures and (iii) the provisions of
Article XII of this Indenture shall be modified or amended without the written
consent of such lenders.
ARTICLE XIII
Conversion of Debentures
SECTION 13.01. Conversion Rights. Subject to and upon
compliance with the provisions of this Article XIII, the Debentures are
convertible, at the option of the Holder thereof, at any time beginning 90 days
following the first date of original issuance of the Convertible Preferred
Securities and on or before the close of business (New York City time) on
December 1, 2026, into fully paid and nonassessable shares of Common Stock of
the Company at an initial conversion rate of 1.339 shares of Common Stock for
each $50.00 in aggregate principal amount of Debentures (equal to a conversion
price of approximately $37.34 per share of Common Stock), subject to adjustment
as described in this Article XIII. A Holder of Debentures may convert any
portion of the principal amount of the Debentures into that number of fully
paid and nonassessable shares of Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing the principal
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amount of the Debentures to be converted by such conversion price. In case a
Debenture or portion thereof is called for redemption, either at the option of
the Company or pursuant to a Tax Event, such conversion right in respect of the
Debenture or portion so called shall expire at the close of business (New York
City time) on the fifth Business Day immediately preceding the corresponding
Redemption Date, unless the Company defaults in making the payment due upon
redemption.
SECTION 13.02. Conversion Procedures. (a) In order to
convert all or a portion of the Debentures, the Holder thereof shall deliver to
the Conversion Agent an irrevocable Notice of Conversion setting forth the
principal amount of Debentures to be converted, together with the name or
names, if other than the Holder, in which the shares of Common Stock should be
issued upon conversion and, if such Debentures are definitive Debentures,
surrender to the Conversion Agent the Debentures to be converted, duly endorsed
or assigned to the Company or in blank. In addition, a holder of Convertible
Preferred Securities may exercise its right under the Declaration to convert
such Convertible Preferred Securities into Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Convertible Preferred Security for a portion of the
Debentures held by the Trust (at an exchange rate of $50.00 in aggregate
principal amount of Debentures for each Convertible Preferred Security) and
(ii) to immediately convert such Debentures, on behalf of such holder, into
Common Stock of the Company pursuant to this Article XIII and, if such
Convertible Preferred Securities are in definitive form, surrendering such
Convertible Preferred Securities, duly endorsed or assigned to the Company or
in blank. So long as any Convertible Preferred Securities are outstanding, the
Trust shall not convert any Debentures except pursuant to a Notice of
Conversion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder will
be entitled to receive the interest payable on the subsequent Interest Payment
Date on the portion of Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding
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sentence, in the case of any Debenture which is converted, interest whose
Stated Maturity is after the date of conversion of such Debenture shall not be
payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments, if any) on the Debentures being converted,
which shall be deemed to be paid in full. If any Debenture called for
redemption is converted, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Debenture shall (subject to any right of the Holder of such Debenture or any
Predecessor Debenture to receive interest as provided in the last paragraph of
Section 3.07 and this paragraph) be paid to the Company upon a Company Request
or, if then held by the Company, shall be discharged from such trust.
Each conversion shall be deemed to have been effected
immediately prior to the close of business (New York City time) on the day on
which the Notice of Conversion was received (the "Conversion Date") by the
Conversion Agent from the Holder or from a holder of the Convertible Preferred
Securities effecting a conversion thereof pursuant to its conversion rights
under the Declaration, as the case may be. The Person or Persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Common Stock as of the
Conversion Date. As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) Subject to any right of the Holder of such Debenture or
any Predecessor Debenture to receive interest as provided in the last paragraph
of Section 3.07 and the second paragraph of clause (a) of Section 13.02, the
Company's delivery upon conversion of the fixed number of shares of Common
Stock into which the Debentures are convertible (together with the cash
payment, if any, in lieu of fractional shares) shall be deemed to satisfy the
Company's obligation to pay the principal amount at Maturity
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of the portion of Debentures so converted and any unpaid interest (including
Additional Payments, if any) accrued on such Debentures at the time of such
conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the last reported sale price of such fractional interest on the date on which
the Debentures or Convertible Preferred Securities, as the case may be, were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn will
make such payment, if any, to the Holder of the Debentures or the holder of the
Convertible Preferred Securities so converted.
(d) In the event of the conversion of any Debenture in part
only, a new Debenture or Debentures for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancelation thereof in
accordance with Section 3.05.
(e) In effecting the conversion transactions described in
this Section 13.02, the Conversion Agent is acting as agent of the holders of
Convertible Preferred Securities (in the exchange of Convertible Preferred
Securities for Debentures) and as agent of the Holders of Debentures (in the
conversion of Debentures into Common Stock), as the case may be, directing it
to effect such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Debentures held by the Trust from time to time for
Convertible Preferred Securities in connection with the conversion of such
Convertible Preferred Securities in accordance with this Article XIII and (ii)
to convert all or a portion of the Debentures into Common Stock and thereupon
to deliver such shares of Common Stock in accordance with the provisions of
this Article XIII and to deliver to the Trust a new Debenture or Debentures for
any resulting unconverted principal amount.
SECTION 13.03. Conversion Price Adjustments. The conversion
price shall be subject to adjustment (without duplication) from time to time as
follows:
(a) In case the Company shall, while any of the Debentures are
Outstanding, (i) pay a dividend or make a distribution with respect to
any class of capital stock of the Company in shares of Common Stock,
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(ii) subdivide its outstanding shares of Common Stock, (iii) combine
its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Company, the conversion price in effect
immediately prior to such action shall be adjusted so that the Holder
of any Debentures thereafter surrendered for conversion shall be
entitled to receive the number of shares of capital stock of the
Company which he would have owned immediately following such action
had such Debentures been converted immediately prior thereto. An
adjustment made pursuant to this Section 13.03(a) shall become
effective immediately after the record date in the case of a dividend
or other distribution and shall become effective immediately after the
effective date in case of a subdivision, combination or
reclassification (or immediately after the record date if a record
date shall have been established for such event). If, as a result of
an adjustment made pursuant to this Section 13.03(a), the Holder of
any Debenture thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes or series of capital
stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a Board Resolution filed
with the Trustee) shall determine the allocation of the adjusted
conversion price between or among shares of such classes or series of
capital stock.
(b) In case the Company shall, while any of the Debentures
are Outstanding, issue rights or warrants to all holders of its Common
Stock entitling them (for a period expiring within 45 days after the
record date mentioned in this Section 13.03(b)) to subscribe for or
purchase shares of Common Stock at a price per share less than the
Current Market Price per share of Common Stock (as determined pursuant
to 13.03(f) below) on such record date, the conversion price for the
Debentures shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately
prior to the date of issuance of such rights or warrants by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus
the number of shares which the aggregate offering price of the total
number of shares so offered for subscription or
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purchase would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after
the record date for the determination of stockholders entitled to
receive such rights or warrants. For the purposes of this subsection,
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall
not issue any rights or warrants in respect of shares of Common Stock
held in the treasury of the Company. In case any rights or warrants
referred to in this subsection in respect of which an adjustment shall
have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Company, the conversion
price shall be readjusted at the time of such expiration to the
conversion price that would have been in effect if no adjustment had
been made on account of the distribution or issuance of such expired
rights or warrants.
(c) Subject to the last sentence of this Section 13.03(c), in
case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of
any class or series of capital stock, cash or assets (including
securities, but excluding any rights or warrants referred to in
Section 13.03(b), any dividend or distribution referred to in Section
13.03(a) and any dividend or distribution paid exclusively in cash),
the conversion price shall be reduced so that the same shall equal the
price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price
reduction contemplated by Section 13.03(c) by a fraction of which the
numerator shall be the Current Market Price per share (determined as
provided in Section 13.03(f)) of the Common Stock on the date fixed
for the payment of such distribution (the "Reference Date") less the
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share
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of Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
Reference Date. In the event that such dividend or distribution is
not so paid or made, the conversion price shall again be adjusted to
be the conversion price which would then be in effect if such dividend
or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of
this Section 13.03(c) by reference to the actual or when issued
trading market for any securities comprising such distribution, it
must in doing so consider the prices in such market over the same
period used in computing the Current Market Price per share of Common
Stock (determined as provided in Section 13.03(f)). For purposes of
this Section 13.03(c), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or
purchase shares of Common Stock shall be deemed instead to be (i) a
dividend or distribution of the evidences of indebtedness, shares of
capital stock, cash or assets other than such shares of Common Stock
or such rights or warrants (making any conversion price reduction
required by this Section 13.03(c)) immediately followed by (ii) a
dividend or distribution of such shares of Common Stock or such rights
or warrants (making any further conversion price reduction required by
Section 13.03(a) or 13.03(b)), except (A) the Reference Date of such
dividend or distribution as defined in this 13.03(c) shall be
substituted as (1) "the record date in the case of a dividend or other
distribution," and (2) "the record date for the determination of
stockholders entitled to receive such rights or warrants" and (3) "the
date fixed for such determination" within the meaning of Sections
13.03(a) and 13.03(b) and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed outstanding for
purposes of computing any adjustment of the conversion price in
Section 13.03(a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding all
regular cash dividends, if the annualized amount thereof per share of
Common Stock does not exceed 15% of the Current Market Price per share
determined as provided in
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Section 13.03(f) of the Common Stock on the Trading Day immediately
preceding the date of declaration of such dividend), the conversion
price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately
prior to the effectiveness of the conversion price reduction
contemplated by this Section 13.03(d) by a fraction of which the
numerator shall be the Current Market Price per share (determined as
provided in Section 13.03(f)) of the Common Stock on the date fixed
for the payment of such distribution less the amount of cash so
distributed and not excluded as provided applicable to one share of
Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
date fixed for the payment of such distribution; provided, however,
that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current
Market Price per share (as defined in Section 13.03(f)) of the Common
Stock on the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder of
shares of Debentures shall have the right to receive upon conversion
the amount of cash such Holder would have received had such Holder
converted each share of the Debentures immediately prior to the record
date for the distribution of the cash. In the event that such
dividend or distribution is not so paid or made, the conversion price
shall again be adjusted to be the conversion price which would then be
in effect if such record date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or
any portion of the Company's Common Stock shall expire and such tender
or exchange offer shall involve the payment by the Company or such
Subsidiary of consideration per share of Common Stock having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds 110% of the Current
<PAGE> 88
81
Market Price per share (determined as provided in Section 13.03(f)) of
the Common Stock on the Trading Day next succeeding the Expiration
Time, the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in
effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this Section 13.03(e) by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Current Market Price per share
(determined as provided in Section 13.03(f)) of the Common Stock on
the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Price per share (determined as provided in
Section 13.03(f)) of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time.
(f) For the purpose of any computation under Section
13.03(b), 13.03(c), 13.03(d) or 13.03(e), the "Current Market Price"
per share of Common Stock on any date in question shall be deemed to
be the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 20
Trading Days before, and ending not later than, the earlier of the day
in question or, if applicable, the day before the "ex" date with
respect to the issuance or distribution requiring such computation;
provided, however, that if another event occurs that would require an
adjustment pursuant to Section 13.03(a) through (e), inclusive, the
Board of Directors may make such adjustments to the Closing Prices
during such five Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 13.03, in
which case any such
<PAGE> 89
82
determination by the Board of Directors shall be set forth in a Board
Resolution and shall be conclusive. For purposes of this paragraph,
the term "ex" date, (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades
regular way on the Nasdaq National Market or on such successor
quotation system or securities exchange as the Common Stock may be
quoted or listed or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or
distribution, and (ii) when used with respect to any tender or
exchange offer, means the first date on which the Common Stock trades
regular way on such quotation system or securities exchange or in such
market after the Expiration Time of such offer.
(g) The Company may make such reductions in the conversion
price, in addition to those required by Sections 13.03 (a) through
(e), as it considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of capital stock (or
rights to acquire capital stock) or from any event treated as such for
income tax purposes.
(h) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the conversion price; provided, however, that any
adjustments which by reason of this Section 13.03(h) are not required
to be made shall be carried forward and taken into account in
determining whether any subsequent adjustment shall be required.
(i) If any action would require adjustment of the conversion
price pursuant to more than one of the provisions described above,
only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value to the Holder
of the Debentures.
SECTION 13.04. Reclassification, Consolidation, Merger or
Sale of Assets. In the event that the Company shall be a party to any
transaction (including without limitation (a) any recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the
<PAGE> 90
83
Common Stock), (b) any consolidation of the Company with, or merger of the
Company into, any other Person, or any merger of another Person into the
Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancelation of outstanding shares of Common Stock of
the Company), (c) any sale, transfer or lease of all or substantially all of
the assets of the Company or (d) any compulsory share exchange) pursuant to
which the Common Stock is converted into the right to receive other securities,
cash or other property, then lawful provision shall be made as part of the
terms of such transaction whereby the Holder of each Debenture then Outstanding
shall have the right thereafter to convert such Debenture only into the kind
and amount of securities, cash or other property receivable upon consummation
of such transaction by a holder of the number of shares of Common Stock of the
Company into which such Debenture could have been converted immediately prior
to such transaction.
The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate
or articles of incorporation or other constituent document to establish such
right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article XIII. The above provisions shall
similarly apply to successive transactions of the foregoing type.
SECTION 13.05. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price
and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted conversion
price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed
with the Trustee, the Conversion Agent and the transfer agent for the
Convertible Preferred Securities and the Debentures; and
<PAGE> 91
84
(b) a notice stating the conversion price has been adjusted
and setting forth the adjusted conversion price shall as soon as
practicable be mailed by the Company to all record holders of
Convertible Preferred Securities and the Debentures at their last
addresses as they appear upon the stock transfer books of the Company
and the Trust.
SECTION 13.06. Prior Notice of Certain Events. In case (a)
the Company shall (i) declare any dividend (or any other distribution) on its
Common Stock, other than (A) a dividend payable in shares of Common Stock or
(B) a dividend payable in cash that would not require an adjustment pursuant to
Section 13.03(c) or 13.03(d), or (ii) authorize a tender or exchange offer that
would require an adjustment pursuant to Section 13.03(e); (b) the Company shall
authorize the granting to all holders of Common Stock of rights or warrants to
subscribe for or purchase any shares of stock of any class or series or of any
other rights or warrants; (c) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company shall be required, or of
the sale or transfer of all or substantially all of the assets of the Company
or of any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or other property; or (d) of the voluntary or
involuntary dissolution, liquidation or winding up of the Company; then the
Company shall (1) if any Convertible Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Convertible Preferred
Securities, and shall cause to be mailed to the holders of record of the
Convertible Preferred Securities, at their last addresses as they shall appear
upon the stock transfer books of the Trust or (2) cause to be mailed to all
Holders at their last addresses as they shall appear in the Security Register,
at least 15 days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record (if any) is to be
taken for the purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution,
<PAGE> 92
85
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up (but no failure to mail
such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
SECTION 13.07. Certain Defined Terms. The following
definitions shall apply to terms used in this Article XIII:
(a) "Closing Price" of any Common Stock on any day shall mean
the last reported sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing
bid and asked prices regular way of such Common Stock, in each case on
the Nasdaq National Market or, if the Common Stock is not quoted on
such market, on the principal national securities exchange on which
such Common Stock is listed or admitted to trading, or, if not listed
or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices as furnished by any New
York Stock Exchange member firm selected from time to time by the
Board of Directors of the Company for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the
Board of Directors.
(b) "Trading Day" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to
determine the Closing Price.
SECTION 13.08. Dividend or Interest Reinvestment Plans.
Notwithstanding the foregoing provisions, the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan, and the
issuance of any shares of Common Stock or options or rights to purchase such
shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the
<PAGE> 93
86
date the Debentures were first issued, shall not be deemed to constitute an
issuance of Common Stock or exercisable, exchangeable or convertible securities
by the Company to which any of the adjustment provisions described above
applies. There shall also be no adjustment of the conversion price in case of
the issuance of any stock (or securities convertible into or exchangeable for
stock) of the Company except as specifically described in this Article XIII.
SECTION 13.09. Certain Additional Rights. In case the
Company shall, by dividend or otherwise, declare or make a distribution on its
Common Stock referred to in Section 13.03(c) or 13.03(d) (including, without
limitation, dividends or distributions referred to in the last sentence of
Section 13.03(c)), the Holder of the Debentures, upon the conversion thereof
subsequent to the close of business (New York City time) on the date fixed for
the determination of stockholders entitled to receive such distribution and
prior to the effectiveness of the conversion price adjustment in respect of
such distribution, shall also be entitled to receive for each share of Common
Stock into which the Debentures are converted, the portion of the shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall
be evidenced by a resolution of the Board of Directors) with respect to all
Holders so converting, the Company may, in lieu of distributing to such Holder
any portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Debentures described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Debentures so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a resolution of the Board of
Directors) to distribute to such Holder a due bill for the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such Holder is so entitled; provided that such due bill
(i) meets any applicable requirements of the principal national securities
exchange, quotation system or other market on which the Common Stock is then
traded and
<PAGE> 94
87
(ii) requires payment or delivery of such shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets no
later than the date of payment or delivery thereof to holders of shares of
Common Stock receiving such distribution.
SECTION 13.10. Trustee Not Responsible for Determining
Conversion Price or Adjustments. Neither the Trustee nor any Conversion Agent
shall at any time be under any duty or responsibility to any Holder of any
Debenture to determine whether any facts exist which may require any adjustment
of the conversion price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind of account) of any shares of Common Stock
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Debenture; and neither the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property upon the
surrender of any Debenture for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article X or this Article XIII.
SECTION 13.11. Restrictions on Transfer of Common Stock
Issuable Upon Conversion. (a) Shares of Common Stock issued upon conversion
of a Debenture in respect of a restricted Convertible Preferred Security shall
bear such restrictive legends as the Company may provide in accordance with
applicable law.
(b) If shares of Common Stock issued upon conversion of a
Debenture in respect of a restricted Convertible Preferred Security are to be
registered in a name other than that of the holder of such Convertible
Preferred Security, then the Person in whose name such shares of Common Stock
are to be registered must deliver to the Conversion Agent a certificate
satisfactory to the Company and signed by such Person, as to compliance with
the restrictions on transfer applicable to such Convertible Preferred Security.
Neither the Trustee nor any Conversion
<PAGE> 95
88
Agent or Registrar shall be required to register in a name other than that of
such holder shares of Common Stock issued upon conversion of such Convertible
Preferred Security not so accompanied by a properly completed certificate.
ARTICLE XIV
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 14.01. No Recourse. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debenture, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past, present or
future as such, of the Company or of any predecessor or successor corporation,
either directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Debentures or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Debentures.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to
<PAGE> 96
89
be an original, but all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
TITANIUM METALS CORPORATION,
By:
---------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee,
By:
---------------------------
Name:
Title:
<PAGE> 97
90
EXHIBIT A
FORM OF DEBENTURE
[FACE OF DEBENTURE]
[Include if Debenture is in global form: THIS SECURITY IS A
GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.]
[Include if Debenture is in global form and The Depository
Trust Company is the Depositary: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED SIGNATORY OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE TRUST OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include if Debenture is restricted: THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT
OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERED (X) PRIOR TO THE THIRD ANNIVERSARY OF THE ISSUANCE HEREOF (OR THE
ISSUANCE OF ANY PREDECESSOR SECURITY HERETO) OR (Y) IF LATER, BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
<PAGE> 98
91
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),
AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SO SPECIFIED IN
THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE EXPIRATION OF THE "40-DAY
RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER
THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR
THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT
CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY
PURSUANT TO THIS CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED
PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE
SECURITIES ACT), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT,
OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES; AND AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
"QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A OR (2) AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
<PAGE> 99
92
TITANIUM METALS CORPORATION
6-5/8% Convertible Junior Subordinated Debenture due 2026
of
Titanium Metals Corporation
No._________
$___________ CUSIP No.
TITANIUM METALS CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________, or
registered assigns, the principal sum of __________________ Dollars
($___________) on December 1, 2026 and to pay interest thereon from November
26, 1996 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be, payable quarterly (subject
to deferral as set forth in the Indenture), in arrears, on March 1, June 1,
September 1 and December 1 (each an "Interest Payment Date") of each year,
commencing March 1, 1997, until the principal thereof is paid or made available
for payment, and they shall be paid to the Person in whose name the Debenture
is registered at the close of business (New York City time) on the regular
record date for such interest instalment, which shall be the February 15, May
15, August 15 and November 15 next preceding such Interest Payment Date (the
"Regular Record Date").
Reference is hereby made to the further provisions of this
Debenture set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Debenture shall not be
<PAGE> 100
93
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
TITANIUM METALS CORPORATION,
By:
---------------------------
Name:
Title:
[Seal]
Attest:
- ---------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
as Trustee,
By:
---------------------------
Name:
Title:
<PAGE> 101
94
[FORM OF REVERSE OF DEBENTURE]
This Debenture is one of a duly authorized issue of securities
of the Company designated as its 6-5/8% Convertible Junior Subordinated
Debentures due 2026 (herein called the "Debentures"), limited in aggregate
principal amount to $180,412,400 in aggregate principal amount (or $207,474,300
if the over-allotment option is exercised in full), issued and to be issued
under an Indenture, dated as of November 20, 1996 (herein called the
"Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered. The terms of the Debentures include
those stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) (the "TIA") as in
effect on the date of the Indenture. The Debentures are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
Holders are referred to the Indenture and the TIA for a statement of such
terms. No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Debenture at the times, place and rate, and in the coin or currency, herein
prescribed or to convert this Debenture as provided in the Indenture. All
terms used in this Debenture which are defined in the Indenture shall have the
meanings assigned to them in the Indenture. The Company will furnish to any
Holder upon written request and without charge a copy of the Indenture.
1. Interest. The Debentures shall bear interest at the rate
of 6.625% per annum (subject to adjustment in the event the Shelf Registration
Statement is not filed or is not declared effective within, or is not
continuously effective for, the time periods specified in the Registration
Agreement as provided in the third succeeding paragraph), from November 26,
1996 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, as the case may be, payable quarterly (subject to
deferral as set forth herein), in arrears, on
<PAGE> 102
95
March 1, June 1, September 1 and December 1 (each an "Interest Payment Date")
of each year, commencing March 1, 1997, until the principal thereof is paid or
made available for payment, and they shall be paid to the Person in whose name
the Debenture is registered at the close of business (New York City time) on
the regular record date for such interest instalment, which shall be the
February 15, May 15, August 15 and November 15 next preceding such Interest
Payment Date (the "Regular Record Date"). Interest will compound quarterly and
will accrue at the rate of 6.625% per annum (subject to adjustment in the event
the Shelf Registration Statement is not filed or is not declared effective
within, or is not continuously effective for, the time periods specified in the
Registration Agreement as provided in the third succeeding paragraph) on any
interest instalment in arrears for more than one quarter or during an extension
of an interest payment period as set forth below.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed
on the basis of the actual number of days elapsed. In the event that any date
on which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
If at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any state thereof, or any
other taxing authority, then, in any such case, the Company shall pay as
additional interest ("Additional Interest") on the Debentures held by the
Property Trustee such amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying any
such taxes, duties, assessments or other governmental charges will be not less
than the amounts the Trust and the Property Trustee would
<PAGE> 103
96
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
Pursuant to the Registration Agreement, dated November 20,
1996, among the Company, the Trust and the Initial Purchasers named in the
Purchase Agreement, the Company and the Trust have agreed that (i) they will,
at the Company's expense, within 90 days after the first date of original
issuance of the Convertible Preferred Securities, file the Shelf Registration
Statement, covering resales of the Convertible Preferred Securities (together
with the Guarantee), the Debentures and the Common Stock issuable upon
conversion thereof pursuant to Rule 415 under the Securities Act, (ii) the
Company and the Trust shall use best efforts to cause such Shelf Registration
Statement to be declared effective within 180 days after the first date of
original issuance of the Convertible Preferred Securities and (iii) the Company
and the Trust will maintain such Shelf Registration Statement continuously
effective under the Securities Act until the earliest of (x) the third
anniversary of the last date of original issuance of the Convertible Preferred
Securities, (y) such date as restrictions on resales shall terminate pursuant
to Rule 144(k) under the Securities Act or any successor rule thereto or (z)
such date as of which all the Convertible Preferred Securities, Debentures or
the Common Stock issued upon conversion thereof have been sold pursuant to such
Shelf Registration Statement. If the Company and the Trust fail to file the
Shelf Registration Statement within 90 days after the first date of original
issuance of the Convertible Preferred Securities pursuant to Section 2(a) of
the Registration Agreement then, at such time, the per annum interest rate on
the Debentures (including the rate of Compound Interest) will increase by 25
basis points. Such increase will remain in effect until the date on which the
Shelf Registration Statement is filed, on which date the interest rate on the
Debentures will revert to the interest rate originally borne by the Debentures
plus any increase in such interest rate pursuant to the following sentence. If
the Shelf Registration Statement is not declared effective within 180 days
after the first date of original issuance of the Convertible Preferred
Securities then, at such time and on each date that would have been the
successive 30th day following such time, the per annum interest rate on the
Debentures (which interest rate shall be the original interest rate on the
Debentures plus any increase or increases in such interest rate pursuant to the
preceding sentence and this sentence) will increase by an additional
<PAGE> 104
97
25 basis points; provided that the interest rate will not increase by more than
50 basis points pursuant to this sentence and will not increase by more than 75
basis points pursuant to this sentence and the preceding sentence. Such
increase or increases will remain in effect until the date on which the Shelf
Registration Statement is declared effective, on which date the interest rate
on the Debentures will revert to the interest rate originally borne by the
Debentures. However, if the Company and the Trust fail to keep the Shelf
Registration Statement continuously effective pursuant to Section 2(b) of the
Registration Agreement, then at such time as the Shelf Registration Statement
is no longer effective and on each date thereafter that is the 30th day
subsequent to such time and until the earlier of (i) such date that the Shelf
Registration Statement is again deemed effective, (ii) the date that is the
third anniversary of the last date of original issuance of the Convertible
Preferred Securities, (iii) such date as restrictions on resales shall
terminate pursuant to Rule 144(k) under the Securities Act or any successor
rule thereto or (iv) such date as of which all of the Convertible Preferred
Securities, Debentures or the Common Stock issued upon conversion thereof are
sold pursuant to the Shelf Registration Statement, the per annum interest rate
on the Convertible Debentures will increase by an additional 25 basis points;
provided, however, that the interest rate will not increase by more than 50
basis points pursuant to this sentence. The Company will be permitted,
however, to suspend the use of the prospectus which forms a part of the Shelf
Registration Statement as provided in the Registration Agreement.
The principal of, premium, if any, and interest on the
Debentures shall be payable at the office or agency of the Company in the
United States maintained for such purpose and at any other office or agency
maintained by the Company for such purpose in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
2. Option to Extend Interest Payment Period. The Company
shall have the right at any time during the term of the Debentures to defer
interest payments (excluding, for such purposes, payments with respect to
Additional Interest,
<PAGE> 105
98
if any) from time to time by extending the interest payment period for
successive periods (each, an "Extension Period") not exceeding 20 consecutive
quarters for each such period; provided no Extension Period may extend beyond
the maturity date of the Debentures. On each Interest Payment Date during an
Extension Period, the Company shall pay all accrued and unpaid Additional
Interest on the Debentures. At the end of each Extension Period, the Company
shall pay all interest then accrued and unpaid (including Additional Interest)
together with interest thereon compounded quarterly at the rate specified in
paragraph 1 above to the extent permitted by applicable law ("Compound
Interest"); provided that during any Extension Period, the Company shall (a)
not declare or pay dividends on, or make a distribution with respect to, or
redeem or purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of shares of
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company
to purchase shares of Common Stock, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged),
(b) not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued
by the Company that rank pari passu with or junior to the Debentures and (c)
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the maturity
date of the Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above requirements. No interest or any other payment
(except for Additional Interest) shall be due and payable during an Extension
Period except at the end thereof.
<PAGE> 106
99
If the Property Trustee is the sole Holder of the Debentures
at the time the Company selects an Extension Period, the Company shall give
written notice to the Regular Trustees, the Property Trustee and the Trustee of
its selection of such Extension Period at least one Business Day prior to the
earlier of (i) the date the distributions on the Convertible Preferred
Securities are payable or (ii) if the Convertible Preferred Securities are
listed on a national securities exchange or quotation system, the date the
Trust is required to give notice to such self-regulatory organization or to
holders of the Convertible Preferred Securities of the record date or the date
such distributions are payable, but in any event not less than 10 Business Days
prior to such record date.
If the Property Trustee is not the sole Holder of the
Debentures at the time the Company selects an Extension Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extension Period at least 10 Business Days prior to the
earlier of (i) the next succeeding Interest Payment Date or (ii) if the
Convertible Preferred Securities are listed on a national securities exchange
or quotation system, the date the Company is required to give notice to such
self-regulatory organization or to Holders of the Debentures on the record or
payment date of such related interest payment, but in any event not less than
two Business Days prior to such record date.
The quarter in which any notice is given pursuant to
paragraphs second and third of this Section 2 shall be counted as one of the 20
quarters permitted in the maximum Extension Period permitted under paragraph
one of this Section 2.
3. Paying Agent and Security Registrar. The Trustee will act
as Paying Agent, Security Registrar and Conversion Agent. The Company may
change any Paying Agent, Security Registrar, co-registrar or Conversion Agent
without prior notice. The Company or any of its Affiliates may act in any such
capacity.
4. Redemption. The Debentures are redeemable, in whole or in
part, at any time or from time to time, on or after December 1, 1999, upon not
less than 15 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount of Debentures to be
redeemed), plus accrued and unpaid interest
<PAGE> 107
100
(including Additional Payments, if any) to, but excluding the Redemption Date,
if redeemed during the 12-month period beginning December 1:
<TABLE>
<CAPTION>
Percentage of
Principal
Year Amount
- ---- ------
<S> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.6375%
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.9750%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.3125%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.6500%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.9875%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.3250%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.6625%
</TABLE>
and at a redemption price equal to 100% of the principal amount of the
Debentures to be redeemed, plus accrued and unpaid interest (including
Additional Payments, if any) to, but excluding, the Redemption Date, if
redeemed on or after December 1, 2006. On and after the Redemption Date,
interest ceases to accrue on the Debentures or portions of them called for
redemption.
The Debentures are subject to redemption in whole (but not in
part), at any time within 90 days, if a Tax Event (as defined in the
Declaration) shall occur and be continuing, at a redemption price equal to 100%
of the principal amount thereof plus accrued but unpaid interest (including
Additional Payments, if any) to the Redemption Date. On and after the
Redemption Date, interest ceases to accrue on the Debentures called for
redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
Redemption Date, to each Holder of Debentures to be redeemed, at such Holder's
address appearing in the Security Register. Debentures in denominations larger
than $50.00 may be redeemed in part but only in integral multiples of $50.00.
In the event of a redemption of less than all of the Debentures, the Debentures
will be chosen for redemption by the Trustee in accordance with the Indenture.
If this Debenture is redeemed subsequent to a Regular Record
Date with respect to any Interest Payment Date specified above and on or prior
to such Interest Payment Date, then any accrued interest will be paid to the
<PAGE> 108
101
person in whose name this Debenture is registered at the close of business on
such record date.
5. Sinking Fund. The Debentures are not entitled to the
benefit of any sinking fund.
6. Subordination. The payment of the principal of, premium,
if any, and interest (including Additional Payments, if any) on all Debentures
is subordinated and junior in right of payment to the prior payment in full of
all existing and future Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred. Each Holder, by accepting a Debenture,
agrees to such subordination and authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee as its attorney-in-fact for
such purpose.
"Senior Indebtedness" means, with respect to the Company, (i)
the principal of, premium, if any, and interest in respect of, (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by the Company, including
interest accruing on or after a bankruptcy or other similar event, whether or
not an allowed claim therein, (ii) all indebtedness, and all obligations to pay
fees and other amounts, under the Credit Facility, (iii) all capital lease
obligations of the Company, (iv) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding obligations to trade creditors), (v) all
obligations of the Company for the reimbursement of any letter of credit,
banker's acceptance, security purchase facility or similar credit transaction,
(vi) all obligations of the type referred to in clauses (i) through (v) above
of other Persons for the payment of which the Company is responsible or liable
as obligor, guarantor or otherwise, and (vii) all obligations of the type
referred to in clauses (i) through (vi) above of other Persons secured by any
lien on any property or asset of the Company (whether or not such obligation is
assumed by the Company), except in the cases of each of clauses (i) through
(vii) above for (1) any such indebtedness that is by its terms subordinated to
or pari passu with the Debentures and (2) any indebtedness between or among the
Company or its affiliates, including all other debt securities and
<PAGE> 109
102
guarantees in respect of those debt securities issued to (a) the Trust or a
trustee of such Trust or (b) any other trust, or a trustee of such trust,
partnership, or other entity affiliated with the Company that is a financing
vehicle of the Company (a "Financing Entity") in connection with the issuance
by such Financing Entity of preferred securities or other securities which rank
pari passu with, or junior to, the Convertible Preferred Securities. Such
Senior Indebtedness shall continue to be Senior Indebtedness and entitled to
the benefits of these subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
7. Conversion. The Holder of any Debenture has the right,
exercisable at any time beginning 90 days following the first date of original
issuance of the Convertible Preferred Securities and on or before the close of
business (New York City time) on December 1, 2026 (or, in the case of
Debentures called for redemption (either at the option of the Company or
pursuant to a Tax Event), on the fifth Business Day immediately preceding the
Redemption Date), to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50.00) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of 1.339 shares of Common Stock for each $50.00 in aggregate principal
amount of Debentures (equal to a conversion price of approximately $37.34 per
share of Common Stock), subject to adjustment under certain circumstances. The
number of shares issuable upon conversion of a Debenture is determined by
dividing the principal amount of the Debenture converted by the conversion
price in effect on the Conversion Date. No fractional shares will be issued
upon conversion but a cash adjustment will be made for any fractional interest.
The Outstanding principal amount of any Debenture shall be reduced by the
portion of the principal amount thereof converted into shares of Common Stock.
To convert a Debenture, a Holder must (i) complete and sign a
conversion notice substantially in the form attached hereto, (ii) surrender the
Debenture to a Conversion Agent, (iii) furnish appropriate endorsements or
transfer documents if required by the Security Registrar or Conversion Agent
and (iv) pay any transfer or similar tax, if required. If a Notice of
Conversion is delivered on or after the Regular Record Date and prior to the
subsequent Interest Payment Date, the Holder will be entitled to receive the
interest payable on the subsequent Interest
<PAGE> 110
103
Payment Date on the portion of Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Debenture shall not be payable, and the Company shall not
make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest (including Additional Payments, if any)
on the Debentures being converted, which shall be deemed to be paid in full.
If any Debenture called for redemption is converted, any money deposited with
the Trustee or with any Paying Agent or so segregated and held in trust for the
redemption of such Debenture shall (subject to any right of the Holder of such
Debenture or any Predecessor Debenture to receive interest as provided in the
last paragraph of Section 3.07 and this paragraph) be paid to the Company upon
a Company Request or, if then held by the Company, shall be discharged from
such trust.
8. Registration, Transfer, Exchange and Denominations. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Debenture is registrable in the Security Register, upon
surrender of this Debenture for registration of transfer at the office or
agency of the Company in New York, New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Debentures are issuable only in registered form without
coupons in denominations of $50.00 and integral multiples thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Prior to due presentment
of this Debenture for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name this
Debenture is registered as the owner hereof for all purposes, whether or not
this Debenture be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary. In the event of redemption
or conversion of this Debenture in part only, a
<PAGE> 111
104
new Debenture or Debentures for the unredeemed or unconverted portion hereof
will be issued in the name of the Holder hereof upon the cancelation hereof.
9. Persons Deemed Owners. Except as provided in the
Indenture, the registered Holder of a Debenture may be treated as its owner for
all purposes.
10. Unclaimed Money. If money for the payment of principal
or interest remains unclaimed for two years, the Trustee and the Paying Agent
shall pay the money back to the Company at its written request. After that,
Holders of Debentures entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
11. Defaults and Remedies. The Debentures shall have the
Events of Default as set forth in Section 5.01 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in aggregate principal amount of the then Outstanding Debentures by notice to
the Company and the Trustee may declare all the Debentures to be due and
payable immediately.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration. Holders may not enforce the Indenture or the
Debentures except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
Outstanding Debentures issued under the Indenture may direct the Trustee in its
exercise of any trust or power. The Company must furnish annually compliance
certificates to the Trustee. The above description of Events of Default and
remedies is qualified by reference to, and subject in its entirety by, the more
complete description thereof contained in the Indenture.
12. Amendments, Supplements and Waivers. The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the
<PAGE> 112
105
rights and obligations of the Company and the rights of the Holders of the
Debentures under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Debentures at the time Outstanding, on behalf of the Holders of all the
Debentures, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Debenture shall be conclusive
and binding upon such Holder and upon all future Holders of this Debenture and
of any Debenture issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Debenture.
13. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Debentures and may otherwise deal with the Company or an Affiliate with the
same rights it would have, as if it were not Trustee, subject to certain
limitations provided for in the Indenture and in the TIA. Any Agent may do the
same with like rights.
14. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Debentures or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Debentures by accepting a Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Debentures.
15. Governing Law. THE DEBENTURES AND THE INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
16. Authentication. The Debentures shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee
or an authenticating agent.
<PAGE> 113
106
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Debenture to:
-------------------------------------
(Insert assignee's social security or
tax identification number)
---------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints agent to transfer this Debenture on the books of the
Company. The agent may substitute another to act for him or her.
Date:
-----------------------
- ------------------------------------------
(Sign exactly as your name appears on the
other side of this Debenture)
Signature Guarantee:*
-----------------------
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Debentures Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
<PAGE> 114
107
NOTICE OF CONVERSION
To: Titanium Metals Corporation
The undersigned owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion below
designated, into the common stock, $.01 par value (the "Common Stock"), of
Titanium Metals Corporation (the "Company"), in accordance with the terms of
the Indenture, between the Company and The Chase Manhattan Bank, as Trustee,
and directs that the shares issuable and deliverable upon conversion, together
with any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: ________________
Number of Debentures to be converted ($50.00 or integral
multiples thereof): ___________________
If a name or names other than the undersigned, please indicate
in the spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or persons.
- -----------------------------------------
(Sign exactly as your name appears on the
the Debenture) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
- -----------------------------------------
<PAGE> 115
108
Signature Guarantee:*
-------------------
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
<PAGE> 1
EXHIBIT 4.7
================================================================================
CONVERTIBLE PREFERRED SECURITIES GUARANTEE AGREEMENT
Titanium Metals Corporation
Dated as of November 20, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation . . . . . . . . . . . . . . 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application . . . . . . . . . . . . . 6
SECTION 2.02. Lists of Holders of Securities . . . . . . . . . . . . . . 6
SECTION 2.03. Reports by the Guarantee Trustee . . . . . . . . . . . . . 6
SECTION 2.04. Periodic Reports to the Guarantee Trustee . . . . . . . . 7
SECTION 2.05. Evidence of Compliance with Conditions Precedent . . . . . 7
SECTION 2.06. Event of Default; Waiver . . . . . . . . . . . . . . . . . 7
SECTION 2.07. Event of Default; Notice . . . . . . . . . . . . . . . . . 7
SECTION 2.08. Conflicting Interests . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Powers, Duties and Rights of
the Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee . . . . . . . . 8
SECTION 3.02. Certain Rights of the Guarantee Trustee . . . . . . . . . 10
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee . . 12
</TABLE>
<PAGE> 3
2
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . 13
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
Guarantee
SECTION 5.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.02. Waiver of Notice and Demand . . . . . . . . . . . . . . . . 15
SECTION 5.03. Obligations Not Affected . . . . . . . . . . . . . . . . . . 15
SECTION 5.04. Rights of Holders . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.05. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.07. Independent Obligations . . . . . . . . . . . . . . . . . . 17
SECTION 5.08. Conversion . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI
Limitation of Transactions; Ranking
SECTION 6.01. Limitation of Transactions . . . . . . . . . . . . . . . . . 18
SECTION 6.02. Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
Termination
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.02. Indemnification . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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3
<TABLE>
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<S> <C> <C>
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns . . . . . . . . . . . . . . . . . . 20
SECTION 9.02. Amendments . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.04. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE> 5
EXECUTION COPY
CONVERTIBLE PREFERRED SECURITIES GUARANTEE
AGREEMENT (this "Guarantee"), dated as of November
20, 1996, is executed and delivered by TITANIUM
METALS CORPORATION, a Delaware corporation (the
"Guarantor"), and THE CHASE MANHATTAN BANK, a New
York banking corporation as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Convertible
Preferred Securities (as defined herein) of TIMET
CAPITAL TRUST I, a Delaware statutory business trust
(the "Trust").
WHEREAS pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of November 20, 1996, among the trustees of
the Trust named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Trust, the Trust
is issuing on the date hereof 3,500,000 convertible preferred securities having
an aggregate liquidation amount of $175,000,000 (plus up to an additional
525,000 convertible preferred securities, having an aggregate liquidation
amount of $26,250,000 to cover over- allotments), designated the 6-5/8%
Convertible Preferred Securities, Beneficial Unsecured Convertible Securities
(BUCS) (the "Convertible Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Convertible Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Guarantee, to
guarantee the obligations of the Trust to the Holders of the Convertible
Preferred Securities on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by each
Holder of Convertible Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
<PAGE> 6
2
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation. As used in
this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.01;
(b) terms defined in the Declaration as at the date
hereof have the same meaning when used in this Guarantee unless
otherwise defined in this Guarantee;
(c) a term defined anywhere in this Guarantee has the same
meaning throughout;
(d) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires;
(g) a reference to the singular includes the plural and
vice versa;
(h) a reference to any Person shall include its successors and
assigns;
(i) a reference to any agreement or instrument shall mean such
agreement or instrument, as supplemented, modified, amended, or
amended and restated, and in effect from time to time; and
(j) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and
any successor statute, law, rule or regulation.
<PAGE> 7
3
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereto.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or in Chicago, Illinois are authorized or
required by any applicable law or executive order to close.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the global trust services business of the Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 450 West 33rd Street, 15th
Floor, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of
Convertible Preferred Securities.
"Debentures" means the 6-5/8% Convertible Junior Subordinated
Debentures due 2026 of the Guarantor held by the Property Trustee (as defined
in the Declaration).
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Convertible Preferred
Securities, to the extent not paid or made by the Trust: (i) any accumulated
and unpaid Distributions (as defined in the Declaration) that are required to
be paid on the Convertible Preferred Securities to the extent the Trust has
funds available therefor, (ii) the redemption price with respect to any
Convertible Preferred Securities called for redemption by the Trust (the
"Redemption Price") to the extent the Trust has funds available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding up or termination of
the Trust (other than in connection with the distribution of Convertible
Subordinated Debentures to the Holders of Convertible Preferred Securities or
the redemption of all the Convertible Preferred Securities (as provided for in
the Declaration)), the lesser of (a) the aggregate liquidation amount and all
accrued and unpaid Distributions on the
<PAGE> 8
4
Convertible Preferred Securities to the date of payment to the extent the Trust
has funds available therefor and (b) the amount of assets of the Trust
remaining available for distribution to Holders of Convertible Preferred
Securities upon the liquidation of the Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of Convertible Preferred Securities; provided, however,
that in determining whether the holders of the requisite percentage of
Convertible Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of the Guarantee Trustee.
"Indenture" means the Indenture dated as of November 20, 1996,
among the Guarantor and The Chase Manhattan Bank, a New York banking
corporation, as trustee, pursuant to which the Debentures are to be issued to
the Property Trustee of the Trust.
"Indenture Trustee" means the Person acting as trustee under
the Indenture, initially The Chase Manhattan Bank.
"Majority in liquidation amount of the Convertible Preferred
Securities" means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of Convertible Preferred Securities, voting separately as a class, of
more than 50% of the aggregate liquidation amount of all Convertible Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with
<PAGE> 9
5
respect to compliance with a condition or covenant provided for in this
Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer", means, with respect to the Guarantee
Trustee, any vice president, any assistant vice president, the treasurer, any
assistant treasurer, the secretary, any assistant secretary, any trust officer
or assistant trust officer or any other officer in the Corporate Trust Office
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
<PAGE> 10
6
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. List of Holders of Securities. (a) The
Guarantor shall provide the Guarantee Trustee with a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders of the Convertible Preferred Securities ("List of Holders"). The List
of Holders as of February 15 and August 15 of each year shall be provided five
Business Days after such dates, and the List of Holders shall also be provided
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders, such List of Holders as of a date no more than
14 days before such List of Holders is given to the Guarantee Trustee.
Notwithstanding the foregoing, the Guarantor shall not be obligated to provide
such List of Holders at any time (x) the List of Holders does not differ from
the most recent List of Holders given to the Guarantee Trustee by the Guarantor
or (y) all of the Convertible Preferred Securities are represented by one or
more Global Securities (as defined in the Indenture). The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60
days after May 15 of each year, the Guarantee Trustee shall provide to the
Holders of the Convertible Preferred Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with
<PAGE> 11
7
the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act, if any, and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence
of compliance with any conditions precedent, if any, provided for in this
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Event of Default; Waiver. The Holders of a
Majority in liquidation amount of Convertible Preferred Securities may, by
vote, on behalf of the Holders of all of the Convertible Preferred Securities,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been permanently cured, for every purpose of
this Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice. (a) The Company
will deliver to the Guarantee Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not, to the best knowledge of the signers
thereof, the Company is in default in the performance and observance of any of
the material terms, provisions and conditions of the Indenture (without regard
to any period of grace or requirement of notice provided thereunder) and, if
the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
(b) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by
<PAGE> 12
8
mail, first class postage prepaid, to the Holders of the Convertible Preferred
Securities, notices of all Events of Default actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice; provided that the Guarantee Trustee shall be fully
protected in withholding such notice if and so long as a Responsible Officer of
the Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Convertible Preferred
Securities.
(c) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or unless a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have obtained
actual knowledge of such Event of Default.
SECTION 2.08. Conflicting Interests. The Declaration shall
be deemed to be specifically described in this Guarantee for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
Powers, Duties and Rights of
the Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee for the benefit of
the Holders of the Convertible Preferred Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder exercising his
or her rights pursuant to Section 5.04(b) or to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered in connection with the appointment
of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this
<PAGE> 13
9
Guarantee for the benefit of the Holders of the Convertible Preferred
Securities.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after all Events of Default that may have occurred have been
cured or waived, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06) and is actually known to a Responsible Officer of the Guarantee Trustee,
the Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
all such Events of Default that may have occurred have been cured or
waived:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee,
and no implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, and shall be fully protected in relying, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Guarantee Trustee and conforming to the requirements of
this Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the
<PAGE> 14
10
Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this Guarantee;
(ii) none of the Guarantee Trustee, its officers, directors,
employees or agents shall be liable for any error of judgment made in
good faith by a Responsible Officer of the Guarantee Trustee, unless
it shall be proved that such Responsible Officer was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Convertible Preferred Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this
Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if (A) the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee or (B) indemnity satisfactory to the
Guarantee Trustee against such risk or liability is not reasonably
assured to it.
SECTION 3.02. Certain Rights of the Guarantee Trustee. (a)
Subject to the provisions of Section 3.01:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
<PAGE> 15
11
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of its
selection, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity
satisfactory to the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that nothing contained in this Section 3.02(a)(vi) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee.
<PAGE> 16
12
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit. The Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by the Guarantee Trustee
hereunder.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Convertible Preferred
Securities, and the signature of the Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Convertible
Preferred Securities (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received
and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the
<PAGE> 17
13
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There
shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, state, territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the
<PAGE> 18
14
Guarantee Trustee shall immediately resign in the manner and with the effect
set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustees. (a) So long as no default or Event of Default has
occurred and is continuing, and subject to Section 4.02(b), the Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
The Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until the removal or resignation
of the Guarantee Trustee.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the Guarantee Trustee.
(c) The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed
by the Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Guarantee Trustee has been appointed
and has accepted such appointment by instrument in writing executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of an instrument of removal or
resignation, the resigning or removed Guarantee Trustee may petition any court
of competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
<PAGE> 19
15
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.02, the
Guarantor shall pay to the Guarantee Trustee all amounts accrued to the date of
such termination, removal or resignation.
(g) No appointment of any Successor Guarantee Trustee shall
be effective until all amounts not subject to a good faith dispute which are
known to be owed to the Guarantee Trustee and which are then due have been
paid; provided that upon such payment, within five Business Days of a request
by the Company, the Guarantee Trustee shall certify that all such amounts have
been paid, and that a Successor Guarantee Trustee may be appointed.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders (except to the extent paid
by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert, the Guarantee Payments, without
duplication. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Trust or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the
<PAGE> 20
16
Guarantor under this Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or
implied agreement, covenant, term or condition relating to the
Convertible Preferred Securities to be performed or observed by the
Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Convertible Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Convertible Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Convertible Preferred Securities, or any action on the
part of the Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the
Convertible Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this
<PAGE> 21
17
Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.04. Rights of Holders. (a) The Holders of a
Majority in liquidation amount of the Convertible Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee.
(b) If an Event of Default with respect to the Debentures (an
"Indenture Event of Default"), constituting the failure to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable has occurred and is continuing, then a Holder of Convertible Preferred
Securities may directly, at any time, institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Convertible
Preferred Securities of such Holder on or after the respective due date
specified in the Debentures. The Holders of Convertible Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures unless the Property Trustee (as defined in the Indenture)
fails to do so.
SECTION 5.05. Guarantee of Payment. This Guarantee creates a
guarantee of payment and not of collection.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all, if any, rights of the Holders against the Trust in respect of any
amounts paid to such Holders by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, at the
time of any such payment, any amounts are due and unpaid
<PAGE> 22
18
under this Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Trust with respect to the Convertible Preferred Securities, and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g) inclusive,
of Section 5.03 hereof.
SECTION 5.08. Conversion. The Guarantor acknowledges its
obligation to issue and deliver common stock of the Guarantor upon the
conversion of the Convertible Preferred Securities.
ARTICLE VI
Limitation of Transactions; Ranking
SECTION 6.01. Limitation of Transactions. So long as any
Convertible Preferred Securities remain outstanding, if (x) the Guarantor has
exercised its option to defer interest payments on the Debentures by extending
the interest payment period and such extension shall be continuing, (y) there
shall have occurred any event of default under this Guarantee or (z) there
shall have occurred any event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default under the Indenture, then
the Guarantor agrees (a) not to declare or pay dividends on, or make a
distribution with respect to, or redeem, purchase acquire or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of common stock in connection with the satisfaction by
the Guarantor of its obligations under any employee benefit plans or the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of common stock, (ii) as a
result of a reclassification of the Guarantor's capital stock or the exchange
or conversion of one class or series of the Guarantor's capital stock for
another class or series of the Guarantor's capital stock or (iii) the purchase
of
<PAGE> 23
19
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged), (b) not to make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem any debt securities of the
Guarantor (including guarantees) that rank pari passu with or junior to the
Debentures and (c) not to make any guarantee payments with respect to the
foregoing (other than pursuant to this Guarantee).
SECTION 6.02. Ranking. (a) This Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior to all other liabilities of the Guarantor except any liabilities that
may be pari passu expressly by their terms, (ii) pari passu with the most
senior preferred stock issued from time to time by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock or preferred securities of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.
(b) The holders of any obligations of the Guarantor that are
senior in priority to the obligations under this Guarantee will be entitled to
all of the rights inuring to the holders of "Senior Indebtedness" under Article
12 of the Indenture, and the Holders of the Convertible Preferred Securities
will be subject to all of the terms and conditions of such Article 12 with
respect to any claims or rights hereunder with the same effect as though fully
set forth herein.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Guarantee will terminate as
to each Holder upon (i) full payment of the Redemption Price of all Convertible
Preferred Securities; or (ii) distribution of the Debentures held by the Trust
to the Holders; or (iii) liquidation of the Trust, or (iv) upon the
distribution of Guarantor's common stock to such Holder in respect of
conversion of such Holder's Convertible Preferred Securities into common stock
of the Guarantor. This Guarantee also will terminate completely upon full
payment of the amounts payable in accordance with the Declaration of
<PAGE> 24
20
the Trust. This Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder must restore payment of any sums
paid under such Convertible Preferred Securities or under this Guarantee.
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or wilful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Convertible Preferred
Securities might properly be paid.
SECTION 8.02. Indemnification. The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its
<PAGE> 25
21
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.02 shall survive the termination of this Guarantee.
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee shall bind the successors, assigns,
receivers and trustees of the Guarantor and shall inure to the benefit of the
Holders of the Convertible Preferred Securities then outstanding. Except in
connection with any permitted merger or consolidation of the Guarantor with or
into another entity or any permitted sale, transfer or lease of the Guarantor's
assets to another entity as described in the Indenture, the Guarantor may not
assign its rights or delegate its obligations under this Guarantee without the
prior approval of the Holders of at least a Majority of the aggregate stated
liquidation amount of the Convertible Preferred Securities then outstanding.
SECTION 9.02. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no vote will
be required), this Guarantee may be amended only with the prior approval of the
Holders of at least a Majority in liquidation amount of all the outstanding
Convertible Preferred Securities. The provisions of Section 11.02 of the
Declaration with respect to meetings of Holders of the Convertible Preferred
Securities apply to the giving of such approval.
SECTION 9.03. Notices. All notices provided for in this
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, sent by facsimile or mailed by registered or certified
mail, as follows:
(a) if given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or
<PAGE> 26
22
such other address as the Guarantee Trustee may give notice of to the
Holders of the Convertible Preferred Securities):
The Chase Manhattan Bank
450 West 33rd Street (15th Floor)
New York, NY 10001
Attention of: Vice President, Global
Trust Services
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Convertible Preferred
Securities):
Titanium Metals Corporation
1999 Broadway (Suite 4300)
Denver, Colorado 80202
Attention of: General Counsel
(c) if given to any Holder at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Benefit. This Guarantee is solely for the
benefit of the Holders of the Convertible Preferred Securities and, subject to
Section 3.01(a), is not separately transferable from the Convertible Preferred
Securities.
SECTION 9.05. Governing Law. THIS GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
<PAGE> 27
23
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
BY SUCH LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
TITANIUM METALS CORPORATION,
as Guarantor,
By
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Guarantee Trustee,
By
-------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 99.1
EXECUTION COPY
TIMET CAPITAL TRUST I
3,500,000 6-5/8% Convertible Preferred Securities (1)
Beneficial Unsecured Convertible Securities (BUCS)
(Liquidation Amount $50.00 per Convertible Preferred Security)
Guaranteed to a Limited Extent by, and
Convertible into the Common Stock of,
TITANIUM METALS CORPORATION
PURCHASE AGREEMENT
New York, New York
November 20, 1996
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
TIMET Capital Trust I, a Delaware statutory business trust (the
"Trust"), and Titanium Metals Corporation, a Delaware corporation (the
"Company"), as sponsor of the Trust and as guarantor, propose to issue and
sell to the parties named in Schedule I hereto (the "Initial Purchasers"),
for whom you are acting as representatives (the "Representatives"),
3,500,000 (the "Firm Securities") of its 6-5/8% Convertible Preferred
Securities, Beneficial Unsecured Convertible Securities (BUCS), liquidation
amount $50.00 per Convertible Preferred Security ("Convertible Preferred
Securities"). The Company and the Trust also propose to grant to the
Initial Purchasers an option to purchase up to 525,000 additional
Convertible Preferred Securities to cover over-allotments, if any (the
"Option
- --------------------
(1) Plus an option to purchase up to 525,000 additional Convertible
Preferred Securities from the Trust to cover over-allotments.
<PAGE> 2
Securities" and, together with the Firm Securities, the "Securities"). The
Securities will represent undivided beneficial ownership interests in the
assets of the Trust, will be guaranteed by the Company as to the payment of
distributions, and as to payments on liquidation or redemption, to the
extent set forth in a guarantee agreement (the "Guarantee") between the
Company and The Chase Manhattan Bank, as trustee (the "Guarantee Trustee"),
and will be effectively convertible into shares of the common stock, $.01
par value ("Common Stock"), of the Company initially at the conversion price
set forth herein. The Securities are to be issued under the Amended and
Restated Declaration of Trust of TIMET Capital Trust I (the "Declaration")
dated as of November 20, 1996 among Joseph S. Compofelice, Robert E.
Musgraves and Mark A. Wallace (each a "Regular Trustee" and, collectively,
the "Regular Trustees"), The Chase Manhattan Bank, as Property Trustee (the
"Property Trustee"), Chase Manhattan Bank Delaware, as Delaware Trustee (the
"Delaware Trustee") and the Company, as Sponsor. The proceeds of the sale
by the Trust of the Securities and its 6-5/8% Common Securities, liquidation
amount $50 per Common Security ("Common Securities"), are to be invested in
the 6-5/8% Convertible Junior Subordinated Debentures due 2026 (the
"Convertible Debentures") of the Company, to be issued under an Indenture
(the "Indenture") between the Company and The Chase Manhattan Bank, as
Trustee (the "Indenture Trustee"). Holders (including subsequent
transferees) of the Securities will have the registration rights set forth
in the Registration Agreement (the "Registration Agreement") to be entered
into among the Company, the Trust and the Initial Purchasers. Pursuant to
the Registration Agreement, the Company and the Trust have agreed to file
with the Securities and Exchange Commission (the "Commission") a shelf
registration statement under the Securities Act of 1933 (the "Securities
Act") to register resales of the Securities, the Guarantee, the Convertible
Debentures and the Common Stock issuable upon conversion thereof. If you
are the only Initial Purchasers, all references herein to the
Representatives shall be deemed to be to the Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act, in
reliance upon exemptions from the registration requirements of the
Securities Act. You have advised the Company that the Initial Purchasers
will offer and sell the Securities purchased by them hereunder in
accordance with Section 4
<PAGE> 3
3
hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Company and
the Trust have prepared a preliminary offering memorandum, dated November
11, 1996 (including Exhibit A thereto, the "Preliminary Memorandum"), and a
final offering memorandum, dated November 20, 1996 (including any and all
exhibits thereto, the "Final Memorandum"). Each of the Preliminary
Memorandum and the Final Memorandum sets forth certain information
concerning the Company, the Trust and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and
the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial Purchasers. Unless
stated to the contrary, all references herein to the Final Memorandum are to
the Final Memorandum at the Execution Time (as defined below) and are not
meant to include any amendment or supplement subsequent to the Execution
Time.
1. Representations and Warranties. Each of the Company and
the Trust represents and warrants to each Initial Purchaser as set forth
below in this Section 1; provided, however, that the representations and
warranties contained in clauses (b), (c) and (e) below shall not be deemed
to constitute representations and warranties regarding the activities of
the Initial Purchasers.
(a) The Final Memorandum, at the date hereof, does not,
and at the Closing Date (as defined below) will not (and any amendment
or supplement thereto, at the date thereof and at the Closing Date,
will not), contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty is
made by the Company or the Trust as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or
any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company or the
Trust by or on behalf of the Initial Purchasers through the
Representatives specifically for inclusion therein (which the parties
hereto understand consists only of
<PAGE> 4
4
the names of the Initial Purchasers, the second full paragraph on page
5 of the Final Memorandum and the table below paragraph 1 and
paragraphs 6 and 7 in the section of the Final Memorandum entitled
"Plan of Distribution" (all such information shall be collectively
referred to herein as the "Initial Purchaser Information")).
(b) Neither the Company, nor any of its Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
(c) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf has engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities
in the United States.
(d) The Securities satisfy the eligibility requirements
of Rule 144A(d)(3) under the Securities Act.
(e) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S
("Regulation S") under the Securities Act. Terms used in this
paragraph have the meanings given to them by Regulation S.
(f) The Company has been advised by the National Association
of Securities Dealers, Inc. Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market that the Securities have
been designated PORTAL-eligible securities in accordance with the
rules and regulations of the National Association of Securities
Dealers, Inc.
<PAGE> 5
5
(g) Neither the Company nor the Trust is an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act of 1940 (together with the rules and
regulations thereunder, the "Investment Company Act"), nor is it a
closed-end investment company required to be registered, but not
registered, thereunder; neither the Company nor the Trust is and,
after giving effect to the offer and sale of the Securities and the
application of the proceeds thereof as described in the Final
Memorandum, will be an "investment company" as defined in the
Investment Company Act.
(h) The Company is subject to and in compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act in all material respects.
(i) Neither the Company nor the Trust has paid or agreed to
pay to any person any compensation for soliciting another to purchase
any of the Securities (except as contemplated by this Agreement).
(j) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(k) The Company has requested that the Initial Purchasers
reserve up to 7,000 Firm Securities to be sold at the initial offering
price to executive officers and directors of the Company and certain
other individuals having relationships with the Company or such
officers and directors.
2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company and the Trust agree that the Trust will sell to each Initial
Purchaser, and each Initial Purchaser agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $50.00 per
<PAGE> 6
6
Security, plus accrued distributions, if any, from November 26, 1996 to the
Closing Date, the number of Firm Securities set forth opposite such Initial
Purchaser's name in Schedule I hereto. Each Security will be convertible at
the option of the holder into shares of Common Stock of the Company at a
conversion rate of 1.339 shares of Common Stock per Security, subject to
adjustment as described in the Final Memorandum.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Trust hereby grants an
option (the "Option") to the Initial Purchasers to purchase, severally and not
jointly, the Option Securities at a purchase price of $50.00 per Security, plus
accrued distributions, if any, from November 26, 1996 to the settlement date
for the Option Securities. The Option may be exercised only to cover over-
allotments in the sale of the Firm Securities by the Initial Purchasers. The
Option may be exercised in whole or in part at any time (but not more than
once) on or before 5:00 p.m. New York City time, on the 30th day after the date
of the Final Memorandum upon written, telecopied or telegraphic notice by the
Representatives to the Company and the Trust setting forth the number of Option
Securities as to which the Initial Purchasers are exercising the Option and the
settlement date therefor. Delivery of certificates for the Option Securities,
and payment therefor, shall be made as provided in Section 3 hereof. The
number of Option Securities to be purchased by each Initial Purchaser shall be
the same percentage of the total number of Option Securities to be purchased by
the Initial Purchasers as such Initial Purchaser is purchasing of the Firm
Securities, subject to such adjustments as the Representatives shall deem
advisable.
As compensation for the commitments of the Initial Purchasers
contained in this Section 2, the Company hereby agrees to pay to the Salomon
Brothers Inc for the respective accounts of the Initial Purchasers an amount
equal to $1.625 per Security times the total number of Firm Securities or
Option Securities purchased by the Initial Purchasers on the Closing Date or
the settlement date for the Option Securities, respectively, as commissions for
the sale of such Firm Securities or Option Securities under this Agreement.
Such payment will be made on the Closing Date
<PAGE> 7
7
with respect to the Firm Securities and on the settlement date for the Option
Securities with respect to the Option Securities.
3. Delivery and Payment. Delivery of and payment for the
Firm Securities and the Option Securities (if the Option provided for in
Section 2(b) hereof shall have been exercised on or before the third business
day prior to the Closing Date) shall be made at 10:00 AM, New York City time,
on November 26, 1996, or such later date (not later than December 3, 1996) as
the Representatives and the Company shall agree upon in writing, which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the Initial Purchasers against payment by the Initial Purchasers through the
Representatives of the purchase price thereof to or upon the order of the Trust
by wire transfer drawn and payable in same day funds or such other manner of
payment as may be agreed by the Company, the Trust and the Representatives.
Delivery of the Securities shall be made at such location as the
Representatives shall reasonably designate at least one business day in advance
of the Closing Date and payment for the Securities shall be made at the office
of Cravath, Swaine & Moore ("Counsel to the Initial Purchasers"), Worldwide
Plaza, 825 Eighth Avenue, New York, New York. Certificates for the Securities
shall be registered in such names and in such denominations as the
Representatives may request not less than three full business days in advance
of the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Representatives in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date.
If the Option is exercised after the third business day prior
to the Closing Date, the Company will deliver (at the expense of the Company)
to the Representatives, at Seven World Trade Center, New York, New York, on the
date specified by the Representatives (which shall be within three business
days after exercise of the Option), certificates for the Option Securities in
such
<PAGE> 8
8
names and denominations as the Representatives shall have requested against
payment of the purchase price thereof to or upon order of the Trust by wire
transfer drawn and payable in same day funds or such other manner of payment as
may be agreed by the Company, the Trust and the Representatives. If settlement
for the Option Securities occurs after the Closing Date, the Company will
deliver to the Representatives on the settlement date for the Option
Securities, and the obligation of the Initial Purchasers to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering of Securities. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees, with the Company that:
(a) It has not offered or sold, and will not offer or
sell, any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) and to whom notice has been given that such sale is
being made in reliance on Rule 144A, or (ii) to other institutional
"accredited investors" (as defined in Rule 501(a)(1),(2), (3) or (7)
of Regulation D) who provide to it and to the Company a letter in the
form of Exhibit A hereto, or (iii) to certain executive officers and
directors of the Company who are "accredited investors" (as defined in
Rule 501(a)(4) of Regulation D), and certain individuals having
relationships with the Company (or an executive officer or director
thereof) who are "accredited investors" (as defined in Rule 501(a)(5)
or (6) or who have such knowledge and experience in financial and
business matters that such individuals are capable of evaluating the
merits and risks of any investment in the Securities, who provide to
it and to the Company a letter in the form of Exhibit B hereto, or
(iv) in accordance with the restrictions set forth in Exhibit C
hereto.
(b) Neither it nor any person acting on its behalf has
made or will make offers or sales of the
<PAGE> 9
9
Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation
D) in the United States.
5. Agreements. Each of the Company and the Trust agrees with
each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser,
without charge, during the period referred to in paragraph (c) below,
as many copies of the Final Memorandum and any amendments and
supplements thereto as it may reasonably request. The Company will
pay the expenses of printing or other production of all documents
relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum without the prior written consent of the Representatives,
which consent shall not be unreasonably withheld.
(c) If at any time prior to the completion of the sale of
the Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly notify the
Representatives of the same and, subject to the requirements of
paragraph (b) of this Section 5, will prepare and provide to the
Representatives pursuant to paragraph (a) of this Section 5 an
amendment or supplement which will correct such statement or omission
or effect such compliance.
(d) The Company and the Trust will arrange for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Initial Purchasers may
reasonably designate and will maintain such qualifications in effect
so long as required for the sale of the Securities. The Company will
promptly advise the Representatives of the receipt
<PAGE> 10
10
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its
affiliates (as defined in Rule 501(b) of Regulation D) (other than
directors or officers of the Company who make resales in compliance
with all applicable resale restrictions) to, resell any Securities
that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of
the Securities under the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf will engage in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities
in the United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will, during any period in which it is not subject to
and in compliance with Section 13 or 15(d) of the Exchange Act,
provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4)
under the Securities Act.
(i) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the
<PAGE> 11
11
meanings given to them by Regulation S.
(j) Each of the Company and the Trust will cooperate with the
Representatives and use its respective best efforts to permit the
Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(k) The Company will not, without the prior written
consent of Salomon Brothers Inc, directly or indirectly, offer, sell,
contract to sell grant any other option to purchase or otherwise
dispose of, or announce the offering of, any shares of preferred
stock, $.01 par value ("Preferred Stock"), or Common Stock of the
Company, or any securities convertible into, or exchangeable for
shares of Preferred Stock or Common Stock, or enter into any agreement
to do any of the foregoing, until 90 days following the date hereof
(other than the Securities); provided, however, that the Company may
issue Common Stock pursuant to any employee or director stock option
or compensation plan in effect at the Execution Time.
(l) In connection with any disposition of Securities pursuant
to a transaction made in compliance with paragraph 1 of Exhibit A, the
Company will reissue certificates evidencing such Securities without a
restrictive legend (provided, if requested, that the legal opinion
referred to therein so permits).
(m) During the period of three years after the last date of
original issuance of the Securities, neither the Company nor the Trust
will be or become an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act and will not
be or become a closed-end investment company required to be
registered, but not registered, under the Investment Company Act.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Firm Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of
the representations and warranties on the part of the Company
<PAGE> 12
12
and the Trust contained herein at the date and time that this Agreement is
executed and delivered by the parties hereto (the "Execution Time"), and the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company and the Trust made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Trust of its obligations hereunder in all material respects and
to the following additional conditions:
(a) The Company and the Trust shall have furnished to the
Representatives the opinion of Robert E. Musgraves, Esq., counsel to
the Company and the Trust, dated the Closing Date (with respect to
paragraphs (i) through (vi) below and the due authorization, execution
and delivery aspects of paragraphs (vii) through (ix) below), and the
opinion of Bartlit Beck Herman Palenchar & Scott, special counsel to
the Company and the Trust, dated the Closing Date (with respect to
paragraphs (vii) through (xv) below), to the effect that:
(i) each of the Company and the subsidiaries of the
Company listed on Schedule II hereto (individually, a
"Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as
described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business;
(ii) all the outstanding shares of capital stock of
the Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either
<PAGE> 13
13
directly or through wholly owned subsidiaries free and clear
of any perfected security interest (other than in favor of the
Company's lenders) and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims, liens
or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum and the Securities
conform to the description thereof contained in the Final
Memorandum; the shares of Common Stock initially issuable upon
conversion of the Securities have been duly authorized for
listing, subject to official notice of issuance, on the Nasdaq
National Market; the holders of the outstanding shares of
capital stock of the Company are not entitled to any
preemptive or other rights to subscribe for the Securities,
the Convertible Debentures or the shares of Common Stock
issuable upon conversion thereof, or the Common Securities,
except as described in the first paragraph of the Final
Memorandum under the section entitled "Shareholders'
Agreements"; and the shares of Common Stock initially issuable
upon conversion of the Securities have been duly and validly
authorized and reserved for issuance upon such conversion and,
when issued upon conversion, will be validly issued, fully
paid and nonassessable;
(iv) to the knowledge of such counsel, after due
inquiry, (A) the Trust has conducted and will conduct no
business other than the transactions contemplated by this
Agreement and as described in the Final Memorandum; (B) the
Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Declaration and the
agreements and instruments contemplated by the Declaration and
the Final Memorandum; and (C) the Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and the Declaration and
described in the Final Memorandum;
(v) to the knowledge of such counsel, after
<PAGE> 14
14
due inquiry, (A) there is no pending or overtly threatened
action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the
Company, the Trust or any of the Subsidiaries of a character
required to be disclosed in the Final Memorandum which is not
so disclosed; and (B) there is no franchise, contract or other
document of a character required to be described in the Final
Memorandum, which is not so described;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and duly executed and
delivered by the Trust;
(vii) the Registration Agreement has been duly
authorized, executed and delivered by the Company and duly
executed and delivered by the Trust, and constitutes a legal,
valid and binding instrument enforceable against the Company
and the Trust in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect);
(viii) the Indenture has been duly authorized,
executed and delivered, and constitutes a legal, valid and
binding instrument enforceable against the Company in
accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect); the Convertible
Debentures have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Trust,
will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture;
(ix) the Guarantee has been duly authorized,
executed and delivered, and constitutes a legal, valid and
binding instrument enforceable against
<PAGE> 15
15
the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect);
(x) all of the issued and outstanding Common
Securities will be owned directly by the Company free and
clear of any security interest, claims, liens or encumbrances;
(xi) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Company or the Trust of the transactions
contemplated by this Agreement, the Registration Agreement,
the Declaration, the Indenture and the Guarantee, except such
as may be required under the blue sky or securities laws of
any jurisdiction in connection with the purchase and sale of
the Securities by the Initial Purchasers and such other
approvals (specified in such opinion) as have been obtained,
and except in connection with the registration of the
Securities, the Guarantee, the Convertible Debentures and the
Common Stock issuable upon conversion thereof pursuant to the
Registration Agreement;
(xii) neither the issue and sale of the Securities
or the Convertible Debentures, the execution and delivery of
the Declaration, the Indenture, the Guarantee or the
Registration Agreement, the consummation of any other of the
transactions herein or therein contemplated nor the
fulfillment of the terms hereof or thereof will conflict with,
result in a breach or violation of, or constitute a default
under or violate (A) any of the terms, conditions or
provisions of the charter or by-laws of the Company or the
Declaration, (B) to the knowledge of such counsel, after due
inquiry, any of the terms, conditions or provisions of any
material document, agreement or other instrument to which the
Company or any of
<PAGE> 16
16
its subsidiaries or the Trust is a party or by which the
Company or any of its subsidiaries or the Trust is bound, (C)
any law or regulation or, to the knowledge of such counsel
after due inquiry, any judgment, order, decree or ruling
applicable to the Company or any of its subsidiaries or the
Trust of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries or the Trust;
(xiii) assuming the accuracy of the representations
and warranties and compliance with the agreements contained
herein, no registration of the Securities or the Convertible
Debentures under the Securities Act is required, and no
qualification of the Declaration, the Indenture or the
Guarantee under the Trust Indenture Act of 1939 is necessary,
for the offer and sale by the Initial Purchasers of the
Securities in the manner contemplated by this Agreement;
(xiv) neither the Trust nor the Company is an
open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act, nor
is it a closed-end investment company required to be
registered, but not registered, thereunder; and each of the
Trust and the Guarantor is not and, after giving effect to the
offer and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will
not be an "investment company" as defined in the Investment
Company Act; and
(xv) the Securities, the Common Securities, the
Convertible Debentures and each of the Guarantee, the
Registration Agreement, the Indenture and the Declaration
conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
Each such counsel shall also state that, in the
course of preparation by the Company of the Final
<PAGE> 17
17
Memorandum, such counsel has participated in conferences with officers
and other representatives of the Company and the Trust,
representatives of the independent public accountants for the Company
and the Trust, representatives of the Initial Purchasers and
representatives of counsel for the Initial Purchasers, at which
conferences such counsel made inquiries of such officers,
representatives and accountants and discussed the contents of the
Final Memorandum and related matters and, although such counsel has
not independently verified and is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (other than as expressly
set forth in such counsel's opinion), no facts have come to the
attention of such counsel which would lead such counsel to believe
that the Final Memorandum (other than the financial or statistical
information contained therein or omitted therefrom as to which such
counsel need not express an opinion), as of its date or on the Closing
Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinions, each such counsel may rely, as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company, the Trust and public officials,
and, with respect to certain matters of Delaware law relating to the
Trust, on the opinion of Richards, Layton & Finger, special Delaware
counsel to the Trust.
All references in this Section 6(a) to the Final
Memorandum shall be deemed to include any amendment or supplement
thereto at the Closing Date.
(b) The Company and the Trust shall have furnished to the
Representatives the opinion of Kirkland & Ellis, special tax counsel
to the Company and the Trust, dated the Closing Date, to the effect
that:
(i) the Trust will be classified as a grantor
<PAGE> 18
18
trust and not as a partnership or an association taxable as a
corporation; for United States federal income tax purposes,
each holder of Convertible Preferred Securities will be
considered the owner of an undivided interest in the
Convertible Debentures, and each holder will be required to
include in its gross income any original issue discount
accrued or other income or gain with respect to its
allocable share of the Convertible Debentures;
(ii) the Convertible Debentures will be classified
for United States federal income tax purposes as indebtedness
of the Company; and
(iii) the statements set forth under the heading
"United States Federal Income Taxation" in the Final
Memorandum, insofar as such statements purport to summarize
the United States federal income tax consequences of the
purchase, ownership and disposition of Convertible Preferred
Securities, provide a fair summary of such consequences.
(c) The Company and the Trust shall have furnished to the
Representatives the opinion of Richards, Layton & Finger, special
Delaware counsel to the Trust, dated the Closing Date, to the effect
that:
(i) the Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act, and all filings required under
the laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a business trust have been
made;
(ii) under the Delaware Business Trust Act and the
Declaration, the Trust has the trust power and authority to
own its property and conduct its business, all as described in
the Final Memorandum;
(iii) the Declaration constitutes a valid and binding
obligation of the Company
<PAGE> 19
19
and the trustees of the Trust, and is enforceable against the
Company and the trustees of the Trust in accordance with its
terms;
(iv) under the Delaware Business Trust Act and the
Declaration, the Trust has the trust power and authority (i)
to execute and deliver, and to perform its obligations under,
the Purchase Agreement and the Rights Agreement, and (ii) to
issue and perform its obligations under the Securities and the
Common Securities;
(v) under the Delaware Business Trust Act and the
Declaration, the execution and delivery by the Trust of the
Purchase Agreement and the Rights Agreement, and the
performance by the Trust of its obligations thereunder, have
been duly authorized by all necessary trust action on the part
of the Trust;
(vi) the Securities have been duly authorized by the
Declaration and are duly and validly issued and fully paid and
nonassessable undivided beneficial interests in the assets of
the Trust and are entitled to the benefits of the Declaration;
the holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware;
provided, however, that the holders may be obligated, pursuant
to the Declaration, (A) to provide indemnity and/or security
in connection with and pay taxes or governmental charges
arising from transfers or exchanges of Securities certificates
and the issuance of replacement Securities certificates, and
(B) to provide security or indemnity in connection with
requests of or directions to the Property Trustee to exercise
its rights and powers under the Declaration.
(vii) under the Delaware Business Trust Act
<PAGE> 20
20
and the Declaration, the issuance of the Securities and the
Common Securities is not subject to preemptive rights;
(vii) the Common Securities have been duly
authorized by the Declaration and are duly and validly issued
and fully paid undivided beneficial interests in the assets of
the Trust and are entitled to the benefits of the Declaration;
and
(ix) the issuance and sale by the Trust of the
Securities and the Common Securities, the exchange of the
Convertible Debentures for the Securities, the execution,
delivery and performance by the Trust of the Purchase
Agreement and the Rights Agreement, the consummation by the
Trust of the transactions contemplated thereby and compliance
by the Trust with its obligations thereunder, (A) do not
violate (1) any of the provisions of the certificate of the
Trust or the Declaration or (2) any applicable Delaware law or
administrative regulation thereunder and (B) do not require
any consent, approval, order or authorization of any Delaware
court or Delaware governmental authority or agency under the
laws of the State of Delaware.
(d) The Chase Manhattan Bank shall have furnished to the
Representatives the opinion of Seward & Kissel, special counsel to The
Chase Manhattan Bank, dated the Closing Date, to the effect that:
(i) The Chase Manhattan Bank has been duly
incorporated and is validly existing as a banking corporation
in good standing under the laws of the State of New York;
(ii) each of the Declaration, the Indenture and the
Guarantee has been duly authorized, executed and delivered by
the Property Trustee, the Indenture Trustee and the Guarantee
Trustee, respectively, and constitutes a legal, valid and
binding instrument enforceable against the Property Trustee,
the Indenture Trustee and the Guarantee Trustee in accordance
with its
<PAGE> 21
21
respective terms (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
from time to time in effect);
(iii) no consent, approval, authorization or order
of any federal or New York State banking authority is required
for the consummation of the transactions contemplated by the
Declaration, the Indenture or the Guarantee by the Property
Trustee, the Indenture Trustee or the Guarantee Trustee,
respectively; and
(iv) neither the execution and delivery of the
Declaration, the Indenture or the Guarantee, the consummation
of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof or
thereof will conflict with, result in a breach or violation
of, or constitute a default under any law or the charter or
by-laws of The Chase Manhattan Bank or the terms of any
indenture or other agreement or instrument known to such
counsel and to which The Chase Manhattan Bank is a party or
bound or any judgment, order or decree known to such counsel
to be applicable to The Chase Manhattan Bank of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over The Chase Manhattan Bank.
(e) Chase Manhattan Bank Delaware shall have furnished to
the Representatives the opinion of David J. Clark, Vice President,
Secretary and Counsel of Chase Manhattan Bank Delaware, dated the
Closing Date, to the effect that Chase Manhattan Bank Delaware has
been duly incorporated and is validly existing as a banking
corporation in good standing under the laws of the State of Delaware;
and has full corporate power and authority to act as trustee of a
statutory business trust under the laws of the State of Delaware.
(f) The Representatives shall have received from Cravath,
Swaine & Moore, special counsel to the Initial Purchasers, such
opinion or opinions, dated the Closing
<PAGE> 22
22
Date, with respect to the issuance and sale of the Securities, the
Final Memorandum (as amended or supplemented at the Closing Date) and
other related matters as the Representatives may reasonably require,
and the Company and the Trust shall have furnished to such counsel
such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(g) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman
of the Board or the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined
the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company has in all
material respects complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(h) At the Execution Time and at the Closing Date,
Coopers & Lybrand L.L.P. shall have furnished to the Representatives a
letter or letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent
<PAGE> 23
23
accountants within the meaning of the Securities Act and the Exchange
Act and the applicable rules and regulations thereunder and Rule 101
of the Code of Professional Conduct of the American Institute of
Certified Public Accountants (the "AICPA") and that they have
performed a review of the unaudited interim financial information as
of September 29, 1996 and for the nine-month periods ended October 1,
1995 and September 29, 1996 in accordance with Statement of Auditing
Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules and pro forma
financial statements included in the Final Memorandum and
reported on by them comply in form in all material respects
with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations
thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
the standards established by the AICPA of the unaudited
interim financial information as indicated in their reports
included or incorporated in the Final Memorandum; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
committees of the Company and the Subsidiaries; and inquiries
of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to
December 31, 1995, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included in the Final Memorandum do not comply as to
form in all material respects
<PAGE> 24
24
with applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not, in all material respects, in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the Final
Memorandum; or
(2) with respect to the period subsequent to
September 29, 1996, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the long-term debt
(including current maturities) of the Company and its
subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the Company
or decreases in working capital of the Company and
its subsidiaries as compared with the amounts shown
on the September 29, 1996 consolidated balance sheet
included in the Final Memorandum, or for the period
from September 30, 1996 to such specified date there
were any decreases, as compared with the
corresponding period in the preceding year in the net
sales, total operating income (or increases in total
operating loss), per share amounts of net income,
increase in interest expense or decrease in earnings
before interest, taxes, depreciation and amortization
of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied
by an explanation by the Company as to the
significance thereof unless said explanation is not
deemed necessary by the Representatives; or
(3) the information included under the headings
"Selected Consolidated Historical
<PAGE> 25
25
and Pro Forma Financial Data" and
"Management--Summary Compensation Table" is not in
conformity with the disclosure requirements of
Regulation S-K.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum, including the information included in the
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" included in the Final Memorandum,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
All references in this Section 6(h) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
date of the letter.
(i) At the Execution Time and at the Closing Date, KPMG
Peat Marwick LLP shall have furnished to the Representatives a letter
or letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with
respect to IMI plc and its subsidiaries within the meaning of the
Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional
Conduct of the AICPA and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules of the IMI
Titanium Business (as defined in the Final Memorandum)
included in the Final Memorandum and reported on by them
comply in form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations thereunder; and
<PAGE> 26
26
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal
interpretation.
All references in this Section 6(i) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
date of the letter.
(j) At the Execution Time and at the Closing Date, Price
Waterhouse LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with
respect to Titanium Hearth Technologies within the meaning of the
Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional
Conduct of the AICPA and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules of the Titanium
Hearth Technologies included in the Final Memorandum and
reported on by them comply in form in all material respects
with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations
thereunder; and
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to
<PAGE> 27
27
accounting, financial or statistical information derived from
the general accounting records of the Company and its
subsidiaries) set forth in the Final Memorandum agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
All references in this Section 6(j) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
date of the letter.
(k) At the Execution Time and at the Closing Date, Price
Waterhouse LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with
respect to Axel Johnson Metals, Inc. (including any successor thereto)
within the meaning of the Securities Act and the Exchange Act and the
applicable rules and regulations thereunder and Rule 101 of the Code
of Professional Conduct of the AICPA and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules of Axel Johnson
Metals, Inc. included in the Final Memorandum and reported on
by them comply in form in all material respects with the
applicable accounting requirements of the Exchange Act and the
related published rules and regulations thereunder; and
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal
interpretation.
All references in this Section 6(k) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
date of the letter.
<PAGE> 28
28
(l) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Final Memorandum, there
shall not have been (i) any change or decrease specified in the letter
or letters referred to in paragraph (d) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
market the Securities as contemplated by the Final Memorandum.
(m) At the Execution Time, the Company shall have furnished
to the Representatives a letter substantially in the form of Exhibit D
hereto from each of Tremont Corporation ("Tremont"), Union Titanium
Sponge Corporation ("UTSC"), Joseph S. Compofelice, Andrew R. Dixey
and J. Landis Martin, addressed to the Representatives, in which each
such person irrevocably agrees that, without the prior written consent
of Salomon Brothers Inc, such person will not, directly or indirectly,
offer, sell, contract to sell, grant any other option to purchase or
otherwise dispose of, or announce the offering of, any shares of
Common Stock beneficially owned by such person (other than the shares
of Common Stock subject to the option granted to Tremont and UTSC by
IMI Americas, Inc.) or any securities convertible into, or
exchangeable for, shares of Common Stock, or enter into any agreement
to do any of the foregoing, for a period of 90 days following the date
of this Agreement.
(n) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(o) The Registration Agreement shall have been duly executed
and delivered by the Company and the Trust.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material
<PAGE> 29
29
respects when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representatives and Counsel to the Initial Purchasers, this Agreement and all
obligations of the Initial Purchasers hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will
be delivered at the offices of Cravath, Swaine & Moore, at Worldwide Plaza, 825
Eighth Avenue, New York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof (other than Section
6(e) or 6(f); provided, however, that the non-satisfaction of Section 6(f) as a
result of any failure on the part of the Company or the Trust to furnish any
document reasonably requested of either of them by Cravath, Swaine & Moore
shall not relieve the Company of its liability hereunder) is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or the Trust to
perform in any material respect any agreement herein or comply in any material
respect with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
<PAGE> 30
30
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Preliminary Memorandum, the Final Memorandum or any information provided
by the Company to any holder or prospective purchaser of Securities pursuant to
Section 5(h), or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Memorandum or the Final Memorandum, or
in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company or the Trust by or
on behalf of any Initial Purchasers through the Representatives specifically
for inclusion therein (which the parties hereto understand consists only of the
Initial Purchaser Information) and (ii) such indemnity with respect to any
untrue statement or omission in the Preliminary Memorandum shall not inure to
the benefit of any Initial Purchaser from whom the person asserting any such
loss, claim, damage or liability purchased the Securities that are the subject
thereof, to the extent that any such loss, claim, damage or liability of such
Initial Purchaser occurs under the circumstances where it shall have been
determined by a court of competent jurisdiction by final and nonappealable
judgment or the parties shall have agreed that (x) the Company had previously
furnished copies of the Final Memorandum to the Initial Purchaser, (y) the
untrue statement or omission of a material fact contained in the Preliminary
Memorandum was completely corrected in the Final Memorandum and (z) there was
not sent or given to such person, at or prior to the written confirmation of
the sale of such Securities to such
<PAGE> 31
31
person, a copy of the Final Memorandum. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify
and hold harmless each of the Company and the Trust, its respective directors,
officers or trustees, as the case may be, and each person who controls the
Company or the Trust, as the case may be, within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Initial Purchaser, but only with reference
to written information relating to such Initial Purchaser furnished to the
Company or the Trust by or on behalf of such Initial Purchaser through the
Representatives specifically for inclusion in the Preliminary Memorandum or the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company acknowledges that the Initial Purchaser
Information constitutes the only information furnished in writing by or on
behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto), and you, as
the Representatives, confirm that such information is correct.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for
<PAGE> 32
32
the fees and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ one
separate counsel (and, in addition, one local counsel in any relevant
jurisdiction for an indemnified party), and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. An
indemnifying party will not, without the prior written consent of the
indemnified parties (not to be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any
<PAGE> 33
33
reason, the Company and the Initial Purchasers agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company, the Trust and one or more
of the Initial Purchasers may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and by the Initial
Purchasers from the offering of the Securities; provided, however, that in no
case shall any Initial Purchaser (except as may be provided in any agreement
among the Initial Purchasers relating to the offering of the Securities) be
responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by such Initial Purchaser hereunder. If
the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Initial Purchasers in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
of the Securities (before deducting expenses), and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Securities hereunder. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Trust, on the one hand,
or the Initial Purchasers, on the other. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director,
<PAGE> 34
34
officer, employee and agent of an Initial Purchaser shall have the same rights
to contribution as such Initial Purchaser, and each person who controls the
Company or the Trust within the meaning of either the Securities Act or the
Exchange Act and each officer and director of the Company or trustee of the
Trust shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more
Initial Purchasers shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Initial Purchaser hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Initial Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the principal amount of Securities set forth opposite their names in Schedule I
hereto bears to the aggregate principal amount of Securities set forth opposite
the names of all the remaining Initial Purchasers) the Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Securities set forth in Schedule I hereto, the remaining
Initial Purchasers shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Securities, and if such non-defaulting
Initial Purchasers do not purchase all the Securities, this Agreement will
terminate without liability to any non-defaulting Initial Purchaser, the
Company or the Trust. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding seven days, as the Representatives shall determine in
order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company, the Trust or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject
<PAGE> 35
35
to termination in the absolute discretion of the Representatives, by notice
given to the Company prior to delivery of and payment for the Securities, if
prior to such time (i) trading in any of the Company's securities shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited (other than pursuant to the
"circuit breaker" rules) or minimum prices shall have been established on the
New York Stock Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the reasonable judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or the Trust or their respective officers or Trustees
and of the Initial Purchasers set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by
or on behalf of the Initial Purchasers or the Company or the Trust or any of
the officers, directors, trustees or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, care of Salomon
Brothers Inc, at Seven World Trade Center, New York, New York 10048; or, if
sent to the Company or the Trust, will be mailed, delivered or telegraphed and
confirmed to it at 1999 Broadway (Suite 4300), Denver, Colorado 80202,
Attention: Vice President, General Counsel and Secretary.
<PAGE> 36
36
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
<PAGE> 37
37
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding
agreement between the Company and the Initial Purchasers.
Very truly yours,
TIMET CAPITAL TRUST I
By:
---------------------------
Name:
Title:
TITANIUM METALS CORPORATION,
By:
---------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
By: SALOMON BROTHERS INC,
By
-----------------------------
Name:
Title:
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement.
<PAGE> 38
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Firm Securities
Initial Purchaser to be Purchased
----------------- ---------------
<S> <C>
Salomon Brothers Inc ...................... 1,166,668
Merrill Lynch, Pierce, Fenner
& Smith Incorporated ................... 1,166,666
Morgan Stanley & Co. Incorporated ......... 1,166,666
---------
Total ................................ 3,500,000
=========
</TABLE>
<PAGE> 39
SCHEDULE II
<TABLE>
<CAPTION>
% of the
Jurisdiction of Company's
Incorporation or Voting Securities
Name of Subsidiary Organization Held
------------------ ---------------- -----------------
<S> <C> <C>
TIMET Savoie, S.A. France 70
Titanium Hearth Technologies, Delaware 100
Inc.
TIMET Hearth Melting Colorado 100
Corporation
Titanium Hearth Technologies, Pennsylvania 100
G.P.
TIMET UK Limited United Kingdom 100
TIMET Castings Corporation Oregon 100
</TABLE>
<PAGE> 40
EXHIBIT A
Form of Investment Letter for
Institutional Accredited Investors
November , 1996
--
Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
In connection with our proposed purchase of _______ 6-5/8%
Convertible Preferred Securities, Beneficial Unsecured Convertible Securities
(BUCS) (the "Securities") of TIMET Capital Trust I, a Delaware statutory
business trust (the "Trust"), we confirm that:
1. We understand that the Securities, the 6-5/8% Convertible
Junior Subordinated Debentures due 2006 (the "Debentures") of Titanium
Metals Corporation (the "Company") and the common stock, $.01 par
value, of the Company (the "Common Stock") issuable upon conversion
thereof have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We understand and agree, on our
own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, (x) that such Securities are being offered only in
a transaction not involving any public offering within the meaning of
the Securities Act, and (y) that if we should resell, pledge or
otherwise transfer such Securities, Debentures and the Common Stock
issuable upon conversion thereof within
<PAGE> 41
2
three years after the last date of the original issuance of the
Securities or, if later, within three months after we cease to be an
affiliate (within the meaning of Rule 144 under the Securities Act) of
the Company, such Securities, Debentures and the Common Stock issuable
upon conversion thereof may be resold, pledged or transferred only (i)
to the Company, (ii) so long as the Securities, Debentures and the
Common Stock issuable upon conversion thereof are eligible for resale
pursuant to Rule 144A under the Securities Act ("Rule 144A"), to a
person whom we reasonably believe is a "qualified institutional buyer"
(as defined in Rule 144A) ("Qualified Institutional Buyer") that
purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A (as indicated by the
box checked by the transferor on the Certificate of Transfer on the
reverse of the certificates if such securities are not in book-entry
form), (iii) in an offshore transaction in accordance with Regulation
S under the Securities Act (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the
certificates if such securities are not in book-entry form), but, if
we are a non-U.S. person, prior to the expiration of the "40 day
restricted period" (within the meaning of Rule 903(c)(3) of Regulation
S under the Securities Act), our transferee shall certify that such
transferee is a non-U.S. person, (iv) to an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the
certificates if such securities are not in book-entry form) that has
certified to the Company and the Property Trustee (or, in the case of
the Debentures and the Common Stock, the Indenture Trustee and the
Transfer Agent, respectively) that it is such an accredited investor
and is acquiring the Securities, Debentures or the Common Stock
issuable upon conversion thereof for investment purposes and not for
distribution, but, if we are a non-U.S. person, prior to the
expiration of the "40 day restricted period" (within the meaning of
Rule 903(c)(3) of Regulation S under the Securities Act), our
transferee shall certify
<PAGE> 42
3
that such transferee is a non-U.S. person, (v) pursuant to an
exemption from registration under the Securities Act provided by Rule
144 (if applicable) under the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, in each
case in accordance with any applicable securities laws of any state of
the United States, and we will notify any purchaser of the Securities,
Debentures or the Common Stock issuable upon conversion thereof from
us of the above resale restriction, if then applicable. We further
understand that, in connection with any transfer of the Securities,
Debentures or the Common Stock issuable upon conversion thereof by us,
the Company and the Property Trustee (or, in the case of the
Debentures and the Common Stock, the Indenture Trustee and the
Transfer Agent, respectively) may request, and, if so requested we
will furnish, such certificates, legal opinions and other information
as they may reasonably require to confirm that any such transfer
complies with the foregoing restrictions.
2. We are able to fend for ourselves in the transactions
contemplated by the offering memorandum, we have such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Securities,
the Debentures or the Common Stock issuable upon conversion thereof
and we and any accounts for which we are acting are each able to bear
the economic risk of our or its investment and can afford the complete
loss of such investment.
3. We understand that the minimum aggregate stated
liquidation amount of Securities that may be purchased by an
institutional "accredited investor" is $250,000.
4. We understand that the Company and Salomon Brothers Inc,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley
& Co. Incorporated (the "Initial Purchasers"), and others will rely
upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and we will agree that if any of the
acknowledgments, representations and warranties deemed to have been
made by us by our
<PAGE> 43
4
purchase of the Securities, for our own account or for one or more
accounts as to each of which we exercise sole investment discretion,
are no longer accurate, we shall promptly notify the Company and the
Initial Purchasers.
5. We are acquiring the Securities purchased by us for
investment purposes, and not for distribution, for our own account or
for one or more accounts as to each of which we exercise sole
investment discretion and we are or such account is an institution
which is an "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act).
6. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
------------------------------
(Name of purchaser)
By:---------------------------
Name:
Title:
Date:
<PAGE> 44
EXHIBIT B
Form of Investment Letter for
Executive Officers and Directors of the Company
and Individuals Having a Relationship with the Company
or such Officers and Directors
November , 1996
--
Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
In connection with my proposed purchase of _______ 6-5/8%
Convertible Preferred Securities, Beneficial Unsecured Convertible Securities
(BUCS) (the "Securities") of TIMET Capital Trust I, a Delaware statutory
business trust (the "Trust"), I confirm that:
1. I understand that the Securities, the 6-5/8% Convertible
Junior Subordinated Debentures due 2006 (the "Debentures") of Titanium
Metals Corporation (the "Company") and the common stock, $.01 par
value, of the Company (the "Common Stock") issuable upon conversion
thereof have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. I understand and agree, on my
own behalf, (x) that such Securities are being offered only in a
transaction not involving any public offering within the meaning of
the Securities Act, and (y) that if I should resell, pledge or
otherwise transfer such Securities, Debentures and the Common Stock
issuable upon conversion thereof within three years after the last
date of the original issuance of the Securities or, if later, within
three months after I cease to be
<PAGE> 45
2
an affiliate (within the meaning of Rule 144 under the Securities Act)
of the Company, such Securities, Debentures and the Common Stock
issuable upon conversion thereof may be resold, pledged or transferred
only (i) to the Company, (ii) so long as the Securities, Debentures
and the Common Stock issuable upon conversion thereof are eligible for
resale pursuant to Rule 144A under the Securities Act ("Rule 144A"),
to a person whom I reasonably believe is a "qualified institutional
buyer" (as defined in Rule 144A) ("Qualified Institutional Buyer")
that purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A (as indicated by the
box checked by the transferor on the Certificate of Transfer on the
reverse of the certificates if such securities are not in book-entry
form), (iii) in an offshore transaction in accordance with Regulation
S under the Securities Act (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the
certificates if such securities are not in book-entry form), (iv) to
an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (as indicated by
the box checked by the transferor on the Certificate of Transfer on
the reverse of the certificates if such securities are not in
book-entry form) that has certified to the Company and the Property
Trustee (or, in the case of the Debentures and the Common Stock, the
Indenture Trustee and the Transfer Agent, respectively) that it is
such an accredited investor and is acquiring the Securities,
Debentures or the Common Stock issuable upon conversion thereof for
investment purposes and not for distribution, (v) pursuant to an
exemption from registration under the Securities Act provided by Rule
144 (if applicable) under the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, in each
case in accordance with any applicable securities laws of any state of
the United States, and I will notify any purchaser of the
<PAGE> 46
3
Securities, Debentures or the Common Stock issuable upon conversion
thereof from me of the above resale restriction, if then applicable.
I further understand that, in connection with any transfer of the
Securities, Debentures or the Common Stock issuable upon conversion
thereof by me, the Company and the Property Trustee (or, in the case
of the Debentures and the Common Stock, the Indenture Trustee and the
Transfer Agent, respectively) may request, and, if so requested I will
furnish, such certificates, legal opinions and other information as
they may reasonably require to confirm that any such transfer complies
with the foregoing restrictions.
2. I am either (A) an "accredited investor" (as defined in
Rule 501(a)(4), (5) or (6) or (B) an individual having such knowledge
and experience in financial and business matters as to be capable of
evaluating the merits and risks of my investment in the Securities,
the Debentures or the Common Stock issuable upon conversion thereof,
and I am able to fend for myself in the transactions contemplated by
the offering memorandum, am able to bear the economic risk of my
investment and can afford the complete loss of such investment.
3. I understand that the Company and Salomon Brothers Inc,
Merrill Lynch, Pierce, Fenner & Smith and Morgan Stanley & Co.
Incorporated (the "Initial Purchasers"), and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations
and agreements and I will agree that if any of the acknowledgments,
representations and warranties deemed to have been made by me by my
purchase of the Securities, are no longer accurate, I shall promptly
notify the Company and the Initial Purchasers.
4. I am acquiring the Securities purchased by me for
investment purposes, and not for distribution, for my own account.
5. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
------------------------------
Name:
Date:
<PAGE> 47
EXHIBIT C
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. Each
Initial Purchaser represents and agrees that, except as otherwise permitted by
Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit, it has
offered and sold the Securities, and will offer and sell the Securities, (i) as
part of their distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S under the Securities Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that,
at or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this
is an exhibit), it shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and December 4, 1996, except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms used
above have the meanings given to them by Regulation S."
<PAGE> 48
2
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to
them by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold, and will not offer or sell, in the United Kingdom, by
means of any document, any Securities other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or as
agent (except in circumstances which do not constitute an offer to the public
within the meaning of the Companies Act 1985 of Great Britain), (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 of the United Kingdom with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom the document may otherwise lawfully be issued or passed
on.
<PAGE> 49
EXHIBIT D
Form of Lock-Up Letter
November __, 1996
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Ladies and Gentlemen:
The undersigned understands that you and certain other firms
propose to enter into a purchase agreement (the "Purchase Agreement") providing
for the purchase by you and such other firms (the "Initial Purchasers") of the
6- 5/8% Convertible Preferred Securities, Beneficial Unsecured Convertible
Securities (BUCS) (the "Securities") of TIMET Capital Trust I (the "Trust"),
which are convertible at the option of the holder thereof into the common
stock, $.01 par value (the "Common Stock") of Titanium Metals Corporation (the
"Company"), and that the Initial Purchasers propose to resell the Securities to
investors as more fully described under the heading "Plan of Distribution" in
the final Offering Memorandum relating to the Securities dated November 20,
1996.
In consideration of the execution of the Purchase Agreement by
the Initial Purchasers, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent
of Salomon Brothers Inc, the undersigned will not, directly or indirectly,
offer, sell, contract to sell, grant any other option to purchase or otherwise
dispose of, or announce the offering of, any shares of Common Stock [(other
than the shares of Common Stock subject to the option granted to the
undersigned by IMI Americas, Inc.)] or any securities convertible into, or
exchangeable for, shares of Common Stock, or enter into any agreement to do any
of the
<PAGE> 50
2
foregoing, for a period of 90 days following the date of the Purchase
Agreement; provided, however, that the undersigned may pledge shares of Common
Stock to secure extensions of credit in the ordinary course.
The undersigned agrees that the provisions of this letter
agreement shall be binding upon the successors, assigns, heirs and personal
representatives of the undersigned.
In furtherance of the foregoing, the Company and First Chicago
Trust Company of New York, its Transfer Agent, are hereby authorized to decline
to make any transfer of securities if such transfer would constitute a
violation or breach of this letter agreement.
It is understood that, if the Purchase Agreement does not
become effective, or if the Purchase Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
the payment for and delivery of the Securities, the undersigned shall be
released from our obligations under this letter agreement without any action by
such person.
This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York (other than its rules of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby).
Very truly yours,
[CORPORATE STOCKHOLDER,
By:---------------------------
Name:
Title:
Date:]
[------------------------------
Name:
Date:]
<PAGE> 1
EXHIBIT 99.2
EXECUTION COPY
TIMET CAPITAL TRUST I
6-5/8% Convertible Preferred Securities
Beneficial Unsecured Convertible Securities (BUCS)
(Liquidation Amount $50.00 per Convertible Preferred Security)
Guaranteed to a Limited Extent by, and
Convertible into the Common Stock of,
TITANIUM METALS CORPORATION
REGISTRATION AGREEMENT
New York, New York
November 20, 1996
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
TIMET Capital Trust I, a Delaware statutory business trust
(the "Trust"), and Titanium Metals Corporation, a Delaware corporation (the
"Company"), as sponsor of the Trust and as guarantor, propose to issue and sell
to certain initial purchasers (the "Initial Purchasers"), for whom you are
acting as representatives (the "Representatives"), upon the terms set forth in
a purchase agreement of even date herewith (the "Purchase Agreement") its
6-5/8% Convertible Preferred Securities, Beneficial Unsecured Convertible
Securities (BUCS), liquidation amount $50.00 per Convertible Preferred Security
(the "Convertible Preferred Securities") (the "Initial Placement"). As an
inducement to the Initial Purchasers to enter into the Purchase Agreement and
in satisfaction of a condition to your obligations thereunder, the Trust and
the Company agree with you, (i) for your benefit and the benefit of the other
Initial Purchasers and (ii) for the benefit of
<PAGE> 2
2
the holders (each such holder and each Initial Purchaser a "Holder" and
together, the "Holders") from time to time of the Convertible Preferred
Securities, the 6-5/8% Convertible Junior Subordinated Debentures Due 2026 (the
"Debentures") and the Common Stock, par value $.01 per share (the "Common
Stock"), of the Company issuable upon conversion of the Convertible Preferred
Securities or the Debentures (collectively, together with the Guarantee of the
Company of the Convertible Preferred Securities (the "Securities"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Final Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
<PAGE> 3
3
"Initial Placement" has the meaning set forth in the preamble
hereto.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of securities registered under a Shelf Registration
Statement.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an
underwritten offering.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the securities covered by such Shelf
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Trust and the Company pursuant to the provisions of Section 2
hereof which covers some or all of the Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"underwriter" means any underwriter of Securities in
connection with an offering thereof under a Shelf Registration Statement.
<PAGE> 4
4
2. Shelf Registration.
(a) The Trust and the Company shall prepare and, not later
than 90 days following the Closing Date, shall file with the Commission and
thereafter shall use their best efforts to cause to be declared effective under
the Act, not later than 180 days following the Closing Date, a Shelf
Registration Statement relating to the offer and sale of the Securities by the
Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement;
provided, however, that no Holder shall be entitled to have the Securities held
by it covered by such Shelf Registration Statement unless such Holder is in
compliance with Section 3(m) hereof.
(b) The Trust and the Company shall each use its best efforts
(i) to keep the Shelf Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by Holders for a period
of three years from the Closing Date or such shorter period that will terminate
upon the earlier of the following: (A) when all the Convertible Preferred
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement, (B) when all Debentures issued to Holders
in respect of Convertible Preferred Securities that had not been sold pursuant
to the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement, (C) when all shares of Common Stock issued upon
conversion of any such Convertible Preferred Securities or any such Debentures
that had not been sold pursuant to the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement and (D) when, in the written
opinion of counsel to the Trust and the Company, all outstanding Securities may
be sold without registration under the Act (in any case, such period being
called the "Shelf Registration Period") and (ii) after the effectiveness of the
Shelf Registration Statement, promptly upon the request of any Holder to take
any action reasonably necessary to register the sale of any Securities of such
Holder and to identify such Holder as a selling securityholder. The Trust and
the Company shall be deemed not to have used their best efforts to keep the
Shelf Registration Statement effective during the requisite period if either
the Trust or the Company voluntarily takes any action that would result in
Holders of securities covered thereby not being able to offer and sell such
securities during that period, unless (i) such action is required by
<PAGE> 5
5
applicable law, or (ii) such action is taken in accordance with Section 2(c)
hereof, and, in either case, so long as the Company promptly thereafter
complies with the requirements of Section 3(i) hereof, if applicable.
(c) The Trust and the Company may suspend the use of the
Prospectus for a period not to exceed 30 days in any three month period or two
periods not to exceed an aggregate of 60 days in any 12 month period for bona
fide business reasons, including the acquisition or divestiture of assets,
public filings with the Commission, pending corporate developments and similar
events.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to you, prior to
the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment
or supplement, if any, to the Prospectus included therein and shall
use their best efforts to reflect in each such document, when so filed
with the Commission, such comments as you reasonably may propose.
(b) The Trust and the Company shall take such action as may
be necessary so that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with
the Act and the rules and regulations thereunder, (ii) any Shelf
Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
<PAGE> 6
6
(c) (1) The Trust and the Company shall advise you and the
Holders and, if requested by you or any such Holder, confirm such
advice in writing:
(i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments
or supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Trust and the Company shall advise you and the
Holders and, if requested by you or any such Holder, confirm such
advice in writing:
(i) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) of the receipt by the Trust or the Company of
any notification with respect to the suspension of the
qualification of the securities included therein for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iii) of the suspension of the use of the Prospectus
pursuant to Section 2(c) hereof or of the happening of any
event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such
date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they
were made) not misleading (which advice shall be accompanied
by an instruction to suspend the use of the Prospectus until
the requisite changes have been made).
(d) The Trust and the Company shall use their best efforts to
obtain the withdrawal of any order
<PAGE> 7
7
suspending the effectiveness of any Shelf Registration Statement at
the earliest possible time.
(e) The Trust and the Company shall furnish to each Holder of
securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendment thereto
(including any reports or other documents incorporated therein by
reference), including financial statements and schedules, and, if the
Holder so requests in writing, any exhibits so requested (including
those incorporated by reference).
(f) The Trust and the Company shall, during the Shelf
Registration Period, deliver to each Holder of securities included
within the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request;
and the Trust and the Company consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
securities in connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of securities pursuant to any Shelf
Registration Statement, the Trust and the Company shall register or
qualify or cooperate with the Holders of securities included therein
and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holders
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such
jurisdictions of the securities covered by such Shelf Registration
Statement; provided, however, that neither the Trust nor the Company
will be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
<PAGE> 8
8
(h) Unless the applicable Securities shall be in book-entry
only form, the Trust and the Company shall cooperate with the Holders
of Securities to facilitate the timely preparation and delivery of
certificates representing Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
permitted denominations and registered in such names as Holders may
request prior to sales of securities pursuant to such Shelf
Registration Statement.
(i) Upon the occurrence of any event contemplated by
paragraph (c)(2)(iii) above, the Trust and the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement
or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to purchasers
of the securities included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Trust or the Company notifies the Holders of the occurrence of any
event contemplated by paragraph 3(c)(2)(iii) above, the Holders shall
suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made.
(j) The Trust and the Company shall use their best efforts to
cause the Depository Trust Company ("DTC") on the first business day
following the effective date of any Shelf Registration Statement
hereunder or as soon as possible thereafter to remove (i) from any
existing CUSIP number assigned to the Securities any designation
indicating that the Securities are "restricted securities", which
efforts shall include delivery to DTC of a letter executed by the
Trust and the Company substantially in the form of Exhibit A hereto
and (ii) any other stop or restriction on DTC's system with respect to
the Securities. In the event the Trust and the Company are unable to
cause DTC to take the actions described in the immediately preceding
sentence, the Company shall take such actions as Salomon Brothers Inc
may reasonably request to provide, as soon as practicable, a CUSIP
number for the Securities registered under such Shelf Registration
Statement and to cause such CUSIP number to be assigned to the
Securities (or to the maximum aggregate
<PAGE> 9
9
principal amount of the Securities to which such number may be
assigned). Upon compliance with the foregoing requirements of this
Section 3(j), the Trust and the Company shall provide the Trustee with
printed certificates for such Securities, in a form eligible for
deposit with DTC.
(k) The Trust and the Company shall use their best efforts to
comply with all applicable rules and regulations of the Commission and
shall make generally available to their security holders as soon as
practicable after the effective date of the applicable Shelf
Registration Statement an earnings statement satisfying the provisions
of Section 11(a) of the Act.
(l) The Trust and the Company shall use their best efforts to
cause the Indenture, the Declaration and the Guarantee to be qualified
under the Trust Indenture Act in a timely manner.
(m) The Trust and the Company may require each Holder of
securities to be sold pursuant to any Shelf Registration Statement to
furnish to the Trust and the Company such information regarding the
Holder and the distribution of such securities as the Trust and the
Company may from time to time reasonably require for inclusion in such
Shelf Registration Statement and the Trust and the Company may exclude
from such registration the Securities of any Holder that fails to
furnish such information within a reasonable time after receiving such
request.
(n) The Trust and the Company shall, if requested, use their
best efforts to promptly incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement (i) such
information as the Majority Holders or, if the Securities, Debentures
or Common Stock are being sold in an underwritten offering, as the
Managing Underwriters and the Majority Holders reasonably agree should
be included therein and provide to the Trust and the Company in
writing for inclusion in the Shelf Registration Statement or
Prospectus, and (ii) such information as a Holder may provide from
time to time to the Trust and the Company in writing for inclusion in
a Prospectus or any Shelf Registration Statement concerning such
Holder and the distribution of such Holder's Securities, Debentures
and Common Stock and,
<PAGE> 10
10
in either case, shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
being notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(o) The Trust and the Company shall enter into such customary
agreements (including underwriting agreements) and take all other
appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less
favorable than those set forth in Section 5 (or such other provisions
and procedures acceptable to the Majority Holders and the Managing
Underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 5.
(p) The Trust and the Company shall (i) make reasonably
available for inspection by the Holders of securities to be registered
thereunder, any underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and any attorney, accountant or
other agent retained by the Holders or any such underwriter all
relevant financial and other records, pertinent corporate documents
and properties of the Trust and the Company and its subsidiaries; (ii)
cause the Company's officers, directors and employees and any relevant
trustee to supply all relevant information reasonably requested by the
Holders or any such underwriter, attorney, accountant or agent in
connection with any such Shelf Registration Statement as is customary
for similar due diligence examinations; provided, however, that any
information that is designated in writing by the Trust and the
Company, in good faith, as confidential at the time of delivery of
such information shall be kept confidential by the Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is
made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a
third party without an accompanying obligation of confidentiality; and
provided further that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on
behalf of the Holders and the other parties entitled thereto by one
counsel designated by and on behalf of
<PAGE> 11
11
such Holders and other parties; (iii) make such representations and
warranties to the Holders of securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily
made by the Company to underwriters in primary underwritten offerings
and covering matters including, but not limited to, those set forth in
the Purchase Agreement; (iv) obtain opinions of counsel to the Trust
and the Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to each selling Holder and
the underwriters, if any, covering such matters as are customarily
covered in opinions requested in the Company's underwritten offerings
and such other matters as may be reasonably requested by such Holders
and underwriters (it being agreed that the matters to be covered by
such counsel shall include, without limitation, as of the date of the
opinions and as of the effective date of the Shelf Registration
Statement or most recent post-effective amendment thereto, as the case
may be, a statement by such counsel regarding the absence from such
Shelf Registration Statement and the prospectus included therein, as
then amended or supplemented, including the documents incorporated by
reference therein, of an untrue statement of a material fact or the
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading);
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Trust and the Company
(and, if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement),
addressed to each selling Holder of securities registered thereunder
and the underwriters, if any, in customary form and covering matters
of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings by the Company; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, if
any, including those to evidence compliance with Section 3(i) and with
any customary conditions contained in the underwriting agreement or
other agreement entered into by the Trust and the
<PAGE> 12
12
Company. The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 3(p) shall be performed at (A) the
effectiveness of such Shelf Registration Statement and (B) each
closing under any underwriting or similar agreement as and to the
extent required thereunder.
(q) The Trust and the Company will use their best efforts to
cause the Common Stock relating to such Shelf Registration Statement
to be listed on each securities exchange, if any, and quoted on each
automatic quotation system, if any, on which any shares of Common
Stock are then listed or quoted.
(r) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Securities or participate as a
member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and
the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of such Securities or as an
underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, the Trust and the Company will assist
such broker-dealer in complying with the requirements of such Rules
and By-Laws, including, without limitation, by (A) if such Rules or
By-Laws, including Rule 2720, shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in
the preparation of the Shelf Registration Statement relating to such
Securities, to exercise usual standards of due diligence in respect
thereto, (B) indemnifying any such qualified independent underwriter
to the extent of the indemnification of underwriters provided in
Section 5 hereof and (C) providing such information to such
broker-dealer as may be required in order for such broker-dealer to
comply with the requirements of the Rules of Fair Practice of the
NASD.
(s) The Trust and the Company shall use their best efforts to
take all other steps necessary to effect the registration, offering
and sale of the securities covered by the Shelf Registration Statement
contemplated hereby.
<PAGE> 13
13
(t) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Trust and the Company will, during any period in which it is
not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4)
under the Securities Act. This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by
such holders, from time to time of such restricted securities.
4. Registration Expenses. The Company shall bear all
expenses incurred in connection with the performance of the Trust's and its
obligations under Sections 2 and 3 hereof and shall reimburse the Holders for
the reasonable fees and disbursements of one firm or counsel designated by the
Majority Holders to act as counsel for the Holders in connection therewith.
5. Indemnification and Contribution. (a) In connection with
any Shelf Registration Statement, the Trust and the Company, jointly and
severally, agree to indemnify and hold harmless each Holder of securities
covered thereby (including each Initial Purchaser), the directors, officers,
employees and agents of each such Holder and each person who controls any such
Holder within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement as originally
filed or in any amendment thereof, or in any preliminary Prospectus or
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with
<PAGE> 14
14
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Trust and the Company will not be liable in any
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Trust and the Company by or on behalf
of any such Holder specifically for inclusion therein and (ii) such indemnity
with respect to any untrue statement or omission in any preliminary prospectus
relating to a Shelf Registration Statement shall not inure to the benefit of
any Holder from whom the person asserting any such loss, claim, damage or
liability purchased the Securities that are the subject thereof, to the extent
that any such loss, claim, damage or liability of such Holder occurs under the
circumstances where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment or the parties shall have
agreed that (w) the Trust and the Company had previously furnished copies of
the final prospectus to such Holder, (x) delivery of the final prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the preliminary prospectus was
completely corrected in the final prospectus and (z) there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the final prospectus. This indemnity
agreement will be in addition to any liability which the Trust and the Company
may otherwise have.
The Trust and the Company, jointly and severally, also agree
to indemnify or contribute to Losses (as defined below) of, as provided in
Section 5(d), any underwriters of securities registered under a Shelf
Registration Statement, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Initial Purchasers and the selling Holders provided in
this Section 5(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(o)
hereof.
(b) Each Holder of securities covered by a Shelf Registration
Statement (including each Initial Purchaser) severally agrees to indemnify and
hold harmless (i) the Trust and the Company, (ii) each of the Company's
directors, (iii) each of the Company's officers who signs such Shelf
<PAGE> 15
15
Registration Statement and (iv) each person who controls the Trust or the
Company within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Trust and the Company to each such
Holder, but only with reference to written information relating to such Holder
furnished to the Trust and the Company by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ one separate counsel (and, in addition, one local counsel
in any relevant jurisdiction for an indemnified party), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate
counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are
<PAGE> 16
16
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. An indemnifying party will not, without the prior
written consent of the indemnified parties (not to be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Shelf Registration Statement which resulted in such
Losses; provided, however, that in no case shall the Initial Purchasers be
responsible, in the aggregate, for any amount in excess of the purchase
discount or commission applicable to such Security, as set forth on the cover
page of the Final Memorandum, nor shall any underwriter be responsible for any
amount in excess of the underwriting discount or commission applicable to the
securities purchased by such underwriter under the Shelf Registration Statement
which resulted in such Losses. If the allocation provided by the immediately
preceding
<PAGE> 17
17
sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Trust and the Company shall be deemed to be equal to the total
net proceeds from the Initial Placement (before deducting expenses) as set
forth on the cover page of the Final Memorandum. Benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions as set forth on the cover page of the Final Memorandum.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Shelf Registration Statement which resulted in
such Losses. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on the other
hand. The parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 5, each
person who controls a Holder within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of such Holder
shall have the same rights to contribution as such Holder, and each person who
controls the Trust or the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Shelf
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder, the Trust or the Company or any of the officers, directors or
controlling persons referred to in Section 5 hereof, and will survive the sale
<PAGE> 18
18
by a Holder of securities covered by a Shelf Registration Statement.
6. Miscellaneous.
(a) No Conflicting Agreements. The Trust and the Company
have not, as of the date hereof, entered into, nor shall they, on or
after the date hereof, enter into, any agreement with respect to their
securities or otherwise that conflicts with the provisions hereof;
provided, however, that the foregoing shall not prevent Company from
allowing beneficiaries of registration rights in existence on the date
hereof with respect to the Common Stock to utilize any Shelf
Registration Statement filed hereunder on such customary and
reasonable terms as counsel for the Company shall determine.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, qualified, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the
Trust and the Company have obtained the written consent of the Holders
of at least a majority of the then outstanding aggregate principal
amount of Securities; provided that, with respect to any matter that
directly or indirectly affects the rights of any Initial Purchaser
hereunder, the Trust and the Company shall obtain the written consent
of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver
or consent to departure from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Shelf Registration Statement
and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis
of securities being sold rather than registered under such Shelf
Registration Statement.
(c) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class
<PAGE> 19
19
mail, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given
by such holder to the Company in accordance with the
provisions of this Section 6(c), which address initially is,
with respect to each Holder, the address of such Holder
maintained by the Registrar, with a copy in like manner to
Salomon Brothers Inc;
(2) if to you, initially at the respective addresses
set forth in the Purchase Agreement; and
(3) if to the Trust or the Company, initially at its
address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given when received.
The Initial Purchasers, the Trust or the Company by notice to
the other may designate additional or different addresses for
subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each
of the parties, including, without the need for an express assignment
or any consent by the Trust or the Company thereto, subsequent Holders
of Securities. The Company hereby agrees to extend the benefits of
this Agreement to any Holder of Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) Counterparts. This agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
<PAGE> 20
20
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by
law.
(i) Securities Held by the Company, etc. Whenever the
consent or approval of Holders of a specified percentage of principal
amount of Securities is required hereunder, Securities held by the
Trust or the Company or their respective Affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed
to be Affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
<PAGE> 21
21
Please confirm that the foregoing correctly sets forth the
agreement among the Trust, the Company and you.
Very truly yours,
TIMET CAPITAL TRUST I
By:
------------------------
Name:
Title:
TITANIUM METALS CORPORATION,
By:
------------------------
Name:
Title:
Accepted in New York, New York
November 20, 1996
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
By: SALOMON BROTHERS INC,
By
-------------------------
Name:
Title:
For themselves and the other
Initial Purchasers named in
the Purchase Agreement.
<PAGE> 22
EXHIBIT A
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
TIMET Capital Trust I
Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, CO 80202
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004
Re: 6-5/8% Convertible Preferred Securities (the
"Securities") of TIMET Capital Trust I, guaranteed to
a limited extent and convertible into the common
stock of Titanium Metals Corporation
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission
has declared effective a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, with regard to all of the Securities
referenced above. Accordingly, there is no long any restriction as to whom
such Securities may be sold and any restrictions on the CUSIP designation are
no longer appropriate and may be removed. I understand that upon receipt of
this letter, DTC will remove any stop or restriction on its system with respect
to this issue.
As always, please do not hesitate to call if we can be of
further assistance.
TIMET Capital Trust I
by:
-------------------------
Authorized Officer
Titanium Metals Corporation
by:
-------------------------
Authorized Officer
